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Homework answers / question archive / 1)Picktures Inc
1)Picktures Inc. is a company that produces custom photo frames. On March 15, 2019, Picktures Inc records the transfer of $110,400 of raw materials into production. $27,600 of the raw materials is considered as direct materials, and $82,800 of the raw materials is considered as indirect materials. What is the journal entry to transfer these costs to the WIP and manufacturing overhead accounts? Do not enter dollar signs or commas in the input boxes. Enter the debit accounts in alphabetical order Date Account Title and Explanation Debit Credit Mar 15 2
2)PBA Co. is undergoing liquidation. Information before the start of liquidation process is as follows:
Cash 10,000
accounts receivable 80,000
receivable from P 10,000
Inventory 180,000
Equipment 320,000
Total assets 600,000
Accounts payable 80,000
Payable to be B 20,000
P, Capital (50%) 250,000
B, Capital (30%) 150,000
A, Capital (20%) 100,000
Total liabilities and equity 600,000
The total cash distributed to the partners after the first and second sales of non cash assets were 12,000 and 30,000 respectively. How much cash did B received in the second cash distribution.
3)When taking a physical inventory count at a typical manufacturing facility, which category of inventory (raw materials, work?in?process, or finished goods) is likely to be the most time consuming to count and determine the relevant costs for? Why?
4)On 1 July 20X2, Sub Ltd sold an item of plant to Parent Ltd for $30 000. The plant had cost Sub Ltd $96 000 and had a carrying value of $24 000. It was estimated that the remaining useful life of the plant was 2 years with a scrap value of $0 at the end of the period. Assume the data provided in the entries for Parent and Sub Ltd in the worksheet, the straight-line depreciation method and a 30 per cent tax rate. Parent Elimination Debit Credit ($) (5) Sub (S) ($) Consolidated (5) consolidated 15 000 96 000 Depreciation expense Profit before tax Less: Income tax expense Profit for the year Retained earnings opening Retained earnings - closing Plant 144 000 43 200 100 800 444 000 28 800 67 200 298 800 366 000 544 800 30 000 30 000 Less: Accumulated depreciation Deferred tax asset What is the consolidated depreciation expense, opening retained earnings and deferred tax asset amounts after effecting the elimination entries? Hint: This question is based on Scenario 2 - Sale of non current assets resources provided in the Unit. A. Depreciation expense $12,000, opening retained earnings $740,700, deferred tax asset $0. B. Depreciation expense $12,000, opening retained earnings $744,900, deferred tax asset $0. C. Depreciation expense $12,000, opening retained earnings $744,900, deferred tax asset $1800. D. Depreciation expense $15,000, opening retained earnings $744,900, deferred tax asset $1800. You selected B - This is incorrect. The correct answer is A TOTAL MARKS: 1 MARKS OBTAINED XO
1)
| Picktures Inc. | |||||
| Journal | |||||
| Date | Account Title and Explanation | LF | Debit | Credit | |
| Mar-15 | Work in Process Account | Dr | 27600 | ||
| Manufacturing Overhead Account | Dr | 82800 | |||
| To | Raw Materials Account | 110400 | |||
| (Being direct and indirect materials used in | |||||
| production respectively) | |||||
2)
Total Cash distributed in second cash distribution = 30,000
On liquidation, the partners receive cash in ratio of their capitals, which herein is 5:3:2 (50%, 30% and 20%) among A, B and C.
From the above concept, B shall receive 3/10 , that is, 30% of the cash distributed in second time= 30000*30%= 9000.
3)
As we know inventory is a current asset to be reported in the assets side of the balance sheet.
Inventory is broadly categorised in 3 sub parts namely : raw materials, work-in-progress and finished goods
Raw materials- as the name suggests they are the goods that a company buys from outside in order to manufacture its final products and therefore, it becomes easy to value them for their cost to the company is known.
Finished goods- They are the final products of the company that it is going to sell to its customers. Pratically, all the amounts that are spent in order to make it salable become the value of the finished goods.
Work in progress: This is the most complicated and time-consuming part of inventory to count and value because of its nature. Work in progress is that part of an inventory which is not complete yet and therefore it can not be valued like finished goods. In case of work in progress it becomes difficult to determine the percentage of completion in order to value them. To value work in progress, the vale of raw materials, labour cost, processing cost and all other direct and indirect cost is added for which it is important to determine the level of completion which makes it more difficult in comparison to other type pf the inventory.
4)PLEASE SEE THE ATTACHED FILE.
