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26. Prepare depreciation schedules for the following methods: (a) straight-line, (b) unitsof-activity,...1. DuPage Company purchases a factory machine at a cost of $18,000 on January 1, 2012. DuPage expects the machine to have a salvage value of $2,000 at the end of its 4-year useful life.
During its useful life, the machine is expected to be used 160,000 hours. Actual annual ourly use was: 2012, 40,000; 2013, 60,000; 2014, 35,000; and 2015, 25,000.
Instructions
Prepare depreciation schedules for the following methods: (a) straight-line, (b) unitsof-activity, and (c) declining-balance using double the straight-line rate.
27. 151.Which of the following would not be classified as a non-current liability? a.Current maturities.
151.Which of the following would not be classified as a non-current liability?
a.Current maturities of long-term debt
b.Bonds payable
c.Mortgage payable
d.Lease liabilities
152.Which of the following liabilities are not related to the operating cycle?
a.Salaries and wages payable
b.Accounts payable
c.Utilities payable
d.Bonds payable
153.Intangible assets include each of the following except
a.copyrights.
b.goodwill.
c.land improvements.
d.patents.
154.It is not true that current assets are assets that a company expects to
a.realize in cash within one year.
b.sell within one year.
c.use up within one year.
d.acquire within one year.
155.The operating cycle of a company is the average time that is required to go from cash to
a.sales in producing revenues.
b.cash in producing revenues.
c.inventory in producing revenues.
d.accounts receivable in producing revenues.
156.On a classified statement of financial position, current assets are customarily listed
a.in alphabetical order.
b.with the largest dollar amounts first.
c.in the reverse order of liquidity.
d.in the order of acquisition.
157.Intangible assets are
a.listed under current assets on the statement of financial position.
b.not listed on the statement of financial position because they do not have physical substance.
c.non-current resources.
d.listed as a long-term investment on the statement of financial position.
158.The relationship between current assets and current liabilities is important in evaluating a company's
a.profitability.
b.liquidity.
c.market value.
d.accounting cycle.
159.The most important information needed to determine if companies can pay their current obligations is the
a.net income for this year.
b.projected net income for next year.
c.relationship between current assets and current liabilities.
d.relationship between short-term and non-current liabilities.
Accounts payable¥ 54,000
Accounts receivable33,000
Accumulated depreciation–equipment84,000
Advertising expense63,000
Cash45,000
Share capital-ordinary126,000
Dividends42,000
Depreciation expense36,000
Equipment630,000
Insurance expense9,000
Note payable, due 6/30/15210,000
Prepaid insurance (month policy)18,000
Rent expense51,000
Retained earnings (1/1/14)180,000
Salaries and wages expense96,000
Service revenue399,000
Supplies12,000
Supplies expense18,000
What is the company’s net income for the year ending December 31, 2014?
a.¥399,000
b.¥126,000
c.¥84,000
d.¥36,000
28. Dowell & Co. is a partnership firm with partners A, B and C, sharing profits and losses in the...
Dowell & Co. is a partnership firm with partners A, B and C, sharing profits and losses in the ratio of 10 : 6 : 4. The Balance Sheet of the firm as on 31st March, 2015 is as under :
Liabilities ~ Assets ~
Capitals : A 80,000 Land 10,000
B 20,000 Buildings 2,00,000
C 30,000 1,30,000 Plant and Machinery 1,30,000
Reserves (Unappropriated profit) 20,000 Furniture 43,000
Long-term Debt 3,00,000 Investments 12,000
Bank overdraft 44,000 Stock 1,30,000
Trade creditors 1,70,000 Debtors 1,39,000
6,64,000 6,64,000
It was mutually agreed that B will retire from partnership and in his place D will be admitted as a partner with effect from 1st April, 2015. For this purpose, the following adjustments are to be made :
(i) Goodwill is to be valued at ~ 1,00,000 but the same will not appear as an asset in the books of the reconstituted firm.
(ii) Buildings, Plant and Machinery are to be depreciated by 5% and 20% respectively. Investments are to be taken over by the retiring partner at ~ 15,000. Provision of 20% is to be made on debtors to cover doubtful debts.
(iii) In the reconstituted firm, the total capital will be ~ 2,00,000 which will be contributed by A, C and D in their new profit-sharing ratio, which is 2 : 2 : 1.
(iv) The surplus funds, if any, will be used for repaying the bank overdraft.
(v) The amount due to the retiring partner shall be transferred to his Loan Account.
You are to prepare : (a) Revaluation Account; (b) Partners’ Capital Accounts; (c) Bank Account; and, (d) Balance Sheet of the reconstituted firm as on 1st April, 2015.
29. 1. Which of the following is a primary function of a database management system? a. Report...
1. Which of the following is a primary function of a database management system? a. Report customization b. Capability to create and modify the database c. Financial transactions input d. Database access authorizations 2. Which of the following terms best describes a payroll system? a. Database management (DBMS) b. Transaction processing system (TPS) c. Decision support system (DSS) d. Enterprise resource planning (ERP) system 3. Which of the following ratios would be used to evaluate a company s profitability? a. Current ratio b. Inventory turnover ratio c. Debt to total assets ratio d. Gross margin ratio 4. An enterprise resource planning (ERP) system has which of the following advantages over multiple independent functional systems? a. Modifications can be made to each module without affecting other modules. b. Increased responsiveness and flexibility while aiding in the decision-making process. c. Increased amount of data redundancy since more than one module contains the same information. d. Reduction in costs for implementation and training.
30. On December 30, 2006, Chang Co. sold a machine to Door Co. in exchange for a noninterest-bearing...
On December 30, 2006, Chang Co. sold a machine to Door Co. in exchange for a noninterest-bearing note requiring ten annual payments of $10,000. Door made the first payment on December 30, 2006. The market interest rate for similar notes at date of issuance was 8%. Information on present value factors is as follows:
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Period Present value of $1 at 8% Present value of ordinary annuity of $1 at 8%
9 0.50 6.25
10 0.46 6.71
In its December 31, 2006 balance sheet, what amount should Chang report as note receivable?
1. $45,000
2. $46,000
3. $62,500
4. $67,100
31. 1.“An adjusting entry may affect more than one balance sheet or income statement account.” Do you...
1.“An adjusting entry may affect more than one balance sheet or income statement account.” Do you agree? Why or why not?
2. Which balance sheet account provides evidence that Apple records sales on an accrual basis rather than a cash basis? Explain.
32. Exercise 1-13 Customer Value, Strategic Positioning Adriana Alvarado has decided to purchase a...
Exercise 1-13 Customer Value, Strategic Positioning
Adriana Alvarado has decided to purchase a personal computer. She has narrowed the choices to two: Drantex and Confiar. Both brands have the same processing speed, 6.4 gigabytes of hard-disk capacity, two USB ports, a DVDRW drive, and each comes with the same basic soft- ware support package. Both come from mail-order companies with good reputations. The selling price for each is identical. After some review, Adriana discovers that the cost of operating and maintaining Drantex over a 3-year period is estimated to be $300. For Confiar, the operating and maintenance cost is $600. The sales agent for Drantex emphasized the lower operating and maintenance costs. The agent for Confiar, however, emphasized the service reputation of the product and the faster delivery time (Confiar can be purchased and delivered one week sooner than Drantex). Based on all the information, Adriana has decided to buy Confiar.
Required:
1. What is the total product purchased by Adriana?
2. CONCEPTUAL CONNECTION How does the strategic positioning differ for the two companies?
3. CONCEPTUAL CONNECTION When asked why she decided to buy Confiar, Adriana responded, ‘‘I think that Confiar offers more value than Drantex.’’ What are the possible sources of this greater value? What implications does this have for the managerial account- ing information system?
4. CONCEPTUAL CONNECTION Suppose that Adriana’s decision was prompted mostly by the desire to receive the computer quickly. Informed that it was losing sales because of the longer time to produce and deliver its products, the management of the company producing Drantex decided to improve delivery performance by improving its internal processes. These improvements decreased the number of defective units and the time required to produce its product. Consequently, delivery time and costs both decreased, and the company was able to lower its prices on Drantex. Explain how these actions translate into strengthening the competitive position of the Drantex PC relative to the Confiar PC. Also discuss the implica- tions for the managerial accounting information system.
33. Q14. A ____ is any manipulation of data, usually with the goal of producing information. &n...
Q14. A ____ is any manipulation of data, usually with the goal of producing information. a. decision b. process c. problem d. system
34. What is Rio"s cost of goods manufactured for February?
Rio Manufacturing Company uses a job order cost system. At the beginning of February, Rio only had one job in process, Job #594. The direct costs assigned to this job at that time were $800 of materials and $650 of labor. Job #594 was finished during February incurring additional direct costs of $120 for materials and $370 for labor. Job #595 was started and finished during February. The direct costs assigned to this job were $310 for materials and $190 for labor. Job #596 was started during February but was not finished by the end of the month. The direct costs assigned to this job were $740 for materials and $300 for labor. Rio applies manufacturing overhead to its products at a rate of 200% of direct labor cost. What is Rio"s cost of goods manufactured for February?
A) $2,440
B) $3,750
C) $4,860
D) $6,500
35. Multiple choice questions 2
11. (TCO 6) Cleaners, Inc. is considering purchasing equipment costing $30,000 with a six-year useful life. The equipment will provide cost savings of $7,300 and will be depreciated straight-line over its useful life with no salvage value. Cleaners requires a 10% rate of return. What is the approximate net present value of this investment? (Points : 5)
$13,800
$1,794
$886
$2,748
12. (TCO 7) Which of the following would not appear as a fixed expense on a selling and administrative expense budget? (Points : 5)
Freight-out
Office salaries
Property taxes
Depreciation
13. (TCO 7) If the required materials to be purchased are 18,000 pounds, the production needs are three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct materials in pounds? (Points : 5)
45,000
9,000
27,000
18,000
14. (TCO 8) Standards that are based on efficient activity with allowances for unavoidable losses are called _______ (Points : 5)
basic standards.
maximum efficiency standards.
currently attainable standards.
expected standards.
15. (TCO 9) A static budget _____________. (Points : 5)
should not be prepared in a company
is useful in evaluating a manager's performance by comparing actual variable costs and planned variable costs
shows planned results at the original budgeted activity level
is changed only if the actual level of activity is different than originally budgeted
16. (TCO 9) If costs are not responsive to changes in activity level, how are they best described? (Points : 5)
Mixed
Flexible
Variable
Fixed
17. (TCO 9) Using the high-low method, what is the fixed cost for the following information?
Month
Miles
Total Cost
January
80,000
$96,000
February
50,000
$80,000
March
70,000
$94,000
April
90,000
$130,000
(Points : 5)
$17,500
$36,000
$14,000
$50,000
18. (TCO 10) Which of the following statements regarding budget reports is incorrect? (Points : 5)
The cost of budget reports should not outweigh the benefits.
Budget reports are used for planning, control, and information.
Reports prepared for upper management typically have fewer details than reports prepared for lower-level managers.
Reports are prepared more frequently for upper management than for lower-level managers.
