Answer: See explanation
Explanation:
Sell as scrap:
Sales of scrap units:
= 22000 × $2.00
= $44,000
Rework:
Sale of reworked unit = 22000 × $8.50 = $187,000
- Cost to rework unit = 22000 × $4.50 = $99,000
- Opportunity cost of not making new unit = 22000 × ($8.50 - $6) = $45000
Incremental income(loss) = $33000
Since the incremental Income from scrap is more than reworking, then it implies that the company should sell as scrap.
Answer:
$23.47
Explanation:
Given that,
Beginning Work in Process inventory = 1,200 units
Units started = 3,300 units
Ending Work in Process = 1,500 units
Total dollar cost = $88,000
Finished units:
= Beginning Work in Process inventory + Units started - Ending Work in Process
= 1,200 units + 3,300 units - 1,500 units
= 3,000 units
Equivalent units:
= (Finished units × 100%) + (Ending Work in Process × 50%)
= (3,000 × 100%) + (1,500 × 50%)
= 3,000 units + 750 units
= 3,750 units
Cost per equivalent whole unit:
= Total dollar cost ÷ Equivalent units
= $88,000 ÷ 3,750
= $23.47
Answer:
$2,525
Explanation:
Though net sales $1,255,000 but it did not indicate the portion of cash collected and account receivables, then we assume all sales is cash revenues.
Gross account receivables is $50,500 then its bad debt expense is $2,525 = 5% * $50,500
Answer:
(a) Plant assets that had cost $20,000 6 years before and were being depreciated on a straight-line basis over 10 years with no estimated scrap value were sold for $5,300.
- increases cash flows from investing activities
(b) During the year, 10,000 shares of common stock with a stated value of $10 a share were issued for $43 a share
- increases cash flows from financing activities
(c) Uncollectible accounts receivable in the amount of $27,000 were written off against Allowance for Doubtful Accounts.
- this corresponds to bad debt expense which is included in the income statement
(d) The company sustained a net loss for the year of $50,000. Depreciation amounted to $22,000, and a gain of $9,000 was realized on the sale of land for $39,000 cash.
- the net loss and the gain on the sale of land decreases the cash flows from operating activities, while the depreciation expense increases it.
- the $39,000 received will increase cash flow from investing activities
(e) A 3-month U.S. Treasury bill was purchased for $100,000. The company uses a cash and cash equivalent basis for its cash flow statement.
- not included in teh cash flow statements
(f) Patent amortization for the year was $20,000
- increases cash flow from operating activities (in a similar way than depreciation)
(g) The company exchanged common stock for a 70% interest in Tabasco Co. for $900,000.
- this is a non-cash financing and investing activity
(h) During the year, treasury stock costing $47,000 was purchased
- decreases cash flow from financing activities