Mastering Managerial Accounting Assignments: Good Grades
Accounting Questions Accounting assignments
1. Juan Foods purchases a computer system in 2015 for $20,000. Its expected useful life is 5 years....
Juan Foods purchases a computer system in 2015 for $20,000. Its expected useful life is 5 years. At the end of 2015, it has to record depreciation on the computer system of $2,000.
What is the correct journal entry to record the depreciation?
- Debit computer system $2,000; credit depreciation expense $2,000
- Debit accumulated depreciation $2,000; credit computer system $2,000
- Debit depreciation expense $2,000; credit accumulated depreciation $2,000
- Debit computer system $2,000; credit accumulated depreciation $2,000
2. Assuming Byrd’s current assets were $1,200,000 and its current ratio was 2.4 at the end of 2006,...
Accounts Payable and Cash Discounts - The Byrd Company had the following transactions during 2007 and 2008:
1. On December 24, 2007 a computer was purchased on account from Computers International for $60,000. Terms of the sale were 2/10, n/30.
2. Byrd calculated that to forgo the discount for the computer would be the equivalent of paying 36% interest annually on the $58,800 for the extra 20 days. Therefore, Byrd went to First Local Bank and signed a $60,000, 30-day note at 12% in order to take advantage of the discount terms. This transaction took place on December 29, 2007. (The account payable was paid on January 2, 2008 and the note was paid at maturity.)
3. On December 30, 2007, Byrd declared a $2.00 cash dividend to the common stockholders. Ten thousand shares were outstanding on this date. The dividend is to be paid on January 5, 2008.
Required
1. Prepare the journal entries for the Byrd Company for both 2007 and 2008. Assume that the net price method is used to account for the credit terms.
2. Show how the preceding items would be reported in the current liabilities section of Byrd’s December 31, 2007 balance sheet.
3. Assuming Byrd’s current assets were $1,200,000 and its current ratio was 2.4 at the end of 2006, compute the current ratio at the end of 2007 (based solely on the effects of the preceding transactions).
Your 45-year-old uncle is 20 years away from retirement; your 35-year-old older sister is about 30 years away from retirement. How might their investment policy statements differ?
4. Letter Co. produces and sells two products, T and O. It manufactures these products in separate...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow.
Product T | Product o | |
Sales | 800000 | 800000 |
Variable Costs | 560000 | 560000 |
Contribution margin | 240,000 | 700,000 |
Fixed Costs | 100,000 | 560,000 |
Income before taxes | 140,000 | 140,000 |
Income taxes (32% rate) | 44,800 | 44,800 |
Net Income | 95,200 | 95,200 |
Instructions:
1. Compute the break-even point in dollar sales for each product
2. Assume that the company expects sales of each product to decline to 33,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement as just shown with columns for each of the two products (assume a 32% tax rate). Also, assume that any loss before taxes yields a 32% tax savings.
3. Assume that the company expects sales of each product to increase to 64,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement shown with columns for each of the two products (assume a 32%income tax rate).
4. If sales greatly decrease, which product would experience a greater loss? Explain
5. Describe some factors that might have created the different cost structures for these two products
5. The payroll records of Speedy Software show the following information about Marsha Gottschalk, an...
The payroll records of Speedy Software show the following information about Marsha Gottschalk, an employee, for the weekly pay period ending September 30, 2015. Gottschalk is single and claims one allowance. Compute her Social Security tax (6.2%), Medical tax (1.45%), federal income tax withholding, state income tax (1%). and net pay for the current pay period. (Use the withholding table in Exhibit 11A.6)(Round your intermediate Calculations and final answers to 2 decimal places.)
6. Calculate the total costs of optimal inventory Question 1: The High-Rise Building Company uses...
Calculate the total costs of optimal inventory
Question 1: The High-Rise Building Company uses 400,000 tons of stone per year. The carrying costs are $100/ton. The cost per order is $500. Calculate the optimal number of orders per year.
400
100
200
300
Question 2: The High-Rise Building Company uses 400,000 tons of stone per year. The carrying costs are $100/ton. The cost per order is $500. Calculate the total costs of optimal inventory.
$200,000
$150,000
$100,000
$50,000
Calculate the total costs of optimal inventory
Accounting Basics
s
CP 5-1 Ethics and professional conduct in business
On April 18, 2014, Bontanica Company, a garden retailer, purchased $9,800 of seed, terms 2/10, n/30, from Whitetail Seed Co. Even though the discount period had expired, Shelby Davey subtracted the discount of $196 when he processed the documents for payment on May 1, 2014.
Discuss whether Shelby Davey behaved in a professional manner by subtracting the discount, even though the discount period had expired.
8. CVP, target operating income, service firm Snow Leopard Daycare
CVP, target operating income, service firm Snow Leopard Daycare provides daycare for children Mondays through Fridays. Its monthly variable costs per child are as follows:
Lunch and snacks $150
Educational supplies 60
Other supplies (paper products, toiletries, etc.) 20
Total$230
Monthly fixed costs consist of the following:
Rent $2,150
Utilities 200
Insurance 250
Salaries 2,350
Miscellaneous 650
Total $5,600
Snow Leopard charges each parent $580 per child.
Required
1. Calculate the breakeven point.
2. Snow Leopard’s target operating income is $10,500 per month. Compute the number of children who must be enrolled to achieve the target operating income.
3. Snow Leopard lost its lease and had to move to another building. Monthly rent for the new building is $3,150. At the suggestion of parents, Snow Leopard plans to take children on field trips. Monthly costs of the field trips are $1,300. By how much should Snow Leopard increase fees per child to meet the target operating income of $10,500 per month, assuming the same number of children as in requirement 2?
9. (Capitalization of Interest) On December 31, 2013, Main Inc. borrowed $3,000,000 at 12% payable
(Capitalization of Interest) On December 31, 2013, Main Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new building. In 2014, the company made the following expendi- tures related to this building: March 1, $360,000; June 1, $600,000; July 1, $1,500,000; December 1, $1,500,000. The building was completed in February 2015. Additional information is provided as follows.
1. | Other debt outstanding | |
10-yea r , 13% bond, December 31, 2007, inte r est payable annually | $4,000,000 | |
6-yea r , 10% note, dated December 31, 20 1 1, inte r est payable annually | $1,600,000 | |
2. | Ma r ch 1, 2014, expenditu r e included land costs of $150,000 | |
3. | Inte r est r evenue earned in 2014 | $49,000 |
Instructions
(a) Determine the amount of interest to be capitalized in 2014 in relation to the construction of the building.
(b ) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2014.
10. Aracel Engineering completed the following transactions in the month of June. Using the follo...
Aracel Engineering completed the following transactions in the month of June. | |
Using the following transactions, record journal entries, create financial statements, and assess the impact of each transaction on the financial statements. | |
Jun. 1 | Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company in exchange for common stock. |
Jun. 2 | The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a long-term note payable for $42,700. |
Jun. 3 | The company purchased a portable building with $55,000 cash and moved it onto the land acquired on June 2. |
Jun. 4 | The company paid $3,000 cash for the premium on an 18-month insurance policy. |
Jun. 5 | The company completed and delivered a set of plans for a client and collected $6,200 cash. |
Jun. 6 | The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500. |
Jun. 7 | The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days. |
Jun. 8 | The company purchased $1,150 of additional office equipment on credit. |
Jun. 9 | The company completed engineering services for $22,000 on credit. |
Jun. 10 | The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days. |
Jun. 12 | The company collected $7,000 cash in partial payment from the client billed on June 9. |
Jun. 14 | The company paid $1,200 cash for wages to a drafting assistant. |
Jun. 17 | The company paid $1,150 cash to settle the account payable created in on June 8. |
Jun. 20 | The company paid $925 cash for minor maintenance of its drafting equipment. |
Jun. 23 | The company paid $9,480 cash in dividends. |
Jun. 28 | The company paid $1,200 cash for wages to a drafting assistant. |
Jun. 29 | The company paid $2,500 cash for advertisements on the web during June. |
The income statement reports the change in equity attributable to the operation of the business during a specific period of time. Using the dropdown buttons, select the financial statement elements and account titles to be included on the income statement. The account balances will automatically populate. Did the company report net income or net loss during the current month? show less v to: Jun 30 Dates: May 31 ARACEL ENGINEERING Income statement For Month Ended June 30, 2015 Revenues: 0
11. Sharkey’s acid-test ratio as of December 31, 2009, is 1. 0.63.
Items (a) through (d) are based on the following information:
SHARKEY CORPORATION | ||
| As of December 31, |
|
| 2009 | 2008 |
Cash | $8,000 | $60,000 |
Marketable securities | 32,000 | 8,000 |
Accounts receivable | 40,000 | 110,000 |
Inventory | 80,000 | 140,000 |
Net property, plant, and equipment | 240,000 | 280,000 |
Accounts payable | 60,000 | 100,000 |
Short-term notes payable | 30,000 | 50,000 |
Cash sales | 1,500,000 | 1,400,000 |
Credit sales | 600,000 | 900,000 |
Cost of goods sold | 1,260,000 | 1,403,000 |
Required Answer the following multiple-choice questions:
a. Sharkey’s acid-test ratio as of December 31, 2009, is
1. 0.63.
2. 0.70.
3. 0.89.
4. 0.99.
b. Sharkey’s receivables turnover for 2009 is
1. 8 times.
2. 6 times.
3. 12 times.
4. 14 times.
c. Sharkey’s inventory turnover for 2009 is
1. 11.45 times.
2. 10.50 times.
3. 9.85 times.
4. 8.45 times.
d. Sharkey’s current ratio at December 31, 2009, is
1. 1.40.
2. 2.60.
3. 1.90.
4. 1.78.
e. If current assets exceed current liabilities, payments to creditors made on the last day of the year will
1. Decrease current ratio.
2. Increase current ratio.
3. Decrease working capital.
4. Increase working capital.
12. To find out the normal wage rate and,
A company has its factories at two locations. Rowan plan is in use at location A and Halsey plan at location B. Standard time and basic rate of wages are same for a job which is similar and is carried out on similar machinery. Time allotted is 60 hours.
Job at location A is completed in 36 hours while at B, it has taken 48 hours. Conversion costs at respective places are Rs.1224 and Rs.1500. Overheads account for Rs.20 per hour.
Required:
I] To find out the normal wage rate and,
II] To compare the respective conversion cost.
Mr A does not maintain complete double entry books of account. From the following details, determine the profit for the year and statement of affairs at the end of the year:
~ 1,000 (Cost) furniture was sold for ~ 5,000 on 1.1.2014; 10% depreciation is to be charged on furniture. Mr A has
drawn ~ 1,000 per month, ~ 2,000 was invested by Mr A in 2014. | (all figures in ~) | |
| 1.1.2014 31.12.2014 | |
Stock | 40,000 60,000 | |
Debtors | 30,000 40,000 | |
Cash | 2,000 | 1,000 |
Bank | 10,000 | (O.D.) 5,000 |
Creditors | 15,000 | 25,000 |
Outstanding Expenses | 5,000 | 8,000 |
Furniture (Cost) | 3,000 | 2,000 |
Bank balance on 1.1.2014 is as per Cash Book, but the bank overdraft on 31.12.2014 is as per bank statement ~ 2,000, Cheques drawn in December, 2014 have not been encashed within the year.
14. 1. From Sweeny Electronics’ standpoint, what difficulties might Nakeisha’s performance appraisal...
1. From Sweeny Electronics’ standpoint, what difficulties might Nakeisha’s performance appraisal practices create? 2. What can Nakeisha do now to diminish the negative impact of her evaluation of Bill?
15. Purchasing computer equipment for cash will a. increase both total assets and total liabilities. b..
Purchasing computer equipment for cash will
a. increase both total assets and total liabilities.
b. decrease both total assets and stockholders’ equity.
c. have no effect on total assets, total liabilities, or stockholders’ equity.
d. decrease both total liabilities and stockholders’ equity.
16. Ral Co. sells 20,000 radios evenly throughout the year. The cost of carrying one unit in inventory...
Ral Co. sells 20,000 radios evenly throughout the year. The cost of carrying one unit in inventory for one year is $8, and the purchase order cost per order is $32. What is the economic order quantity?
- 625
- 400
- 283
- 200
17. On January 1, 2017, Scott Enterprises, Ltd. had inventory of £50,000. At December 31, 2017, Scott...
On January 1, 2017, Scott Enterprises, Ltd. had inventory of £50,000. At December 31, 2017, Scott had the following account balances. Freight-in.................................£ 4,000 Purchases.................................509,000 Purchase discounts........................6,000 Purchase returns and allowances.........8,000 Sales revenue............................840,000 Sales discounts.............................7,000 Sales returns and allowances............11,000 At December 31, 2017, Scott determines that its ending inventory is £60,000. Instructions (a) Compute Scott s 2017 gross profit. (b) Compute Scott s 2017 operating expenses if net income is £130,000 and there are no non-operating activities.
18. Alcorn Service Company was formed on January 1, 2018. Events Affecting the 2018 Accounting Period...
Alcorn Service Company was formed on January 1, 2018. Events Affecting the 2018 Accounting Period 1. Acquired $67,000 cash from the issue of common stock 2. Purchased $2,600 of supplies on account. 3. Purchased land that cost $32,000 cash. 4. Paid $2,600 cash to settle accounts payable created in Event 2 5. Recognized revenue on account of $56,000. 6. Paid $28,000 cash for other operating expenses. 7. Collected $45,000 cash from accounts receivable. Information for 2018 Adjusting Entries 8. Recognized accrued salaries of $3,900 on December 31, 2018. Had $900 of supplies on hand at the end of the accounting period. Events Affecting the 2019 Accounting Period 1. Acquired $27,000 cash from the issue of common stock. 2. Paid $3,900 cash to settle the salaries payable obligation. 3. Paid $5,700 cash in advance to lease office space. 4. Sold the land that cost $32,000 for $32,000 cash 5. Received $6,900 cash in advance for services to be performed in the future. 6. Purchased $1,700 of supplies on account during the year 7. Provided services on account of $39,000. 8. Collected $40,000 cash from accounts receivable. 9. Paid a cash dividend of $6,000 to the stockholders. 10. Paid other operating expenses of $26,500.