Widgeon Co manufactures three products: Bales; Tales; and Wales. The selling prices are: $55; $78; and $32, respectively. The variable costs for each product are: $20; $50; and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 7 hours to process, Tales take 4 hours, and Wales take 1 hour. Assuming that Widgeon
produced enough product with the highest contribution margin per unit to use 1,000 hours of machine time. Product demand does not warrant any more production of that product. What is the maximum additional contribution margin that can be realized by utilizing the remaining 1,000 hours on the product with the second highest contribution margin per hour?
A) $5,000
B) $7,000
C) $4,000
D) $28,000
B
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The changes in account balances of the Dunedin Corporation during 2014 are presented below: Increase Assets ............................................... $133,500 Liabilities .......................................... 40,500 Common Stock ......................................... 90,000 Additional Paid-In Capital ........................... 9,000 Assuming there are no changes in retained
earnings except for net income and a dividend payment of $19,500, the net income for 2014 should be a. $6,000. b. $13,500. c. $19,500. d. $25,500.
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Indicate whether the statement is true or false
Which of the following is false regarding contingent consideration in business combinations?
A. The contingent consideration fair value is recognized as part of the acquisition regardless of whether eventual payment is based on future performance of the target firm or future stock price of the acquirer. B. Contingent consideration is recorded because of its substantial probability of eventual payment. C. Contingent consideration is reflected in the acquirer's balance sheet at the present value of the potential expected future payment. D. Contingent consideration payable in stock shares is reported under stockholders' equity. E. Contingent consideration payable in cash is reported under liabilities.
Stephanie is a calendar year cash basis taxpayer. She owns a 50% profit and loss interest in a cash basis partnership with a September 30 year-end. The partnership’s operating income (after deducting guaranteed payments) was $120,000 ($10,000 per month) and $144,000 ($12,000 per month), respectively, for the partnership tax years ended September 30, 2019 and 2020. The partnership paid guaranteed payments to Stephanie of $2,000 and $3,000 per month during the fiscal years ended September 30, 2019 and 2020. How much will Stephanie’s adjusted gross income be increased by these partnership items for her tax year ended December 31, 2019?
A. $60,000 B. $72,000 C. $84,000 D. $90,000 E. $108,000