Assignment Questions

 5.if 8000 units are sold, what is the total amount of variable costs related to the units sold?

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Part A Revolutionary Designs, Inc. Company Information Revolutionary Designs, Inc. manufactures and markets reproductions of early American furniture. furniture (chairs, tables is located Two of the company’s major product lines are oak and maple dining-room and sideboards) and walnut bedroom furniture (headboards and dressers). The company in a small community and has been in business for over 20 years Jack and Susan Newsome started the company to produce furniture sold in discount stores and warchouse furniture chains. Then called Newsome Furniture, the company primarily made dining room and bedroom furniture from oak and pine. Approximately seven years ago, the company started manufacturing Revolutionary period Revolutionary period reproduction furniture It begins to ship furniture in March, but most shipments are made between May and October, when reproduction furniture for a specialty outlet retailer. The line was an immediate success, and the company changed its name and product strategy. It is now one of the largest U.S. producers of The company’s major production period begins in January or February and lasts until the early fal. retail furniture stores have their peak season Recently your boss met the Newsomes at an antique auction. After learning about their financial needs, he contacted you and suggested that you visit them at their plant and office as soon a possible. He tells you that Revolutionary Designs has been a customer of First Bank, a competitor, for about three years. He also tells you that the Newsomes may currently borrow up to a limit of $1.2 million on a line of credit secured by inventory and receivables, and that they are looking fora lending institution that will offer them a higher limit with better term Assume that you are visiting with Susan and Jack at their plant and offices Our Revolutionary reproductions business continues to grow. We simply don’t have the capacity to make and deliver enough furniture to meet demand during the peak Susan: selling months. Last year we did slightly over $8 million, an increase of about $500,000 from the prior year. We held our prices last year, and in 20Y2, but sales grew because we added several new retailers to our customer list. This year, we are raising our prices about 10 percent, and we still are experiencing an increase in unit sales. We are now realizing the benefits of our expensive sales promotion in 20Y3 as well as the improving economy. When home sales go up, we know our sales will also In 20Y2, we began to move beyond the major metropolitan area furniture stores, and we now sell to retailers just about anywhere in the country. This has helped us to continue our growth; and we plan to continue opening new retailers in new markets. We ship our furniture promptly, on any of several trucking companies, and we give Jack: all of our customers excellent service, no matter what their size and location That’s right. In fact, our delivery charge is never over $200, regardless of the dollar amount of the sale, the size of the order, or the customer’s location. That’s a real Susan: selling point with our low-volume customers across the country

 Could you please give me all the answer of my question? Thank you.

Chapter 13 Corporations: Organization, Stock Transactions, and Dividends 621 Discussion Questions 1. Of two corporations organized at approximately the same time and engaged in competing businesses one issued $80 par common stock, and the other issued $1 par common stock. Do the par designa tions provide any indication as to which stock is preferable as an investment? Explain 5. a. Where should a declared but unpaid cash divi b. Where should a declared but unissued stock 6. A corporation reacquires 60,000 shares of its own dend be reported on the balance sheet? dividend be reported on the balance sheet? 2. A stockbroker advises a client to “buy preferred stock. 10 par common stock for $3,000,000, recording it With that type of stock,. lyoul will never have to at cost. worry about losing the dividends. ls eoker rightea. What efect does chis transaecton have on rev a. What effect does this transaction have on rev- 3. A corporation with both preferred stock and co enue or expense of the period? b. What effect does it have on stockholders’ equity? mon stock outstanding has a substantial credit balance in its retained earnings account at the be- ginning of the current fiscal year. Although net in come for the current year is sufficient to pay the preferred dividend of $150,000 each quarter anda What is the effect on the corporation’s revenue a common dividend of $90,000 each quarter, the board of directors declares dividends only on the 7· The treasury stock in Discussion Question 6 is re- sold for $3,750,000 of the period? b. What is the effect on stockholders equity? 8. What are the three classifications of restrictions of normally reported on the financial statements? 9. Indicate how prior period adjustments would be preferred stock. Suggest possible reasons for pass ing the dividends on the common stock retained earnings, and how are such restritions An owner of 2,500 shares of Simmons Company com- mon stoc 4. k receives a stock dividend of 50 shares. What is the effect of the stock dividend on the stockholder’s proportionate interest the corporation? orted on the financial statements presented only for the current period. a. (equity) in low does the total equity of 2,550 shares com 10. What is the primary purpose of a stoc pare with the total equity of 2,500 shares before b. How the stock dividend?

b. Assume that in 2014, actual Overhead Actual OverheadApplied Overhead OH in WIP Credit Balance- Overapplied Add to ending COGS Subract from ending

For each of the following items in Kabletown Inc.’s financial statements, indicate (1) whether it is reported in the income statement (I/S) or balance sheet (B/S) and (2) whether it is an asset (A). liability (L), stockholders’ equity (SE), revenue (R), or expense (E) account. The first item is given as an example

e Microsoft Edge Start Chapter 3 HW x Studen ezto.mheducation.com/hm.tpx The following accounts are taken from Equilibrium Riding, Inc., a company that specializes in occupational therapy and horseback riding lessons, as of December 31 EQUILIBRIUM RIDING, INC Unadjusted Trial Balance At December 31 Account Name Debits Credits S 63,300 6,650 5,500 67,950 23,100 Cash Accounts Receivable Prepaid Insurance Equipment Land Accounts Payable Unearned Revenue Notes Payable (long-term) Common stock Retained Earnings Dividends Service Revenue 33,750 2,550 73,000 5,000 32,815 26,500 Wages Expense Repairs and Maintenance Expense 6,400 415 300 Office Expenses Totals $173,615 $173,615 Required: 1. Using the unadjusted trial balance provided, create an Income Statement for Equilibrium Riding Inc., for the year ended December 31 EQUILIBRIUM RIDING, INC. Income Statement ware 20

Complete the journal entry worksheet and question 2

An international children s charity collects donations, which are used to buy clothing and toys for children in need The charity records donations of cash and other items as Donations Revenue when received. a. Received S8.550 in cash and checks from a door-to-door campaign. b. Paid $2, 650 cash for employee wages this month. c. Paid $3, 800 cash on a short-term loan from the bank (ignore interest) d. Bought $4, 200 worth of new toy supplies from a large toy manufacturer, paying $2, 100 cash and signing a short-term note for $2, 100. e. The manufacturer generously donated an additional $3, 150 of toy supplies. Prepare journal entries for the above transactions, which occurred during a recent month (If no entry is required for a transaction/event, select “No Journal Entry Required” in the first account field.) Record the receipt of $8, 550 in cash and checks from a door-to-door campaign. , Determine the charity’s preliminary net income Preliminary Net Income

Comeplete the journal entry worksheet and also question 2

Junktrader is an online company that specializes in matching buyers and sellers of used items. Buyers and sellers can purchase a membership with Junktrader, which provides them advance notice of potentially attractive offers. a. Junktrader provided online advertising services for another company for $325 on account. b. On the last day of the month, Junktrader paid $120 cash to run an ad promoting the company’s services. The ad ran that day in the local newspaper. c. Received $215 cash in membership fees for the month from new members. d. Received an electricity bill for $96 for usage this month. The bill will be paid next month. e. Billed a customer $374 for helping sell some junk. Junktrader expects to receive the customer’s payment by the end of next month. Prepare journal entries for the above transactions, which occurred during a recent month. (If no entry is required for a transaction/event, select “No Journal Entry Required” in the first account field.) Junktrader provided online advertising services for another company for $325 on account. Record the transaction. Determine Junktrader’s preliminary net income. Preliminary Net Income

Question 2

a. Issued $27, 000 of QCI stock for cash. b. Incurred $890 of utilities costs this month and will pay them next month. c. Paid wages for the current month, totaling $1, 850. d. Performed cleaning services on account worth $3, 200. e. Some of Quick Cleaners’ equipment was repaired at a total cost of $254. The company paid the full amount at the time the repair work was done. Prepare journal entries for the above transactions, which occurred during a recent month. (If no entry is required for a transaction/event, select “No Journal Entry Required” in the first account field.) Issued $27, 000 of QCI stock for cash. Record the transaction. Determine QCI’s preliminary net income. Preliminary Net Income