Strategic Tips for Cost Accounting Assignments

Published: 8 months ago

Strategic Tips for Cost Accounting Assignments

1. On January 2, 2011, Pet Corporation enters into a business combination with Sea Corporation...

On January 2, 2011, Pet Corporation enters into a business combination with Sea Corporation in which Sea is dissolved. Pet pays $1,650,000 for Sea, the consideration consisting of 66,000 shares of Pet $10 par common stock with a market value of $25 per share. In addition, Pet pays the following expenses in cash at the time of the merger:

Finders’ fee $ 70,000

Accounting and legal fees 130,000

Registration and issuance costs of securities 80,000

$280,000

Balance sheet and fair value information for the two companies on December 31, 2010, immediately before the merger, is as follows (in thousands):



REQUIRED: Prepare a balance sheet for Pet Corporation as of January 2, 2011, immediately after the merger, assuming the merger is treated as anacquisition

2. Use the information below to answer the following question(s). Jill Bishop makes homemade soap. She.

Use the information below to answer the following question(s).

Jill Bishop makes homemade soap. She sells it for $100 a case. Her variable costs are $40 per case. She has fixed costs of $600.

11) What is the break-even point in cases?

A) 6 cases

B) 10 cases

C) 15 cases

D) 20 cases

E) 100 cases

12) What is the contribution margin per case?

A) $100.00

B) $60.00

C) $40.00

D) $15.00

E) $10.00

13) What is the break-even point in units for a product line, assuming a unit selling price of $200, total fixed costs are $4,000, unit variable costs are $40, and target operating income is $16,000,000?

A) 25 units

B) 75 units

C) 100 units

D) 125 units

E) 100,000 units

14) What is the break-even point in units, assuming a product's selling price is $100, fixed costs are $8,000, unit variable costs are $20, and operating income is $32,000?

A) 100 units

B) 300 units

C) 400 units

D) 500 units

E) 600 units

15) What would target operating income be when fixed costs equal $6,000, unit contribution margin equals $40.00, and the number of units equals 400?

A) $6,000

B) $10,000

C) $16,000

D) $20,000

E) $60,000

16) How many units would have to be sold to yield a target income of $11,000 assuming variable costs are $30 per unit, total fixed costs are $1,000, and the unit selling price is $40?

A) 1,200 units

B) 1,100 units

C) 1,000 units

D) 900 units

E) 300 units

Answer the following question(s) using the information below.

Stephanie's Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,000, variable costs are $400, and fixed costs are $90,000.

17) What is the Bridal Shoppe's operating income when 200 dresses are sold?

A) $120,000

B) $80,000

C) $200,000

D) $100,000

E) $30,000

18) How many dresses are sold when operating income is zero?

A) 225 dresses

B) 150 dresses

C) 100 dresses

D) 90 dresses

E) 60 dresses

19) How many dresses must the Bridal Shoppe sell to yield after-tax net income of $18,000, assuming the tax rate is 40%?

A) 180 dresses

B) 170 dresses

C) 150 dresses

D) 200 dresses

E) 270 dresses

20) To determine the effect of income tax on a decision, managers should evaluate

A) target operating income.

B) contribution margin.

C) tax as a variable expense in determining contribution margin.

D) selling price.

E) target net income.

3. GEOG 101 Introduction to Geography Week 2 Quiz Answers (APUS) Europe and Russia 1. As a command...

GEOG 101 Introduction to Geography Week 2 Quiz Answers (APUS)

Europe and Russia

1.     As a command economy, the Soviet Union was able to make what major change to Russian agriculture?

2.     The textbook maps a boundary between Europe’s core and periphery in Chapter 2. Which country lies entirely outside the European core?

3.     What is true about the geography of the North European Lowland?

4.     Which of the following statements about Moscow is false?

5.     Which of the following areas of Russia is east of the Urals?

6.     The Iberian Peninsula is isolated from the rest of Europe by what mountain range?

7.     What is true of about a primate city?

8.     Which of the following statements about Russia and the United States is false?

9.     Where have significant oil and natural gas supplies been found in the European realm?

10.  One small advantage that Russia has with its ports is that western Barents Sea ports are keep relatively ice free by ______.

11.  What is true about St. Petersburg?

12.  To the east of the Kuzbas region lies a farming and resource extraction region centered around _____.

13.  Moscow dealt severely with the breakaway republic of Chechnya in the 1990s and 2000s because _______.

14.  Which of the following is an example of  a  shatterbelt?

15.  Which of the following is the Northern Europe's largest country in terms of both population and territory?

16.  Which of the following is not an example of European international integration?

17.  Czarina Catherine the Great's territorial acquisition thrust was aimed at _____.

18.  Permanently frozen ground that thaws only briefly at the surface is known as ______.

19.  The population of Northern Ireland is ______.

20.  Which of the following is false about Azerbaijan?

21.  Which is not true about the site and situation of Paris?

22.  Which of the following statements about the Soviet Union is false?

23.  Which of the following western European states is not currently a member of the European Union?

24.  Russian imperialism in the century after Catherine the Great was aimed chiefly at _____.

25.  Which physical region of Russia is the most agriculturally productive?

4. Analyzing manufacturing cost accounts Clapton Company manufactures custom guitars in a wide...

Analyzing manufacturing cost accounts

Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May:

Materials

Work in Process

Wages Payable

Factory Overhead

In addition, the following information is   available:

a.     Materials and direct labor were applied to six jobs in May:

b.     Factory overhead is applied to each job at a rate of 50% of direct labor cost.

c.     The May 1 Work in Process balance consisted of two jobs, as follows:

Job no.          Style

Work in Process, May 1

Job 101               AF1                      $26,400

Job 102               AF3                      46,000

Total                                                     $72,400

d.     Customer jobs completed and units sold in May were as follows:

Instructions

1.     Determine the missing amounts associated with each letter. Provide supporting calcu­ lations by completing a table with the following headings:

2.     Determine the May 31 balances for each of the inventory accounts and factory over­ head.

5. Journalize the admission of Terrell under each of the following independent assumptions.

At April 30, partners’ capital balances in PDL Company are: G. Donley $52,000, C. Lamar $48,000, and J. Pinkston $18,000. The income sharing ratios are 5:4:1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner.

Instructions

(a)Journalize the admission of Terrell under each of the following independent assumptions.

(1)Terrell purchases 50% of Pinkston"s ownership interest by paying Pinkston $16,000 in cash.

(2)Terrell purchases 33?% of Lamar"s ownership interest by paying Lamar $15,000 in cash.

(3)Terrell invests $62,000 for a 30% ownership interest, and bonuses are given to the old partners.

(4)Terrell invests $42,000 for a 30% ownership interest, which includes a bonus to the new partner.

(b)Lamar"s capital balance is $32,000 after admitting Terrell to the partnership by investment. If Lamar"s ownership interest is 20% of total partnership capital, what were (1) Terrell"s cash investment and (2) the bonus to the new partner?

6. You are auditing general cash for the Pittsburgh Supply Company for the fiscal year ended July...

You are auditing general cash for the Pittsburgh Supply Company for the fiscal year ended July 31, 2013. The client has not prepared the July 31 bank reconciliation. After a brief discussion with the owner, you agree to prepare the reconciliation, with assistance from one of Pittsburgh Supply’s clerks. You obtain the following information:

Additional information obtained is as follows:

1. Checks clearing that were outstanding on June 30 totaled $2,411.

2. Checks clearing that were recorded in the July disbursements journal totaled $21,120.

3. A check for $1,130 cleared the bank but had not been recorded in the cash disbursements journal. It was for an acquisition of inventory. Pittsburgh Supply uses the periodic-inventory method.

4. A check for $646 was charged to Pittsburgh Supply but had been written on a different company’s bank account.

5. Deposits included $600 from June and $24,874 for July.

6. The bank charged Pittsburgh Supply’s account for a nonsufficient check totaling $516. The credit manager concluded that the customer intentionally closed its account and the owner left the city. The check was turned over to a collection agency.

7. A note for $6,000, plus interest, was paid directly to the bank under an agreement signed 4 months ago. The note payable was recorded at $6,000 on Pittsburgh Supply’s books.

Required

a. Prepare a bank reconciliation that shows both the unadjusted and adjusted balance per books.

b. Prepare all adjusting entries.

c. What audit procedures would you use to verify each item in the bank reconciliation?

d. What is the cash balance that should appear on the July 31, 2013, financial statements?

7. Farris Company borrowed $800,000 from Bank Two on January 1, 2014, in order to expand its mining cap

Farris Company borrowed $800,000 from Bank Two on January 1, 2014, in order to expand its mining capabilities. The five-year note required annual payments of $208,349 and carried an annual interest rate of 8.5%. What is the amount of expense Farris must recognize on its 2015 income statement?$68,000.$56,070.$43,127.$50,290.

8. 1. Which of the following usually is least important as a measure of short-term liquidity? a....

1.    Which of the following usually is least important as a measure of short-term liquidity?

a.      Quick ratio.

b.      Debt ratio.

c.      Current ratio.

d.      Cash flows from operating activities.

9. Accounting Assumptions

Suppose you work for a company called Greenwood Sky Divers as a sky-diving instructor. Since you have your pilot's license, you also give flying lessons on the side. You and the owner of Greenwood Sky Divers both belong to a local club, the Greenwood Eagles, whose members get together for sky dives on weekends. Greenwood Sky Divers is a sole proprietorship that has been in business for six years. The owner of the company regularly reviews financial reports, and the company's accountant prepares end-of-the-year reports to compare results from one year to the next. Decide what info in this paragraph is relevant to accounting for Greenwood Sky Divers. Identify the accounting assumptions (business entity, accounting period, and going concern) for Greenwood, and giver an example of each assumption from the info given here.

10. Rectify the following errors: (a) Salary paid Rs 5,000 was debited to employee's personal account...

Rectify the following errors:

11. 61.The following adjusting journal entry was found on page 4 of the journal. Select the best...

61.The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry.

a.Record payment of fees earned

b.Record fees earned at the end of the month

c.Record fees that have not been earned at the end of the month

d.Record the payment of fees to be earned.

62.The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry.

a.Adjust supplies inventory to actual

b.Record purchase of supplies

c.Adjust supplies expense

d.Record sale of supplies

63.The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry.

a.Record the payment of wages

b.Record wages to be paid this month

c.Record wages paid in advance

d.Record wages expense incurred and to be paid next month

64.What affect will this adjustment have on the accounting records?

a.Increase net income

b.Increase revenues reported for the period

c.Decrease liabilities

d.All are true.

65.What affect will this adjusting journal entry have on the accounting records?

a.Increase income

b.Decrease net income

c.Decrease expenses

d.Increase assets

66.What affect will the following adjusting journal entry have on the accounting records?

a.Increase net income

b.Increase revenues

c.Decrease expenses

d.Decrease net book value

67.How will the following adjusting journal entry affect the accounting equation?.

a.Increase assets, increase revenues

b.Increase liabilities, increase revenues

c.Decrease liabilities, increase revenues

d.Decrease liabilities, decrease revenues

68.Which of the following is not true regarding Depreciation?

a.Depreciation allocates the cost of a fixed asset over its estimated life.

b.Depreciation expense reflects the decrease in market value each year.

c.Depreciation is an allocation not a valuation method.

d.Depreciation expense does not measure changes in market value.

69.The account type and normal balance of Prepaid Expense is

a.revenue, credit

b.expense, debit

c.liability, credit

d.asset, debit

70.The account type and normal balance of Accumulated Depreciation is

a.revenue, credit

b.expense, debit

c.asset, credit

d.asset, debit