Required information Problem 20-1A Production cost flow and measurement; journal entries LO P1 [The following data pertains to the questions below.] Sierra Company produces soccer balls in two sequential processes: Cutting and Stitch production starting at the beginning of the Cutting process. Here's the data available: Raw materials inventory Work in process inventory-Cutting Work in process inventory Stitching Finished goods inventory Beginning Inventory $16,000 63,500 83,300 24, leo Ending Inventory $17,950 70,500 66,700 12,250 The following additional information elaborates on the production activities of the company for May Direct materials Raw materials purchased on credit Direct materials used in cutting Direct materials used in stitching 5 35.000 22,250 Direct Tab 12 of 2 Next > Saved Check my work mode: This indicates correctness or errors in your work The subsequent information describes production activities in the company: Direct materials Raw materials purchased on credit Direct materials used in Cutting Direct materials used in stitching $ 35,000 22,250 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 16,699 66,490 138, 40e Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 10,800 55,400 49,000 Raw materials purchased on credit Direct materials used in Cutting Direct materials used in stitching $ 35,00 22,250 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 16,689 66,480 138,400 Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 10,800 55,400 49,000 Factory Overhead Rates Cutting (150% of direct materials used) Stitching (120% of direct labor used) Sales $336,000 Piex1 2 of 2 Completeu su Tor. It does Required information RM - April 30 RM purchases RM - May 31 Raw Materials (RM). 16.000 Indirect materials employed 35.000 Direct materials - Cutting 17.950 22 250 10.800 35.900 219 430 WIP - April 30 Direct materials - Stitching Direct labor - Cutting Overapolled overhead - Cutting % $ Work in Process (WIP) Stitching 83,300 Cost of goods sold 66,400 56,750® 79,680 66,700 Factory Overhead 1 2 of 2 Next > id Windows to be a 9 W WORMode
Answer:
Explanation:
a. On March 2
Debiting Accounts Receivable A/c $$887,400
Crediting Sales A/c $$887,400
(Recognizing the sale of inventory at sale price)
Debiting Cost of Goods Sold A/c $
Crediting Merchandise Inventory A/c $571,700
(Recognizing merchandise sold at cost)
b. On March 8
Debiting Sales Return and Allowance A/c $103,200
Crediting Accounts Receivable $103,200
(Recording the sales return)
Debiting Merchandise Inventory A/c $62,500
Crediting Cost of Goods Sold A/c $62,500
(Recording the sales return)
c. On March 12
Debiting Cash A/c $768,516
Debiting Sales Discounts A/c $15,684
Crediting Accounts Receivable A/c $784,200
(Recording cash received)
Calculating the balance owed is as follows:
= Sale of inventory - Returns
= $887,400 - $103,200
= $784,200
And the discount = $784,200 × 2% = 15,684
Answer:
An increase in the price of soccer balls.
Explanation:
Soccer balls consist of polyethylene and materials derived from petroleum. An escalation in oil prices will directly raise the costs of soccer balls since the expense of the raw materials has increased.
Kayaks also utilize materials sourced from oil, which is why their prices are on the rise too.
There's a direct correlation between soccer balls and kayaks because both rely on oil for their production.
Answer:
The right choice is option (D).
Explanation:
The scenario provides the following information:
Operating Income (EBIT) = $2,500,000
Depreciation Expense = $500,000
Tax rate = 40%
Net investment = $1,000,000
Thus, we can determine BBC's free cash flow using this formula:
= EBIT × (1 - Tax Rate) + Depreciation & Amortization - Net investment
Insert the values into the formula above:
So, the calculation becomes:
= $2,500,000 × (1 - 40%) + $500,000 - $1,000,000
= $1,500,000 + $500,000 - $1,000,000
= $1,000,000
Response:
$20,000
Clarification:
At the issuance of the bond, the bond discount is calculated as follows:
= Value of Bonds issued - [(Value of Bonds issued ÷ 100) × Issue price]
= 705,000 - [($705,000 ÷ 100) × 98]
= $705,000 - $690,900
= $14,100
Bond Payable equals $705,000
The unamortized bond discount is calculated as:
= Bond discount at issuance - Amortized amount
= $14,100 - $8,200
= $5,900
Redemption Value of Bond is determined by:
= Retired price of bonds × 7,050
= 102 × 7,050
= $719,100
Loss on retirement of the Bond is calculated as:
= Redemption Value of Bond - (Value of Bonds issued - Unamortized bond discount)
= 719,100 - (705,000 - 5,900)
= 719,100 - 699,100
= $20,000
