Success: Achieve Distinction with Accounting Assignment

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Success: Achieve Distinction with Accounting Assignment

1. Victory Company purchases office equipment at the beginning of the year at a cost of $15,000. The...

Victory Company purchases office equipment at the beginning of the year at a cost of $15,000. The machine's useful life is estimated to be 7 years with a $1,000 salvage value. The journal entry to record the first year depreciation is: Debit Depreciation Expense $2,143; credit Accumulated Depreciation $2,143. Debit Depreciation Expense $2,000; credit Office Equipment $2,000. Debit Office Equipment $2,000; credit Accumulated Depreciation $2,000. Debit Accumulated Depreciation $2,143; credit Office Equipment $2,143. Debit Depreciation Expense $2,000; credit Accumulated Depreciation $2,000.

2. Shown here are condensed income statements for two different companies (both are organized as LLCs...

Shown here are condensed income statements for two different companies (both are organized as LLCs and pay no income taxes).

Required

1. Compute times interest earned for Ace Company.

2. Compute times interest earned for Deuce Company.

3. What happens to each company’s net income if sales increase by 30%?

4. What happens to each company’s net income if sales increase by 50%?

5. What happens to each company’s net income if sales increase by 80%?

6. What happens to each company’s net income if sales decrease by 10%?

7. What happens to each company’s net income if sales decrease by 20%?

8. What happens to each company’s net income if sales decrease by 40%?

9. Comment on the results from parts 3 through 8 in relation to the fixed-cost strategies of the two companies and the ratio values you computed in parts 1 and 2.

3. Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour

Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January, 2,000 products are produced using 6,300 direct labor hours. Monster's actual payroll during January was $98,280. What is the labor quantity variance? Select one: a. $4,800 unfavorable b. $2,280 unfavorable c. $4,800 favorable d. $2,520 favorable

4. Perdon Corporation manufactures safes—large mobile safes, and large

Perdon Corporation manufactures safes—large mobile safes, and large walkin stationary bank safes. As part of its annual budgeting process, Perdon is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be allocated to each product line. The information shown on page 922 relates to overhead.

Instructions

(a) The total estimated manufacturing overhead was $260,000. Under traditional costing (which assigns overhead on the basis of direct-labor hours), what amount of manufacturing overhead costs are assigned to:

(1) One mobile safe?

(2) One walk-in safe?

(b) The total estimated manufacturing overhead of $260,000 was comprised of $160,000 for material-handling costs and $100,000 for purchasing activity costs. Under activitybased costing (ABC):

(1) What amount of material handling costs are assigned to:

(a) One mobile safe?

(b) One walk-in safe?

(2) What amount of purchasing activity costs are assigned to:

(a) One mobile safe?

(b) One walk-in safe?

(c) Compare the amount of overhead allocated to one mobile safe and to one walk-in safe under the traditional costing approach versus under ABC.

5. MELTON RIVER RESORT Trial Balance August 31, 2012 Credit Debit Account Number 19.600 101 Supplies...

Show transcribed image text MELTON RIVER RESORT Trial Balance August 31, 2012 Credit Debit Account Number 19.600 101 Supplies 126 6.000 Prepaid Insurance 130 Land 140 125.000 Buildings 143 26.000 Equipment 149 6,500 Accounts Payable 201 7,400 Unearned Rent Revenue 80,000 100.000 5.000 Mortgages Payable 275 Owner's Capital 301 Owner's Drawings Rent Revenue 80.000 429 Maintenance and Repairs Expense 51.000 Salaries and Wages Expense 726 9.400 Utilities Expense 732 $273,900 S273,900 In addition to those accounts listed on the trial balance, the chart of accounts for Melton River Resort also contains the following accounts and account numbers: No. 112Accounts Receivable, No. 144 Accumulated Depreciation-Buildings No. 150Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payablo, No. 620 Depreciation Expense, No. 6ai Supplies Expense, No 718 interest Expensc, and No. 722 Insurance Expense. Other data: 1. Insurance expires at the rate of $300 per month. 2. A count on August 31 shows$800 of supplies on hand. 1. Annual depreciation is s6.000 on buildings and S2,400 on equipment 5. Salaries of rent revenue of earned prior to August 31. at August 6. Rentals of $4.000 were due from tenants at August 31.(Use Accounts Receivable.) The mortgage interest rate is 9% per year. he mortgage was taken out on August 1) ab 4.

6. Cost Accumulation

19. LO. 4 (Cost Accumulation) On September 25, 2010, a hurricane destroyed the work in process inventory of Biloxi Corporation. At that time, the company was in the process of manufacturing two custom jobs (B325 and Q428). Although all of Biloxi’s on-site accounting records were destroyed, the...

7. When allocating costs to inventory produced for the period, fixed overhead should be based upon

When allocating costs to inventory produced for the period, fixed overhead should be based upon

1. The actual amounts of goods produced during the period.


2. The normal capacity of production facilities.


3. The highest production levels in the last three periods.


4. The lowest production level in the last three periods.

8. Journalise the following transactions: Mr. Peter started business with cash $100000 and a...

Journalise the following transactions:

1. Mr. Peter started business with cash $100000 and a building valued at $500000.


2. Purchased goods amounting to $200000 out of which goods of $180000 were purchased on credit from D. Lal.


3. Sold goods on credit to Ramesh $160000.


4. Received $156000 from Ramesh in full settlement of his account.


5. Paid $178000 to D.Lal in full settlement of $180000 due to him.


6. An old machine with the book value of $80000 is exchanged for a new machine of $240000. The old machine is valued at $50000 for exchange purposes by Machine Tools Ltd.


7. Purchased machinery from Pele & Sons for $50000 on credit.


8. Depreciation of $5000 was provided on the machinery at the end of the year.


9. Paid income tax $5000.


10. A cheque amounting to $5000 deposited in the bank was returned dishonoured.

9. 51) ______________ provides computer resources on demand. a) Infrastructure-as-a-service model b)...

51) ______________ provides computer resources on demand.



a) Infrastructure-as-a-service model

b) Platform-as-a-service model

c) Software-as-a-service model

d) SOAP model





52) ______________ handles all aspects of an application – the software, the resources to run it, and storing the data.



a) Infrastructure-as-a-service model

b) Platform-as-a-service model

c) Software-as-a-service model

d) SOAP model

 

53) ______________ provides computer resources as extensions to an organization’s existing resources.



a) Infrastructure-as-a-service model

b) Platform-as-a-service model

c) Software-as-a-service model

d) SOAP model



54) Hyo runs an ice cream store with her family. Which of the following cloud computing services would make the most sense for the business?



a) Infrastructure-as-a-service model

b) Platform-as-a-service model

c) Software-as-a-service model

d) SOAP model



55) Travis is the VP of Operations for a company that owns and operates six ski areas around the world.  Their IT needs are seasonal.  Which of the following cloud computing services would make the most sense for the business?



a) Infrastructure-as-a-service model

b) Platform-as-a-service model

c) Software-as-a-service model

d) SOAP model

 

56) Paula owns a variety store in a tourist town. The store recently went online, and the response has been remarkable. The store’s current infrastructure is running close to capacity, so handling the influx of orders is taking much longer than it should.  Which of the following cloud computing services would make the most sense for the business?



a) Infrastructure-as-a-service model

b) Platform-as-a-service model

c) Software-as-a-service model

d) SOAP model



57) Which of the following is not a benefit of cloud computing?



a) Making individuals more productive

b) Facilitating collaboration

c) Reducing costs

d) Responding quickly to market changes

e) Reducing the need for an IT strategy



58) Which of the following is not a concern or risk of cloud computing?



a) Training

b) Legacy systems are not easily transferable to the cloud.

c) Costs

d) Reliability

e) Security



59) Enabling groups to work together in ways that were not available previously is called



a) Mining insights from data

b) Reducing costs

c) Facilitating collaboration

d) Making individuals more productive



60) All of the following are cloud computing security issues except_________.



a) sensitive data access

b) users technical ability

c) privacy

d) malicious insiders

10. Amy Austin established an insurance agency on March 1 of the current year and completed the...

Transactions

Amy Austin established an insurance agency on March 1 of the current year and completed the following transactions during March:

a. Opened a business bank account with a deposit of $50,000 in exchange for capital stock.

b. Purchased supplies on account, $4,000.

c. Paid creditors on account, $2,300.

d. Received cash from fees earned on insurance commissions, $13,800.

e. Paid rent on office and equipment for the month, $5,000.

f. Paid automobile expenses for month, $1,150, and miscellaneous expenses, $300.

g. Paid office salaries, $2,500.

h. Determined that the cost of supplies on hand was $2,700; therefore, the cost of supplies used was $1,300.

i. Billed insurance companies for sales commissions earned, $12,500.

j. Paid dividends, $3,900.

Instructions

1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:

2. Briefly explain why the issuance of capital stock and revenues increased stockholders' equity, while dividends and expenses decreased stockholders' equity.

3. Determine the net income for March.

4. How much did March's transactions increase or decrease retained earnings?

11. On April 1, 2005, Jennifer Stafford created a new travel agency, See-It-Now Travel

Problem 4-2A Applying The Accounting Cycle



On April 1, 2005, Jennifer Stafford created a new travel agency, See-It-Now Travel. The following transactions occurred during the company’s first month:



April 1 Stafford invested $20,000 cash and computer equipment worth $40,000 in the business.

2 Rented furnished office space by paying $1,700 cash for the first month’s (April) rent.

3 Purchased $1,100 of office supplies for cash.

10 Paid $3,600 cash for the premium on a 12-month insurance policy. Coverage begins on April 11.

14 Paid $1,800 cash for two weeks’ salaries earned by employees.

24 Collected $7,900 cash on commissions from airlines on tickets obtained for customers.

28 Paid another $1,800 cash for two weeks’ salaries earned by employees.

29 Paid $250 cash for minor repairs to the company’s computer.

30 Paid $650 cash for this month’s telephone bill.

30 Stafford withdrew $1,500 cash for personal use.



The company’s chart of accounts follows:



Required

1. Use the balance column format to set up each ledger account listed in its chart of accounts.

2. Prepare journal entries to record the transactions for April and post them to the ledger accounts. The company records prepaid and unearned items in balance sheet accounts.

3. Prepare an unadjusted trial balance as of April 30.

4. Use the following information to journalize and post adjusting entries for the month:

a. Two-thirds of one month’s insurance coverage has expired.

b. At the end of the month, $700 of office supplies are still available.

c. This month’s depreciation on the computer equipment is $600.

d. Employees earned $320 of unpaid and unrecorded salaries as of month-end.

e. The company earned $1,650 of commissions that are not yet billed at month-end.

5. Prepare the income statement and the statement of owner’s equity for the month of April and the balance sheet at April 30, 2005.

6. Prepare journal entries to close the temporary accounts and post these entries to the ledger.

7. Prepare a post-closing trial balance.



Check (3) Unadj. trial balance totals, $67,900

(4a) Dr. Insurance Expense, $200

(5) Net income, $1,830; Capital (4/30/2005), $60,330; Total assets, $60,650

(7) P-C trial balance totals, $61,250

12. Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his divisions return on investment (ROI), which has exceeded 22% each of the last three years. He has computed the cost and revenue estimates for each product as follows: The company’s discount rate is 20%. 1. Calculate the payback period for each product. (Round your answers to 2 decimal places.) 2. Calculate the net present value for each product. (Round discount factor(s) to 3 decimal places.) 3. Calculate the internal rate of return for each product. (Round percentage answer to 1 decimal place. i.e. 0.1234 should be considered as 12.3%.) 4. Calculate the project profitability index for each product. (Round discount factor(s) to 3 decimal places. Round your answers to 2 decimal places.) 5. Calculate the simple rate of return for each product. (Round percentage answer to 1 decimal place. i.e. 0.1234 should be considered as 12.3%.) 6. (a) For each measure, identify whether Product A or Product B is preferred. Net Present Value, Profitably Index, Payback Period, Internal Rate of Return (b) Based on the simple rate of return, Lou Barlow would likely: Accept Product A Accept Product B Reject Both Product

13. P7-27A Preparing a bank reconciliation and journal entries The December cash records of Davidson ...

P7-27A Preparing a bank reconciliation and journal entries The December cash records of Davidson Insurance follow Lear 1. Adj Cash Receipts Cash Payments Date Cash Debit Check No. 1416 1417 1418 1419 1420 1421 1422 Cash Credit 4,240 550 600 1,900 1,860 810 180 630 1,390 1,490 700 600 Dec. 4 14 17 31 Davidson's Cash account shows a balance of $17,450 at December 31. On December 31, Davidson Insurance received the following bank statement: Bank Statement for December 14,100 Beginning Balance Deposits and other Credits: EFT Dec.1 Dec. 5 Dec. 10 Dec. 15 Dec. 18 Dec. 22 350 4,240 550 600 1,900 1,400 BC 9,040 Checks and other Debits: Dec. 8 Dec. 11 (check no. 1416) Dec. 19 Dec. 22 (check no. 1417) Dec. 29 (check no. 1418 Dec. 31 (check no. 1419) Dec. 31 400 810 225 180 630 1,930 10 NSF EFT SC (4,185) 18,955 Ending Balance

14. 1. The Woody Company manufactures slippers and sells them at $10 a pair. Variable manufacturing...

1. The Woody Company manufactures slippers and sells them at $10 a pair. Variable manufacturing cost is $4.50 a pair, and allocated fixed manufacturing cost is $1.50 a pair. It has enough idle capacity available to accept a one-time-only special order of 20,000 pairs of slippers at $6 a pair. Woody will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales?

(a) $0,

(b) $30,000 increase,

(c) $90,000 Increase or

(d) $120,000 increases show your calculations.

2. The Reno Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 20,000 units of Part No. 498 is as follows:



The Tray Company has offered to sell 20,000 units of Part No. 498 to Reno for $60 per unit. Reno will make the decision to buy the part from Tray if there is an overall savings of at least $25,000 for Reno. If Reno accepts Tray’s offer, $9 per unit of the fixed overhead allocated would be eliminated. Furthermore, Reno has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. For Reno to achieve an overall savings of $25,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be

(a) $80,000,

(b) $85,000,

(c) $125,000, or

(d) $140,000 show yourcalculations.