Assignment Assistance: Elevate Your Accounting Grades
1. 1. Consider a firm with a 2007 net income of
1. Consider a firm with a 2007 net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover?
A) 12.50
B) 10.00
C) 42.00
D) 4.16
E) 20.00
2. A shipment of parts valued at $75,000 needs to be shipped from Tampa, FL, to Chicago, IL. They could be shipped by rail, taking 15 days at a cost of $1,575, or by truck, taking 4 days at a cost of $2,640. The annual holding cost rate for this type of item has been estimated at 22%. What option is more economical? Answer: Send the shipment by rail.
A) True
B) False
3. A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing
A) Postponement
B) Cross-docking
C) Channel assembly
D) Drop shipping
E) Float reduction
4. A fried chicken fast-food chain that acquired feed mills and poultry farms has performed
A) Horizontal integration
B) Forward integration
C) Backward integration
D) Current transformation
E) Job expansion
5. Which of the following is an opportunity for effective management in the supply chain?
A) Random "pull" data
B) Multistage control of replenishment
C) The bullwhip effect
D) Customer managed inventory
E) Channel assembly
6. In most acceptance sampling plans, when a lot is rejected, the entire lot is inspected and all defective items are replaced. When using this technique the AOQ
A) Worsens (AOQ becomes a larger fraction)
B) Improves (AOQ becomes a smaller fraction)
C) Is not affected, but the AQL is improved
D) Is not affected
E) Falls to zero
2. Which of the following is not an element of manufacturing overhead?
Which of the following is not an element of manufacturing overhead?
a. Sales manager’s salary.
b. Plant manager’s salary.
c. Factory repairman’s wages.
d. Product inspector’s salary.
3. The accountant of ABC Company is preparing a bank reconciliation statement for t month of October. T
The accountant of ABC Company is preparing a bank reconciliation statement for t month of October. The bank statement shows a balance of $9,719 while the ledger balan is $7,261. He compiles the following information: Description Amount $1,380 $500 $336 $775 $15 $4,036 $3.402 $1,450 Check #3119 recorded at $1,830 bNSF checks a EFT for insurance deducted c d EFT for rent collected e Service charge deducted fOutstanding checks g Deposit in transit hNotes collected by bank Compute the adjusted bank balance for the month of October a. $10,520 b. $9,070 c. $9,085 d. $8,749
Reconciliation of Jazz Company's bank account at May 31 of the current year is: Balance per bank statement 2,600,000 Deposits outstanding 300,000 Bank service charge 10,000 Erroneous bank charge 40,000 Outstanding checks (100,000) Erroneous bank credits (60,000) CM for collection of note (600,000) Balance per book 2,190,000 June data are as follows: Bank Book Checks recorded 2,200,000 2,500,000 Correction of erroneous bank credit in May 60,000 Deposits recorded 1,600,000 1,800,000
Correction of erroneous bank charge 40,000 Services charges recorded 50,000 CM for collection of bank 550,000 600,000 NSF checks returned with June 30 statement (will be redeposited) 100,000
Questions: Based on the above data and the result of your audit, compute for the following: 1. How much is the total outstanding checks on June 30? a. 400,000 c. 190,000 b. 510,000 d. 340,000 2. How much is the total deposit in transit on June 30? a. 510,000 c. 100,000 b. 500,000 d. 90,000 3. How much is the total adjusted cash receipts in June? a. 2,350,000 c. 2,190,000 b. 2,400,000 d. 2,030,000
4, How much is the total adjusted cash disbursements in June? a. 2,650,000 c. 2,500,000 b. 2,280,000 d. 2,490,000 5. How much is the total adjusted cash balance as of June 30? a. 2,480,000 c. 2,370,000
b. 2,280,000 d. 2,490,000
5. The standard time allowed for a job is 50 hours. The hourly rate of wages is Rs 4.00 plus a DA of 25...
The standard time allowed for a job is 50 hours. The hourly rate of wages is Rs 4.00 plus a DA of 25 paise per hour worked. The actual time taken by the worker was 40 hours. Calculate the earnings per hour worked under Halsey's premium plan and Rowan's plan.
6. The following information pertains to the inventory of Parvin Company for Year 3 Beginning invent...
Please help answers part a, b & c
The following information pertains to the inventory of Parvin Company for Year 3 Beginning inventory Jan. 1 Apr. 1Purchased Oct. Purchased 400 units 8 $30 2,000 units 8 $35 600 units $38 During Year 3, Parvin sold 2,700 units of inventory at $90 per unit and incurred $41,500 of operating expenses. Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 30 percent income tax rate. Parvin started the period with cash of $75,000, inventory of $12,000, common stock of $50,000, and retained earnings of $37,000 a. Prepare income statements using FIFO and LIFO PARVIN COMPANY Income Statements For the Year Ended December 31, Year 3 FIFO LIFO $ 243,000 243,000 Sales Cost of goods sold Gross margin Operating expenses Income before tax ncome tax expense 0 0 et income
Bradbeer Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,500 hours. At the end of the year, actual direct labor-hours for the year were 16,000 hours, the actual manufacturing overhead for the year was $233,000, and manufacturing overhead for the year was under applied by $15,400. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:
A) $249,375
B) $217,600
C) $228,000
D) $238,000
8. E21A1. (Lessee Entries; Finance Lease with No Residual Value) (LO 1, 4) DU Journeys enters into...
E21A1. (Lessee Entries; Finance Lease with No Residual Value) (LO 1, 4) DU Journeys enters into an agreement with Traveler Inc. to lease a car on December 31, 2016. The following information relates to this agreement. 1.The term of the noncancelable lease is 3 years with no renewal or bargain purchase option. The remaining economic life of the car is 3 years, and it is expected to have no residual value at the end of the lease term. 2.The fair value of the car was $15,000 at commencement of the lease. 3.Annual payments are required to be made on December 31 at the end of each year of the lease, beginning December 31, 2017. The first payment is to be of an amount of $5,552.82, with each payment increasing by a constant rate of 5% from the previous payment (i.e., the second payment will be $5,830.46 and the third and final payment will be $6,121.98). 4.DU Journeys' incremental borrowing rate is 8%. The rate implicit in the lease is unknown. 5.DU Journeys uses straightline depreciation for all similar cars. Instructions (a) Prepare DU Journeys' journal entries for 2016, 2017, and 2018. (b) Assume, instead of a constant rate of increase, the annual lease payments will increase according to the Consumer Price Index (CPI). At its current level, the CPI stipulates that the first rental payment should be $5,820. What would be the impact on the journal entries made by DU Journeys at commencement of the lease, as well as for subsequent years?
Question: Morton Company’s contribution format income statement for last month is given below: Sales (48,000 units × $22 per unit) $ 1,056,000 Variable expenses 739,200 Contribution margin 316,800 Fixed expenses 253,440 Net operating income $ 63,360 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits. Required: 1. New equipment has come onto the market that would allow Morton Company to automate a portion of its operations. Variable expenses would be reduced by $6.60 per unit. However, fixed expenses would increase to a total of $570,240 each month. Prepare two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. (Round your "Per unit" answers to 2 decimal places.)
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Question: Morton Company’s contribution format income statement for last month is given below: Sales (48,000 units × $22 per unit) $ 1,056,000 Variable expenses 739,200 Contribution margin 316,800 Fixed expenses 253,440 Net operating income $ 63,360 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits. Required: 1. New equipment has come onto the market that would allow Morton Company to automate a portion of its operations. Variable expenses would be reduced by $6.60 per unit. However, fixed expenses would increase to a total of $570,240 each month. Prepare two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. (Round your "Per unit" answers to 2 decimal places.) Morton Company’s contribution format income statement for last month is given below: Sales (48,000 units × $22 per unit)$1,056,000 Variable expenses739,200 Contribution margin316,800 Fixed expenses253,440 Net operating income$63,360The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits.Required:1.New equipment has come onto the market that would allow Morton Company to automate a portion of its operations. Variable expenses would be reduced by $6.60 per unit. However, fixed expenses would increase to a total of $570,240 each month. Prepare two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment...
1. Sales Forecast Why do you think most long-term financial planning begins with sales forecasts? Put differently, why are future sales the key input?
2. Sustainable Growth In the chapter, we used Rosengarten Corporation to demonstrate how to calculate EFN. The ROE for Rosengarten is about
7.3 percent, and the plowback ratio is about 67 percent. If you calculate the sustainable growth rate for Rosengarten, you will find it is only 5.14 percent. In our calculation for EFN, we used a growth rate of 25 percent. Is this possible? (Hint: Yes. How?)
11. BALANCE SHEET The assets of Dallas & Associates consist entirely of current assets and net plant...
BALANCE SHEET The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2 5 million and net plant and equipment equals $2 million. It has notes payable of $150,000, long-term debt of $750,000, and total common equity of $1 5 million. The firm does have accounts payable and accruals on its balance sheet. The firm only finances with debt and common equity, so it has no preferred stock on its balance sheet.
a. What is the company’s total debt?
b. What is the amount of total liabilities and equity that appears on the firm’s balance sheet?
c. What is the balance of current assets on the firm’s balance sheet?
d. What is the balance of current liabilities on the firm’s balance sheet?
e. What is the amount of accounts payable and accruals on its balance sheet? [Hint:
Consider this as a single line item on the firm’s balance sheet.]
f. What is the firm’s net working capital?
g. What is the firm’s net operating working capital?
h. What is the explanation for the difference in your answers to parts f and g?
Cost Accounting System is neither unnecessary nor expensive, rather it is profitable investment comment
13. E2-6 (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and...
E2-6 (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter.
1. Economic entity assumption
2. Going concern assumption
3. Monetary unit assumption
4. Periodicity assumption
5. Historical cost principle
6. Fair value principle
7. Expense recognition principle
8. Full disclosure principle
9. Cost constraint
10. Industry practices
Instructions
Identify by number the accounting assumption, principle, or constraint that describes each situation on the next page. Do not use a number more than once.
(a) Allocates expenses to revenues in the proper period.
(b) Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.)
(c) Ensures that all relevant financial information is reported.
(d) Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.)
(e) Indicates that personal and business record keeping should be separately maintained.
(f) Separates financial information into time periods for reporting purposes.
(g) Permits the use of fair value valuation in certain industries. (Do not use fair value principle.)
(h) Assumes that the dollar is the “measuring stick” used to report on financial performance.
14. Explain equivalent units. Why are equivalent-unit calculations necessary in process costing?
Explain equivalent units. Why are equivalent-unit calculations necessary in process costing?
Tom Jones is the owner and operator of Jones Enterprise, a motivational consulting business. At the end of its accounting period, December 31, 2009, Jones Enterprise has assets of $760,000 and liabilities of 240,000. Use the accounting equation to calculate the answers in each of the following: a) Tom Jones, capital, as of December 31, 2009 b) Tom Jones, capital, as of December 31, 2010, assuming that assets increased by $120,000 and liabilities increased by $72,000 during 2010 c) Tom Jones, capital, as of December 31, 2010, assuming that assets decreased by $60,000 and liabilities increased by $21,600 during 2010 d) Tom Jones, capital, as of December 31, 2010, assuming that assets increased by $100,000 and liabilities decreased by $38,400 during 2010 e) Net income during 2010, assuming that as of December 31, 2010, assets were $960,000, liabilities were $156,000, and there were no additional investments or withdrawals.
16. EXERCISE 9-11 Flexible Budget LO9-1 Refer to the data for Lavage Rapide in Exercise 9-10. The com...
Exercise 9-12 and 9-14 EXERCISE 9-11 Flexible Budget LO9-1 Refer to the data for Lavage Rapide in Exercise 9-10. The company actual washed 8,800 cars in August. Using Exhibit 9-5 as your guide, prepare the company's flexible budget for Augu EXERCISE 9-12 Activity Variances LO9-2 August Using Exhibit 9-5 as your guide, prepare the company's f Refer to the data for Lavage Rapide in Exercise 9-10. The company actually washed 8,80 Calculate the company's activity variances for August. (Hint: Refer to Exhibit 9-6) Required: nue and Spending Varlances LO9-3 EXERCISE 9-13 Reve Refer to the data for Lavage Rapide in Exercise 9-10. Also ating results for August are as follows: assume that the company's actual oper- Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses 8,800 $43,080 Cleaning supplies Electricity Maintenance Wages and salaries.. Depreciation Rent Administrative expenses .. 7,560 2,670 2,260 8,500 6,000 8,000 4,950 39,940 $ 3,140 Total expense. Net operating income Required: Calculate the company's revenue and spending variances for August. (Hint: Refer to EXERCISE 9-14 Prepare a Flexible Budget Performance Report Lo9-A Refer to the data for Lavage Rapide in Exercises 9-10 and 9-13. Required: Using Exhibit 9-8 as your guide, prepare a flexible budget performance report pany's revenue and spending variances and activity variances for August. e report that shows the com- EXERCISE 9-15 Flexible Budget Performance Report in a Cost Center LO9-1, L09- Packaging Solutions Corporation manufactures and sells a wide variety get d m Performance reports are prepared monthly for each department. The planninga is the budget for the Production Department are based on the following formulas, W of labor-hours worked in a month: of
17. (Objectives 18-3, 18-6) The following misstatements are included in the accounting records of...
(Objectives 18-3, 18-6) The following misstatements are included in the accounting records of Westgate Manufacturing Company.
1. The accounts payable clerk prepares a monthly check to Story Supply Company for the amount of an invoice owed and submits the unsigned check to the treasurer for payment along with related supporting documents that have already been approved. When she receives the signed check from the treasurer, she records it as a debit to accounts payable and deposits the check in a personal bank account for a company named Story Company. A few days later, she records the invoice in the acquisitions journal again, resubmits the documents and a new check to the treasurer, and sends the check to the vendor after it has been signed.
2. The amount of a check in the cash disbursements journal is recorded as $4,612.87 instead of $6,412.87.
3. The accounts payable clerk intentionally excluded from the cash disbursements journal seven large checks written and mailed on December 26 to prevent cash in the bank from having a negative balance on the general ledger. They were recorded on January 2 of the subsequent year.
4. Each month, a fraudulent receiving report is submitted to accounting by an employee in the receiving department. A few days later, he sends Westgate an invoice for the quantity of goods ordered from a small company he owns and operates in the evening. A check is prepared, and the amount is paid when the receiving report and the vendor’s invoice are matched by the accounts payable clerk.
5. Telephone expense (account 2112) was unintentionally charged to repairs and maintenance (account 2121).
6. Acquisitions of raw materials are often not recorded until several weeks after the goods are received because receiving personnel fail to forward receiving reports to accounting. When pressure from a vendor’s credit department is put on Westgate’s accounting department, it searches for the receiving report, records the transactions in the acquisitions journal, and pays the bill.
Required
a. For each misstatement, identify the transaction-related audit objective that was not met.
b. For each misstatement, state a control that should have prevented it from occurring on a continuing basis.
c. For each misstatement, state a substantive audit procedure that could uncover it.
(Objective 18-3)