Michael was driving back to the office from his off-site construction job on Friday. He had put in a long week and just wanted to go home. But a text from Robert back in the office reminded him to enter his weekly mileage-the accountants needed to finish the company's total fleet expenses for its quarterly income statement-and the performance evaluation meeting was on Monday. Michael was frustrated that his weekend was now going to be delayed because of this data entry business. He wondered why Robert couldn't just use the fuel cost for the income statement. In the end, Michael complied with Robert's request and input his mileage information. Michael's mileage was added to the other vehicles' mileage information, with the quarterly totals listed below. Total fleet expenses on the income statement are a combination of the five costs shown here. 8888 Q1 Q2 Q3 Q4 Vehicle Insurance $1,700 1,700 1.700 1,700 Registration Fees Fuel $1.100 $2,700 1,100 3,000 1,100 2,600 1,100 3,200 Depreciation (Shed & Vehicles) $5,100 5,100 5,100 5,100 Vehicle Maintenance Miles Driven $2.565 27,000 2,610 30,000 2,354 26,000 2,828 32,000

t is the last day of the month and fiscal year, your manager asks you to create an invoice for $10,000 (debiting Accounts Receivable and Crediting Sales) and send it to a specified customer. Normally invoices are sent to customers when products have been shipped or the service has been finished. You manager tells you that we will be shipping equipment and performing the setup services for this customer next month (as early as next week). You know that by preparing the closing entries tomorrow, the revenue will be included in this year’s fiscal year and then the revenue account will be set to zero for the beginning of the year.   How would you respond to your manager? Do you have any suggestions or alternative ways you would recommend to your manager on how to record this?

You are the manager of accounting for a company that sells computer software packages. You have just received word from the comptroller that there has been a change in the expense allowances for employees using their own cars on business. Previously one rate was applied to all employees, but now there will be different allowance rates for regular and nonregular drivers Effective immediately, regular drivers will receive $1.00 per mile for the first 650 miles driven per month, and 25¢ for each additional mile; nonregular drivers will receive 80¢ per mile for the first 150 miles per month, and 25¢ for each additional mile Regular drivers are those who use their own cars frequently on the job to drive to their sales territories. Nonregular drivers are those employees-such as home-office personnel-who only occasionally use their cars on business. To ensure that these categories are used properly, you have requested that the manager of each department notify Accounts Payable, in writing,…

Jason Kemp was torn between conflicting emotions. On the one hand, things were going so well. He had just completed 6 months as the assistant financial manager in the Electronics Division of Med-Products Inc. The pay was good, he enjoyed his coworkers, and he felt that he was part of a team that was making a difference in American health care. On the other hand, his latest assignment was causing some sleepless nights. Mel Cravens, his boss, had asked him to “refine” the figures on the division’s latest project—a portable imaging device code—named ZM. The original estimates called for investment of $15.6 million and projected annual income of $1.87 million. Med-Products required an ROI of at least 15% for new project approval. So far, ZM’s rate of return was nowhere near that hurdle rate. Mel encouraged him to show increased sales and decreased expenses in order to get the projected income above $2.34 million. Jason asked for a meeting with Mel to voice his concerns.   Jason: Mel, I’ve…

Jason Kemp was torn between conflicting emotions. On the one hand, things were going so well. He had just completed 6 months as the assistant financial manager in the Electronics Division of Med-Products Inc. The pay was good, he enjoyed his coworkers, and he felt that he was part of a team that was making a difference in American health care. On the other hand, his latest assignment was causing some sleepless nights. Mel Cravens, his boss, had asked him to “refine” the figures on the division’s latest project—a portable imaging device code—named ZM. The original estimates called for investment of $15.6 million and projected annual income of $1.87 million. Med-Products required an ROI of at least 15% for new project approval. So far, ZM’s rate of return was nowhere near that hurdle rate. Mel encouraged him to show increased sales and decreased expenses in order to get the projected income above $2.34 million. Jason asked for a meeting with Mel to voice his concerns.   Jason: Mel, I’ve…

Data Recovery Services (DRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. DRS offers a 15% discount to students and faculty at educational institutions. Consider the following transactions during the month of June.   June 10 Rashid’s hard drive crashes and he sends it to DRS. June 12 After initial evaluation, DRS e-mails Rashid to let him know that full data recovery will cost $2,200. June 13 Rashid informs DRS that he would like them to recover the data and that he is a student at UCLA, qualifying him for a 15% educational discount and reducing the cost by $330 ( = $2,200 × 15%). June 16 DRS performs the work and claims to be successful in recovering all data. DRS asks Rashid to pay within 30 days of today’s date, offering a 4% discount for payment within 10 days. June 19 When Rashid receives the hard drive, he notices that DRS did not successfully recover all data.…

Data Recovery Services (DRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. DRS offers a 20% discount to students and faculty at educational institutions. Consider the following transactions during the month of June. June   10   Rashid’s hard drive crashes and he sends it to DRS. June   12   After initial evaluation, DRS e-mails Rashid to let him know that full data recovery will cost $2,900. June   13   Rashid informs DRS that he would like them to recover the data and that he is a student at UCLA, qualifying him for a 20% educational discount and reducing the cost by $580 ( = $2,900 × 20%). June   16   DRS performs the work and claims to be successful in recovering all data. DRS asks Rashid to pay within 30 days of today’s date, offering a 3% discount for payment within 10 days. June   19   When Rashid receives the hard drive, he notices that DRS did not successfully…

You are working for a large firm that has asked you to attend a career fair at a university that is 185 miles from your office. You need to be there at 9:00 a.m. on a Monday morning. You can drive your personal car and be reimbursed $0.55 per mile, but you would need to leave home at 5:30 a.m. to get to the event and set up on time. Company policy allows you to spend the night if you must leave town before 6:00 a.m. The hotel across the street from campus charges $85 per night. Instead of driving, you could catch a 7:00 a.m. flight with a round-trip fare of $260. Flying would require you to rent a car for $29 per day, and you would have an airport parking fee of $20 for the day. The company pays a per diem of $40 for incidentals if you spend at least 6 hours out of town. (The per diem would be for one 24-hour period for either flying or driving.) As a manager, you are responsible for recruiting within a budget and want to determine which is more economical. Use the information provided to answer these questions. A. What is the total amount of expenses you would include on your expense report if you drive? B. What is the total amount of expenses you would include on your expense report if you fly? C. What is the relevant cost of driving? D. What is the relevant cost of flying? E. What is the differential cost of flying over driving? F. What other factors should you consider in your decision between driving and flying?

Derek Dingler conducts corporate training seminars on managerial accounting techniques all around the country. An upcoming training seminar is to be held in Philadelphia. Just prior to that engagement, Derek will be in New York City. He plans to stay in Philadelphia the night of the seminar, as the next morning he plans to meet with clients about future training seminar possibilities. One travel option is to fly from New York to Philadelphia on the first flight on Friday morning, which will get him to Philadelphia two hours before the start of his seminar. The cost of that flight is $287. Uber fees for his time in Philadelphia will cost $68. His meal per diem is $40 for each full day and $25 for each half day. The hotel cost is $225 per night. His second option is to rent a car and drive the two hours to Philadelphia from New York City the afternoon before the seminar. The cost of the rental car including gas is $57 per day and the car will be needed for two full days. At the end of…

Derek Dingler conducts corporate training seminars on managerial accounting techniques all around the country. An upcoming training seminar is to be held in Philadelphia. Just prior to that engagement, Derek will be in New York City. He plans to stay in Philadelphia the night of the seminar, as the next morning he plans to meet with clients about future training seminar possibilities. One travel option is to fly from New York to Philadelphia on the first flight on Friday morning, which will get him to Philadelphia two hours before the start of his seminar. The cost of that flight is $287. Uber fees for his time in Philadelphia will cost $68. His meal per diem is $40 for each full day and $25 for each half day. The hotel cost is $225 per night. His second option is to rent a car and drive the two hours to Philadelphia from New York City the afternoon before the seminar. The cost of the rental car including gas is $57 per day and the car will be needed for two full days. At the end of…