Tapley Dental Associates is considering a project that has the following cash flow data. What is the project's payback?

Tapley Dental Associates is considering a project that has the following cash flow data. What is the project's payback?

Year: 0 1 2 3 4 5

Cash flows: -$1,000 $300 $310 $320 $330 $340

 

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Thomas Magnum began operations as a private investigator on January 1, 2008. The trial balance columns of the worksheet for Thomas Magnum, P.I. at March 31 are as follows.

Thomas Magnum began operations as a private investigator on January 1, 2008. The trial balance columns of the worksheet for Thomas Magnum, P.I. at March 31 are as follows.

                                            

THOMAS MAGNUM, P.I., INC.

Worksheet

For the Quarter Ended March 31, 2008

Trial Balance

Account Titles Dr. Cr. 

Cash 11,400 Accounts Receivable 5,620 Supplies 1,050 Prepaid Insurance 2,400 Equipment 30,000 Notes Payable 10,000 Accounts Payable 12,350 Common Stock 20,000 Dividends 600 Service Revenue 13,620 Salaries Expense 2,200 Travel Expense 1,300 Rent Expense 1,200 Miscellaneous Expense 200 55,970 55,970

 

Other data:

1. Supplies on hand total $380.

2. Depreciation is $1,000 per quarter.

3. Interest accrued on 6-month note payable, issued January 1, $300.

4. Insurance expires at the rate of $200 per month.

5. Services provided but unbilled at March 31 total $530.

Instructions

(a) Enter the trial balance on a worksheet and complete the worksheet.

(b) Prepare an income statement and a retained earnings statement for the quarter and a classified balance sheet at March 31. No additional common stock was issued during the quarter ended March 31, 2008.

(c) Journalize the adjusting entries from the adjustments columns of the worksheet.

(d) Journalize the closing entries from the financial statement columns of the worksheet.

 

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Springfield Manufacturing produces electronic storage devices

Springfield Manufacturing produces electronic storage devices, and uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and indirect manufacturing costs. Total indirect manufacturing costs for January were $300 million, and were allocated to each product on the basis of direct manufacturing labor costs of each line. Summary data (in millions) for January for the most popular electronic storage device, the Big Bertha, was:

 

Big Bertha

Direct materials costs $9,000,000

Direct manufacturing labor costs $3,000,000

Indirect manufacturing costs $8,500,000

Units produced 40,000

Required:

A. Compute the manufacturing cost per unit for each product produced in January.

B. Suppose production will be reduced to 30,000 units in February. Speculate as to whether the unit costs in February will most likely be higher or lower than unit costs in January; it is not necessary to calculate the exact February unit cost. Briefly explain your reasoning.

 

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Scenario - Antonio Cleaning has asked you to help them determine the best method for allocating costs from their service departments to their producing departments

12-59 Allocating Costs Using Direct and Step-Down Methods

Goal: Create an Excel spreadsheet to allocate costs using the direct method and the stepdown method. Use the results to answer questions about your findings.

Scenario: Antonio Cleaning has asked you to help them determine the best method for allocating costs from their service departments to their producing departments.
Additional background information for your spreadsheet appears in Fundamental Assignment Material

12-B2. Exhibit 12-4 on page 532 illustrates the types of calculations that are used for allocating costs using the direct method and the step-down method.

Introduction to Management Accounting: Chapters 1-17, Fourteenth Edition, by Charles T. Horngren, Gary L. Sundem, William O. Stratton,

David Burgstahler, and Jeff Schatzberg. Published by Prentice Hall. Copyright © 2008 by Pearson Education, Inc.

Chapter 12: Cost Allocation 585

When you have completed your spreadsheet, answer the following questions:

1. What are the total costs for the Residential department using the direct method? What are the total costs for the Commercial department using the direct method?
2. What are the total costs for the Residential department using the step-down method?
3. What are the total costs for the Commercial department using the step-down method?
4. Which method would you recommend that Antonio Cleaning use to allocate their service departments’ costs to their producing departments? Why?

 

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Murdock Paints is in the process of evaluating two mutually exclusive additions to its processing capacity.

Murdock Paints is in the process of evaluating two mutually exclusive additions to its processing capacity. The firm’s financial analysts have developed pessimistic, most likely, and optimistic estimates of the annual cash inflows associated with each project. These estimates are shown in the following table. Project A Project B Initial investment (CF0) $8,000 $8,000 Outcome Annual cash inflows (CF) Pessimistic $ 200 $ 900 Most likely 1,000 1,000 Optimistic 1,800 1,100

a. Determine the range of annual cash inflows for each of the two projects.

b. Assume that the firm’ s cost of capital is 10% and that both projects have 20-year lives. Construct a table similar to this for the NPVs for each project. Include the range of NPVs for each project.

c. Do parts a and b provide consistent views of the two projects? Explain.

d. Which project do you recommend? Why?

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Completing the Accounting Cycle – Appendix G - XACC280 Assignment

Completing the Accounting Cycle – Appendix G - XACC280 Assignment

 

• Complete P4-5B on pp. 189 of Financial Accounting.

• Use the Excel Document – P4-5B, found in the Course Materials Forum, to complete the problem; complete all six tabs. (appendix G)

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13-49 Variances Study Appendix 13. Consider the following data regarding factory overhead Acc 561

13-49 Variances Study Appendix 13. Consider the following data regarding factory overhead Acc 561

 

Week 5 Question 13-49:

 

13-49 Variances Study Appendix 13. Consider the following data regarding factory overhead: Variable Fixed Budget for actual hours of input $45,000 $70,000 Applied 41,000 64,800 Budget for standard hours allowed for actual output achieved ? ? Actual incurred 48,500 68,500 Using the above data, fill in the following blanks with the variance amounts. Use F for favorable or U for unfavorable for each variance.

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