Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Textbook Question
Chapter 12, Problem 4P
Halpern Company’s controller prepared the following income statement and
Investigation shows that R&D costs include, among others, $8,000 of operating costs because “the company is not yet operating at capacity.” In addition, R&D costs include $5,000 of materials that were wasted during early production because “our employees made some unnecessary mistakes.”
Required:
Prepare the financial statements according to GAAP.
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The management of Woznick Corporation has been concerned for some time with
the financial performance of its product V860 and has considered discontinuing it
on several occasions. Data from the company's accounting system for this product
for last year appear below:
Sales
Variable expenses
Fixed manufacturing expenses
Fixed selling and administrative expenses
In the company's accounting system all fixed expenses of the company are fully
allocated to products. Further investigation has revealed that $30,000 of the fixed
manufacturing expenses and $13,000 of the fixed selling and administrative
expenses are avoidable if product V860 is discontinued.
What would be the financial advantage (disadvantage) from dropping product
V860?
Multiple Choice
($35,000)
($5,000)
$35,000
$5,000
$ 150,000
$ 72,000
$50,000
$ 33,000
FFF
Next
Assume that you are one of the owners of Pinoy Corporation. Upon reviewing the project income statements as shown in Tables 7.3 and 7.4 you realized that salaries are understated because it only accounts for the 12 months of salary of each employee and does not include the 13th month pay, which is required by law. You also feel that cost of goods sold ought to be computed at 45% instead of 40% of salles revenues. Using a spreadsheet program, revise the projected income statements for the first year and the first three years of the business.
The management of M Corporation has been concerned for some time with the financial performance of its product I54J and has considered discontinuing it on several occasions. Data from the company's accounting system appear below:
Sales
$ 650,000
Variable Expenses
$ 293,000
Fixed manufacturing expense
$ 221,000
Fixed selling and administrative expense
$ 150,000
In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $95,000 of the fixed manufacturing expenses and $85,000 of the fixed selling and administrative expenses are avoidable if product I54J is discontinued. According to the company's accounting system, what is the net operating income earned by
product I54J?
A. $14,000
B. ($357,000)
C. ($14,000)
D. $357,000
Chapter 12 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 12 - Prob. 1GICh. 12 - Prob. 2GICh. 12 - Prob. 3GICh. 12 - Prob. 4GICh. 12 - Prob. 5GICh. 12 - Prob. 6GICh. 12 - Prob. 7GICh. 12 - What activities are included in RD? Which are...Ch. 12 - What elements of RD activities does a company...Ch. 12 - How does a company record a patent worth 100,000...
Ch. 12 - Prob. 11GICh. 12 - Prob. 12GICh. 12 - Over how many years are patents amortized?...Ch. 12 - Prob. 14GICh. 12 - Prob. 15GICh. 12 - Prob. 16GICh. 12 - Prob. 17GICh. 12 - Prob. 18GICh. 12 - Prob. 19GICh. 12 - Prob. 20GICh. 12 - What is the proper time or time period over which...Ch. 12 - Prob. 2MCCh. 12 - Prob. 3MCCh. 12 - Which of the following assets typically are...Ch. 12 - Prob. 5MCCh. 12 - Prob. 6MCCh. 12 - Prob. 7MCCh. 12 - Prob. 8MCCh. 12 - Prob. 9MCCh. 12 - Prob. 10MCCh. 12 - Steel Magnolia Incorporated purchased a trademark...Ch. 12 - Match the following items with correct accounting...Ch. 12 - Notting Hill Company incurred the following costs...Ch. 12 - Hook Corp. incurred the following start-up costs,...Ch. 12 - Mystic Pizza Company purchased a patent from Prime...Ch. 12 - Mystic Pizza Company purchases a franchise from NY...Ch. 12 - Prob. 7RECh. 12 - Prob. 8RECh. 12 - Prob. 9RECh. 12 - Prob. 10RECh. 12 - Prob. 1ECh. 12 - On January 4, 2019, Franc Company purchased for...Ch. 12 - On January 11, 2019, Hughes Company applied for a...Ch. 12 - Gansac Publishing Company signed a contract with...Ch. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - KLK Clothing Company manufactures professional...Ch. 12 - Cressman Company incurred RD costs for various...Ch. 12 - In 2019, Lalli Corporation incurred RD costs as...Ch. 12 - Kling Company was organized in late 2019 and began...Ch. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Company is considering purchasing EKC Company....Ch. 12 - Prob. 18ECh. 12 - Prob. 19ECh. 12 - Prob. 20ECh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Halpern Companys controller prepared the following...Ch. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - Hamilton Companys balance sheet on January 1,...Ch. 12 - Prob. 8PCh. 12 - Lee Manufacturing Corporation was incorporated on...Ch. 12 - Information concerning Tully Corporations...Ch. 12 - Prob. 11PCh. 12 - In examining Samson Manufacturing Companys books,...Ch. 12 - Prob. 2CCh. 12 - Prob. 3CCh. 12 - Prob. 4CCh. 12 - On June 30, 2019, your client, Sprauge...Ch. 12 - Prob. 6CCh. 12 - NBC paid 401 million for the rights to televise...Ch. 12 - Prob. 8C
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