Ace Your Budgeting and Forecasting Assignments with Ease
10. Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory system. The
Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
a. Sold merchandise for cash (cost of merchandise $12,797). $ 19,200
b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $120 ). 200
c. Sold merchandise (costing $2,850 ) to a customer on account with terms n/60. 6,000
d. Collected half of the balance owed by the customer in (c). 3,000
e. Granted a partial allowance relating to credit sales the customer in (c) had not yet paid.
1.Compute Net Sales and Gross Profit for Hair World.
2.Compute the gross profit percentage
3.Hair World is considering a contract to sell merchandise to a hair salon chain for $11,000. This merchandise will cost Hair World $8,080. What would be the increase (or decrease) to Hair World’s gross profit and gross profit percentage?
11. 209. Details of a purchase invoice and related credit memo are summarized as follows: Invoice:...
209. Details of a purchase invoice and related credit memo are summarized as follows:
Invoice: | Cost of merchandise listed on purchase invoice | $6,500 |
| Prepaid freight charge added to invoice | 150 |
| Terms, FOB shipping point, 1/10, n/eom |
|
| Credit memo: Cost of merchandise returned | $1,500 |
|
|
|
Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period. Determine the following:
(a) | Amount of the cash discount allowed. |
(b) | Amount to be paid by the purchaser if the discount is taken. |
(c) | Cost of the merchandise to the purchaser if the discount is NOT taken. |
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|
210. Conquest Company uses a perpetual inventory system. Conquest purchased $1,500 of merchandise on account and payment was made within the discount period. The credit terms were 2/10,n/30. Journalize Conquest’s purchase and payment.
211. Merchandise with a list price of $4,700 is purchased on account, terms FOB shipping point, 1/10, n/30. The seller prepaid freight costs of $100. Prior to payment, $1,400 of the merchandise is returned. The correct amount is paid within the discount period.
Record the foregoing transactions of the buyer in the sequence indicated below, assuming a perpetual inventory system is used.
(a) | Purchased the merchandise. |
(b) | Recorded receipt of the credit memo for merchandise returned. |
(c) | Paid the amount owed. |
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|
212. Details of invoices for purchases of merchandise are as follows:
|
|
|
| Returns and |
| Merchandise | Freight | Terms | Allowances |
(a) | $800 | $45 | FOB shipping point, 1/10, n/30 | $200 |
(b) | 4,600 | --- | FOB destination, n/30 | 800 |
(c) | 2,400 | 55 | FOB shipping point, 2/10, n/30 | 600 |
(d) | 7,500 | --- | FOB destination, 1/10, n/30 |
|
|
|
|
|
|
Determine the amount to be paid in full settlement of each of the invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.
213. Journalize the entries to record the following selected transactions:
(a) | Sold $900 of merchandise on account, subject to 7% sales tax. The cost of the merchandise sold was $510. |
(b) | Paid $436 to the state sales tax department for taxes collected. |
12. Problem P1-1 Budgets in Managerial Accounting
Problem P1-1 Budgets in Managerial Accounting
Santiago's Salsa is in the process of preparing a production cost budget for May. Actual costs in April were:
Santiago's Salsa
Production Cost Budget
April 2011
Production - Jars of salsa $25,000
Ingredient cost (variable) $20,000
Labor cost (variable) $12,000
Rent (fixed) $5,000
Depreciation (fixed) $6,000
Other (fixed) $1,000
Total $44,000
Required:
Part a: Using this information, prepare a budget for May. Assume that production will increase to 30,000 jars of salsa, reflecting an anticipated sales increase related to a new marketing campaign.
Part b.1: Does the budget suggest that additional workers are needed? Suppose the wage rate is $20 per hour. How many additional labor hours are needed in May?
Part b.2: What would happen if management did not anticipate the need for additional labor in May? Narrative answer:
13. Beth Corbin's regular hourly wage rate is $16, and she receives an hourly rate of $24 for work in...
Beth Corbin's regular hourly wage rate is $16, and she receives an hourly rate of $24 for work in excess of 40 hours. During a January pay period, Beth works 45 hours. Beth's federal income tax withholding is $95, and she has no voluntary deductions. Compute Beth Corbin's gross earnings and net pay for the pay period. Data for Beth Corbin are presented in BE 10-5. Prepare the journal entries to record (a) Beth's pay for the period and (b) the payment of Beth's wages. Use January 15 for the end of the pay period and the payment date.
14. The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as..
The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: The following additional information is taken from the records: A. Land was sold for $120. B. Equipment was acquired for cash. C. There were no disposals of equipment during the year. D. The common stock was issued for cash. E. There was a $62 credit to Retained Earnings for net income. F. There was a $24 debit to Retained Earnings for cash dividends declared. A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. B. Was Olson-Jones s net cash flow from operations more or less than net income? What is the source of this difference?
15. Stine Corp.'s trial balance reflected the following account balances at December 31, 2014: In St...
Stine Corp.'s trial balance reflected the following account balances at December 31, 2014: In Stine's December 31, 2014 balance sheet, the current assets total is $95,000. $87,000. $82,000. $78,000
16. 1. Which of the following transactions results in an immediate increase in expenses? (a) Purchase of
1. Which of the following transactions results in an immediate increase in expenses?
(a) Purchase of office equipment on credit.
(b) Payment of accounts payable.
(c) Payment of wages.
(d) Repayment of bank loan.
2. In practice, accountants record sales revenue when:
(a) An order is placed by a customer.
(b) Cash is received for the sales.
(c) A product is finished and ready for sale.
(d) An invoice or account is sent to the customer.
3. A capital expenditure results in a debit to:
(a) An asset account.
(b) An expense account.
(c) An equity account.
(d) A liability account.
4. Depending on the circumstances, the value of an asset could reasonably be thought
of as:
(a) Its replacement cost.
(b) Its realizable value in a market.
(c) The future benefits that will flow from it.
(d) Any of the above.
5. The IASB Framework gives primacy of definition to:
(a) Expenses and income.
(b) Payments and receipts.
(c) Equity.
(d) Assets and liabilities.
6. According to the IASB’s Framework, an asset is something:
(a) Owned.
(b) Controlled.
(c) Used.
(d) Owned and controlled.
7. The following would not be recognized as assets under IFRS rules:
(a) Research costs.
(b) Costs of setting up a business.
(c) Re-decoration of a building.
(d) All of the above.
17. 1. Which of the following is true of total quality management? A. It makes quality principles part o
1.
Which
of the following is true of total quality management?
A.
It
makes quality principles part of the organization’s strategic objectives.
B.
It
is applied only to a few aspects of operations.
C.
It
applies exclusively to the managers.
D.
It
applies to the inputs of a system.
E.
It
is a one-time improvement process.
2.
Which
of the following is a predominant principle of total quality management?
A.
Contingency
thinking
B.
Continuous
improvement
C.
Quantitative
analysis
D.
Progression
principle
E.
Deficit
principle
3.
An
ISO certification is a global indicator of the importance of:
A.
knowledge
management.
B.
evidence-based
management.
C.
total
quality management.
D.
quantitative
analysis.
E.
contingency
thinking.
4.
________
is the process of using intellectual capital for competitive advantage.
A.
Evidence-based
management
B.
Knowledge
management
C.
Quantitative
analysis
D.
Total
quality management
E.
Scientific
management
5.
Which
of the following is an intellectual asset?
A.
Receivables
B.
Inventory
C.
Patents
D.
Equipment
E.
Cash
6.
A
learning organization that continuously improves, using the lessons of
experience, is one that mainly practices ________.
A.
bureaucracy
B.
administrative
principles
C.
scientific
management
D.
evidence-based
management
E.
knowledge
management
7.
Which
of the following best describes evidence-based management?
A.
It
is the process of using intellectual capital for competitive advantage.
B.
It
involves making decisions based on hard facts about what really works.
C.
It
is the use of large data bases and mathematics to solve problems.
D.
It
is the science of reducing a task to its basic physical motions.
E.
It
emphasizes careful selection and training of workers and supervisory support.
18. Increasing the promotional budget for a product in order to increase awareness is not advisable...
Increasing the promotional budget for a product in order to increase awareness is not advisable in the short run under which of the following circumstances?paste your question here...
19. Problem 17-5A Comparative ratio analysis LO A1, P3 [The following information applies to the ques...
Show transcribed image text Problem 17-5A Comparative ratio analysis LO A1, P3 [The following information applies to the questions displayed belowl Summary information from the financial statements of two companies competing in the same industry Barco Barco Kyan Company Company Company Company Data from the current year's income statement Data from the current year-end balance sheets 770.000 s 880,200 Sales 632.500 585,100 19,500 34,000 Cost of goods sold Cash 7900 13,000 37400 57,400 nterest expense Accounts receivable, net 14,800 24,300 7200 Income tax expense Current notes receivable (trade) 162,200 210,400 Net Income 84,440 132,500 Merchandise inventory 4.51 511 5.000 6.950 Basic earnings per share Prepaid expenses 304,400 290.000 Plant assets, net 542.450 445.440 Total assets Beginning-of-year balance sheet data 29,800 54,200 Accounts receivable, net Liabilities and Equity 61,340 93,300 Current notes receivable (trade) Current llabilities 80,800 101,000 Merchandise Inventory 55,600 107400 Long-term notes payable 382,500 398,000 80.000 206,000 Total assets Common stock, $5 par value 206,000 180.000 123,300 142,150 Common stock, $5 par value Retained earnings 542,450 earnings Retained 445,440 s 93,600 98,300 Total liabilitles and equity
20. Prepare a trial balance as of 2010 August 31.
Economy Laundry Company had the following transactions in August 2010:
Aug. 1 Issued capital stock for cash, USD 150,000.
3 Borrowed USD 40,000 from the bank on a note.
4 Purchased cleaning equipment for USD 25,000 cash.
6 Performed services for customers who promised to pay later, USD 16,000.
7 Paid this month"s rent on a building, USD 2,800.
10 Collections were made for the services performed on August 6, USD 3,200.
14 Supplies were purchased on account for use this month, USD 3,000.
17 A bill for USD 400 was received for utilities for this month.
25 Laundry services were performed for customers who paid immediately, USD 22,000.
31 Paid employee salaries, USD 6,000.
31 Paid cash dividend, USD 2,000.
a. Prepare journal entries for these transactions.
b. Post the journal entries to T-accounts. Enter the account number in the Posting Reference column of the journal as you post each amount. Use the following account numbers:
No. | Acct. | Account Title |
100 |
| Cash |
103 |
| Accounts receivable |
170 |
| Equipment |
200 |
| Accounts payable |
201 |
| Notes payable |
300 |
| Capital stock |
320 |
| Dividends |
400 |
| Service revenue |
507 |
| Salaries expense |
511 |
| Utilities expense |
515 |
| Rent expense |
518 |
| Supplies expense |
c. Prepare a trial balance as of 2010 August 31.
21. Dividing Partnership Income Lawford and Delgado have decided to form a partnership. They have...
Dividing Partnership Income Lawford and Delgado have decided to form a partnership. They have agreed that Lawford is to invest $90,000 and that Delgado is to invest $30,000. Lawford is to devote one-half time to the business and Delgado is to devote full time. The following plans for the division of income are being considered: Equal division. In the ratio of original investments. In the ratio of time devoted to the business. Interest of 12% on original investments and the remainder equally. Interest of 12% on original inve
22. Miley Equipment Company sells computers for $1,500 each and also gives each customer
Miley Equipment Company sells computers for $1,500 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2010, the company sold 700 computers. Based on past experience, the company has estimated the total 2-y...
23. Describe the governmental activities of a state or local governm
Describe the governmental activities of a state or local government and identify the measurement focus and basis of accounting used in accounting and financial reporting for these activities.
24. Millar, Inc., purchased a truck to use for deliveries and is attempting to determine how much...
Millar, Inc., purchased a truck to use for deliveries and is attempting to determine how much depreciation expense would be recognized under three different methods. The truck cost $20,000 and is expected to have a value of $4,000 at the end of its five-year life. The truck is expected to be used at the rate of 10,000 miles in the first year, 20,000 miles in the second and third years, and 15,000 miles in the fourth and fifth years.
a. Determine the amount of depreciation expense that will be recognized under each of the following depreciation methods in the first and second years of the truck's useful life. A full year's depreciation will be recognized in the first year the truck is used. (Omit the ""$"" sign in your response.)
b. Prepare the plant assets section of the balance sheet at the end of the second year of the asset's useful life under the double-declining-balance method, assuming the truck is the only plant asset owned by Millar, Inc. (Amounts to be deducted should be indicated with a minus sign. Omit the ""$"" sign in your response.)
25. In a factory, two types of radios are manufactured viz. Orient and Sujan Models. From the following...
In a factory, two types of radios are manufactured viz. Orient and Sujan Models. From the following particulars, prepare a statement showing cost and profit per radio sold. There is no opening or closing stock.
26. All of the following statements in regard to working capital are correct except
All of the following statements in regard to working capital are correct except:
- Current liabilities are an important source of financing for many small firms.
- Profitability varies inversely with liquidity.
- The hedging approach to financing involves matching maturities of debt with specific financing needs.
- Financing permanent inventory buildup with long-term debt is an example of an aggressive working capital policy.
27. Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the...
Show transcribed image text Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below The following transactions occurred during April: (a) Purchased materials on account at a cost of $232,770. (b) Requisitioned materials at a cost of $112,100, of which $15,900 was for general factory use. (c) Recorded factory labor of $225,700, of which $42,975 was indirect. (d) Incurred other costs: Selling expense Factory utilities Administrative expenses Factory rent Factory depreciation $35,600 23,100 51,550 11,800 20,300 (e) Applied overhead at a rate equal to 132 percent of direct labor cost ( Completed jobs costing $262,550 (g) Sold jobs costing $323,270 (h) Recorded sales revenue of $516,000 Required 1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. (Round your answers to 2 decimal places.)
28. Ranns Supply uses a perpetual inventory system
Ranns Supply uses a perpetual inventory system. On January 1, its inventory account had a beginning balance of $6,450,000. Ranns engaged in the following transactions during the year:
1. Purchased merchandise inventory for $9,500,000.
2. Generated net sales of $26,000,000.
3. Recorded inventory shrinka...
29. Which of the following statements is incorrect concerning the worksheet?
Which of the following statements is incorrect concerning the worksheet?
a. The worksheet is essentially a working tool of the accountant.
b. The worksheet is distributed to management and other interested parties.
c. The worksheet cannot be used as a basis for posting to ledger accounts.
d. Financial statements can be prepared directly from the worksheet before journalizing and posting the adjusting entries.
30. Explain how Strategic Management Accounting can provide information which meets the requirements of...
Management accounting practice has traditionally focused on techniques to assist organisational decision-making and cost control. In concentrating on the internal environment, the management accounting function has been criticised for not addressing the needs of senior management to enable effective strategic planning. In particular, the criticism has focused on inadequate provision of information which analyses the organisation's exposure to environmental change and its progress towards the achievement of corporate objectives.
Requirement:
Explain how Strategic Management Accounting can provide information which meets the requirements of senior managers in seeking to realise corporate objectives.