As part of the year-end accounting process and review of operating policies, Cullen Co. is considering a change in the accounting for its equipment from the straight-line method to an accelerated method. Your supervisor wonders how the company will report this change in principle. He read in a newspaper article that the FASB has
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Explain why manufacturing overhead costs cannot be directly associated with any particular product, and how such costs are allocated to each of several company's products under the so-called traditional approach to overhead allocation.
1) Longhorn Company reports current E&P of $100,000 in 20X3 and accumulated E&P at the beginning of the year of negative $200,000. Longhorn distributed $300,000 to its sole shareholder on January 1, 20X3. The shareholder's tax basis in his stock in Longhorn is $100,000. How is the distribution treated by the shareholder in 20X3?
A. John Adams Company purchased equipment on January 1, 2011 for $90,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life. Instructions: Answer the following independent questions.
Discuss the allowance method and the direct write-off method of accounting for bad debts. When is the expense for uncollected accounts receivable recognized under each method? Respond to at least two of your classmates' postings. The allowance method takes a percentage of every sale or service and moves it to the allowance f
Please see attachment. My question is why did he use those rates highlighted in red. Margaret started her own business in the current year and will report a profit for her first year. Her results of operations are as follows: Gross income $50,000 Travel $1,000 Transportation 6,173 miles, using standard mileage method
37) Waco's Widgets plans to sell 22,000 widgets during May, 19,000 units in June, and 20,000 during July. Waco keeps 10% of the next month's sales as ending inventory. How many units should Waco produce during June? A. 19,000 B. 21,000 C. 19,100 D. 18,900 38) Looker Hats is planning to sell 600 felt hats, and 70
10) Which would be an appropriate cost driver for the ordering and receiving activity cost pool? A. Inspections B. Machine setups C. Machine hours D. Purchase orders 11) Which of the following is NOT typical of traditional costing systems? A. Use of multiple cost drivers to allocate overhead B. Use of a
Luca Company over applied manufacturing overhead during 2006. Which one of the following is part of the year end entry to dispose of the over applied amount assuming the amount is material? A. An increase to finished goods B. A decrease to work in process inventory C. An increase to cost of goods sold D. A decrease
The core values for this course are integrity and excellence. Applying the values of integrity and excellence, discuss ethical considerations of accounting for business combinations in a manner that prevents misunderstanding in the questions below. Business combinations have become an important strategic move by corporations
In corporations, accountants are responsible for identifying, measuring, recording, and communicating financial and other related information to all interested stakeholders. Write a substantial paragraph (200 to 300 words) answering the following questions. 1. Why are the values of responsible stewardship and integr
The partnership of Rachel, Adams and Nixon has the following trial balance on September 30,2012: Debits Credits Cash 20,000 Acc Receivable 30,000 Inventory
Net Income for Levin-Tom partnership for 2012 was 125000. Levin and Tom have agreed to distribute partnership net income according to the following plan. Levin Tom Interest on average capital balances
With respect to the three reports in comparison: Income Statement, Cash Flow Statement, and Balance Sheet how can I "zero" in, or in laymen's terms, do an efficient comparison. I cannot give too much detail. I am seeking the valuation method for Sears, Wal Mart & Target, including types of inventory and fiscal year-end dolla
ABC Corp. owns a piece of land and building a few miles from its headquarters. The land originally cost ABC $500,000 to purchase. ABC is considering using the facility for a new training program. It could also rent a building about the same distance from its headquarters for $20,000 a year. A developer has offered ABC $2.5 mill
Intermediate Accounting Botticelli Inc. was organized in late 2010 to manufacture and sell hosiery. At the end of its fourth year of operation, the company has been fairly successful, as indicated by the following reported net incomes. 2010 $140,000a 2011 $160,000b 2012 $205,000 2013 $276,000 a. Includes a $10,000 i
Question: REQUIRED: A. Materials price variance for each item. Materials price variance = (Act Rate - Std rate) * Actual Qty Materials price variance = (Act Rate - Std rate) * Actual Qty B. Materials quantity variance for each item. C. Labor rate variance. D. Labor efficiency variance. E. Budget variance. F. Volume
Could you please help me with the following question: A corporation had the following stock outstanding when the company's board of directors declared a $95,000 cash dividend the current year: Preferred stock, $100 par, 6%, 5,000 shares issued $ 500,000 Common stock, $10 par, 75,000 shares issued $
Chicago Company: Activity-Based Costing (ABC) vs Traditional Costing Systems, allocation base for the indirect manufacturing cost
I need some help in addressing the following questions: 1. What are some differences between activity-based costing and the traditional costing systems? 2. What are some of the reasons that activity-based costing may be resisted by top management? 3. Why are activity rates important to management? In your opinion, w
Resource: Feature Story on Super Bakery Inc. Read the attached feature story on Super Bakery Inc. 1. What strategies did the management of Super Bakery, Inc. use? 2. Why did Super Bakery's management think it was necessary to install an ABC system? Do you agree with their reasoning? If you disagree, identify your recomm
1. What is vertical analysis? When would you use vertical analysis instead of horizontal? Do companies use one or the other? Please explain. What about industry averages? How do people use industry averages for comparative analysis? 2. What are the formulas of the following liquidity ratios and their formulas and what do
Suppose that Helen's marginal income tax rate is 28 percent. Compare her after-tax income and her group medical costs under three scenarios: a. She receives $45,000 in salary and pays $2,500 for individual medical coverage. b. She receives $43,000 in salary and group medical coverage on a noncontributory basis with the emplo
A new cardiac catheterization lab was constructed. The investment for the lab was $450,000 in equipment costs and $50,000 in renovation costs. A desired return on investment is 12 percent. Once the lab was constructed, 5,000 patients were served in the first year and were charged $340, for each procedure. The annual fixed cost f
What are transfer prices? Discuss their major disadvantages.
Suzie Allbright, CPA, risk factors, effect on inherent risk, control risk and risk of material misstatement
Project Overview Suzie Allbright, CPA, is planning the audit of a newly obtained client, Phillips Energy, for the year ended December 31, 20xx. Phillips Energy is regulated by the state utility commission and because it is a publicly traded company, the audited financial statements must be filed with the Securities and Exchange
How do large corporations get away with paying very little taxes?
1. The stock of Cardinal Corporation is held as follows: 85% by Blue Jay Corporation (basis of $800,000) and 15% by Samuel (basis of $60,000). Cardinal Corporation is liquidated on October 20, 2009, pursuant to a plan adopted on January 9, 2009. Pursuant to the liquidation, Cardinal Corporation distributed Asset A (basis of $550
1. The December 31, 2009, balance sheet of the BCD General Partnership reads as follows. Basis FMV Cash Receivables Capital assets Total Ben, capital Cassie, capital Deidra, capital Total $180,000 -0- 42,000 $222,000 $ 74,000 74,000 74,000 $222,000 $180,000 90,000 63,000 $333,
Capitalized asset cost and first year depreciation, and identifying depreciation results that meet management objectives On January 3, 2012, Trusty Delivery Service purchased a truck at a cost of $90,000. Before placing the truck in service, Trusty spent $3,000 painting it, $1,500 replacing tires, and $4,500 overhauling the e
Accounting for petty cash transactions Suppose that on June 1, Rockin' Gyrations, a disc jockey service, creates a petty cash fund with an imprest balance of $500. During June, Michael Martell, fund custodian, signs the following petty cash tickets: Petty Cash ticket # Item Amount 1 Postage for package recei