Smart owns multiple Burger restaurants. After months of struggling, one of the restaurants just must be closed, Smart knows that this loss will already cause a decrease in his reported net earnings, he decides to go ahead and charge a majority of the company's expenses to this business unit shut down. This is an example of ………. in earning Management
Q: Kenneth Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf…
A: Transaction price that should be computed for this agreement : Price + Performance bonus =…
Q: Required information [The following information applies to the questions displayed below.] Annin…
A: FIFO METHOD :— Under this method, equivalent units is calculated by adding equivalent units in…
Q: You have established your performance materiality for accounts payable and revenue; now you must…
A: Materiality is a concept used in accounting and auditing to determine the significance or importance…
Q: (Fair Value and Equity Method Compared) Blank Co. acquired 25% of the 500,000 shares of outstanding…
A: For accounting purposes, the valuation of investments can be done using the equity method and the…
Q: a. On October 1, the Business Students' Society (BSS) placed an order for 250 golf shirts at a unit…
A:
Q: The following adjusted trial balance at December 31 of Wilson Trucking Company. Account Title Cash…
A: Solution: Under closing entries, temporary accounts are closed to income summary and retained…
Q: The Solid Systems Company began operations on December 1, 2021. The unadjusted trial balance of the…
A: Closing journal entries are the journal entries that are recorded in the books of accounts at the…
Q: Required information [The following information applies to the questions displayed below.] Dengo…
A:
Q: A manufactured product has the following information for June. Standard Quantity and Cost 6 pounds @…
A: Standard hours is the number of hours estimated by the entity relating to the direct labor. These…
Q: Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the…
A: Direct costs are recorded as work in process, and indirect costs are recorded as manufacturing…
Q: Betty writes a check for $500 payable to Luanne and drawn on Union Planters Bank. Luanne indorses…
A: Dishonoured cheques are cheques that a bank on which is drawn declines to pay. There are a number of…
Q: The following adjusted trial balance at December 31 of Wilson Trucking Company. Account Title Cash…
A: Solution: Net income = Revenues - Expenses Ending owner's capital =Beginning owner's capital + Net…
Q: Qalvin Corporation, a MSME, reported the following gross income and expenses in 2022:…
A: Tax:- A tax is the compulsory payment which is imposed by the government on income and capital gain…
Q: Riverside Incorporated makes one model of wooden canoe. Partial information for it follows: Number…
A: MARGINAL COSTING INCOME STATEMENT Marginal Costing Income Statement is also known as Contribution…
Q: Miller Corporation produces a single product and has the following cost structure: Number of units…
A: Variable costing means that inventory is valued at variable manufacturing cost and fixed cost is…
Q: Hemlock Nutritional Supplements (HNS) provides you with the following accounting records on…
A: 1. Calculation of costs per unit for recent month A.Direct materials per unit = $126000/60000=$2.1…
Q: Drama Corporation uses the allowance method for estimating uncollectible accounts. Required:…
A: The journal entries are prepared to keep the record of day to day transactions of the business on…
Q: Crane Ltd. began operations in January 2023. On December 31, 2023, the end of its first year of…
A: Allowance for credit losses is the estimate of the total receivables that are doubtful of recovery.…
Q: Panamint Systems Corporation is estimating activity costs associated with producing disk drives,…
A: 1. Activity rate = estimated overhead / estimated cost driver Estimated Overhead Estimated…
Q: PROBLEM 3-16 Comprehensive Problem LO3-1, LO3-2, LO3-4 Gold Nest Company of Guandong, China, is a…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: York Corporation is using a predetermined overhead rate of $22.30 per machine-hour that was based on…
A: Predetermined overhead rate is a single rate calculated to allocate fixed manufacturing overhead.…
Q: Explain the difference between tax reliefs and tax credits. Giving at two examples for each that…
A: Individuals and businesses have to pay taxes on their income and earnings. The government provides…
Q: how to prepare the income statement for the above transactions
A: Income statement: It implies to a financial statement prepared by the business at the closing of…
Q: n May 1, 2022, Ella leases her condo to Fitz for a 12-month lease period starting May 1 for $1,000…
A: The rental income is one source of income and this is passive income. In rent some deposit is…
Q: In preparation for a proposed bond sale, the city manager of the City of Appleton requested that you…
A: CITY OF APPLETON Statement of Leegal Debt Margin December 31 Assessed Value of…
Q: 000 Suppose that you decide to borrow Installment Loan A: three-year loan at 6.3% Installment Loan…
A: Vehicles are purchased on monthly payments and these monthly payments carry the payment for interest…
Q: ABC Company employs a periodic inventory system and sells its inventory to customers for $20 per…
A: For accounting purposes, recording of inventory, purchases or sales details, ending inventory…
Q: 5. Firm A's share price drops by 60% of the dividend amount on the ex-dividend date. If the rate of…
A: 5. Let's assume that the dividend amount per share is $D$, and the initial share price before the…
Q: Could I also get the results for part D. through F.
A: The process of accounting for expenses involved in the manufacture of items is known as…
Q: TX, Inc., dominates the snack-food industry with its Salty Chip brand. Assume that TX purchased Taco…
A: In the books of VECTOR, INC.:- Particulars In millions In millions Purchase Price $5.8…
Q: A. What is total current assets on this company's balance sheet? B. What is the correct order for…
A: Current assets are the assets presented on the statement of financial position or the balance sheet…
Q: Blossom Inc. is a retailer operating in Calgary, Alberta, Blossom uses the perpetual inventory…
A: Inventory valuation refers to the process of assigning a monetary value to the inventory of a…
Q: Wildhorse Company has several processing departments. Costs to be accounted for in the Assembly…
A: Process costing is the technique that applies by the firms engaging in the production of similar…
Q: 5. Your great uncle recently died and left you $50,000 in his will. The lawyers tell will is complex…
A: Money has time value because value of money decreases with time due to the interest rat and…
Q: The following transactions apply to Walnut Enterprises for Year 1, its first year of operations:…
A: Note: As per our guidelines, we will solve the first three subparts. Journal entries: S. No.…
Q: An inexperienced accountant for Prestwick Company prepare the month of August, current year.…
A: Income statement refers to the statement which is being prepared by the company at the end of the…
Q: The Presley Corporation is about to go public. It currently has aftertax earnings of $7,700,000, and…
A: Earnings per share (EPS) is a financial ratio that measures the portion of a company's profit that…
Q: The comparative balance sheet of Iglesias Inc. for December 31, 20Y3 and 20Y2, is as follows: 1…
A: The cash flow statement assesses a corporation's ability to handle its cash balance, or how…
Q: The following data are available pertaining to Household Appliance Company's retiree health care…
A: Post retirement benefit obligation is an obligation Company has to pay to it's employees at the time…
Q: As of December 31, 2022, Sandy Beach had $8,300,000 in 5.0 percent serial bonds outstanding. Cash of…
A: Governmental accounting deals with the recording of governmental activities, it records income and…
Q: An investor purchased 478 shares of common stock, $25 par, for $19,598. Subsequently, 97 shares were…
A: Cost price per share = 19598 / 478 = $41 per share Gain / (Loss) on Sale of 97 share = (31-41)*97 =…
Q: Gandhi Ltd renders a promotional service to small retailing businesses. There are three levels of…
A: Contribution per unit is a financial metric used in accounting to measure the profitability of a…
Q: of $2,000. Gooch Company paid $480 for local advertising, which is reimbursable from Flint. of the…
A: Journal entry refers to the entries which records the transactions of the business into the books of…
Q: (A) Geronimo's Current Assets Total: (B) Geronimo's Noncurrent Assets Total: (C) Geronimo's Current…
A: A financial statement that shows a company's financial situation at a certain time is the balance…
Q: Discuss how characteristics of not-for-profit organizations differ from for-profit organizations in…
A: The primary objective of not-for-profit organizations is to serve a social or community need,…
Q: On January 1, 2022, Kristopher Co. issued ten-year bonds with a face value of $6,000,000 and a…
A: The bonds are the financial instruments of the business. The bonds are reported as long term…
Q: E6-13 (Algo) Determining the Effects of Credit Sales, Sales Discounts, and Sales Returns and…
A: Cost of goods sold, commonly known as COGS - is a part of the Income statement which represents the…
Q: Exercise 19-24 (Algorithmic) (LO. 3) On January 1 of the current year, Rhondell Corporation has…
A: Return on capital (ROC) measures a company's net income relative to the sum of its debt and equity…
Q: 1. Explain whether the following statement is true or false: "Responsiveness usually result to…
A: 1.The statement "Responsiveness usually result to effectiveness and efficiency" is generally true.…
Q: The Morrit Corporation has $480,000 of debt outstanding, and it pays an interest rate of 9%…
A: Lets understand the basics. Time intest earned ratio indicates operating income of the entity as…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Pick only one option: The owner of Tommy's Technicians has found that his shop is losing money and he is in jeopardy of going out of business. Sales have remained constant for quite some time and now he is looking at ways to cut expenses to stay in business. Which of the following expenses is his best choice to try to immediately reduce and save him meaningful dollars so he can remain in business? (Hint: First consider which ones he has ultimate control over?) Rent expense Utilities expense Payroll expense Shop insurance expense Advertising expenseConsider the following conversation between Leonard Bryner, president and manager of a firm engaged in job manufacturing, and Chuck Davis, certified management accountant, the firms controller. Leonard: Chuck, as you know, our firm has been losing market share over the past 3 years. We have been losing more and more bids, and I dont understand why. At first, I thought that other firms were undercutting simply to gain business, but after examining some of the public financial reports, I believe that they are making a reasonable rate of return. I am beginning to believe that our costs and costing methods are at fault. Chuck: I cant agree with that. We have good control over our costs. Like most firms in our industry, we use a normal job-costing system. I really dont see any significant waste in the plant. Leonard: After talking with some other managers at a recent industrial convention, Im not so sure that waste by itself is the issue. They talked about activity-based management, activity-based costing, and continuous improvement. They mentioned the use of something called activity drivers to assign overhead. They claimed that these new procedures can help to produce more efficiency in manufacturing, better control of overhead, and more accurate product costing. A big deal was made of eliminating activities that added no value. Maybe our bids are too high because these other firms have found ways to decrease their overhead costs and to increase the accuracy of their product costing. Chuck: I doubt it. For one thing, I dont see how we can increase product-costing accuracy. So many of our costs are indirect costs. Furthermore, everyone uses some measure of production activity to assign overhead costs. I imagine that what they are calling activity drivers is just some new buzzword for measures of production volume. Fads in costing come and go. I wouldnt worry about it. Ill bet that our problems with decreasing sales are temporary. You might recall that we experienced a similar problem about 12 years agoit was 2 years before it straightened out. Required: 1. Do you agree or disagree with Chuck Davis and the advice that he gave Leonard Bryner? Explain. 2. Was there anything wrong or unethical in the behavior that Chuck Davis displayed? Explain your reasoning. 3. Do you think that Chuck was well informedthat he was aware of the accounting implications of ABC and that he knew what was meant by cost drivers? Should he have been well informed? Review (in Chapter 1) the first category of the Statement of Ethical Professional Practice for management accountants. Do any of these standards apply in Chucks case?Recently, the owner of KFC Franchise decided to change how she compensated her top manager. Last year, the manager received a fixed salary of GHC50,000 and KFC made GHC110,000 in profits (excluding the manager’s compensation). She feared that her store’s performance was connected to the top manager shirking on the job and expected that changes to her top manager’s compensation structure would improve sales. Therefore, this year she decided to offer him a fixed salary of $40,000 plus 5 percent of the store’s profit. Since the change, the store is performing much better, and she forecasts profits this year to be $300,000 (again, excluding the manager’s compensation). Assuming the change of compensation is the reason for owner make (net of payment to her top manager) because of this change? Does the manager make more money under the new payment scheme?
- Recently, the owner of KFC Franchise decided to change how she compensated her top manager. Last year, the manager received a fixed salary of GHC50,000 and KFC made GHC110,000 in profits (excluding the manager’s compensation). She feared that her store’s performance was connected to the top manager shirking on the job and expected that changes to her top manager’s compensation structure would improve sales. Therefore, this year she decided to offer him a fixed salary of $40,000 plus 5 percent of the store’s profit. Since the change, the store is performing much better, and she forecasts profits this year to be $300,000 (again, excluding the manager’s compensation). Assuming the change of compensation is the reason fothe increased profits, and the forecast is accurate, how much more money will the owner make (net of payment to her top manager) because of this change? Does the manager make more money under the new payment scheme?A manager in your organization just received a special order at a price that is “below cost.” The manager points to the document and says, “These are the kinds of orders that will get you in trouble. Every sale must bear its share of the full costs of running the business. If we sell below our full cost, we'll be out of business in no time.” What do you think of this remark?You should use a financial calculator and Excel to solve the problems. Discuss the differences between efficiency and effectiveness. Why is it important for small business owners to understand the difference between profit and profitability? What financial ratio is used to determine profitability? Sam quit a $30,000-a-year job with a local heating and air conditioning firm to go into business for himself. After his first year in business, his accountant showed him an income statement that indicated Sam’s firm had a profit of $40,000. During this year Sam had drawn a salary of $20,000. What was Sam’s accounting profit, his entrepreneurial profit, and his opportunity cost? Explain the difference between accounting and entrepreneurial profit. Discuss the differences between operating and financial leverage. You are going to open a business making custom cabinets. You can sell each cabinet for $80. It takes a cabinet-maker approximately 45 minutes to make one cabinet. Each…
- Recently, the owner of a Trader Joe's franchise decided to change how she compensated her top manager. Last year, she paid him a fixed salary of $65,000, and her store made $120,000 in profits (not counting payment to her top manager). She suspected the store could do much better and feared the fixed salary was causing her top manager to shirk on the job. Therefore, this year she decided to offer him a fixed salary of $30,000 plus 15 percent of the store's profits. Since the change, the store is performing much better, and she forecasts profits this year to be $280,000 (again, not counting the payment to her top manager). Assuming the change in compensation is the reason for the increased profits, and that the forecast is accurate, (a) Which compensation method (the old one or the new one) will the manager prefer? Please explain why. (b) Which compensation method (the old one or the new one) would the owner of the franchise prefer? Please explain why. (c) If there was another…Mr. Said started a new company in which he is providing cleaning services. He is looking to get business from big hotels in Salalah but struggling to get it, as he is new to this market. What should he do to overcome this problem? a. Make more marketing efforts to authenticate his small business b. Wait to get support from the government c. All of the options given d. Hire less workersEllie Ice-cream’s owner is disturbed by the poor profit performance of his ice cream counter. He has prepared the following profit analyses for the year just ended: The owner is thinking the elimination of this counter. If it is eliminated then: Depreciation of counter equipment is avoidable The supervisory salaries is avoidable The insurance expense is unavoidable The depreciation of building unavoidable The general overhead is unavoidable Required:a) Should the company eliminate the counter or not? Fill in the table and justify your answer. b) Mention at least three relevant costs.
- Anita Brown is the manager of a wholesale food company. Her compensation, in part, is incentive-based. In other words, the higher the company income, the higher her incentive compensation. Each year, in an effort to influence her bonus, Anita makes several recommendations, concerning adjusting entries, to the company controller. One of her favorites is to ask the controller to reduce the estimate of doubtful accounts.1. How does lowering the estimate of doubtful accounts affect the income statement and balance sheet?2. Is there an ethical consideration in this case? If so, what is it?3. Should Anita be permitted to weigh in on adjusting entries under these circumstances? Why or why not?Nunez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income for each store in 2014 is as follows: (Click to view the operating income for the stores.) The equipment has a zero disposal value. In a senior management meeting, Maria Lopez, the management accountant at Nunez Corporation, makes the following comment, "Nunez can increase its profitability by closing down the Rhode Island store." Is Maria Lopez Correct? Read the requirements. Requirement 1. By closing down the Rhode Island store, Nunez can reduce overall corporate overhead costs by $45,000. Calculate Nunez's operating income if it closes the Rhode Island store. Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. Begin by calculating Nunez's operating income if it closes the Rhode Island store. (Enter losses in revenues as a negative amount. Enter a "0" if the cost is Data Table (Loss in Revenues) Savings in Costs Revenues Connecticut…Day Street Deli’s owner is disturbed by the poor profit performance of his ice cream counter.He has prepared the following profit analysis for the year just ended: he owner is thinking the elimination of this counter. If it is eliminated then: ✓ Depreciation of counter equipment is avoidable ✓ The supervisory salaries is avoidable✓ The insurance expense is unavoidable ✓ The depreciation of building unavoidable ✓ The general overhead is unavoidable Required:a) Should the company eliminate the counter or not? Show your calculations and justify your answer.b) Mention at least three relevant costs.