(Solved):Q: A new company, i…

Question


A new company, is being established to manufacture and sell an electronic tracking device:
the Trackit. The owners are excited about the future profits that the business will generate.
They have forecast that sales will grow to 2,600 Trackits per month within five months and
will be at that level for the remainder of the first year.
The owners will invest a total of $250,000 in cash on the first day of operations (that is the
first day of July). They will also transfer non-current assets into the company.
Extracts from the company’s business plan are shown below.
Sales
The forecast sales for the first five months are:
Month Trackits (units)
July 1,000
August 1,500
September 2,000
October 2,400
November 2,600
The selling price has been set at $140 per Trackit.
Sales receipts
Sales will be mainly through large retail outlets. The pattern for the receipt of payment is
expected to be as follows:
Time of payment % of sales value
Immediately 15 *
One month later 25
Two months later 40
Three months later 15
The balance represents anticipated bad debts.
* A 4% discount will be given for immediate payment
Production
The budget production volumes in units are:
July August September October
1,450 1,650 2,120 2,460
5
Variable production cost
The budgeted variable production cost is $90 per unit, comprising:
$
Direct materials 60
Direct labour 10
Variable production overheads 20
Total variable cost 90
Direct materials: Payment for purchases will be made in the month following receipt of
materials. There will be no opening inventory of materials in July. It will be company policy to
hold inventory at the end of each month equal to 20% of the following month’s production
requirements.
Direct labour will be paid in the month in which the production occurs.
Variable production overheads: 65% will be paid in the month in which production occurs and
the remainder will be paid one month later.
Fixed overhead costs
Fixed overheads are estimated at $840,000 per annum and are expected to be incurred in
equal amounts each month. 60% of the fixed overhead costs will be paid in the month in
which they are incurred and 15% in the following month. The balance represents depreciation
of noncurrent assets.
Required:
a) Prepare a cash receipts budget schedule for each of the first three months
(July – September), including the total receipts per month. 
b) Prepare a material purchases budget schedule for each of the first three
months (July – September), including the total purchases per month. 
c) Prepare a cash budget for the month of July. Include the owners’ cash contributions 

(Solved):Q: Garrison Shops h…

Question
Garrison Shops had a SUTA tax rate of 3.7%. The state's taxable limit was $8,000 of each employee's earnings. For the year, Garrison Shops had FUTA taxable wages of $67,900 and SUTA taxable wages of $83,900. Compute:
Round your answers to the nearest cent.
a. Net FUTA tax
b. Net SUTA tax

Image Transcription

Garrison Shops had a SUTA tax rate of 3.7%. The state's taxable limit was $8,000 of each employee's earnings. For the year, Garrison Shops had FUTA taxable wages of $67,900 and SUTA taxable wages of $83,900. Compute: Round your answers to the nearest cent. a. Net FUTA tax b. Net SUTA tax

(Solved):Q: On January 1, 20…

Question

On January 1, 2018 ABC Corporation issued a five-year $1,000,000, 8%, at $1,250,000. Interest is paid annually on December 31. The market rate of interest is 5%.

a) Using the effective interest rate method, what is the interest expense at December 31, 2018? Interest Expense at December 31,2018 = $___________________________

B)What is the carrying value of the bond at December 31, 2018? Carrying value of bond on December 31, 2018 = $ ________________________

C)What is the carrying value of the bond at January 1, 2023? Carrying value of the bond at January 1, 2023 =$_________________________

(Solved):Q: A segmented inco…

Question

A segmented income statement for Smith & Eason’s Armory as shown below:

  Shield Club Tear Gas Grenade Total
Sales Revenue $ 400,000 $ 200,000 $ 300,000 $ 900,000
Less: Variable Expenses 225,000 120,000 250,000 595,000
Contribution Margin $ 175,000 $ 80,000 $ 50,000 $ 305,000
Less Direct Fixed Expenses:        
Machine Rent (5,000) (20,000) (50,000) (75,000)
Supervision (15,000) (10,000) (20,000) (45,000)
Depreciation (35,000) (10,000) (25,000) (70,000)
Segment Margin $ 120,000 $ 40,000 $ (45,000) $ 115,000

Refer to the information for Smith & Eason’s Armory above. Smith & Eason’s management is deciding whether to keep or drop the Tear Gas Grenade product line. Smith & Eason's’s mob control product line has a contribution margin of $50,000 (sales of $300,000 less total variable costs of $250,000). All variable costs are relevant. Relevant fixed  costs  associated  with  this line  include  80%  of  Tear Gas Grenade’s  machine  rent  and  all  of  Grenade’s supervision salaries.

Questions:

List factors that Smith & Eason  should consider in deciding whether to drop the Tear Gas Grenade line (at least 2 factors).

(Solved):Q: Help me do this …

Question
Help me do this revision from question 6 to question 13 . Thanks
Q.6 A debit may signify:
A) an increase in an asset account
B) a decrease in an asset account
C) an increase in a liability account
Q.7 The type of account with a normal credit balance is:
A) an asset
D) an increase in the owner's capital acount
B) drawing
C) a revenue
D) an expense
Q.8 A debit balance in which of the following accounts would indicate a likely error?
A) Account receivable B) CashC) Fee Earned
D) Miscellaneous Expense

Image Transcription

Q.6 A debit may signify: A) an increase in an asset account B) a decrease in an asset account C) an increase in a liability account Q.7 The type of account with a normal credit balance is: A) an asset D) an increase in the owner's capital acount B) drawing C) a revenue D) an expense Q.8 A debit balance in which of the following accounts would indicate a likely error? A) Account receivable B) CashC) Fee Earned D) Miscellaneous Expense

(Solved):Q: Use the net FUTA…

Question

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.

Ted Carman worked for Rivertide Country Club and earned $28,500 during the year. He also worked part time for Harrison Furniture Company and earned $12,400 during the year. The SUTA tax rate for Rivertide Country Club is 4.2% on the first $8,000, and the rate for Harrison Furniture Company is 5.1% on the first $8,000. Calculate the FUTA and SUTA taxes paid by the employers on Carman's earnings.

  FUTA SUTA
a.  Rivertide Country Club $fill in the blank 1 $fill in the blank 2
b.  Harrison Furniture Company $fill in the blank 3 $fill in the blank 4

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