Elder Company is a manufacturer of personal computers

E1-5 Elder Company is a manufacturer of personal computers. Various costs and expenses associated with its operations are below. The company intends to classify these costs and expenses into categories. Match the Cost and Expenses with the appropriate Category.

Associate each cost/expense with each association category:

Cost and Expenses Association Categories
1. Property taxes on the factory building
2. Production superintendents’ salaries
3. Memory boards and chips used in assembling computers
4. Depreciation on the factory equipment.
5. Salaries for assembly line quality control inspectors
6. Sales commissions paid to sell personal computers.
7. Electrical components used in assembling computers.
8. Wages of workers assembling personal computers
9. Soldering materials used on factory assembly line.
10. Salaries for the night security guards for the factory building.

Categories:
a. Direct materials
b. Direct labor
c. Manufacturing overhead
d. Period costs

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Mindy Feldkamp and her two colleagues, Oscar Lopez and Lori Melton, are personal trainers at an upscale health spa/resort in Tampa, Florida

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1. Mindy Feldkamp and her two colleagues, Oscar Lopez and Lori Melton, are personal trainers at an upscale health spa/resort in Tampa, Florida. They want to start a health club that specializes in health plans for people in the 50 + age range. The growing population in this age range and strong consumer interest in the health benefits of physical activity have convinced them they can profitably operate their own club. In addition to many other decisions, they need to determine what type of business organization they want. Oscar believes there are more advantages to the corporate form than a partnership, but he hasn't yet convinced Mindy and Lori. They have come to you, a small business consulting specialist, seeking information and advice regarding the choice of starting a partnership versus a corporation.

a) Prepare a memo (dated May 26, 2009) that describes the advantages and disadvantages of both partnerships and corporations. Advise Mindy, Oscar and Lori regarding which organizational form you believe would better serve their purposes. Make sure to include reasons supporting your advice.

AND SO ON

All Parts 1 to 5


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The One Product economy, which produces and sells only personal computers (PCs), expects that it can sell 500 more, or 12,500 PCs, next year

11. The One Product economy, which produces and sells only personal computers (PCs), expects that it can sell 500 more, or 12,500 PCs, next year. Nominal GDP was $20 million this year, and the money supply was $7 million. The central bank for the One Product economy plans to increase the money supply by 10 percent next year.

a. What was the average selling price for the personal computers this year?
b. What is the expected average selling price next year for personal computers if the velocity of money remains at this year’s turnover rate? What percentage change in price level is expected to occur?
c. If the objective is to keep the price level the same next year (i.e., no inflation), what percentage increase in the money supply should the central bank plan for?
d. How would your answer in (c) change if the velocity of money is expected to be three times next year? What is it now?

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On July 1, 2011, Ted, age 73 and single, sells his personal residence of the last 30 years for $365,000

On July 1, 2011, Ted, age 73 and single, sells his personal residence of the last 30 years for $365,000. Ted's basis in his residence is $35,000. The expenses associated with the sale of his home total $20,000. On December 15, 2011, Ted purchases and occupies a new residence at a cost of $175,000. Calculate Ted's realized gain, recognized gain, and adjusted basis of his new residence.

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The Zygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation

The Zygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. June is Zygon's first month of operations, and therefore, there was no beginning inventory. Direct materials cost for the month totaled $895,000, while conversion costs equaled $4,225,000. Accounting records indicate that 475,000 chips were started in June, and that 425,000 chips were completed.

Ending inventory was 50% complete as to conversion costs.

Required:
a. What is the total manufacturing cost per chip for June?
b. Allocate the total costs between the completed chips and the chips in ending inventory.

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Norwel company manufactures miniature circuit boards used in wireless phones and personal organizers

Norwel company manufactures miniature circuit boards used in wireless phones and personal organizers. On January 2, 2014, Norwel purchased a circuit board stamping machine at a retail price of $12,000. Norwel paid 5% sales tax on this purchase. Norwel paid a contractor $1,400 for a specially wired platform for the machine, to ensure non-interrupted power to the machine.

Norwel estimates the machine will have a 4-year useful life, with a residual value of $2,000 at the end of 4 years. Norwel uses straight-line depreciation and employs the half-year convention in accounting for partial-year depreciation (that is, it takes a half year of depreciation in the first year of an asset’s useful life). Norwel’s fiscal year ends on December 31.

1) At what amount should Norwel record the acquisition cost of the machine?

2) What journal entry should Norwel record in 2014?

3) At what amount will the machine be reported in Norwel’s balance sheet at December 31, 2014?

4) On July 1, 2015, Norwel decides to outsource its circuit board operations to Boards-R-Us Inc. As part of his plan, Norwel sells the machine (and the platform) to Boards-R-Us for $7,000. What is the impact of this disposal on Norwel’s 2015 income before taxes?

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