(Solved):Q: Nature of Uncoll…

Question

Nature of Uncollectible Accounts

MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $562,947,000 and allowance for doubtful accounts of $89,602,000. Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, J&J reported accounts receivable of $11,260,000,000 and allowance for doubtful accounts of $275,000,000.

a.  Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM. Round your answer to one decimal place.
 %

b.  Compute the percentage of the allowance for doubtful accounts to the accounts receivable for Johnson & Johnson. Round your answer to one decimal place.
 %

c.  Possible reasons for the difference in the two ratios computed in (a) and (b) include:

  1. Casino operators historically lose money on operations.
  2. Casino operators have larger accounts receivable.
  3. Individuals who may have adequate creditworthiness could overextend themselves and lose more than they can afford if they get caught up in the excitement of gambling.
  4. Casino operations experience greater bad debt risk because it is difficult to control the creditworthiness of customers entering the casino.

 

(Solved):Q: nature’s Garden …

Question

nature’s Garden Inc., produces wood chips, wood pulp, and mulch.  These products are produced through harvesting trees and sending the logs through a wood chipper machine.  One batch of logs produces 20,304 cubic yards of wood chips, 14,100 cubic yards of mulch, and 9,024 cubic yards of wood pulp.  The joint production process costs a total of $32,000 per batch.  After the split-off point, wood chips are immediately sold for $ 25.00 per cubic yard while wood pulp and mulch are processed further.  The market value of the wood pulp and mulch at the split-off point is estimated to be $22.00 and $24.00 yard, after which it is sold for $ 30.00 per cubic yard.  The additional production process of the mulch costs $ 4.00 per cubic yard, after which it is sold for $ 32.00 per cubic yard.

Requirement:

Allocate the joint costs of production to each product using the net realizable value method.  Please use the Excel template provided to assist you in solving this problem.

(Solved):Q: The operating re…

Question

The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes a number of businesses, examples of which are indicated in parentheses.

Time Warner, Inc.
Segment Revenues
(in millions)
Turner (cable networks and digital media) $10,596  
Home Box Office (pay television) 5,615  
Warner Bros. (films, television, and videos) 12,993  

Assume that the variable costs as a percent of sales for each segment are as follows:

Turner 40%  
Home Box Office 35%  
Warner Bros. 25%  

a. Determine the contribution margin and contribution margin ratio. Enter amounts in millions. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to the nearest whole percent for each segment from the information given. Enter all amounts as positive numbers.

  Turner Home Box Office Warner Bros.
Revenues $   $   $
Variable costs            
Contribution margin $   $   $  
Contribution margin ratio (as a percent)   %   %   %

 

b. Does your answer to (b) mean that the other segments are more profitable businesses?

The higher contribution margin ratio of a segment should not be interpreted as being the   profitable segment. If the volume of business is not sufficient to exceed the break-even point, then the segments would be  . In the final analysis, the fixed costs also should be considered in determining the overall profitability of the segments. The   shows how sensitive the profit will be to changes in volume.

(Solved):Q: (a) Calculate an…

Question

(a) Calculate and Closing stock from the following information:-
Total sales Rs 600000
Gross Profit 25% on Sales
Stock Turnover Ratio = 5 times
Closing stock is Rs. 12000 more than opening stock
(b) Gross Profit Ratio of a company was 25%. Its cash sales were Rs. 200000 and its credit Sales was 90% of the total sales. If the indirect expenses of the Company were Rs. 20000. Calculate net Profit ratio.

(Solved):Q: ****** I am only…

Question

****** I am only having a hard time with steps 6 and 7. Those are the only two answers I'm getting wrong. Answers 1-5 I've already answered correctly. If I could just get help with steps 6 and 7 thank you.

Determine the number of sales (units) that would be necessary under

Break-Even Sales Under Present and Proposed Conditions

Darby Company, operating at full capacity, sold 124,200 units at a price of $108 per unit during the current year. Its income statement for the current year is as follows:

Sales     $13,413,600
Cost of goods sold     6,624,000
Gross profit     $6,789,600
Expenses:      
Selling expenses $3,312,000    
Administrative expenses 3,312,000    
Total expenses     6,624,000
Income from operations     $165,600

The division of costs between fixed and variable is as follows:

  Variable Fixed
Cost of goods sold 70%   30%  
Selling expenses 75%   25%  
Administrative expenses 50%   50%  

Management is considering a plant expansion program that will permit an increase of $1,188,000 in yearly sales. The expansion will increase fixed costs by $118,800, but will not affect the relationship between sales and variable costs.

Required:

1.  Determine the total variable costs and the total fixed costs for the current year. Enter the final answers rounded to the nearest dollar.

Total variable costs $8776800
Total fixed costs $4471200

2.  Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Enter the final answers rounded to two decimal places.

Unit variable cost $70.67
Unit contribution margin $37.33

3.  Compute the break-even sales (units) for the current year. Enter the final answers rounded to the nearest whole number.
 119775 units

4.  Compute the break-even sales (units) under the proposed program for the following year. Enter the final answers rounded to the nearest whole number.
 122957 units

5.  Determine the amount of sales (units) that would be necessary under the proposed program to realize the $165,600 of income from operations that was earned in the current year. Enter the final answers rounded to the nearest whole number.
 127394 units

6.  Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar.
$ __________

7.  If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year? Enter the final answer rounded to the nearest dollar.
$ __________

(Solved):Q: To what extent d…

Question

To what extent do you consider the following items to be proper costs of the fixed asset? Give reasons for your opinions.

a.    Overhead of a business that builds its own equipment.

b.    Cash discounts on purchases of equipment.

c.    Interest paid during construction of a building.

d.    Cost of a safety device installed on a machine.

e.    Freight on equipment returned before installation, for replacement by other equipment of greater capacity.

f.    Cost of moving machinery to a new location.

g.    Cost of plywood partitions erected as part of the remodeling of the office.

h.    Replastering of a section of the building.

i.    Cost of a new motor for one of the trucks.

(Solved):Q: The Company uses…

Question

The Company uses a periodic inventory system. For specific identification, ending inventory consists of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. (Round cost per unit to 2 decimal places.)

 
Laker Company reported the following January purchases and sales data for Its only product.
Date
Activities
Units Acquired at Cost
Units sold at Retail
Jan. 1 Beginning inventory
140 units @ $6.00 = $
840
Jan. 10 Sales
100 units @ 15
Jan. 20 Purchase
60 units @ $5.00 =
зее
Jan. 25 Sales
80 units @ $ 15
Jan. 30 Purchase
180 units @ $4.50 =
810
Totals
380 units
$1,950
180 units
Required:
The Company uses a perlodic inventory system. For specific Identification, ending Inventory consists of 200 units, where 180 are from
the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Determine the cost assigned to
ending Inventory and to cost of goods sold using (a) specific identification, (b) welghted average, () FIFO, and (d) LIFO.
Complete this question by entering your answers in the tabs below.
Weighted
Average
Specific Id
FIFO
LIFO
Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. (Round cost per unit to 2 decimal places.)
b) Weighted Average
Cost of Goods Available for Sale
Cost of Goods Sold
Ending Inventory
# of units Average
Average Cost of Goods
# of units Cost per Available for
Sale
# of units
sold
Average
Cost per
Unit
Cost of
Ending
Inventory
in ending
Cost
Goods Sold
unit
inventory
per unit
Beginning inventory
140
840
Purchases:
Jan. 20
60
300
Jan. 30
180
810

Laker Company reported the following January purchases and sales data for Its only product. Date Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning inventory 140 units @ $6.00 = $ 840 Jan. 10 Sales 100 units @ 15 Jan. 20 Purchase 60 units @ $5.00 = зее Jan. 25 Sales 80 units @ $ 15 Jan. 30 Purchase 180 units @ $4.50 = 810 Totals 380 units $1,950 180 units Required: The Company uses a perlodic inventory system. For specific Identification, ending Inventory consists of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Determine the cost assigned to ending Inventory and to cost of goods sold using (a) specific identification, (b) welghted average, () FIFO, and (d) LIFO. Complete this question by entering your answers in the tabs below. Weighted Average Specific Id FIFO LIFO Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. (Round cost per unit to 2 decimal places.) b) Weighted Average Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory # of units Average Average Cost of Goods # of units Cost per Available for Sale # of units sold Average Cost per Unit Cost of Ending Inventory in ending Cost Goods Sold unit inventory per unit Beginning inventory 140 840 Purchases: Jan. 20 60 300 Jan. 30 180 810

(Solved):Q: Martin Corporati…

Question

Martin Corporation is planning to issue 3,000 shares of its own $10 par value common stock for two acres of land to be used as a building site.

Instructions

a.    What general rule should be applied to determine the amount at which the land should be recorded?

b.    Under what circumstances should this transaction be recorded at the fair value of the land?

c.    Under what circumstances should this transaction be recorded at the fair value of the stock issued?

d.    Assume Martin intentionally records this transaction at an amount greater than the fair value of the land and the stock. Discuss this situation.

(Solved):Q: Walthman Industr…

Question

Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows:



Salesperson

Total
Sales

Variable Cost
of Goods Sold
Variable
Selling
Expenses
Case $610,000   $268,400   $109,800  
Dix 603,000   241,200   96,480  
Johnson 588,000   305,760   105,840  
LaFave 586,000   281,280   123,060  
Orcas 616,000   221,760   86,240  
Sussman 620,000   310,000   124,000  
Willbond 592,000   272,320   88,800  

Required:

1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. Round percents to the nearest whole number. Enter all amounts as positive numbers.

Walthman Industries Inc.
Salespersons' Analysis
For the Year Ended December 31
Salesperson Contribution Margin Variable Cost of Goods Sold as a Percent of Sales Variable Selling Expenses as a Percent of Sales Contribution Margin Ratio
Case $ % % %
Dix   % % %
Johnson   % % %
LaFave   % % %
Orcas   % % %
Sussman   % % %
Willbond   % % %

2. Which salesperson generated the highest contribution margin ratio for the year?

 

3. Identify the factors other than contribution margin that should be considered in evaluating the performance of salespersons.

  1. Rate of growth in sales for the current year compared with past years
  2. Years of experience for salespersons
  3. Size of sales territory
  4. Actual sales compared with budgeted sales
  5. All of the above
 

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