Comprehensive Guide to Accounting Discussion Posts
19. Distinguish between financial and nonfinancial transactions. Give three examples of each.
Distinguish between financial and nonfinancial transactions. Give three examples of each.
20. Overhead costs are the source of product cost distortions. Do
Overhead costs are the source of product cost distortions. Do you agree or disagree? Explain.
Do the terms FIFO and LIFO refer to techniques used in determining quantities of the various classes of merchandise on hand? Explain.
Does the term last-in in the LIFO method mean that the items in the inventory are assumed to be the most recent (last) acquisitions? Explain.
If merchandise inventory is being valued at cost and the price level is steadily rising, which of the three methods of costing—FIFO, LIFO, or average cost—will yield (a) the highest inventory cost, (b) the lowest inventory cost, (c) the highest gross profit, and (d) the lowest gross profit?
Which of the three methods of inventory costing—FIFO, LIFO, or average cost—will in general yield an inventory cost most nearly approximating current replacement cost?
22. Direct Material Price Variane.
Q10 Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product. Use the data for questions 10 to 14. Standard Standard Standard Quantity Price Cost Direct materials 8 pounds $1.80 p/ pd $14.40 Direct labor 0.25 hour $8.00 p/ hr $2.00 During May, Arrow purchased 160,000 pounds of direct material at a total cost of $304,000. The total direct labor wages for May were $37,800. Arrow manufactured 19,000 units of product during May using 142,500 pounds of direct material and 5,000 direct labor hours. The direct material price variance for May is (note that the purchase price variance is based on the amount purchased - while usage variance is based on amount used): Answer $16,000 unfavorable. $14,250 favorable. $16,000 favorable. $14,250 unfavorable. Q11 The direct material quantity variance for May is: Answer $17,100 unfavorable. $14,400 unfavorable. $17,100 favorable. $1,100 favorable. Q12 The direct labor rate variance for May is: Answer $2,090 favorable. $2,200 favorable. $2,000 unfavorable. $1,900 unfavorable. Q13 The direct labor efficiency variance for May is: Answer $2,000 favorable. $2,200 favorable. $1,800 unfavorable. $2,000 unfavorable.
23. 51.Which of the following is an advantage of using the net price method for recording cash discounts
51.Which of the following is an advantage of using the net price method for recording cash discounts on credit sales?
a.It eases communication with customers about their balances.
b.It conservativelyreflects current period sales revenue.
c.It simplifies recording of sales returns and allowances.
d.It requires less record keeping than the gross method.
52.When the net price method is used to record credit sales, the sales discounts not taken account is reported as a(n)
a.addition to sales returns and allowances on the income statement.
b.deduction from gross sales on the income statement.
c.deduction from selling expenses on the income statement.
d.addition to sales revenue on the income statement.
53.Puzzle Company sold merchandise on credit with a list price of $75,000. Terms were 3/10, n/30. Which of the following entries correctly applies the indicated method to record the sale?
a. | Gross Price Method Accounts Receivable 72,750 Sales 72,750 | |
b. | ?Net Price Method Accounts Receivable 72,750 Sales 72,750 | |
c. | ?Net Price Method Accounts Receivable 75,000 Sales 75,000 | |
d. | ?Gross Price Method Accounts Receivable 72,000 Sales 72,000 |
54.Hole Sailors, Inc. sold merchandise on credit with a list price of $12,000. Terms were 1/20, n/45. Which of the following entries correctly applies the indicated method to record the sale?
a. | ?Net Price Method Accounts Receivable 10,800 Sales 10,800 | |
b. | Net Price Method Accounts Receivable 11,400 Sales 11,400 | |
c. | ?Net Price Method Accounts Receivable 12,000 Sales 12,000 | |
d. | ?Gross Price Method Accounts Receivable 12,000 Sales 12,000 |
55.A disadvantage of using the gross price method to account for cash discounts extended by the seller to its customer is that
a.the method reports accounts receivable at the net realizable value.
b.the method overstates current sales and accounts receivable.
c.the method requires more bookkeeping than the net price method.
d.the method enables sales returns and allowances to be recorded at gross amounts.
56.In accounting for sales transactions, which method isolates sales discounts not taken?
a.allowance method
b.gross price method
c.percentage of price method
d.net price method
57.The sales returns and allowances account is reported as a
a.contra-revenue account on the income statement.
b.current liability on the balance sheet.
c.contra-asset reducing accounts receivable on the balance sheet.
d.selling expense on the income statement.
58.Theoretically, the amount of estimated future returns and allowances on credit sales should be recorded during the period of the sale so as not to overstate sales and ending accounts receivable. In practice, these estimates are not recorded by most companies because
a.the amount of such returns and allowances tends to fluctuate too greatly from period to period.
b.there is too much uncertainty surrounding such estimates.
c.such estimates are not allowed according to generally accepted accounting principles.
d.the amount of such returns and allowances is usually not material.
59.?On August 1, Party Hearty Company sold merchandise on credit with a list price of $6,300. Terms were 2/10, n/30. Which of the following entries correctly applies the indicated method to receive the appropriate customer payment on August 15?
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60.?February 1, Adams Company sold merchandise on credit with a list price of $8,400. Terms were 3/15, n/45. Which of the following entries correctly applies the indicated method to receive the appropriate customer payment on February 12?
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24. Discuss the differences between internal and external users of information and their needs and...
Discuss the differences between internal and external users of information and their needs and demands on an information system. Historically, which type of user has the firm catered to most?
25. 1. Coy Corporation and its divisions are engaged solely in
1. Coy Corporation and its divisions are engaged solely in manufacturing operations. The following data (consistent with prior years’ data) pertain to the industries in which operations were conducted for the year ended December 31, 2011 (in thousands):
In its segment information for 2011, how many reportable segments does Coy have?
(a) Three
(b) Four
(c) Five
(d) Six
2. Hen Corporation’s revenues for the year ended December 31, 2011, are as follows (in thousands):
Consolidated revenue per income statement ………. $1,200
Intersegment sales ……………………………………. 180
Intersegment transfers ………………………………….. 60
Combined revenues of all segments ………………. $1,440
Hen has a reportable segment if that segment’s revenues exceed:
(a) $6
(b) $24
(c) $120
(d) $144
3. The following information pertains to Ari Corporation and its divisions for the year ended December 31, 2011 (in thousands):
Sales to unaffiliated customers …………………..…… $4,000
Intersegment sales of products similar to those
sold to unaffiliated customers ……………………….… 1,200
Interest earned on loans to other industry segments ………. 80
The intersegment interest is not reported by the divisions on internal reports reviewed by the chief operating officer. Ari and all of its divisions are engaged solely in manufacturing operations. Ari has a reportable segment if that segment’s revenue exceeds:
(a) $528
(b) $520
(c) $408
(d) $400
4. The following information pertains to revenue earned by Wig Company’s operating segments for the year ended December 31, 2011:
In conformity with the revenue test, Wig reportable segments were:
(a) Only DG
(b) Beck and DG
(c) Ames, Beck, and DG
(d) Ames, Beck, Cyns, and DG
Use the following information in answering questions 5 and 6: Gum Corporation, a publicly owned corporation, is subject to the requirements for segment reporting. In its income statement for the year ended December 31, 2011, Gum reported revenues of $50,000,000, operating expenses of $47,000,000, and net payroll costs of $15,000,000.
Gum’s combined identifiable assets of all industry segments at December 31, 2011, were $40,000,000.
5. In its 2011 financial statements, Gum should disclose major customer data if sales to any single customer amount to at least:
(a) $300,000
(b) $1,500,000
(c) $4,000,000
(d) $5,000,000
6. In its 2011 financial statements, if Gum is organized on an industry basis, it should disclose foreign operations data on a specific country if revenues from that country’s operations are at least:
(a) $5,000,000
(b) $4,700,000
(c) $4,000,000
(d) $1,500,000
7. Selected data for a segment of a business enterprise are to be separately reported in accordance with GAAP when the revenues of the segment exceed 10% of the:
(a) Combined net income of all segments reporting profits
(b) Total revenues obtained in transactions with outsiders
(c) Total revenues of all the enterprise’s operating segments
(d) Total combined revenues for all segments reporting profits
8. In financial reporting of segment data, which of the following items is used in determining a segment’s operating income?
(a) Income tax expense
(b) Sales to other segments
(c) General corporate expense
(d) Gain or loss on discontinued operations
26. Module 4 Chapter 15 Homework Saved 3 Required information The following information applies to th...
Module 4 Chapter 15 Homework Saved 3 Required information The following information applies to the questions displayed below. points Mackenzie is considering conducting her business, Mac561, as either a single member LLC or as an S corporation. Determine Mackenzie's after-tax cash flow from the entity's business income and any compensation she receives from the business assuming her marginal ordinary income tax rate is 37 percent, her marginal FICA rate on employee compensation is 1.45 percent, her marginal self-employment tax rate is 2.9 percent, and any employee compensation on self-employment income she receives is subject to the 0.9 percent additional Medicare tax. Finally, Mac561 generated $200,000 of business income before considering the deduction for compensation Mac561 pays to Mackenzie and Mackenzie can claim the full qualified business income deduction on Mac561's business income. (Round your intermediate computations to the nearest whole dollar amount.) 04.34:21 eBook Print a. Mackenzie conducted Mac561 as a single-member LLC er-tax cash flow References
27. Petty Cash The petty cash fund of Teasdale’s Auto Repair
Petty Cash The petty cash fund of Teasdale’s Auto Repair Service, a sole proprietorship, contains the following. The general ledger account Petty Cash has a balance of $300. Prepare the journal entry to record the reimbursement of the petty cashfund.
28. Purchased merchandise from Black Company for $6,000 under credit terms of 1/15, n/30, FOB ...
Problem 5-2A Preparing journal entries for merchandising activities-perpetual system L.O. P1, P2
July 1
Purchased merchandise from Black Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.
2
Sold merchandise to Coke Co. for $800 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $500.
3
Paid $100 cash for freight charges on the purchase of July 1.
8 Sold merchandise that had cost $1,200 for $1,600 cash.
9
Purchased merchandise from Lane Co. for $2,300 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
11
Received a $200 credit memorandum from Lane Co. for the return of part of the merchandise purchased on July 9.
12
Received the balance due from Coke Co. for the invoice dated July 2, net of the discount.
16
Paid the balance due to Black Company within the discount period.
19
Sold merchandise that cost $900 to AKP Co. for $1,250 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
21
Issued a $150 credit memorandum to AKP Co. for an allowance on goods sold on July 19.
24
Paid Lane Co. the balance due after deducting the discount.
30
Received the balance due from AKP Co. for the invoice dated July 19, net of discount.
31
Sold merchandise that cost $3,200 to Coke Co. for $5,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.
Prepare journal entries to record the above merchandising transactions of Bask Company, which applies the perpetual inventory system. (Identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable"Black.) (Omit the "$" sign in your response.)
29. The following annual account balances aretaken from Armour Sports at December 31:
Please explain how do you get theanswers if you can
The following annual account balances aretaken from Armour Sports at December 31:
2008 | 2007 | |||
Accounts receivable | $ | 85,692 | $ | 80,485 |
Net Sales | 2,691,855 | 2,396,858 | ||
Requirement 1: |
What is the number of days' salesuncollected between years 2007 and 2008? (Round your ... |
30. Gold Star Rice. Ltd., of Thailand exports Thai rice throughout Asia The company grows three...
grows three varieties of rice-fragrant, White, and Loonzain. Budgeted sales by product and in total for the coming month are shown below As shown by these data, net operating income is budgeted at $30, 720 for the month and break even sales at $702,000. Assume that actual sales for the month total $750,000 as planned Actual sales by product are: White. $300,000; Fragrant. $180,000; and Loonzain. $270,000. Prepare a contribution format income statement for the month based on actual sales data
31. Pat Buhn is the new owner of Young Co. She has heard about internal control but is not clear...
Pat Buhn is the new owner of Young Co. She has heard about internal control but is not clear about its importance for her business. Explain to Pat the four purposes of internal control, and give her one application of each purpose for Young Co.
32. E 4-4 Excess Assigned to Identifiable Net Assets Palat Ltd paid $3,600,000 in cash, to acquire 90...
E 4-4 Excess Assigned to Identifiable Net Assets Palat Ltd paid $3,600,000 in cash, to acquire 90 percent of Sanun Ltd voting stoakn that differ with the fair value on January 1,2014. holders' equity of Sanun Ltd at that time was $5,000,000. Below are the assets and liabilities of Sanun Ltd book value Inventory (sold in the current year) was overvalued by $200,000 Land was overvalued by $500,000 Equipment (remaining ife of 4 years) was undervalued by $400,000 Building (remaining life of 5 years) was overvalued by $750,000 Notes receivable (due in 4 years) was undervalued by $200,000 Sanun Ltd declared a dividend of $150,000 for March and June 2014 each. Sanun Ltd net income for the year was $1,000,000
33. 1. Poor quality materials could have an unfavorable effect on
1. Poor quality materials could have an unfavorable effect on which of the following variances?
Lab efficiency variance Materials quantity Variance
A Yes Yes
b Yes No
c No Yes
d No No
2. Which of the following statements concerning ideal standards is incorrect?
A. Ideal standards generally do not provide the best motivation for workers.
B. Ideal standards do not make allowances for waste, spoilage, and machine breakdowns.
C. Ideal standards are better suited for cash budgeting than practical standards.
D. Ideal standards may be better than practical standards when managers seek continual improvement.
3. Under traditional standard costing, which of the following would commonly be included when setting a standard quantity for direct material?
An allowance for material An allowance for material rejected
wasted during production during production
a YES YES
b YES NO
c NO YES
d NO NO
4. When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n)
a Combined price and quantity variance
b Efficiency variance
d Quantity variance
5. Which of the following would produce a materials price variance?
a An excess quantity of materials used
b An excess number of direct labor-hours worked in completing a job
c Shipping materials to the plant by air freight rather than by truck
d Breakage of materials in production
34. Discuss the importance to the cost accounting department of the move ticket.
1. Discuss the importance to the cost accounting department of the move ticket.
2. How realistic are the assumptions of the economic order quantity model? Discuss each assumption individually.
3. Explain why the economic order quantity is the intersection of the ordering-cost curve and the carrying-cost curve.
4. Supervisors in the work centers oversee the usage of raw material in production; explain why the work centers do not keep the records of the work-in-process.