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DerKrebs [107]
3 years ago
5

The following budget information is available for the HD Sales Company (HDC) for January: Sales $ 320,000 Freight out $ .25 per

unit sold Depreciation on Admin. Equipment $ 10,000 Sales & Admin. Salaries $ 40,000 +2% of sales Advertising $ 12,000 Depreciation on Manuf. Equip. $ 15,000 Lease on Sales Building $ 45,000 Miscellaneous Selling Expenses $ 5,000 All operating expenses are paid in cash in the month incurred.If HDC expects to sell 20,000 units of inventory, the total budgeted selling and administrative expenses would be what amount on the January pro forma income statement?
Business
1 answer:
Mamont248 [21]3 years ago
5 0

Answer:

The total budgeted selling and administrative expenses would be what amount on the January pro forma income statement is $113,400

Explanation:

Computation of total budgeted selling and administrative expenses in the January pro forma income statement is shown below:

= Freight out + Sales & Admin Salaries + Advertising + Lease on Sales building + Miscellaneous selling expenses

where,

Freight out = $0.25 × 20,000 units = $5,000

Sales & Admin Salaries = 40,000 + 2% of $320,000 = $46,400

So,

The total budgeted selling and administrative expenses is

= $5,000 + $46,400 + $12,000 + $45,000 + $5,000

= $113,400

Since depreciation part is not be considered because it is a non cash expense so we don't include the depreciation cost in computation part.

Hence, the total budgeted selling and administrative expenses would be what amount on the January pro forma income statement is $113,400

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saul85 [17]

Answer:

1. Jan. 10

Dr Cash $280,000

Cr Common Stock $70,000

Cr AdditionalPaid-in Capital-Common $210,000

Mar. 1

Dr Cash $636,000

Cr Preferred Stock $600,000

Cr Additional Paid-in Capital-Preferred $36,000

May 1

Dr Cash $720,000

Cr Common Stock $120,000

Cr Additional Paid-in Capital-Common $600,000

Sept. 1

Dr Cash $25,000

Cr Common Stock $5,000

Cr Additional Paid-in Capital-Common $20,000

Nov. 1

Dr Cash $168,000

Cr Preferred Stock $150,000

Cr Additional Paid-in Capital-Preferred $18,000

Explanation:

Preparation of the journal entries

1. Jan. 10

Dr Cash (70,000x$4) $280,000

Cr Common Stock (70,000x$1) $70,000

Cr AdditionalPaid-in Capital-Common $210,000

($280,000-$70,000)

Mar. 1

Dr Cash (12,000x$53) $636,000

Cr Preferred Stock (12,000x$50) $600,000

Cr Additional Paid-in Capital-Preferred $36,000

($636,000-$600,000)

May 1

Dr Cash (120,000x$6) $720,000

Cr Common Stock (120,000x$1) $120,000

Cr Additional Paid-in Capital-Common $600,000

($720,000-$600,000)

Sept. 1

Dr Cash (5,000x$5) $25,000

Cr Common Stock (5,000x$1) $5,000

Cr Additional Paid-in Capital-Common $20,000

($25,000-$5,000)

Nov. 1

Dr Cash (3,000x$56) $168,000

Cr Preferred Stock(3,000x$50) $150,000

Cr Additional Paid-in Capital-Preferred $18,000

($168,000-$150,000)

8 0
3 years ago
JLR Enterprises provides consulting services throughout California and uses job-order costing system to accumulate the cost of c
Shkiper50 [21]

Find full question attached

Answer and Explanation:

Answer and explanation attached

6 0
3 years ago
On January 1, Year 1, Ballard company purchased a machine for $28,000. On January 1, Year 2, the company spent $7,000 to improve
timofeeve [1]

Answer:

$23,520

Explanation:

The computation of book value of the machine is shown below:-

Machine cost                           $28,000

Less: Depreciation                    $4,200

($28,000 - $2,800) ÷ 6

Book Value at beginning

of Year 2                                    $23,800

Add: Improvements                   $7,000

Total                                             $54,600

Less: Accumulated

Depreciation for 3 years            $31,080

($54,600 - $2,800) × 3 ÷ 5 years

Book Value Dec 31, Year 4         $23,520

3 0
3 years ago
Journalizing issuance of stock—at par and at a premium
suter [353]

Answer:

a.

Cash                                                                           27000 Dr

     Common Stock                                                            13500 Cr

     Paid in capital in excess of par-Common stock         13500 Cr

b.

Cash                                                    135000 Dr

     Preferred Stock                                   135000 Cr

Explanation:

a.

When we issue stock at premium, we always record the amount received from such issuance of stock at full. So, the cash account will be debited for 4500 * 6 = 27000

However, we record the common stock issued at par value and the remaining is credited under the reserve account which is Paid in capital in excess of par.

Thus the common stock will be credited by its par value of 4500 * 3 = 13500 and the remaining 4500 * 3 will be credited to the Paid in Capital account.

b.

The par value of the preferred stock is 4500 * 30 = 135000

Thus the preferred stock is issued at par and we simply debit the cash received from the issue and credit the preferred stock.

4 0
3 years ago
In January of 2018, the Phillips Company purchased a patent at a cost of $100,000. In addition, $10,000 in legal fees were paid
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Answer:

The answer is: $113,000

Explanation:

By 2020, Phillips Company had already amortized $22,000 of the patent expenses (2 years x [10% x ($100,000 + $10,000)]). Since it lost its patent defense in 2020, it will now have to write off $113,000 ($88,000 pending amortization + $25,000 in legal fees) for the adjustment of its 2018 income.

5 0
3 years ago
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