E12-6 (Recording and Amortization of Intangibles) Rolanda Marshall Company, organized in 2007, has set up a single account for all intangible assets. The following summary discloses the debit entries that been recorded during 2008.
1/2/08 Purchased patent (8 yr life) $350,000
4/1/08 Purchased goodwill (indefinite life) $360,000
7/1/08 Purchased franchise with 10 yr life; expires 7/1/18 $450,000
8/1/08 Payment of copyright (5 yr life) $156,00
9/1/08 Research and development costs $215,000
Total: $1,531,000
Instructions:
Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types pf intangibles. Make the entries ad of 12/31/08 recording any necessary amortization and reflecting all balances accurately as of that date. (Use the straight line amortization)
Click here for the solution: Rolanda Marshall Company, organized in 2007, has set up a single account for all intangible assets
Showing posts with label single. Show all posts
Showing posts with label single. Show all posts
Wednesday, November 11, 2015
Wednesday, October 14, 2015
Mozena Corporation manufactures a single product (ACC 560 Week 4)
ACC 560 Week 4 Assignment
E5-6 Mozena Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,000 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively.
Production in Units 3,000
Production Costs
Direct Materials $7,500
Direct labor 15,000
Utilities 1,800
Property taxes 1,000
Indirect labor 4,500
Supervisory salaries 1,800
Maintenance 1,100
Depreciation 2,400
Instructions
(a) Identify the above costs as variable, fixed, or mixed.
(b) Calculate the expected costs when production is 5,000 units.
Click here for the solution: Mozena Corporation manufactures a single product (ACC 560 Week 4)
E5-6 Mozena Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,000 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively.
Production in Units 3,000
Production Costs
Direct Materials $7,500
Direct labor 15,000
Utilities 1,800
Property taxes 1,000
Indirect labor 4,500
Supervisory salaries 1,800
Maintenance 1,100
Depreciation 2,400
Instructions
(a) Identify the above costs as variable, fixed, or mixed.
(b) Calculate the expected costs when production is 5,000 units.
Click here for the solution: Mozena Corporation manufactures a single product (ACC 560 Week 4)
The Medical Center has a single operating room that is used by local physicians to perform surgical procedures
The Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On November 1 of the current year, the annual operating room overhead is estimated to be:
Disposable supplies $150,000
Depreciation expense 27,000
Utilities 5,500
Nurse salaries 225,500
Technician wages 74,000
Total operating room overhead $492,000
The overhead costs will be assigned to procedures based on the number of surgical room hours. The Medical Center expects to use the operating room an average of eight hours per day, six days per week. In addition, the operating room will be shut down two weeks per year for general repairs.
a. Determine the predetermined operating room overhead rate for the year.
b. Gretchen Kelton had a 6 hour procedure on November 10. How much operating room overhead would be charged to her procedure, using the rate determined in part (a)?
c. During November, the operating room was used 192 hours. The actual overhead costs incurred for November were $38,500. Determine the overhead under-or over- applied for the period.
Click here for the solution: The Medical Center has a single operating room that is used by local physicians to perform surgical procedures
Disposable supplies $150,000
Depreciation expense 27,000
Utilities 5,500
Nurse salaries 225,500
Technician wages 74,000
Total operating room overhead $492,000
The overhead costs will be assigned to procedures based on the number of surgical room hours. The Medical Center expects to use the operating room an average of eight hours per day, six days per week. In addition, the operating room will be shut down two weeks per year for general repairs.
a. Determine the predetermined operating room overhead rate for the year.
b. Gretchen Kelton had a 6 hour procedure on November 10. How much operating room overhead would be charged to her procedure, using the rate determined in part (a)?
c. During November, the operating room was used 192 hours. The actual overhead costs incurred for November were $38,500. Determine the overhead under-or over- applied for the period.
Click here for the solution: The Medical Center has a single operating room that is used by local physicians to perform surgical procedures
Friday, September 25, 2015
Putnam Corporation manufactures a single product
P11-1A Putnam Corporation manufactures a single product. The standard cost per unit of product is shown below.
Direct materials-1 pound plastic at $7.00 per pound $ 7.00
Direct labor-1.5 hours at $12.00 per hour 18.00
Variable manufacturing overhead 11.25
Fixed manufacturing overhead 3.75
Total standard cost per unit $40.00
The predetermined manufacturing overhead rate is $10 per direct labor hour ($15.00 ÷ 1.5). It was computed from a master manufacturing overhead budget based on normal production of 7,500 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $56,250 ($7.50 per hour) and total fixed overhead costs of $18,750 ($2.50 per hour). Actual costs for October in producing 4,900 units were as follows.
Direct materials (5,100 pounds) $ 37,230
Direct labor (7,000 hours) 87,500
Variable overhead 56,170
Fixed overhead 19,680
Total manufacturing costs $200,580
Direct materials-1 pound plastic at $7.00 per pound $ 7.00
Direct labor-1.5 hours at $12.00 per hour 18.00
Variable manufacturing overhead 11.25
Fixed manufacturing overhead 3.75
Total standard cost per unit $40.00
The predetermined manufacturing overhead rate is $10 per direct labor hour ($15.00 ÷ 1.5). It was computed from a master manufacturing overhead budget based on normal production of 7,500 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $56,250 ($7.50 per hour) and total fixed overhead costs of $18,750 ($2.50 per hour). Actual costs for October in producing 4,900 units were as follows.
Direct materials (5,100 pounds) $ 37,230
Direct labor (7,000 hours) 87,500
Variable overhead 56,170
Fixed overhead 19,680
Total manufacturing costs $200,580
The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.
Instructions:
a) Compute all of the materials and labor variances.
b) Compute the total overhead variance.
Instructions:
a) Compute all of the materials and labor variances.
b) Compute the total overhead variance.
Click here for the solution: Putnam Corporation manufactures a single product
Wednesday, September 23, 2015
Crest Industries sells a single model of satellite radio receivers for use in the home
Exercise 3-33 CVP with Income Taxes
Crest Industries sells a single model of satellite radio receivers for use in the home. The radios have the following price and cost characteristics:
Sales Price …………………………….. $ 80 per radio
Variable costs ………………………. $32 per radio
Fixed costs ……………………………... $360.00 per month
Crest is subject to an income tax rate of 40 percent.
Required
How many receivers must Crest sell earn a monthly operating profit of $90,000 after taxes?
Click here for the solution: Crest Industries sells a single model of satellite radio receivers for use in the home
Crest Industries sells a single model of satellite radio receivers for use in the home. The radios have the following price and cost characteristics:
Sales Price …………………………….. $ 80 per radio
Variable costs ………………………. $32 per radio
Fixed costs ……………………………... $360.00 per month
Crest is subject to an income tax rate of 40 percent.
Required
How many receivers must Crest sell earn a monthly operating profit of $90,000 after taxes?
Click here for the solution: Crest Industries sells a single model of satellite radio receivers for use in the home
Friday, September 11, 2015
Topple Company produces a single product
Topple Company produces a single product. Operating data for the company and its absorption costing income statement for the last year is presented below:
Units in beginning inventory 2,000
Units produced 9,000
Units sold 10,000
Sales $100,000
Less cost of goods sold:
Beginning inventory 12,000
Add cost of goods manufactured 54,000
Goods available for sale 66,000
Less ending inventory 6,000
Cost of goods sold 60,000
Gross margin 40,000
Less selling & admin. expenses 28,000
Net operating income $12,000
Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. This overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.
Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.
Click here for the solution: Topple Company produces a single product
Units in beginning inventory 2,000
Units produced 9,000
Units sold 10,000
Sales $100,000
Less cost of goods sold:
Beginning inventory 12,000
Add cost of goods manufactured 54,000
Goods available for sale 66,000
Less ending inventory 6,000
Cost of goods sold 60,000
Gross margin 40,000
Less selling & admin. expenses 28,000
Net operating income $12,000
Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. This overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.
Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.
Click here for the solution: Topple Company produces a single product
Sunday, September 6, 2015
The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer, defined benefit plan that provides annuity and disability benefits
7-13 The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer, defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the city’s General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Net Assets for the Employees’ Retirement Fund as of July 1, 2011, is shown here:
CITY OF SWEETWATER
Employees' Retirement Fund
Statement of Net Assets
As of July 1, 2011
Assets
Cash $ 50,000
Accrued interest receivable 135,000
Investments, at fair value:
Bonds 4,500,000
Common stocks 1,300,000
Total assets 5,985,000
Liabilities
Accounts payable and accrued expenses 350,000
Net assets held in trust for preparation for benefits $5,635,000
During the year ended June 30, 2012, the following transaction occurred:
The interest receivable on investments was collected in cash.
Member contributions in the amount of $400,000 were received in cash. The city’s General Fund also contributed $600,000 in cash.
Annuity benefits of $700,000 and disability benefits of $150,000 were recorded as liabilities.
Accounts payable and accrued expenses in the amount of $900,000 were paid in cash.
Interest income of $240,000 and dividends in the amount of $40,000 were received in cash. In addition, bond interest income of $140,000 was accrued at year-end.
Refunds of $130,000 were made in cash to terminated, nonvested participants.
Common stocks, carried at a fair value of $500,000, were sold for $480,000. That $480,000, plus an additional $300,000, was invested in stocks.
At year-end, it was determined that the fair value of stocks held by the pension plan had decreased by $50,000; the fair value of bonds had increased by $30,000.
Nominal accounts for the year were closed.
a.) Record the transactions on the books of the Employees’ Retirement Fund.
b.) Prepared a Statement of Changes in Net Assets for the Employees’ Retirement Fund for the Year Ended June 30, 2012.
c.) Prepare a Statement of Net Assets for the Employees’ Retirement Fund as of June 30, 2012.
Click here for the solution: The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer, defined benefit plan that provides annuity and disability benefits
CITY OF SWEETWATER
Employees' Retirement Fund
Statement of Net Assets
As of July 1, 2011
Assets
Cash $ 50,000
Accrued interest receivable 135,000
Investments, at fair value:
Bonds 4,500,000
Common stocks 1,300,000
Total assets 5,985,000
Liabilities
Accounts payable and accrued expenses 350,000
Net assets held in trust for preparation for benefits $5,635,000
During the year ended June 30, 2012, the following transaction occurred:
The interest receivable on investments was collected in cash.
Member contributions in the amount of $400,000 were received in cash. The city’s General Fund also contributed $600,000 in cash.
Annuity benefits of $700,000 and disability benefits of $150,000 were recorded as liabilities.
Accounts payable and accrued expenses in the amount of $900,000 were paid in cash.
Interest income of $240,000 and dividends in the amount of $40,000 were received in cash. In addition, bond interest income of $140,000 was accrued at year-end.
Refunds of $130,000 were made in cash to terminated, nonvested participants.
Common stocks, carried at a fair value of $500,000, were sold for $480,000. That $480,000, plus an additional $300,000, was invested in stocks.
At year-end, it was determined that the fair value of stocks held by the pension plan had decreased by $50,000; the fair value of bonds had increased by $30,000.
Nominal accounts for the year were closed.
a.) Record the transactions on the books of the Employees’ Retirement Fund.
b.) Prepared a Statement of Changes in Net Assets for the Employees’ Retirement Fund for the Year Ended June 30, 2012.
c.) Prepare a Statement of Net Assets for the Employees’ Retirement Fund as of June 30, 2012.
Click here for the solution: The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer, defined benefit plan that provides annuity and disability benefits
Friday, August 21, 2015
T. Allen Home Improvement Company installs replacement siding, windows, and louvered glass doors for single family homes
P9-2 (Lower-of-Cost-or-Market) T. Allen Home Improvement Company installs replacement siding, windows, and louvered glass doors for single family homes and condominium complexes in northern New Jersey and southern New York. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2007, and Tim Taylor, controller for T. Allen, has gathered the following data concerning inventory. At May 31, 2007, the balance in T. Allen’s Raw Material Inventory account was $408,000, and the Allowance to Reduce Inventory to Market had a credit balance of $29,500. Taylor summarized the relevant inventory cost and market data at May 31, 2007, in the schedule below. Taylor assigned Patricia Richardson, an intern from a local college, the task of calculating the amount that should appear on T. Allen’s May 31, 2007, financial statements for inventory under the lower-of-cost or-market rule as applied to each item in inventory. Richardson expressed concern over departing from the cost principle.
Replacement Sales Net Realizable Normal
Cost Cost Price Value Profit
Aluminum siding $ 70,000 $ 62,500 $ 64,000 $ 56,000 $ 5,100
Cedar shake siding 86,000 79,400 94,000 84,800 7,400
Louvered glass doors 112,000 124,000 186,400 168,300 18,500
Thermal windows 140,000 122,000 154,800 140,000 15,400
Total $408,000 $387,900 $499,200 $449,100 $46,400
Instructions
(a) (1) Determine the proper balance in the Allowance to Reduce Inventory to Market at May 31, 2007.
(2) For the fiscal year ended May 31, 2007, determine the amount of the gain or loss that would be recorded due to the change in the Allowance to Reduce Inventory to Market.
(b) Explain the rationale for the use of the lower-of-cost-or-market rule as it applies to inventories
Click here for the solution: T. Allen Home Improvement Company installs replacement siding, windows, and louvered glass doors for single family homes
Replacement Sales Net Realizable Normal
Cost Cost Price Value Profit
Aluminum siding $ 70,000 $ 62,500 $ 64,000 $ 56,000 $ 5,100
Cedar shake siding 86,000 79,400 94,000 84,800 7,400
Louvered glass doors 112,000 124,000 186,400 168,300 18,500
Thermal windows 140,000 122,000 154,800 140,000 15,400
Total $408,000 $387,900 $499,200 $449,100 $46,400
Instructions
(a) (1) Determine the proper balance in the Allowance to Reduce Inventory to Market at May 31, 2007.
(2) For the fiscal year ended May 31, 2007, determine the amount of the gain or loss that would be recorded due to the change in the Allowance to Reduce Inventory to Market.
(b) Explain the rationale for the use of the lower-of-cost-or-market rule as it applies to inventories
Click here for the solution: T. Allen Home Improvement Company installs replacement siding, windows, and louvered glass doors for single family homes
Sunday, July 12, 2015
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.
Click here for the solution: On July 1, 2011, Ted, age 73 and single, sells his personal residence of the last 30 years for $365,000
Click here for the solution: On July 1, 2011, Ted, age 73 and single, sells his personal residence of the last 30 years for $365,000
Saturday, July 11, 2015
Denny Corporation, a manufacturing company, produces a single product
Denny Corporation, a manufacturing company, produces a single product. The following information has been taken from the company’s production, sales, and cost records for the just completed year:
Production in units 51,000
Direct labor $120,325
Raw materials purchased $325,019
Manufacturing overhead $250,265
Selling and administrative expenses $422,100
Raw Materials, Beginning $62,900
Raw Materials, Ending $45,345
Work in Process, Beginning $52,984
Work in Process, Ending $58,777
Prepare the Cost of Goods Manufactured Statement.
Click here for the solution: Denny Corporation, a manufacturing company, produces a single product
Production in units 51,000
Direct labor $120,325
Raw materials purchased $325,019
Manufacturing overhead $250,265
Selling and administrative expenses $422,100
Raw Materials, Beginning $62,900
Raw Materials, Ending $45,345
Work in Process, Beginning $52,984
Work in Process, Ending $58,777
Prepare the Cost of Goods Manufactured Statement.
Click here for the solution: Denny Corporation, a manufacturing company, produces a single product
Thursday, July 2, 2015
Herschel Candy Co. produces a single product: chocolate almond bar that sells for $0.40 per bar
Herschel Candy Co. produces a single product: chocolate almond bar that
sells for $0.40 per bar. Variable costs for each bar (sugar, chocolate,
almonds, wrapper and labor) total $0.25. Total Mo. Fixed costs are
$60,000. Last month, bar sales reached 1 million. Herschel's President
wants to increase company's profitability by following options:
1) increase advertising
2) Increase quality of bar's ingredients and simultaneously increase selling price
3) Increase selling price with no change in ingredients
1) increase advertising
2) Increase quality of bar's ingredients and simultaneously increase selling price
3) Increase selling price with no change in ingredients
a) Sales mgr. is confident intensive advertising campaign will double sales volume. If co.'s president goal is to increase this month's profits by 50% over last month's, what is max. amt. that can be spent on advertising that doubles sales volume?
b) Assume company increases quality of ingredients, thus increasing variable costs to $.30 per bar. By how much must selling price per unit be increased to maintain same breakeven point in units?
c) Assume next that company has decided to increase its selling price to $0.50 per bar with no change in advertising or ingredients. Compute sales volume in units that would be needed at new price for company to earn same profit as it earned last month.
Click here for the solution: Herschel Candy Co. produces a single product: chocolate almond bar that sells for $0.40 per bar
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