Continuous Problem - City of Monroe
The Balance Sheets of the General Fund and the Street and Highway Fund of the City of Monroe as of December 31, 2016, follow. These (beginning) balances have been entered in the proper general ledger accounts, as of 1/1/2017.
CITY OF MONROE
Assume your company is involved in a major lawsuit and the probable damages are estimated to be $2,000,000.
A. Describe the effects damage estimates would have on the financial statements of a corporation and a partnership.
B. How do disclosure requirements differ from a corporation to a partners...
VI. Statement of Changes in Financial Position
A. From the perspective of an investor, determine whether or not you would invest in your chosen company based on the company's statement of changes in financial position (SCFP). Support your opinion.
The return on assets is very low, under 3% in e...
I recently read in a financial magazine an article that indicated that the airline industry has poor financial flexibility.
What is meant by financial flexibility?
Why financial flexibility is important for the airline industry?
How can the airline industry as a whole to improve their financial...
Dialyze USA is considering opening a new branch dialysis and infusion center in a suburban free-standing strip center. Dialyze USA is a for-profit corporation, thus subject to income taxes.
Equipment and fixtures for the center will cost $2,000,000 and be depreciated to $0 over a 5-year period o...
Nordic Company issued bonds with the following provisions
Maturity value: $60,000,000.
Interest: 7.9 percent per annum payable semi-annually each June 30 and December 31.
Terms: Bonds dated January 1, 2017, due five years from that date.
The company's fiscal year ends on December 31. The bonds w...
Jeff Robinson is a real estate developer who specializes in residential apartments.
A complex of 40 run-down apartments has recently come on the market for $645,500.
Robinson predicts that after remodeling, the 20 one-bedroom units will rent for $500 per
month and the 20 two-bedroom apartments fo...
A company has adopted the following policies regarding merchandise purchases
and inventory. At the end of any month, the inventory should be $18,500 plus 80% of the cost
of goods to be sold during the following month. The cost of merchandise sold averages 75%
of sales. Purchase terms are generall...
EnterTech has noticed a significant decrease in the profitability of its line of portable CD players.
The production manager believes that the source of the trouble is old, inefficient equipment used
to manufacture the product. The issue raised, therefore, is whether EnterTech should (1) buy new
The division managers of Chester Construction Corporation submit capital investment proposals
each year for evaluation at the corporate level. Typically, the total dollar amount requested by the
divisional managers far exceeds the company's capital investment budget. Thus, each proposal is
Pack & Carry is debating whether to invest in new equipment to manufacture a line of high-quality
luggage. The new equipment would cost $1,728,125, with an estimated five-year life and no salvage
value. The estimated annual operating results with the new equipment are as follows:
Revenue from s...
You are the manager of the Midwest Region, a 27-restaurant division that is part of the chain "Bites
and Bits." The restaurants offer casual dining and compete with such chains in your region as
Olive Garden and Outback Steakhouse . You receive an annual cash bonus of 5 percent of sales
Jennifer Baskiter is president and CEO of Plants& More.com , an Internet company that sells plants
and flowers. The success of her startup Internet company has motivated her to expand and create
two divisions. One division focuses on sales to the general public and the other focuses on
AgriChem Industries manufactures fertilizer concentrate and uses cost standards. The fertilizer
is produced in 500-pound batches; the normal level of production is 250 batches of fertilizer per
month. The standard costs per batch are as follows:
Gumchara Corporation reported the following information with respect to the materials required to
manufacture amalgam florostats during the current month:
Standard price per gram of materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4
Standard quantity of materials ...
On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget
for March, April, and May. All of the company's sales are made on account. The following information
has been provided by Spicer's management:
Month Credit Sales
Jan. . . . . . . . . . . . . . . . ...
The president of Cold Moo Ice Cream Company, a chain of ice cream stores in the Midwest, was
unhappy with the actual six-month profit figures for the company recently prepared by the CFO.
The president asked the CFO for a profit breakdown, by store, of the actual six-month results.
When the presi...
Listed below are nine technical accounting terms introduced in this chapter:
Variable costs Relevant range Contribution margin
Break-even point Fixed costs Semivariable costs
Economies of scale Sales mix Unit contribution margin
Each of the following statements may (or may not) describe one of t...
MURDER TO GO! writes and manufactures murder mystery parlor games that it sells to retail
stores. The following is per-unit information relating to the manufacture and sale of this product:
Unit sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
The idea of the predetermined overhead analysis is an important one for fixed costs. The first is a comparison of actual fixed to actual budget. How would this change in the given range of plant production? The actual could change by an increase in insurance costs in the year or supervisor salaries...
Schmeltz Industries organized in January and recorded the following transactions during its first months of operation:
Jan. 5 Purchased materials on account for $800,000.
Jan. 9 Used materials costing $450,000 on job no. 1001.
Jan. 14 Used materials costing $200,000 on job no. 1002.
Assume you have just been hired as the management accountant in charge of providing your firm's
managers with product cost information. Identify the activities you might undertake for the following
four value chain components:
a. Research and development
Accessory World makes floor mats for the automobile industry. Finished sets of mats must pass
through two departments: Cutting and Coating. Large sheets of synthetic material are cut to size in
the Cutting Department and then transferred to the Coating Department, where each set is sprayed
Spear Custom Furniture uses an activity-based cost accounting system to apply overhead to production.
The company maintains four overhead cost pools. The four cost pools, and their budgeted
amounts for the upcoming period, are as follows:
Maintenance . . . . . . . . . . . . . . . . . . . . . . ...