Sodas Inc. and Tom’s Bottling Plant have a manufacturing franchise arrangement. This involves the transfer of a. a license. b. a trade name. c. the formula to make a certain product. d. the ownership of the business.
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Sodas Inc. and Tom’s Bottling Plant have a manufacturing franchise arrangement. This involves the transfer of
a. a license.
b. a trade name.
c. the formula to make a certain product.
d. the ownership of the business.
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- I.-The common examples of businesses where the production of joint products can be found include chemical companies, refineries, coke manufacturers, flour mills, coal mines, gas companies, lumber mills, meat processors and packers, dairies and canners etc. II.-The point at which joint products emerge in their separately identifiable form is known as point of separation or split-off point. A. Only statement II is true B. Only statement I is true C. Both statements are false D. Both statements are trueABC Corp. sells warehouse equipment and provides temporary warehouse workers to businesses. With its business in mind, what would constitute a liability for ABCPaul wholly owns and operates an office supplies business and a printing/shipping business through separate entities. The office supplies business and printing/shipping business share centralized purchasing to obtain volume discounts and share a centralized accounting office that performs all necessary accounting for both businesses (including preparing financial statements, paying bills, collecting receivables, and preparing payrolls for both businesses). Paul maintains a website that promotes both businesses. The businesses operate in separate spaces in the same building (next to each other), but share an office and a shipping/receiving space at the rear of the building and an opening in the shared inside wall that allows customers to move between the businesses without going outside. Each business owns its own equipment and employs its own staff. May Paul aggregate these businesses for purposes of the QBI deduction? Explain.
- Hepworth Credit Corporation is a wholly owned subsidiary of a large manufacturer of computers. Hepworth is in the business of financing computers, software, and other services that the parent corporation sells. Hepworth has two departments that are involved in financing services: the Credit Department and the Business Practices Department. The Credit Department receives requests for financing from field sales representatives, records customer information on a preprinted form, and then enters the information into the computer system to check the creditworthiness of the customer. (Other actions may be taken if the customer is not in the database.) Once creditworthiness information is known, a printout is produced with this information plus other customer-specific information. The completed form is transferred to the Business Practices Department. The Business Practices Department modifies the standard loan covenant as needed (in response to customer request or customer risk profile). When this activity is completed, the loan is priced. This is done by keying information from the partially processed form into a personal computer spreadsheet program. The program provides a recommended interest rate for the loan. Finally, a form specifying the loan terms is attached to the transferred-in document. A copy of the loan-term form is sent to the sales representative and serves as the quote letter. The following cost and service activity data for the Business Practices Department are provided for the month of May: All materials and supplies are used at the end of the process Required: 1. How would you define the output of the Business Practices Department? 2. Using the FIFO method, prepare the following for the Business Practices Department: a. A physical flow schedule b. An equivalent units schedule c. Calculation of unit costs d. Cost of ending work in process and cost of units transferred out e. A cost reconciliationWhich of the following is the primary source of revenue for a service business? A. the production of products from raw materials B. the purchase and resale of finished products C. providing intangible goods and services D. the sale of raw materials to manufacturing firmsWhich of the following is the primary source of revenue for a merchandising business? A. the production of products from raw materials B. the purchase and resale of finished products C. the provision of intangible goods and services D. the sale of raw materials to manufacturing firms
- Listed below are definitions, examples, or descriptions related to business entities.1. Owned by one person2. Can make and sell goods (manufacturing)3. Owned by more than one person4. Can sell goods (merchandising)5. Can provide and sell services6. Legally, a separate entity from theowner(s)7. A law firm owned by some of theemployees who are each liable for thefinancial obligations of the entity8. The Coca-Cola CompanyRequired:1. For each of the three types of business entities (sole proprietorship, partnership, and corporation),select as many of the definitions, examples, or descriptions as apply to that type ofentity.2. CONCEPTUAL CONNECTION Explain the advantages and disadvantages of each type ofbusiness entity.XYZ Company has two business units selling two different products. Business unit A produces and sells sprinkler heads and requires customers to pay for their purchase prior to the production of the sprinkler heads. Business unit A recognizes revenue at the time of payment. Business unit B produces and sells household faucets and allows customers to pay for their faucets after they are delivered to the customer. Business unit B recognizes revenue when the customer receives the product. What is the likely effect that will occur by management in measuring and comparing the performance of each business unit? A Business unit A will have overstated revenue in comparison to business unit B. B Business unit A and business unit B can be effectively compared. C Business unit A will have understated revenue in comparison to business unit B. D Management cannot effectively compare the business units.Select Manufacturing Co. produces three joint products and one organic waste byproduct. Assuming the byproduct can be sold to an outside party.what is the correct accounting treatment of the byproduct proceeds received by the firm ? a.Apply sale proceeds on a prorated basis to the joint products’ sales. b.Use the sale proceeds to reduce the common costs in the joint production process. c.Apply the sale proceeds to the firm’s miscellaneous income account. d.Either “b” or “c” can be used.
- Select Manufacturing Co. produces three joint products and one organic waste byproduct. Assuming the byproduct can be sold to an outside party, what is the correct accounting treatment of the byproduct proceeds received by the firm? a. Apply sale proceeds on a prorated basis to the joint products’ sales. b. Use the sale proceeds to reduce the common costs in the joint production process. c. Apply the sale proceeds to the firm’s miscellaneous income account. d. Either “b” or “c” can be usedDameeya and Delischa discuss the application of MFRS 10, MFRS 11 and MFRS 128 in preparing the group financial statements of their employer, Mega Bhd. One of the issues was the investment in Dely Bhd. A contractual agreement between Mega Bhd, Turkiya Bhd and Bee Bhd enables them to jointly control Dely Bhd and decisions about relevant business activities of Dely Bhd should have the unanimous consent of all the companies sharing the control. Since Mega Bhd is the highest investor in Dely Bhd with 40% interest, Dameeya and Delischa were contented with the idea that the investment in Dely Bhd should apply the acquisition method and the financial statements of Dely Bhd should be consolidated with Mega Bhd in accordance with MFRS 10.Required:State your opinion on Dameeya and Delischa’s view. Discuss your opinion with reference to the relevant MFRSs. (MFRS10 Consolidated Financial Statements, MFRS11 Joint Arrangements and MFRS128 Investments in Associates and Joint Ventures)Phoenix Inc., a cellular communication company, has multiple business units, organized as divisions. Each division’s management is compensated based on the division’s operating income. Division A currently purchases cellular equipment from outside markets and uses it to produce communication systems. Division B produces similar cellular equipment that it sells to outside customers—but not to division A at this time. Division A’s manager approaches division B’s manager with a proposal to buy the equipment from division B. If it produces the cellular equipment that division A desires, division B will incur variable manufacturing costs of $60 per unit. Relevant Information about Division B Sells 90,000 units of equipment to outside customers at $130 per unit Operating capacity is currently 80%; the division can operate at 100% Variable manufacturing costs are $70 per unit Variable marketing costs are $8 per unit Fixed manufacturing costs are $900,000 Income per Unit for Division A…