FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On June 1,2023 , Oriole Company and Waterway Company merged to form Wildhorse Inc. A total of 725,000 shares we complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2025, the company issued an additional 616,000 shares of stock for cash. All 1,341,000 shares were outstanc December 31, 2025. Wildhorse Inc. also issued $600,000 of 20 -year, 8% convertible bonds at par on July 1,2025 . Each $1,000 bond converts of common at any interest date. None of the bonds have been converted to date. Wildhorse Inc. is preparing its annual report for the fiscal year ending December 31, 2025. The annual report will show share figures based upon a reported after-tax net income of $1,592,000. (The tax rate is 20%.) Determine the following for 2025. a. The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. 2,500.) Basic earnings per share shares Diluted earnings per share shares b. The earnings figures to be used for calculating: (Round answers to 0 decimal places, e.g. 2,500.) Basic earnings per share $
Transcribed Image Text:The cheque-clearing office of Pay Loans Company is responsible for processing all cheques that come to the company for payment.
Managers at the company believe that variable overhead costs are essentially proportional to the number of labour-hours worked in
the office, so labour-hours are used as the activity base when preparing variable overhead budgets and performance reports. Data for
October, the most recent month, appear below:
Budgeted labour-hours
1,500
Actual labour-hours
1,460
Standard labour-hours allowed for the actual number of cheques processed
1,520
Variable overhead costs:
Office supplies
Staff coffee lounge
Indirect labour
Total variable overhead cost
Cost
Formula
Actual
(per
Costs
labour
Incurred in
hour)
October
$ 0.90
0.50
3.90
$ 1,277
710
4,325
$ 5.30
$ 6,312
Fixed overhead at Pay Loans Company consists entirely of supervisory salaries and is applied at a rate of $6 per direct labour-hour.
Actual fixed overhead costs totalled $6,400 In October, while the flexible budget was $6,000 for the month.
Required:
Prepare an overhead performance report for October for the cheque-clearing office that Includes both spending and efficiency
variances for variable overhead and the budget variance for fixed overhead. (Indicate the effect of each variance by selecting "F" for
favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).)
Overhead costs
Cost Actual Costs
Formula Incurred for
(per labour- 1,460 Labour-
hour)
Hours
Variable overhead costs:
Office supplies
$
0.90
$
1,277
Staff coffee lounge
0.50
710
Indirect labour
3.90
4,325
Total variable overhead cost
$
5.30
$
6,312
Fixed overhead costs:
Supervisory salaries
Total overhead cost
6.400
$
12,712
PAY LOANS COMPANY
Overhead Performance Report
For the Month Ended October 31
Flexible
Budget Based
on 1,460
Labour-Hours
Flexible
Budget Based
on 1,520
Labour-Hours
Total Variance
F
None
U
Breakdown of the Total Variance
Spending (Budget)
Variance
Efficiency Variance
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