Record journal entries for the following: (a) On December 1, ...

[ssal]

Record journal entries for the following: (a) On December 1, 18,000 was received for a service contract to be performed from December 1 through April 30. (b) If the service work for this contract is performed evenly and on a regular basis throughout this period, prepare the adjusting journal entry on December 31.

Question 2

Under the revised ABC system, the activity-cost driver rate for the supervision activity is ________.
 
  Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:
 
   T-SHIRTS SWEATSHIRTS
  Production and sales volume 60,000 units 35,000 units
  Selling price 16.00 29.00
  Direct material  2.00  5.00
  Direct labor  4.50  7.20
  Manufacturing overhead  2.00  3.00
  Gross profit  7.50 13.80
  Selling and administrative  4.00  7.00
   Operating profit  3.50  6.80
 
  What is projected operating income if direct materials costs of T-Shirts increase to 4.00 per unit and direct labor costs of Sweatshirts increase to 8.20 per unit?
 
  A) 2.58
  B) 2.40
  C) 2.24
  D) 1.16

[randomguy133]

Answer to Question 1

12/1 Cash 18,000
Unearned Fees 18,000

12/31 Unearned Fees 3,600
Fees Earned 3,600
(18,000 / 5 months = 3,600)

Answer to Question 2

Answer: D