Business
On December 15, 2013, Rigsby Sales Co. sold a tract of land that cost $3,600,000 for $4,500,000. Rigsby appropriately uses the installment sale method of accounting for this transaction. Terms called for a down payment of $500,000 with the balance in two equal annual installments payable on December 15, 2014, and December 15, 2015. Ignore interest charges. Rigsby has a December 31 year-end. In its December 31, 2013, balance sheet, Rigsby would report: a. Realized gross profit of $100,000. b. Deferred gross profit of $100,000. c. Installment receivables (net) of $3,200,000. d. Installment receivables (net) of $4,
Nanjones Company manufactures a line of products distributed nationally through wholesalers. Presented below are planned manufacturing data for the year and actual data for November of the current year. The company applies overhead based on planned machine hours using a predetermined annual rate. Planning Data Annual NovemberFixed manufacturing overhead $1,200,000 $100,000Variable manufacturing overhead 2,400,000 220,000Direct labor hours 48,000 4,000Machine hours 240,000 20,000Data for NovemberDirect labor hours (actual) 4,200 Direct labor hours (plan based on output) 4,000 Machine hours (actual) 21,600 Machine hours (plan based on output) 21,000 Fixed manufacturing overhead $101,200 Variable manufacturing overhead $214,000 The fixed overhead volume variance for November wasa. $1,200 unfavorable.b. $5,000 favorable.c. $5,000 unfavorable.d. $10,000 favorable.