Refer to the data for Beech Corporation in Exercise 2. The company is considering making the following changes to the assumptions underlying its master budget: 1. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale. 2. Each month’s ending inventory must equal 20% of the cost of next month’s sales. 3. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All other information from Exercise 8–12 that is not mentioned above remains the same. Data given in Exercise 2: Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation balance sheet June 30 Assets Cash.................................................................... .......................$ 90,000 Accounts receivable ....................................................................136,000 Inventory........................................................................................62,000 Plant and equipment, net of depreciation..................................210,000 Total assets…………………………………..........................................$498,000 Liabilities and Stockholders’ Equity Accounts payable ............................................................................$ 71,100 Common stock.................................................................................327,000 Retained earnings ...........................................................................99,900 Total liabilities and stockholders’ equity ……………….................$498,000 Beech’s managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month’s ending inventory must equal 30% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $60,000. Each month $5,000 of this total amount is depreciation expense and the remaining $55,000 relates to expenses that are paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30. Required: Using the new assumptions described above, complete the following requirements: 1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30. 2. a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30. b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30. 3. Using Schedule 9 as your guide, prepare an income statement for the quarter ended September 30. 4. Prepare a balance sheet as of September 30.
> The following expenditures were among those a not-for-profit botanical society incurred during 20X4: What amount should be classified as fund-raising costs in the society’s activity statement? a. $0 b. $5,000 c. $35,00
> In July 20X2, Ross donated $200,000 cash to a church with the stipulation that the revenue generated from this gift be paid to him during his lifetime. The conditions of this donation are that after Ross dies, the church may use the principal for any pur
> Roberts Foundation received a nonexpendable endowment of $500,000 in 20X3 from Multi Enterprise and invested it in publicly traded securities. Multi did not specify how gains and losses from dispositions of endowment assets were to be treated. No restric
> In 20X1, a not-for-profit trade association enrolled five new member companies, each of which was obligated to pay nonrefundable initiation fees of $1,000. The association received these fees in 20X1. Three of the new members paid the initiation fees in
> On January 2, 20X2, a not-for-profit botanical society received a gift of an exhaustible fixed asset with an estimated useful life of 10 years and no salvage value. The donor’s cost of this asset was $20,000, and its fair market value at the date of the
> Tower Inc. advises you that it is facing bankruptcy proceedings. As the company’s CPA, you are aware of its condition. Tower’s balance sheet on December 31, 20X1, and supplementary data follow: Additional Information
> A client has joined other creditors of Jet Company in a composition agreement seeking to avoid a bankruptcy proceeding against Jet. Which statement describes the composition agreement? a. It provides for the appointment of a receiver to take over a
> Penn Inc.’s assets have the carrying values and estimated fair values as follows: Penn’s debts follow: Required: a. Prepare a schedule to calculate the net estimated amount available for general unsecured creditor
> Atwater Health Services, a voluntary health and welfare organization, has provided support for families with low income in the town of Atwater for approximately 20 years. In 20X6, it conducted a major funding campaign to help replace facilities that are
> The plan of reorganizing for Taylor Companies, Inc., was approved by the court, stockholders, and creditors on December 31, 20X1. The plan calls for a general restructuring of all of Taylor’s debt. The company’s liabil
> The following are the 20X2 transactions of the Midwest Heart Association, which has the following funds and fund balances on January 1, 20X2: 1. Had Unrestricted pledges totaling $700,000, of which $150,000 is for 20X3 and uncollectible pledges esti
> A trustee has been appointed for Pace Inc., which is being liquidated under Chapter 7 of the Bankruptcy Code. The following occurred after the assets were transferred to the trustee: 1. Sales on account by the trustee were $75,000. Cost of goods sold w
> WorldCom Inc. was one of the largest companies to file for bankruptcy. This case requires the analysis of WorldCom’s December 31, 2002, 10-K filed with the Securities and Exchange Commission. The 10-K can be obtained through EDGAR (w ww.sec.gov) or some
> Your client is insolvent under the federal bankruptcy law. Under the circumstances a. So long as the client can meet current debts or claims by its most aggressive creditors, a bankruptcy proceeding is not possible. b. Your CPA firm need not d
> Narco is in serious financial difficulty and is unable to meet current unsecured obligations of $30,000 to some 14 creditors who are demanding immediate payment. Narco owes Johnson $5,000, and Johnson has decided to file an involuntary petition against N
> The order of payments for unsecured priority claims in a Chapter 7 bankruptcy case is such that a. Tax claims of governmental units are paid before claims for administrative expenses incurred by the trustee. b. Tax claims of governmental units
> The highest priority for payment of unsecured claims in a bankruptcy proceeding is a. Administrative expenses of the bankruptcy. b. Unpaid federal income taxes. c. Wages of each employee up to $10,000 earned within 180 days before the p
> The creditors of Lost Hope Company have had several meetings with the company’s management to discuss its financial difficulties. Lost Hope currently has a significant deficit in retained earnings and has defaulted on several of its debt issues. The opti
> Shimada Products Corporation of Japan is anxious to enter the electronic calculator market. Management believes that in order to be competitive in world markets, the price of the electronic calculator that the company is developing cannot exceed $15. Shi
> Refer to the financial statements for Castile Products, Inc., in Exercise 15–8. In addition to the data in these statements, assume that Castile Products, Inc., paid dividends of $2.10 per share during the year. Also assume that the company’s common stoc
> Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 800,000 shares of common stock were outstanding. Th
> Refer to the data in Exercise 1 for Weller Corporation. Data given in Exercise 1: Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common st
> Refer to the data in Exercise 1 for Weller Corporation. Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A tot
> Refer to the data in Exercise 1 for Weller Corporation. Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A tot
> Refer to the data in Exercise 1 for Weller Corporation. Data given in Exercise 1: Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common st
> Martin Company uses the absorption costing approach to cost-plus pricing.It is considering the introduction of a new product. To determine a selling price, the company has gathered the following information: Number of units to be produced and sold each
> Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per unit): The company estimates that it can sell 800 units of each product per month. The same raw material is used in each product. The ma
> Futura Company purchases the 40,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $8.40 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starter
> Portsmouth Company makes fine colonial reproduction furniture. Upholstered furniture is one of its major product lines and the bottleneck on this production line is time in the upholstery shop. Upholstering is a craft that takes years of experience to ma
> Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company’s most popular models appear below. Required: 1. If we assume that the total time available on the plastic injection mo
> Imperial Jewelers manufactures and sells a gold bracelet for $189.95.The company’s accounting system says that the unit product cost for this bracelet is $149.00 as shown below: Direct materials ........................................$ 84.00 Direct lab
> Svahn, AB, is a Swedish manufacturer of sailing yachts. The company has assembled the information shown below that pertains to two independent decision-making contexts called Case A and Case B: Case A: The company chronically has no idle capacity and the
> Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company’s Springfield Club reported the following results fo
> Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Janet Dunn, who has just been appointed general manager of the Westw
> Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. The production superintendent was pleased when he saw this report and commented: “T
> Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the foll
> Wallis Company manufactures only one product and uses a standard cost system.The company uses a predetermined plantwide overhead rate that relies on direct labor-hours as the allocation base. All of the company’s manufacturing overhead
> Refer to the data in Exercise 10–6. Assume that instead of producing 4,000 units during the month, the company produced only 3,000 units, using 14,750 pounds of material. (The rest of the material purchased remained in raw materials inv
> Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: During August, 5,750 hours of direct labor time were
> Refer to the data for Lavage Rapide in Exercises 9–10 and 9–13. Data given in Exercise 9-10: Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data
> Refer to the data for Lavage Rapide in Exercise 9–10. Also assume that the company’s actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed……………………………………………………………………..8,800 Rev
> Refer to the data for Lavage Rapide in Exercise 9–10. The company actually washed 8,800 cars in August. Exercise 9–10: Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility nea
> Refer to the data for Lavage Rapide in Exercise 9–10. The company actually washed 8,800 cars in August. Data given in Exercise 9-10: Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Mo
> Refer to the data for The Terminator Inc. in Exercise 9–6. A management intern has suggested that the budgeted revenues and costs should be adjusted for the actual level of activity in April before they are compared to the actual revenu
> Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company’s planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) ..........................
> Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information: Wolfpack Company Balance Sheet June 30 Assets Cash..................................................................
> Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below: Wheeling Company Balance Sheet September 30 Assets Cash.......................................................................................$ 59,000 Ac
> Hartwell Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. Its predetermined overhead rate includes $1,760,000 of fixed manufacturing overhead in the numerator and 44,000 dire
> The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: In addition, 6,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the be
> Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash...................
> Weller Company’s budgeted unit sales for the upcoming fiscal year are provided below: The company’s variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include adve
> Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. T
> Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 5%. For examp
> SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service,
> The following activities occur at Greenwich Corporation, a company that manufactures a variety of products. a. Receive raw materials from suppliers. b. Manage parts inventories. c. Do rough milling work on products. d. Interview and process new employees
> Refer to the data in Exercise 8. Assume that Minneapolis’ sales by major market are: The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost
> Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting job
> Athens Company is conducting a time-driven activity-based costing study in its Engineering Department. To aid the study, the company provided the following data regarding its Engineering Department and the customers served by the department: Required:
> Refer to the data in Exercise 6 for Chuck Wagon Grills. Assume in this exercise that the company uses absorption costing. Data from Exercise 6: Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Dir
> Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials ................................................................$9 Direct labor ...................................................
> Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format segmented income statement as shown below: Required: 1. Compute the companywide break-even point in dollar sales. 2. Co
> Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct materials…………………………. .............................$25 Direct labo
> Parker Products, Inc. is a manufacturer whose absorption costing income statement reported sales of $123 million and a net operating loss of $18 million. According to a CVP analysis prepared for management, the company’s break-even point is $115 million
> Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $500,000, 46%, and $10,000, respectively. The North Division’s contribution margin and
> Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown below: Required: 1. Compute the companywide break-even point in dollar sales. 2.
> Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: The company’s manufacturing overhead cost is applied to production on the basis of direct labor hours. A
> Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: The company’s manufacturing overhead cost is applied to production on the basis of direct labor hours. A
> Matheson Electronics has just developed a new electronic device it believes will have broad market appeal. The company has performed marketing and cost studies that revealed the following information: a. New equipment would have to be acquired to produce
> Bracey Company manufactures and sells one product. The following information pertains to the company’s first year of operations: Variable cost per unit: Direct materials ..................................................................$19 Fixed costs p
> Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: The company’s manufacturing overhead cost is applied to production on the basis of direct labor hours. A
> Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company’s factory; Jim is manager of the equipment maintenance department. The men ha
> O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials ...................................................
> O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials ...................................................
> The Excel worksheet form that appears below is to be used to recreate the main example in the text pertaining to Colonial Pewter Company. Download the workbook containing this form from Connect, where you will also receive instructions about how to use t
> The Excel worksheet form that appears below is to be used to recreate Example E and Exhibit 13–8. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form. Y
> The Excel worksheet form that appears below is to be used to recreate the example in the text related to Santa Maria Wool Cooperative. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this
> The Excel worksheet form that appears below is to be used to recreate the Review Problem pertaining to the Magnetic Imaging Division of Medical Diagnostics, Inc.Download the workbook containing this form from Connect, where you will also receive instruct
> The Excel worksheet form that appears below is to be used to recreate the main example in the text pertaining to Colonial Pewter Company. Download the workbook containing this form from Connect, where you will also receive instructions about how to use t
> The Excel worksheet form that appears below is to be used to recreate the Review Problem relating to Harrald’s Fish House. Download the workbook containing this form from Connect, where you will also receive instructions about how to us
> Ogilvy Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable cost per unit: Direct materials ............................................................$16 Fixe
> The Excel worksheet form that appears below is to be used to recreate the Review Problem related to Mynor Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form.
> The Excel worksheet form that appears below is to be used to recreate the Review Problem pertaining to Ferris Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet f
> The Excel worksheet form that appears below is to be used to recreate portions of Review Problem 1 relating to Dexter Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this wo
> Refer to the financial statements for Rusco Company in Problem 14–13. Because the Cash account decreased so dramatically during this year, the company’s executive committee is anxious to see how the income statement wo
> Refer.to.the.data.for.Carmono.Company.in.Exercise.14–6. Data.given.in.Exercise.14-6: Comparative.financial.statement.data.for.Carmono.Company.follow: For this year the company reported net income as follows: Sales…
> Refer to the data for Pavolik Company in Exercise 14–4. Data given in Exercise 14–4: The following changes took place last year in Pavolik Company’s balance sheet accounts: Long-term investments th
> Refer to the financial statements for Rusco Company in Problem 14–13. Because the Cash account decreased so dramatically during this year, the company’s executive committee is anxious to see how the income statement wo
> Refer to the data for Hanna Company in Exercise 14–2.The company’s income statement for the year appears below: Sales ...............................................................$350,000 Cost of goods sold ........
> Refer to the data for Carmono Company in Exercise 14–6. Data.given.in.Exercise.14-6: Comparative.financial.statement.data.for.Carmono.Company.follow: For this year the company reported net income as follows: Sales…
> Kelly Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable cost per unit: Direct materials .....................................................................$1
> Refer to the data for Pavolik Company in Exercise 14–4. Data given in Exercise 14–4: The following changes took place last year in Pavolik Company’s balance sheet accounts: Long-term investments tha
> Shimano Company has an opportunity to manufacture and sell one of two new products for a five year period. The company’s tax rate is 30% and its after-tax cost of capital is 14%. The cost and revenue estimates for each product are as fo
> Rosman Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Rosman estimated the following costs and revenues for the project: Cost of new equipment needed ………………………………………. $420,000 Sale of
> Lander Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Lander estimated the following costs and revenues for the project: Cost of equipment needed ……………………………………………….. $250,000 Working
> Winthrop Company has an opportunity to manufacture and sell a new product for a five-year period. To pursue this opportunity, the company would need to purchase a piece of equipment for $130,000. The equipment would have a useful life of five years and z
> Gaston Company is considering a capital budgeting project that would require a $2,000,000 investment in equipment with a useful life of five years and no salvage value. The company’s tax rate is 30% and its after-tax cost of capital is
> Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $200,000 in operating assets to produce and sell 16,000 units. Its required return on investment (ROI) in its operating assets
> Wilderness Products, Inc., has designed a self-inflating sleeping pad for use by backpackers and campers. The following information is available about the new product: a. An investment of $1,350,000 will be necessary to carry inventories and accounts rec
> The postal service of St. Vincent, an island in the West Indies, obtains a significant portion of its revenues from sales of special souvenir sheets to stamp collectors. The postal service purchases the souvenir sheets from a supplier for $0.80 each. St.
> Valmont Company has developed a new industrial piece of equipment called the XP–200. The company is considering two methods of establishing a selling price for the XP–200—absorption cost-plus pricing and value-based pricing. Valmont’s cost accounting sys
