Discuss whether Ryan Frazier is behaving in a professional manner.
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Anstead Co. is experiencing a decrease in sales and operating income for the fiscal year ending October 31. Ryan Frazier, controller of Anstead Co., has suggested that all orders received before the end of the fiscal year be shipped by midnight, October 31, even if the shipping department must work overtime. Because Anstead Co. ships all merchandise FOB shipping point, it would record all such shipments as sales for the year ending October 31, thereby offsetting some of the decreases in sales and operating income. Discuss whether Ryan Frazier is behaving in a professional manner.
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- The demand for cocoa butter hand lotion, one of numerous products manufactured by Smooth Skin Care Products Inc., has dropped sharply because of recent competition from a similar product. The controller has been asked by the president of the company for advice on whether to continue production during the following month or to suspend the manufacture of cocoa butter hand lotion until a strategy to regain market share. The controller has assembled the following pertinent data: Smooth Skin Care Products Inc. Income Statement - Cocoa Butter Hand Lotion For the Month Ended January 31 Financial Categories Sales (400,000) Cost of goods sold Gross profit Dollar Amount $ 32,200,000 $28,330,000 $ 3,870,000 Selling and admin expenses Loss from operations $ 4,270,000 $ (400,000) The production costs and selling and administrative expenses, based on the production of 400,000 units in the Income Statement above, are as follows: Direct materials Category Dollar Amount $16 per unit 17 per unit Direct…Roeker Company provides information systems consultation services to large companies in the Chicagoland area. Due to a dip in the economy, Roeker has increased the percentage of credit sales which it believes will be uncollectible from 3.0% to 3.2% for 2019. Roeker's consulting services provided revenues of $700,000 in 2019. During 2020, Roeker has write-offs of $750 related to goods purchased in 2019. Prior to the write-off for the $750 default, Roeker's accounts receivable and allowance for doubtful accounts balances were $480,000 and $232 (credit), respectively. Required: Question Content Area 1. Prepare the journal entry to record the defaulted account. Question Content Area 2. Prepare the adjusting entry to record the bad debt expense for 2019.In October, Nicole eliminated all existing Inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would keep track of its new inventory using a perpetual Inventory system. On December 31 of last year, NGS had 20 units at a total cost of $5.50 per unit. Nicole purchased 40 more units at $7.50 in February. In March, Nicole purchased 20 units at $9.50 per unit. In May, 50 units were purchased at $9.30 per unit. In June, NGS sold 50 units at a selling price of $11.50 per unit and 60 units at $11.30 per unit. 2. Compute the Cost of Goods Available for Sale, Cost of Goods Sold, and Cost of Ending Inventory using the first-in, first-out (FIFO) method. (Round…
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- The Carlson Department Store suffered heavy damage when a hurricane struck on August 31, 2013. The store was closed for four months (Sept – Dec 2013) and Carlson is now involved in a dispute with its insurance company concerning the amount of lost sales during the time the store was closed. Two key issues must be resolved: The amount of sales Carlson would have made if the hurricane had not struck; and Whether Carlson is entitled to any compensation for excess sales from increased business activity after the storm More than $8 billion in federal disaster relief and insurance money came into the county, resulting in increased sales at department stores and numerous other businesses. The table below shows the sales data for the 48 months preceding the storm. The following table reports total sales for the 48 months preceding the storm for all department stores in the county, as well as the total sales in the county for the four months the Carlson Department Store was closed. Management…Blue Corporation is a manufacturing company which has decided to introduce a new line of merchandise on January 25, 2019. The company has experienced significant revenue and earnings growth in recent years and anticipates future growth to decline slightly, yet remain consistent with the strong industry average (10-15% annual revenue growth). Blue has incurred certain patent costs and considerable attorney fees, in addition to survey costs, management studies, salaries, insurance, and quality inspections. Given the three alternative methods for handling research and experimental expenditures, which method(s) would be most appropriate for Blue Corporation? Explain Why? How should Blue Corporation’s manufacturing expenditures be reported?Dryden Company is an auto parts supplier. At the end of each month, the employee who maintains all of the inventory records takes a physical inventory of the firm’s stock. When discrepancies occur between the recorded inventory and the physical count, the employee changes the physical count to agree with the records.Required:1. What problems could arise as a result of Dryden Company’s inventory procedures?2. How could the internal control system be strengthened to eliminate the potential problems?
- Sizemo Elektroniks sells semiconductors that are used in games and small toys. The company has been extremely successful in recent years, recording an increase in earnings each of the past six quarters. At the end of the current quarter, Jay Shulz, the company's staff accountant, calculated the ending inventory for the semiconductors and was surprised to find that the quantity of the Hayden X537 model had not changed during the quarter. Jay confirmed his calculation with the inventory control manager, who indicated that sales of the Hayden 537X had stopped when the Hayden 637X semiconductor was released early in the quarter. Jay researched the issue further and found that the Hayden 637X semiconductor has the same applications as the Hayden 537X, but has more computing power and a lower cost than the 537X. Jay emailed this information to Tina Vereen, the chief financial officer, and recommended that the company apply the lower-of-cost-or-market method to the Hayden 537X semiconductors…There is usually a time-lag between the balance sheet date and the date of issuance of financial statements. After the balance sheet date, but before the issuance of financial statements, a FMCG company has been sued for poor quality of one of its food items. It is not certain whether the company will be fined for the quality issues as the case has just been filed. Previous examples of such cases show that FMCG companies are usually liable to pay heavy penalties if complaints filed against such firms for poor quality of food products are proven to be true. Which qualitative characteristics of financial statements should the company try to maintain while issuing its financial statements under these circumstances, and why? Which qualities should they consider sacrificing, and why? Justify your answer.A flood destroyed Toshiaki Company's warehouse and all of its inventory. Toshiaki will use the gross profit method to determine its inventory in the warehouse at the time. Toshiaki's management believes that the average of the last two years' gross profit percentage is a good estimate of the gross profit in the current year. Sales last year were $7,700 and $6,100 in the year before. Its cost of goods sold was $4,466 last year and $3,782 the year before. Toshiaki's prior-year balance sheet reported inventory of $450. Before the flood, net sales were $5,200. Toshiaki purchased $3,900 of inventory. Read the requirements. Requirement a. Use the gross profit method to determine Toshiaki's historical gross profit percentage. Identify the appropriate formula and then calculate Toshiaki's historical gross profit percentage for each year. (Round the gross profit percentage to one decimal place, X.X%.) Gross profit % Two Year's Prior % Prior Year % Requirements Round percentages to one decimal…
