A cash receipts journal and a cash payments journal are provided in the Working Papers. Source documents are abbreviated as: check, C; receipt, R.

Using the current year, journalize the following transactions.

Transactions:
May 16.	Signed a 180-day, 10% note with First National Bank, $16,000.00. R335.
Aug. 8.	Signed a 120-day, 9% note with American Bank,$20,000.00. R456.
Dec. 3.	Drew $16,900.00 from a line of credit. R615.

J. Lo’s Clothiers has forecast credit sales for the fourth quarter of the year. Experience has shown that 30 percent of sales are collected in the month of sale, 60 percent are collected in the following month, and 10 percent are never collected. Prepare a schedule of cash receipts for J. Lo’s Clothiers covering the fourth quarter (October through December).

Wright Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on May 31, 2017, its Cash account shows a $27,500 debit balance. The company’s May 31 bank statement shows$25,800 on deposit in the bank. Prepare a bank reconciliation for the company using the following information. a. The May 31 bank statement lists $100 in bank service charges; the company has not yet recorded the cost of these services. b. Outstanding checks as of May 31 total$5,600. c. May 31 cash receipts of $6,200 were placed in the bank’s night depository after banking hours and were not recorded on the May 31 bank statement. d. In reviewing the bank statement, a$400 check written by Smith Company was mistakenly drawn against Wright’s account. e. The bank statement shows a $600 NSF check from a customer; the company has not yet recorded this NSF check.

Assume that Wise Co. in the previous problem uses the periodic inventory system.

Required
1. Prepare headings for a sales journal like the one in Exhibit 7A.1. Prepare headings for a cash receipts journal like the one in Exhibit 7A.2. Journalize the April transactions shown in the previous problem that should be recorded in the sales journal and the cash receipts journal assuming the periodic inventory system is used.
2. Open the general ledger accounts with balances as shown in the previous problem (do not open a Cost of Goods Sold ledger account). Also open accounts receivable subsidiary ledger accounts for Brooke Sledd, Paul Kohr, and Amy Nilson. Under the periodic system, an Inventory account exists but is inactive until its balance is updated to the correct inventory balance at year-end. In this problem, the Inventory account remains inactive but must be included to correctly complete the trial balance.
3. Complete parts 3, 4, and 5 of the previous problem using the results of parts 1 and 2 of this problem.

During a recent month, Cleveland Company planned to provide cleaning services to 30 customers for $25 per hour. Each job was expected to take 3 hours. The company actually served 10 more customers than expected, but the average time spent on each job was only 2.5 hours each. Cleveland's revenues for the month were a.$250 more than expected. b. $250 less than expected. c.$750 more than expected. d. Cannot be determined from data given

Several years ago, a man won $27 million in the state lottery. To pay off the winner, the state planned to make an initial$1 million payment today followed by equal annual payments of $1.3 million at the end of each year for the next 20 years. Just before receiving any money, the man offered to sell the winning ticket back to the state for a onetime immediate payment of$14.4 million. If the state uses a 6 percent/year $MARR$, should it accept the man’s offer? Use a future worth analysis.

Indicate whether each of the following donated services situations would require a journal entry for contribution revenue and a related expense or asset by answering Y for yes or N for no.

Y N 1. Volunteers worked as sales assistants in a not-for-profit hospital snack shop.
Y N 2. An architect provided pro bono design services for the planned remodeling of a local museum.
Y N 3. A member of a church volunteered to repaint the church’s activities room to make it more attractive. Church leaders had not planned to repaint the room.
Y N 4. Several local persons used their cars to deliver meals to senior citizens for Meals on Wheels.
Y N 5. A psychiatrist volunteered several hours each week at a not-for-profit counseling center to assist persons with alcohol and drug addiction.
Y N 6. A local CPA firm performed the regular annual financial statement audit for the university’s chapter of Beta Alpha Psi.
Y N 7. A local pastor donated several hours weekly to the local food bank run by an NFP.
Y N 8. A registered dietitian donates several hours each summer providing dietary instruction to children with diabetes who are attending a camp sponsored by the local chapter of the American Diabetes Association.

Cooking Whiz manufactures premium food processors. The following are some manufacturing overhead data for Cooking Whiz for the year ended December 31, 2017:

$$\begin{matrix} \text{Manufacturing Overhead} & \text{Actual Results} & \text{Flexible Budget} & \text{Allocated Amount}\\ \text{Variable } & \text{\$ 71.808} & \text{\$ 80.640} & \text{\$ 80.640}\\ \text{Fixed } & \text{360.672} & \text{351.360} & \text{368.640}\\ \end{matrix}$$

Budgeted number of output units: 915. Planned allocation rate: 2 machine-hours per unit. Actual number of machine-hours used: 1.632. Static-budget variable manufacturing overhead costs: $76.860. Compute the following quantities (you should be able to do so in the prescribed order): 1. Budgeted number of machine-hours planned. 2. Budgeted fixed manufacturing overhead costs per machine-hour. 3. Budgeted variable manufacturing overhead costs per machine-hour. 4. Budgeted number of machine-hours allowed for actual output produced. 5. Actual number of output units. 6. Actual number of machine-hours used per output unit.

Bjork Larsen was trying to decide whether to use a new racing wax for cross-country skis. He decided that the wax would be worth the price if he could average less than 55 seconds on a course he knew well, so he planned to study the wax by racing on the course 8 times. His 8 race times were 56.3, 65.9, 50.5, 52.4, 46.5, 57.8, 52.2, and 43.2 seconds. Should he buy the wax? Explain by using a confidence interval

Stallworth Company uses the direct write-off method of recording uncollectible accounts expense. A general journal and cash receipts journal are provided in the Working Papers.

Instructions:

Journalize the following transactions completed during the current year. Use page 4 of a general journal and page 6 of a cash receipts journal. Source documents are abbreviated as follows: memorandum, M; receipt, R.

Transactions:

Jan. 23. Rochelle Company's legal counsel notified Stallworth of its plans to declare bankruptcy. Write off the $325.15 account balance as uncollectible. M42.

Mar. 6. Received a$168.25 check from Norris Industries in full payment of its account. Norris Industries was never notified that Stallworth previously wrote off the account as uncollectible. M62 and R432.

May 9. Based on conversations with managers at Guice Corporation, the account is expected to become uncollectible, $421.05. M73.

July 30. Received a check from Zimmer Supply as a partial payment on its account that was previously written off as uncollectible,$250.00. M85 and R503.

The partners share equally in all changes in equity. For the situation, prepare the appropriate journal entries to admit a new partner on June 1 of the current year. A cash receipts journal and a general journal are provided in the Working Papers. Source documents are abbreviated as follows: memorandum, M; receipt, R.

Marie Henson and Bobby Edwards each have $40,000.00 of equity. Cindy Yates will pay the partnership$34,000.00 cash for a one-third share in the business. R135 and M38.

The amount of catalyst $(x)$ and the yield $(y)$ of a chemical experiment are analyzed using a simple linear regression model. There are 30 observations $(x_i , y_i )$, and it is found that the fitted model is

$$y = 51.98 + 3.44x$$

Suppose that the sum of squared residuals is $\sum_{i=1}^{30} e_i^2 = 329.77$, and that $\sum_{i=1}^{30} x_i = 603.36, \sum_{i=1}^{30} x_i^2 = 12578.22$. If an additional experiment is planned with a catalyst level 22, give a range of values with $95\%$ confidence for the yield that you think will be obtained for that experiment.

The total sustained load on the concrete footing of a planned building is the sum of the dead load plus the occupancy load. Suppose that the dead load

$$X _ { 1 }$$

has a gamma distribution with

$$\alpha _ { 1 } = 50 \text { and } \beta _ { 1 } = 2$$

, whereas the occupancy load

$$X _ { 2 }$$

has a gamma distribution with

$$\alpha _ { 2 } = 20 \operatorname { and } \beta _ { 2 } = 2$$

. (Units are in kips.) Assume that

$$X _ { 1 } \text { and } X _ { 2 }$$

are independent. Find a value for the sustained load that will be exceeded with probability less than 1/16.

Assume that you are on the board of directors of a company that has decided to buy 80 percent of the outstanding stock of another company within the next three or four months. The discussions have convinced you that this company is an excellent investment opportunity, so you decide to buy $10,000 worth of the company’s stock for your personal portfolio. Is there an ethical problem with your decision? Would your answer be different if you planned to invest$500,000? Are there different ethical considerations if you don’t buy the stock but recommend that your brother do so?