Question

when you gotta study for other classes and have no time fornthis class. Help is gladly appreciated!

Exchange Corp. is a company that acts as a factor in tax-favored real estate wees. Such was know as 1031 exchanges permit participants to avoid some or all of the capital gains taxes that would otherwise be due. The bookkeeper for the company has been asked to prepare a report for the company to help its owner manager analyze performance. The first such report appears below Exchange Corp Analysis of Revers and Costs For the month Eaded 31 pling Budget Actual unit Unit Revenues and Costs Costs Variances Exchanges completed $ 610 $ 65e 54 Legal and search fees Office expenses t depreciation 195 2394 E Insurance Total expense et operating income Note that the revenues and costs in the above report are unit revenues and costs. For example, the average office expense is $239 per exchange completed on the planning budget whereas, the average actual office expense is $196 per exchange completed Legal and search fees is a variable cost office expenses is a mixed cost and equipment depreciation, rent, and insurance are fixed costs. In the planning budget, the fixed component of office expenses was $4,600. All of the company's revenues come from fees collected when an exchange is completed. Required: 1. Is the report prepared by the bookkeeper useful as a performance report? 2. Complete the performance report that would help the owner manager assess the performance of the company in May Complete this question by en Required Regu Complete the performance report that would help the owner/manager assess the performance of the company in May. (Indicate the effect variance by selecting "F for favorable, "Ufor unfavorable, and "None for no effect (Lezero variance). Input all amounts as positive valu Exchange Corp Flexible Budget Performance Report For the Month Ended May 31 Ach Results

Answer 1

1. No, the report prepared by the bookkeeper is not useful as a performance report is prepared in per unit basis not on total basis.

F G H B C D E Exchange Corp Flexible Budget Performance Report For the Month Ended May 31 Revenue Actual and Flexible Results Spending Budget Variances 25 $15,250 $1.000U $16,250 Particulars Activity Variances Planning Budget 20 $13.000 $3,250 F 4 5 Exchanges Completed 6 Revenue 7 8 Expenses : 9 Legal and search fees 10 Office expenses 11 Equipment depreciation 12 Rent 13 Insurance 14 15 Total Expenses 16 Net Operating Income $5,525 $4,900 $600 $1.500 $3001 $400 U -$1,075 F -S150 F -$375 F -$75 F $5.125 $5,975 $750 $1,8751 $375 $1,025 U $1,195 U $150 UI $375 U $75 U $4,100 $4.780 $6001 $1,500 $300 $12.825 $2,425 $1,275 F $275F $14.100 $2.150 $2.820 U S430 F $11,2801 $1,720

A B F G H C D E Exchange Corp Flexible Budget Performance Report For the Month Ended May 31 N w Particulars Actual Results Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget 20 =E6-B6 U =E5*650 =E6-H6 F =H5*650 U 4 5 Exchanges Completed 25 6 Revenue =610*B5 7 8 Expenses : 9 Legal and search fees =$B$5*221 10 Office expenses =SBS5*196 11 Equipment depreciation =SB$5*24 12 Rent =SB$5*60 13 Insurance =SBS5*12 14 15 Total Expenses =SB$5*513 16 Net Operating Income =$B$5*97 17 =B9-E9 =B10-E10 =B11-E11 =B12-E12 =B13-E13 =E$5*205 F =ES5*239 F =ES5*30 F =E$5*75 F =E$5*15 =E9-H9 =E10-H10 =E11-H11 =E12-H12 =E13-H13 U =H$5*205 U=HS5*239 U =HS5*30 U =H$5*75 U =H$5*15 =SUM(C9:C14) F =ES5*564 =B16-E16 F =E$5*86 =SUM(F9:F13) U=H$5*564 =F6-F15 F =H$5*86