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Sati [7]
3 years ago
10

E20.5 (LO 3) (Application of Years-of-Service Method) Andrews Company has five employees participating in its defined benefit pe

nsion plan. Expected years of future service for these employees at the beginning of 2020 are as follows.
Employee Future year of services
Jim 3
Paul 4
Nancy 5
Dave 6
Kathy 6

On January 1, 2020, the company amended its pension plan, increasing its projected benefit obligation by $150,768.

Compute the amount of prior service cost amortization for the years 2020 through 2024 using the years-of-service method, setting up appropriate schedules.
Business
1 answer:
GuDViN [60]3 years ago
8 0

<u>Solution and Explanation:</u>

<u>Computation of service years </u>

Year  Jim  Paul  Nancy  Dave  Kathy  Total  *  Cost  Amortization

2014  1  1  1  1  1  5            *  3000     15000

2015  1  1  1  1  1  5             *  3000  15000

2016  1  1  1  1  1  5            *  3000  15000

2017   1  1  1  1  4            *  3000  12000

2018    1  1  1  3             *  3000  9000

2019     1  1  2              *  3000  6000

                               72000

<u>Future years of service </u>        

Jim         3          

Paul  4          

Nancy  5          

Dave  6          

Kathy  6          

       24          

cost per service year $=\$ 72000 / 24=\$ 3000$

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Which of the following statements is true? a. The production budget is not converted into dollars. b. The sales budget includes
Svetllana [295]

Answer:

e. All of these choices are correct.

Explanation:

Note:

Statement a. about production budget is correct as the production budget only estimates number of units to be produced, in quantity and not in dollars and therefore is not converted into dollars.

Statement b. about sales budget is also correct as it shows the quantity in units and also in value.

Statement c. about overhead budget is also correct as the budget segregates variable and fixed overheads properly.

Statement d. about labor budget is correct, as in this budget an average rate is used for calculating the expenses.

Therefore all of the above is correct.

8 0
3 years ago
Danner Company expects to have a cash balance of $58,050 on January 1, 2017. Relevant monthly budget data for the first 2 months
Alina [70]

Answer:

                                                                             January                  February

Beginning Cash Balance                                     58,050                  35,475

Add: Receipts

Collections from Customers                               109,650                 193,500

Sale of Marketable Securities                              <u>15,480</u>                 <u>       0      </u>

Total Receipts                                                   <u>   125,130    </u>             <u>  193,500</u>

Total Available Cash                                            183,180                  228,975

Less: Disbursements

Direct Materials                                                  64,500                      96,750

Direct Labour                                                      38,700                       58,050

Manufacturing Overhead                                  25,155                        30,315

Selling and Administrative                                 19,350                        25,800

Total Disbursements                                       <u>  147,705       </u>             <u>   210,915</u>

Cash Balance                                                     35,475                        18,060

Financing

Add: Borrowings                                                   0                                  7,740

Less: Repayments                                          <u>       0           </u>                    <u>      0    </u>

Ending Cash Balance                                        35,475                         25,800

The company wants to maintain a minimum monthly cash balance of $25,800 so in February they will have to borrow;

= 25,800 - 18,060

= $7,740

8 0
4 years ago
Incite Co. has a 30 percent tax rate. Its total interest payment for the year just ended was $43.4 million. What is the interest
inn [45]

Answer: $13,020,000

Explanation:

Given that,

Tax rate = 30%

Total interest payment for the year just ended = $43,400,000

Interest Tax Shield = Tax rate × Total interest payment

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                               = $13,020,000

Therefore, the interest tax shield is $13,020,000.

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3 years ago
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Answer:

Explanation:

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Question

Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers, $325,000; Cash paid for rent, $37,000; Cash paid to employees for services rendered during the year, $117,000; Cash paid for utilities, $47,000. In addition, you determine that customers owed the company $57,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $1,700 at year-end, and the rent payment was for a two-year period. Calculate accrual net income for the year.

4 0
3 years ago
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