Homework answers / question archive / 1)On 16 September 2020 X Corporation is organized with authorized common stock of 10,000 shares with $1 par value

1)On 16 September 2020 X Corporation is organized with authorized common stock of 10,000 shares with $1 par value

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1)On 16 September 2020 X Corporation is organized with authorized common stock of 10,000 shares with $1 par value. If X issued 500 shares for cash at $3 per share, the paid in capital account should be credited by ----.

Select one:

a. $500.

b. $1500.

c. $2000.

d. $1000.

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The first item of stockholders’ equity of the balance sheet is the preferred stocks.

Select one:

a. False.

b. True.

2)Depreciation, depletion, and amortization all involve the allocation of the cost of a long-lived asset to expense.

Select one:

a. True.

b. False.

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The cost of natural resources should be allocated among the useful life by using the sum-of-the-years-digits

Select one:

True

False

3)Sutton Manufacturing's operations: 3(Click the icon to view the data.) A (Click the icon to view additional data.) Requirements Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. Sutton Manufacturing Cash Collection Budget January February $ 15,480 $ 17,280 $ 62,400 61,920 March Quarter Cash sales 17,100 $ 49,860 Credits sales 69,120 193,440 77,880 $ 79,200 86,220 $ 243,300 Total cash collections Requirement 2. Prepare a production budget. (Hint: Unit sales - Sales in dollars / Selling price per unit.) Sutton Manufacturing Production Budget January February 8,600 9,600 March Quarter 27,700 Unit sales 9,500 Plus: Desired ending inventory 1,920 1,900 1,840 1,840

* More Info X ? a. Actual sales in December were $78,000. Selling price per unit is projected to remain stable at $9 per unit throughout the budget period. Sales for the first 5 months of the upcoming year are budgeted to be as follows: January $ 77,400 February $ 86,400 March $ 85,500 April. $ 82,800 May... $ 72,000 b. Sales are 20% cash and 80% credit. All credit sales are collected in the month following the sale. c. Sutton Manufacturing has a policy that states that each month's ending inventory of finished goods should be 20% of the following month's sales in units). d. Of each month's direct material purchases, 15% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $1.50/kg. Ending inventory of direct materials should be 10% of next month's production needs. e. Monthly manufacturing conversion costs are $5,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred. f. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Sutton Manufacturing will purchase equipment for $5,400 (cash), while February's cash expenditure will be $12,800 and March's cash expenditure will be $15,600. g. Operating expenses are budgeted to be $1.25 per unit sold plus fixed operating expenses of $1,600 per month. All operating expenses are paid in the month in which they are incurred.
d. Of each month's direct material purchases, 15% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $1.50/kg. Ending inventory of direct materials should be 10% of next month's production needs. e. Monthly manufacturing conversion costs are $5,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred. f. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Sutton Manufacturing will purchase equipment for $5,400 (cash), while February's cash expenditure will be $12,800 and March's cash expenditure will be $15,600 g. Operating expenses are budgeted to be $1.25 per unit sold plus fixed operating expenses of $1,600 per month. All operating expenses are paid in the month in which they are incurred. h. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $4,500 for the entire quarter, which includes depreciation on new acquisitions. i. Sutton Manufacturing has a policy that the ending cash balance in each month must be at least $5,000. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $125,000. The interest rate on these loans is 1% per month simple interest (not compounded). Sutton Manufacturing pays down on the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter. j. The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays $10,000 cash at the end of February in estimated taxes.
i X ? Data Table 4,640 Current Assets as of December 31 (prior year): Cash .. $ Accounts receivable, net .. $ Inventory .. $ Property, plant, and equipment, net. $ Accounts payable. .. $ Capital stock ... $ Retained earnings .. 51,000 15,400 121,000 43,600 126,000 23,000 

4)On August 1, 2019 X company purchased furniture at $13,000. The salvage value is $1,000 and the useful life is 5 years. X uses the sum of the year’s digits method. The depreciation expense for 2019 is ------.

Select one:

a. $2,000.

b. $1,000.

c. $1,667.

d. $833.

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On July 1, 2006, X Corporation purchased factory equipment for $150,000. Salvage value $4,000. The equipment will be depreciated over ten years using the double-declining balance method. X should record depreciation expense for 2007 on this equipment of-----.

Select one:

a. $30,000.

b. $24,000.

c. $27,000.

d. $26,280.

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