3. (5 points) During 2020, Larsen Company's accounts receivable averaged $750,000. Larsen's 2020 income statement reported net sales of $6,780,000, uncollectible accounts expense of $160,000, and net income of $768,000. (Assume 365 days in a year.) Using the information, above compute the following for Larsen Company: (a.) Accounts receivable turnover: (Round to the nearest two decimals) (b.) Average number of days to collect accounts receivable (Round to nearest day) 5. (35 points total) Depreciation in financial statements (a.) (15 points) Dynasty Co. uses straight-line depreciation in its financial statements, with depreciation for a partial year rounded to the nearest full month. On September 28, 2018 Dynasty purchased equipment at a cost of $140,000. For financial reporting purposes, the useful life of this equipment was estimated at 5 years, with a $30,000 salvage value. Calculate the depreciation expense relating to this equipment that Dynasty will recognize in its financial statements in the following years. If no depreciation will be recognized in a particular year, write zero. (b.) Domino, Inc uses straight-line depreciation with a half-year convention in its financial statements. On March 10, 2018, Domino acquired a computer system at a cost of $98,800. Estimated useful life is six years, with residual value of $5,200. 1) (15.75 points) Complete the following schedule, showing depreciation expense Domino expects to recognize each year in the financial statements. 2) (4.25 points) Assume Domino sells the computer system on October 3, 2021 for $26,650 (hint: pay attention to the start month (March) of depreciation & sell date (October)). For financial statement purposes, compute the book value of the computer system at date of disposal and the gain or loss on disposal (indicate gain or loss by circling the correct response). Book value (date of sale): Gain or loss on disposal (please circle your response & provide the dollar amount):

Question 2 (based on Week 1 Excel Examples - Chapters 1-4) Note: This question is a little more complex than the previous one, and will require you compute your answer in 2 stages. You plan on retiring in 25 years. In order to increase your retirement income, you open a retirement account today, and make a $20,000 deposit. In addition, you will deposit $5,000 every year for the next 25 years. Your plan is to start making annual withdrawals of $50,000 from the account, after you retire. Assuming the account is earning 7% rate of interest, how many years will it take, after you retire, before the funds in your account are completely exhausted? Please include a written answer in a text box. (assume annual compounding)

Question 3 (based on Week 1 Excel Examples - Chapters 1-4) You are planning on buying a new house, and want to make sure you can afford the monthly payments. The house you picked will necessitate you borrow $300,000. You think you can get the following mortgage terms: borrow $300,000 at a fixed quoted (nominal) annual rate of 3.775%; to be paid off in equal monthly payments over 15 years. Compute the required monthly payment, and prepare an amortization table, showing for each month the beginning balance, payment, payment applied to interest, payment applied to principal, and ending balance. (assume monthly compounding) (Note: This question doesn't require a written answer.)

a. Determine the annual break-even dollar sales volume. b. Determine the current margin of safety in dollars. c. Prepare a cost-volume-profit graph for the guitar shop. Label both axes in dollars with maximum values of $1,000,000. Draw a vertical line on the graph for the current ($800,000) sales level, and label total variable costs, total fixed costs, and total profits at $800,000 sales. d. What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $50,000?

Contribution Income Statement and Operating Leverage Willamette Valley Fruit Company started as a small cannery-style operation in 1999. The company now processes, on average, 20 million pounds of berries each year. Flash-frozen berries are sold in 30 pound packs to retailers. Assume 650,000 packs were sold for $75 each last year. Variable costs were $42 per pack and fixed costs totaled $14,250,000. Required a. Prepare a contribution income statement for last year. b. Determine last year's operating leverage. c. Calculate the percentage change in profits if sales decrease by 10%. d. Management is considering the purchase of several new pieces of packaging equipment. This will increase annual fixed costs to $15,500,000 and reduce variable costs to $40 per crate. Calculate the effect of this acquisition on operating leverage and explain any change.

Required a. Prepare a contribution income statement for July. b. Determine Jail and Sail's monthly break-even point in units. c. Determine Jail and Sail's margin of safety in units for July. d. Determine the unit sales required for a monthly after-tax profit of $20,000. e. Prepare a cost-volume-profit graph. Label the horizontal axis in units with a maximum value of 4,000. Label the vertical in dollars with a maximum value of $600,000. Draw a vertical line on the graph for the current (2,200) unit level and label total variable costs, total fixed costs, and total before-tax profits at 2,200 units.

Keggler's Supply is a merchandiser of three different products. Beginning inventories for March are foot- wear, 20,000 units; sports gear, 80,000 units; and apparel, 50,000 units. Management believes each of these inventories is too high and begins a new policy that ending inventory in any month should equal 30% of the budgeted sales units for the following month. Budgeted sales units for March, April, May, and June follow. Required Prepare a merchandise purchases budget (in units only) for each product for the months of March, April, and May.

Evans Inc. has just started a small corporation that buys and sells booths for trade shows across Canada. The bank has lent Evan $50,000 and needs the 2022 financial statements to determine whether they will renew the loan. Evan will prepare the financial statements on his own, as there are not that many transactions. Evans Inc.’s shares do not trade on the stock exchange. Booths can be sold for anywhere between $20,000 to $200,000. On September 15th Kaur Inc. signed a contract with Evans Inc. for a booth and set up. The cost of the booth $80,000 and a selling price for the booth and set is $120,000. On September 25th Kaur Inc. paid $25,000 to secure the delivery of the booth. On October 20th Evans Inc. delivers the booth to Kaur Inc. with terms FOB shipping point. On November 1st Kaur Inc. is supposed to pay Evans Inc. the balance due. Evans Inc. set up the booth on November 5th. On November 10th Evan Inc. received the money for setting up the booth. The estimated fair value to set up the booth is $2,500. The estimated fair value of the booth is $122,500. On November 1st Kaur Inc. informs Evans Inc. that they will be not be able to pay their account that is due. The two parties enter into an agreement that the account will be converted into a non-interest bearing promissory note to be repaid in one year from now. Evans Inc. borrows fund at a rate of 4%. Kaur Inc. has various loans at 6% interest. The company’s year end is December 31st. Recommend which GAAP Evans Inc. should use. Support your answer. Identify two key stakeholders of the company and what their objective is From an ethics perspective explain any concerns you may have with this case. List the performance obligations? Explain when the revenue should be recognized for each performance obligation assuming the company uses ASPE. Support your answer by explaining why it should be recognized at the time you selected. Be sure to use GAAP to support your answer. Prepare the journal entries for 2022 and 2023. If there is no entry be sure to state no entry. In your answer do not use the discount on notes account. If the company followed IFRS use the 5 step approach and apply each step to the question?

Management expects December's results to be repeated in January, February, and March without any changes in strategy. Management, however, hus an alternative plan. It believes that if the unit selling price is reduced to $125 per unit and advertising is increased to $287,500 per month, sales units will be 16.500 for January, 18,150 for February, and 19,965 for March. The cost of its product will remain ut $75 per unit, the sales staff will continue to cam a 10% commission, and the remaining expenses will stay the same. Required 1. Prepure budgeted incoase statements for each of the months of January, February, and March that show results from implementing the proposed plan. Use a three-column format, with one column for each months. Ignore income taxes. 2. For the proposed plan, is income in March budgeted to be higher than income in December?

To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 20,500 units. Budgeted sales in units follow: April, 20,500; May, 19,500; June, 20,000; and July, 20,500. The product's selling price is $24.00 per unit and its total product cost is $19.85 per unit. b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 4,925 pounds. The budgeted June 30 ending raw materials inventory is 4,000 pounds. Each finished unit requires 0.50 pound of direct materials. c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales. The March 31 finished goods inventory is 16,400 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. e. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $20,000 per month is the only fixed factory overhead item. f. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly sal- ary is $3,000. g. Monthly general and administrative expenses include $12,000 for administrative salaries and 0.9% monthly interest on the long-term note payable. h. The company budgets 30% of sales to be for cash and the remaining 70% on credit. Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale). i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials purchases are fully paid in the next month (none are paid in the month of purchase). j. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of 1% at each month-end (before any repayment). If the month-end preliminary cash balance exceeds the minimum, the excess will be used to repay any loans. k. Dividends of $10,000 are budgeted to be declared and paid in May. 1. No cash payments for income taxes are budgeted in the second calendar quarter. Income tax will be assessed at 35% in the quarter and budgeted to be paid in the third calendar quarter. m. Equipment purchases of $100,000 are budgeted for the last day of June.