Question 1
Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree. Her goals for the next 11 months are to sell one mixer per month and to give two to three classes per week. The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with Kzinski that include shipping costs in the negotiated purchase price (mixers will be shipped FOB destination). Assume that Natalie has decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory. The following transactions occur in February to May 2008. Feb. 2 Natalie buys two deluxe mixers on account from Kzinski Supply Co. for $1,200 ($600 each), FOB destination, terms n/30. 16 She sells one deluxe mixer for $1,050 cash. 25 She pays the amount owed to Kzinski. Mar. 2 She buys one deluxe mixer on account from Kzinski Supply Co. for $618, FOB destination, terms n/30. 30 Natalie sells two deluxe mixers for a total of $2,300 cash. 31 She pays the amount owed to Kzinski. Apr. 1 She buys two deluxe mixers on account from Kzinski Supply Co. for $1,224 ($612 each), FOB destination, terms n/30. 13 She sells three deluxe mixers for a total of $3,450 cash. 30 Natalie pays the amounts owed to Kzinski. May 4 She buys three deluxe mixers on account from Kzinski Supply Co. for $1,875 ($573.33 each), FOB destination, terms n/30. 27 She sells one deluxe mixer for $1,150 cash. Instructions (a) Prepare jouranl entries for each of the transactions. (b) Determine the cost of goods available for sale. Recall from Chapter 5 that at the end of January, Cookie Creations had three mixers on hand at a cost of $595 each. (c) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, and (iv) gross profit rate under each of the following methods: LIFO, FIFO, and average cost. (d) Natalie is thinking of getting a bank loan. If this is the only factor Natalie hs to consider in choosing an inventory cost flow assumption, which cost flow assumption would you recommend that Natalie use? Why?,Actually, I submitted the incorrect one. How can I resubmit with the correct one?,Not sure if question went through but this is the incorrect assignment how can I submit the correct one?,Please do not do first assignment. This is the correct one.. see attachment. I only need help with CCC5,The correct assignment is attached. Do you have a way to respond that you have received the correct assignment? Or call 615-426-7723,Hello, please DO NOT work on assignment CCC6. Could you please email me at quiquort@yahoo.com. I have attached the correct assignment CCC5,Thanks. January 8th collected $450.00 from community center January 13th $75.00 cell bill January 28th $56.00 for assistant ( 7hours * $8.00 per hour),okay let me retrieve those and I will get them to you later.. I am at work and may not be able to access them from here.,This is the original assignment. As I do not have the final answers to show corrections or mistakes. My professor has not graded them so I am not sure if my work would be correct any way. My deadline to turn in CCC5 is Sunday Midnight CST. Continuing Cookie Chronicle (Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 3.) CCC4 Cookie Creations is gearing up for the winter holiday season. During the month of December 2009, the following transactions occur. Dec. 1 Natalie hires an assistant at an hourly wage of $8 to help with cookie making and some administrative duties. 5 Natalie teaches the class that was booked on November 25. The balance outstanding is received. 8 Cookie Creations receives a check for the amount due from the neighborhood school for the class given on November 30. 9 Cookie Creations receives $750 in advance from the local school board for five classes that the company will give during December and January. 15 Pays the cell phone invoice outstanding at November 30. 16 Issues a check to Natalie?s brother for the amount owed for the design of the website. 19 Receives a deposit of $60 on a cookie class scheduled for early January. 23 Additional revenue earned during the month for cookie-making classes amounts to $4,000. (Natalie has not had time to account for each class individually.) $3,000 in cash has been collected and $1,000 is still outstanding. (This is in addition to the December 5 and December 9 transactions.) 23 Additional supplies purchased during the month for sugar, flour, and chocolate chips amount to $1,250 cash. 23 Issues a check to Natalie?s assistant for $800. Her assistant worked approximately 100 hours from the time in which she was hired until December 23. 28 Pays a dividend of $500 to the common shareholder (Natalie). As of December 31, Cookie Creations? year-end, the following adjusting entry data are provided. 1. A count reveals that $50 of brochures and posters remain at the end of December. 2. Depreciation is recorded on the baking equipment purchased in November. The baking equipment has a useful life of 5 years. Assume that 2 months? worth of depreciation is required. 3. Amortization (which is similar to depreciation) is recorded on the website. (Credit the Website account directly for the amount of the amortization.) The website is amortized over a useful life of 2 years and was available for use on December 1. 4. Interest on the note payable is accrued. (Assume that 1.5 months of interest accrued during November and December.) Round to nearest dollar. 5. One month?s worth of insurance has expired. 6. Natalie is unexpectedly telephoned on December 28 to give a cookie class at the neighborhood community center on December 31. In early January Cookie Creations sends an invoice for $450 to the community center. 7. A count reveals that $1,025 of baking supplies were used. 8. A cell phone invoice is received for $75. The invoice is for services provided during the month of December and is due on January 15. 9. Because the cookie-making class occurred unexpectedly on December 28 and is for such a large group of children, Natalie?s assistant helps out. Her assistant worked 7 hours at a rate of $8 per hour. 10. An analysis of the unearned revenue account reveals that two of the five classes paid for by the local school board on December 9 still have not been taught by the end of December. The $60 deposit received on December 19 for another class also remains unearned. Instructions Using the information that you have gathered and the general ledger accounts that you have prepared through Chapter 3, plus the new information above, do the following. (a) Journalize the above transactions. (b) Post the December transactions. (Use the general ledger accounts prepared in Chapter 3.) (c) Prepare a trial balance at December 31, 2009. (c) Totals $8,160 (d) Prepare and post adjusting journal entries for the month of December. (e) Prepare an adjusted trial balance as of December 31, 2009. (f) Prepare an income statement and a retained earnings statement for the 2-month period ending December 31, 2009, and a classified balance sheet as of December 31, 2009. (g) Prepare and post closing entries as of December 31, 2009. (h) Prepare a post-closing trial balance. 2 chapter 4 Accrual Accounting Concepts (e) Totals $8,804 (f) Net income $3,211 (h) Totals $6,065,I have attached documentation. Thanks,Not sure if you got last message because I was at work. But I have attached the document for CCC4. Thanks
Question 2
Select for each relationship the most likely demand state for K14s climbing equipment. Question 10 answers The average number of sunny days in a year. Read Answer Items The number of rainy or snowy days in a year. Read Answer Items The price of a hotel room in the nearby resort village. Read Answer Items The mortgage rate for second homes in the nearby mountain village. Read Answer Items The price of a 3 day climbing tour. Read Answer Items Answer A. Direct B. Inverse C. Join Match these statements with the proper category. Question 9 answers "K14 is the only climbing store at the base of the Crystal Peak Trail." Read Answer Items "We will decorate our store to resemble a cozy lodge where hikers and climbers can gather to share stories and relax." Read Answer Items "Our store manager is famous in the climbing circuit and he will leverage his contacts to arrange for celebrity climbers to visit our store to sign autographs and conduct climbing workshops with our customers." Read Answer Items "In order to create awareness for Grand Opening, we will host a rock climbing contest in our new in-door climbing center." Read Answer Items Answer A. Esteem B. Differentiation C. Knowledge D. Relevance "Our service goals are simple and easy to maintain. We will make plain our policy that we do not accept returns or exchanges without receipt and proof of product failure. We are in this to make money, as a business, and cannot afford to give our value to free riders or people with 'buyer's remorse', who choose not to take responsibility for their purchase(s)." Based on K14s strict return policy, which AMA Gap do you expect the company will be dealing with frequently? Question 8 answers Manage Create Deliver Research Which companies are included in K14s industry? Question 7 answers All companies that sell outdoor gear. All companies that make mannequins, retail fixtures, and cash registers. All companies that manufacture parts and material that are used in the manufacture of outdoor gear. All companies that manage outdoor adventure tours. All companies that manufacture outdoor gear.
Question 3
Professor Message Hello Class, Here is some guidance for the Reeby case study in week 1. The spreadsheet accompanying this solution sets out a forecast in the same general format as Table 4.5. Historical results from 2005 to 2010 are also shown. Earnings per share (EPS) equals return on equity (ROE) times starting book value per share (BVPS). EPS is divided between dividends and retained earnings, depending on the dividend payout ratio. BVPS grows as retained earnings are reinvested. The keys to Reeby Sports? future value and growth are profitability (ROE) and the reinvestment of retained earnings. Retained earnings are determined by dividend payout. The spreadsheet sets ROE at 15% for the five years from 2012 to 2016. If Reeby Sports will lose its competitive edge by 2017, then it cannot continue earning more than its 10% cost of capital. Therefore ROE is reduced to 10% starting in 2017. The payout ratio is set at .30 from 2012 onwards. Notice that the long-term growth rate, which settles in between 2017 and 2018, is ROE ? ( 1 ? dividend payout ratio) = .10 ? (1 - .30) = .07. Now, just compute the horizon value for 2016 using the constant growth formula. Respectfully, Dr. Cavendish Ten years ago, in 2011, George Reeby founded a small mail-order company selling high-quality sports equipment. Since those early days Reedy Sports has grown steadily and been consistently profitable. The company has issued 2 million shares, all of which are owned by George Reeby and his five children. For some months George has been wondering whether the time has come to take the company public. This would allow him to cash in on part of his investment and would make it easier for the firm to raise capital should it wish to expand in the future. But how much are the shares worth? George?s first instinct is to look at the firm?s balance sheet, which shows that the book value of the equity is $26.34 million, or $13.17 per share. A share price of $13.17 would put the stock on a P/E ratio of 6.6. That is quite a bit lower than the 13.1 P/E ratio of Reeby?s larger rival, Molly sports. George suspects that book value is not necessarily a good guide to share?s market value. He thinks of his daughter Jenny, who works in an investment bank. She would undoubtedly know what the shares are worth. He decides to phone her after she finishes work that evening at 9 o?clock or before she starts the next day at 6:00 a.m. Before phoning, George jots down some basic data on the company?s profitability. After recovering from its early losses, the company has earned a return that is higher than its estimate 10% cost of capital. George is fairly confident that the company could continue to grow fairly steadily for the next six to eight years. In fact he feels that the company went public, it could hold back on dividends and plow more money back into the business. There are some clouds on the horizon. Competition is increasing and only that morning Molly Sports announced plans to form a mail-order division. George is worried that beyond the next six or so years it might become difficult to find worthwhile investment opportunities. George realizes that Jenny will need to know much more about the prospects for the business before she can put a final figure on the value of Reeby Sports, but he hopes that the information is sufficient for her to give a preliminary indication of the value of the shares. 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E Earnings per share, $ -2.10 -0.70 0.23 0.81 1.10 1.30 1.52 1.64 2.00 2.03 Dividend, $ 0.00 0.00 0.00 0.20 0.20 0.30 0.30 0.60 0.60 0.80 Book value per share, $ 9.80 7.70 7.00 7.61 8.51 9.51 10.73 11.77 13.17 14.40 ROE, % -27.10 -7.10 3.0 11.6 14.5 15.3 16.0 15.3 17.0 15.4 Q1. Help Jenny to forecast dividend payments for Reeby Sports and to estimate the value of the stock. You do not need to provide a single figure. For example, you may wish to calculate two figures, one on the assumption that the opportunity for further profitable investment is reduced in year 6 and another on the assumption that it is reduced in year 8. Q2. How much of your estimate of the value of Reeby?s stock comes from the present value of growth opportunities?
Question 4
1. Activity-based costing systems and traditional costing systems will produce the same results for product cost and profitability, although they use different methods of calculation. (Points : 1) True False 2. The first step in the activity-based costing system is to identify each activity and its total indirect cost. (Points : 1) True False 3. Peterson Company has both fixed and variable costs. If the volume doubles, the total fixed costs will double. (Points : 1) True False 4. Peterson Company has both fixed and variable costs. If the volume doubles, the total variable costs will double. (Points : 1) True False 5. Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. There are no direct labor costs. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $ .08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is the total manufacturing cost per ceiling fan? (Points : 1) $125.75 $121.13 $115.32 $124.30 None of these is correct 6. Two main benefits of activity-based costing are more accurate product cost information and more detailed information on costs of activities and the drivers of these costs. (Points : 1) True False 7. Jurassic Manufacturers produces flooring material. Fixed costs are $5,000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $5,000, how many units need to be sold? (Points : 1) 500 300 450 350 8. Activity-based management refers to using activity-based cost information to make decisions that increase profits while satisfying customers' needs. (Points : 1) True False 9. Jurassic Manufacturers produces flooring material. Fixed costs are $5,000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $2,000, how many units need to be sold? (Points : 1) 270 300 320 350 10. Equival Company wishes to sell truck axles to car manufacturers. The current market price of the axles is $400, and Equival knows it must accept the market price. Currently, it costs the company $330 to produce each axle. The company wishes to make a profit equal to 20% of the price. Which of the following strategies should Equival adopt to achieve its objective? (Points : 1) Raise the price to $410. Reduce its production costs by $10 per unit. Increase the production costs by $20 per unit. Use advertising to increase the volume of sales.
Question 5
40. The City of Pfeiffer starts the year of 2010 with the General Fund and an enterprise fund. The General Fund has two activities: education and parks/recreation. For convenience, assume that the General Fund holds $123,000 cash and a new school building costing $1 million. The city utilizes straight-line depreciation. The building has a 20-year life and no salvage value. The enterprise fund has $62,000 cash and a new $600,000 civic auditorium with a 30-year life and no salvage value. The enterprise fund monitors just one activity, the rental of the civic auditorium for entertainment and other cultural affairs. The following transactions for the city take place during 2010. Assume that the city?s fiscal year ends on December 31. a. Decides to build a municipal park and transfers $70,000 into a capital projects fund and imme-diately expends $20,000 for a piece of land. The creation of this fund and this transfer were made by the highest level of government authority. b. Borrows $110,000 cash on a long-term bond for use in creating the new municipal park. c. Assesses property taxes on the first day of the year. The assessment, which is immediately en-forceable, totals $600,000. Of this amount, $510,000 will be collected during 2010 and another $50,000 is expected in the first month of 2011. The remainder is expected about halfway through 2011. d. Constructs a building in the park in (b) for $80,000 cash for playing basketball and other sports. It is put into service on July 1 and should last 10 years with no salvage value. e. Builds a sidewalk around the new park for $10,000 cash and puts it into service on July 1. It should last for 10 years, but the city plans to keep it up to a predetermined quality level so that it will last almost indefinitely. f. Opens the park and charges an entrance fee of only a token amount so that it records the park, therefore, in the General Fund. Collections during this first year total $8,000. g. Buys a new parking deck for $200,000, paying $20,000 cash and signing a long-term note for therest. The parking deck, which is to go into operation on July 1, is across the street from the civicauditorium and is considered part of that activity. It has a 20-year life and no salvage value h. Receives a $100,000 cash grant for the city school system that must be spent for school lunchesfor the poor. Appropriate spending of these funds is viewed as an eligibility requirement of thisgrant. During the current year, $37,000 of the amount received was properly spent. i. Charges students in the school system a total fee of $6,000 for books and the like. Of thisamount, 90 percent is collected during 2010 with the remainder expected to be collected in thefirst few weeks of 2011. j. Buys school supplies for $22,000 cash and uses $17,000 of them. The General Fund uses the purchases method. k. Receives a painting by a local artist to be displayed in the local school. It qualifies as a work of art, and officials have chosen not to capitalize it. The painting has a value of $80,000. It isviewed as inexhaustible. l. Transfers $20,000 cash from the General Fund to the Enterprise Fund as a capital contribution. m. Orders a school bus for $99,000. n. Receives the school bus and pays an actual cost of $102,000. The bus is put into operation onOctober 1 and should last for five years with no salvage value. o. Pays salaries of $240,000 to schoolteachers. In addition, owes and will pay $30,000 during thefirst two weeks of 2011. Vacations worth $23,000 have also been earned but will not be takenuntil July 2011. p. Pays salaries of $42,000 to city auditorium workers. In addition, owes and will pay $3,000 in thefirst two weeks of 2011. Vacations worth $5,000 have also been earned but will not be taken untilJuly 2011. q. Charges customers $130,000 for the rental of the civic auditorium. Of this balance, collected $110,000 in cash and will collect the remainder in April 2011. r. Pays $9,000 maintenance charges for the building and sidewalk in (d) and (e). s. Pays $14,000 on the bond in (b) on the last day of 2010: $5,000 principal and $9,000 interest. t. Accrues interest of $13,000 on the note in (g) as of the end of 2010, an amount that it will pay in June 2011. u. Assumes that a museum that operates within the city is a component unit that will be discretely presented. The museum reports to city officials that it had $42,000 of direct expenses this pastyear and $50,000 in revenues from admission charges. The only assets that it had at year-end were cash of $24,000, building (net of depreciation) of $300,000, and a long-term liability of $210,000. Prepare the 2010 government-wide financial statements for this city. Assume the use of the modified approach.
