Business
A manufacturer has an estimated practical capacity of 90,000 machine hours, and each unit requires two machine hours. The following data apply to a recent accounting period: Actual variable overhead$ 240,000 Actual fixed overhead$ 442,000 Actual machine hours worked 88,000 Actual finished units produced 42,000 Budgeted variable overhead at 90,000 machine hours$ 200,000 Budgeted fixed overhead$ 450,000 Of the following factors, the manufacturer's production volume variance is most likely to have been caused by: A. A wage hike granted to a production supervisor. B. A newly imposed initiative to reduce finished goods inventory levels. C. Acceptance of an unexpected sales order. D. Temporary employment of workers with lower skill levels than originally anticipated.
Fraud Investigators Inc. operates a fraud detection service. On March 31, 10 customers were billed for detection services totaling $21,000. On October 31, a customer balance of $1,300 from a prior year was determined to be uncollectible and was written off. On December 15, a customer paid an old balance of $760, which had been written off in a prior year. On December 31, $460 of bad debts were estimated and recorded for the year.Required:1. Prepare journal entries for each transaction above. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)a) Record the service revenue of $34,000 billed on account.TransactionGeneral JournalDebitCreditaB) Record the write-off of a certain customer account from a prior year which is not collectible totaling $1,950..TransactionGeneralDebitCreditC1.Record the reversal of the write-off of a $810 customer account.C2. Record the receiptof cash of $810 from the customer.D. Record the estimate bad debts of $590 for the year.2. Complete the following table, indicating the amount and effect (+ for increase, for decrease, and NE for no effect) of each transaction. Ignore income taxes.TransactionNet ReceivableNet SalesIncome From OperationABCDOption for A : NE, +/- 34,000, +34,000, -34,000Option for B : NE, +/- 1950, +1950, -1950Option for C: NE, +/- 810, +810, -810Option for D : NE, +/- 590, +590, -590
In the current year, a company paid interest of $40,000, had net capital expenditures of $300,000, and issued net new debt of $75,000. In addition, the company reported cash flow from operating activities of $600,000, cash flow from investing activities of ($250,000), and cash flow from financing activities of $65,000. The marginal tax rate is 35%. Compute the free cash flow to the firm. In the current year, a company paid interest of $40,000, had net capital expenditures of $300,000, and issued net new debt of $75,000. In addition, the company reported cash flow from operating activities of $600,000, cash flow from investing activities of ($250,000), and cash flow from financing activities of $65,000. The marginal tax rate is 35%. Compute the free cash flow to the firm.
Taxable income and pretax financial income would be identical for Skysong Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2019 2020 2021 Excess of revenues over expenses (excluding two temporary differences) $154,000 $191,000 $88,100 Installment gross profit collected 8,500 8,500 8,500 Expenditures for warranties (4,500) (4,500) (4,500) Taxable income $158,000 $195,000 $92,100 Pretax financial income 2019 2020 2021 Excess of revenues over expenses (excluding two temporary differences) $154,000 $191,000 $88,100 Installment gross profit recognized 25,500 -0- -0- Estimated cost of warranties (13,500) -0- -0- Income before taxes $166,000 $191,000 $88,100 The tax rates in effect are 2019, 40%; 2020 and 2021, 45%. All tax rates were enacted into law on January 1, 2019. No deferred income taxes existed at the beginning of 2019. Taxable income is expected in all future years. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016, 2017, and 2018.
Corinne is offered a job with a salary of $70,000, which she turns down to start her own business. She uses $20,000 of her own savings to help start the business, savings that had been providing her a return of $1,000 per year. Over her first year in business, Corinne collects total revenue of $180,000 and must cover explicit costs of $105,000. During her first year in business, Corinne's accounting profit is _____, and her economic profit is _____.
Indicate the effect each separate transaction has on investing cash flows.a. Sold a truck costing $42,500, with $23,000 of accumulated depreciation, for $9,000 cash. b. The sale results in a $10,500 loss. Sold a machine costing $11,600, with $8,500 of accumulated depreciation, for $6,000 cash. c. The sale results in a $2,900 gain. Purchased stock investments for $16,500 cash. The purchaser believes the stock is worth at least $31,000.
Playoff Corporation acquired 80% ownership of Stadium Corporation on January 1, 2010 for $160,000. On that date, the fair value of the noncontrolling interest was $40,000, and Stadium reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Playoff uses the equity method. On the date of acquisition, the fair value of Stadiums depreciable assets was $50,000 more than book value and those assets had a 10 year remaining life. The pre-closing trial balance data for Playoff and Stadium on December 31, 2014, included the following:Playoff books:Stadium books:Investment in Stadium Co. Stock$188,000Dividends Declared$ 10,000Income from Subsidiary 20,000Common Stock 100,000Retained Earnings 90,000Net Income for the year 30,000Required: a. Provide all the journal entries recorded by Playoff during 2014 related to their investment in Stadium.Investment in Stadium24,000 Income from S24,000Cash8,000 Investment in Stadium8,000Income from S4,000 Investment in Stadium4,000b. Provide all workpaper entries needed to prepare a consolidation workpaper as of December 31, 2014. CAD: FV 200 BV 150 = Diff 50 Dep assets 50 / 10 yr life = $5,000Common Stock 100,000Retained Earnings 90,000 Investment in Stadium152,000 Noncontrolling Interest 38,000Buildings and Equipment50,000 Accumulated Depreciation25,000 Investment in Stadium NCI