Support for Accounting Modules and Research Papers
14. The Cutting Department of Cassel Company has the following production and cost data for July....
The Cutting Department of Cassel Company has the following production and cost data for July.
Production | Costs | |||||
1. | Transferred out 12,000 units. | Beginning work in process | $0 | |||
2. | Started 3,000 units that are 60% | Materials | 45,000 | |||
complete as to conversion | Labor | 16,200 | ||||
costs and 100% complete as | Manufacturing overhead | 18,300 | ||||
to materials at July 31. | ||||||
Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.
(a) Determine the equivalent units of production for (1) materials and (2) conversion costs.
Materials | Conversion Costs | |||
Total equivalent units of production |
|
|
(b)Compute unit costs.(Round unit costs to 2 decimal places, e.g. 2.25.)
Materials | $ | |
Conversion costs | $ |
Prepare a cost reconciliation schedule.
Cost Reconciliation | ||
Costs accounted for | ||
Transferred out | $ | |
Work in process, July 31 | ||
Materials | $ | |
Conversion costs |
|
|
Total costs | $ |
15. A job cost sheet of Fenter Company is given below.
A job cost sheet of Fenter Company is given below.
Instructions
(a) Answer the following questions.
(1) What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?
(2) What is the predetermined manufacturing overhead rate?
(3) What are the total cost and the unit cost of the completed job?
(b) Prepare the entry to record the completion of thejob.
16. Based on the DBM job description, extract a list of task and contextual performance behaviors. Refer
Based on the DBM job description, extract a list of task and contextual performance behaviors. Refer to Table 4.2 for a review of the differences between task and contextual performance. Consider the following adaptation of a job description for the position of a district business manager for a sales organization in Bristol-Myers Squibb (BMS) (www.bms.com). BMS produces pharmaceuticals, infant formulas and nutritional products, ostomy and advanced wound care products, cardiovascular imaging supplies, and over-the-counter products. Some of its brands include Enfamil, Cardiolite, and Plavix. Its stated mission is to "extend and enhance human life by providing the highest-quality pharmaceutical and related health care products."
17. Which one of the following statements about certificates of deposit is not true? (A) Certificates of
Which one of the following statements about certificates of deposit is not true?
(A) Certificates of deposit are negotiable deposits issued by banks
(B) Certificates of deposit will typically have maturity periods of between 1 month and 5 years
(C) Certificates of deposit are non-negotiable
(D) Certificates of deposit are issued in bearer form
18. what effect will the sales have on Aruna’s tax liability?
Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both assets qualify as §1231 assets. The first is machinery and will generate a $10,000 §1231 loss on the sale. The second is land that will generate a $7,000 §1231 gain on the sale. Aruna’s ordinary marginal tax rate is 30 percent.
a. Assuming she sells both assets in December of year 1 (the current year), what effect will the sales have on Aruna’s tax liability?
b. Assuming that Aruna sells the land in December of year 1 and the machinery in January of year 2, what effect will the sales have on Aruna’s tax liability for each year?
c. Explain why selling the assets in separate years will result in greater tax savings for Aruna.
19. A company forgot to record accrued and unpaid employee wages of $350,000 at period-end.
A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would
a. Understate net income by $350,000.
b. Overstate net income by $350,000.
c. Have no effect on net income.
d. Overstate assets by $350,000.
e. Understate assets by $350,000.
20. 3. Calculate cash price of a machine from the following information: Down payment Rs. 10,000; 4...
3.Calculate cash price of a machine from the following information:
Down payment Rs. 10,000;
4 annual instalments at the end of each year Rs. 10,000; and
Rate of interest 5% per annum.
4.Mr. X purchased a cycle on hire purchase for Rs. 1,000 to be paid as follows: On
signing the agreement Rs. 120; At the end of the first year Rs. 170; At the end of the
second year Rs. 160; At the end of the last year Rs. 550. The vendor charged interest
at 10 % per annum on the cash value remaining unpaid each year. Calculate the cash
value of the cycle.
21. 16. Journalizing is the process of entering amounts in the ledger. True False 17. Transactions are..
16. Journalizing
is the process of entering amounts in the ledger.
True False
17. Transactions
are listed in the journal chronologically.
True False
18. Journalizing
transactions using the double-entry bookkeeping system will eliminate
fraud.
True False
19. Liability
accounts are increased by debits.
True False
20. Expense
accounts are increased by credits.
True False
21. Revenue
accounts are increased by credits.
True False
22. The
normal balance of a capital account is a debit.
True False
23. The
normal balance of the drawing account is a debit.
True False
24. The
normal balance of an expense account is a credit.
True False
25. The
normal balance of revenue accounts is a credit.
True False
26. Withdrawals
decrease owner’s equity and are listed on the income statement as a deduction
from revenue.
True False
27. For
a month’s transactions for a typical medium-sized business, the salary expense
account is likely to have only credit entries.
True False
28. For
a month’s transactions for a typical medium-sized business, the accounts
payable account is likely to have only credit entries.
True False
29. When
a business receives a bill from the utility company, no entry should be made until
the invoice is paid.
True False
30. An
account has three parts to it; a title, an increase side, and a decrease
side.
True False
22. Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the S...
Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. All of the company’s transactions with customers, employees, and suppliers are conducted in cash; there is no credit. |
The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $84,000 of manufacturing overhead for an estimated activity level of $40,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: |
Raw materials$10,900 Work in process$5,000 Finished goods$8,500
During the year, the following transactions were completed: |
a. | Raw materials purchased for cash, $165,000. |
b. | Raw materials requisitioned for use in production, $143,000 (materials costing $124,000 were charged directly to jobs; the remaining materials were indirect). |
c. | Costs for employee services were incurred as follows: |
Direct labor | $ | 153,000 |
Indirect labor | $ | 237,500 |
Sales commissions | $ | 22,000 |
Administrative salaries | $ | 45,000 |
d. | Rent for the year was $18,400 ($13,900 of this amount related to factory operations, and the remainder related to selling and administrative activities). |
e. | Utility costs incurred in the factory, $19,000. |
f. | Advertising costs incurred, $14,000. |
g. | Depreciation recorded on equipment, $22,000. ($18,000 of this amount was on equipment used in factory operations; the remaining $4,000 was on equipment used in selling and administrative activities.) |
h. | Manufacturing overhead cost was applied to jobs, $? |
i. | Goods that had cost $228,000 to manufacture according to their job cost sheets were completed. |
j. | Sales for the year totaled $518,000. The total cost to manufacture these goods according to their job cost sheets was $218,000. 1B. Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these t-accounts (don’t forget to enter the beginning balances in your inventory accounts). (Round your intermediate calculations to 2 decimal places.) For: -Raw materials -working progress -Finished goods -Manufacturing overhead -cost of goods sold 1C. Is Manufacturing Overhead underapplied or overapplied for the year? 1D. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations to 2 decimal places.) 1E. Prepare an income statement for the year. (Round your intermediate calculations to 2 decimal places.) |
23. Due to erratic sales of its sole product a high-capacity battery for laptop computers-PEM, Inc., ...
Due to erratic sales of its sole product a high-capacity battery for laptop computers-PEM, Inc., has been experiencing difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (19,500 units x $30 per unit) $585,000 Variable expenses 409,500 Contribution margin 175,500 Fixed expenses 180,000 (4,500) Net operating loss
24. Which of the following is not classified as an accounting change by IFRS? a. Change in accounting...
Which of the following is not classified as an accounting change by IFRS?
a. Change in accounting policy.
b. Change in accounting estimate.
c. Errors in financial statements.
d. None of the above.
25. BACKGROUND: Audit standards require that auditors use analytical procedures at two
BACKGROUND: Audit standards require that auditors use analytical procedures at two stages in the audit: at the planning, or risk assessment, level and at the final, or concluding, stages of the audit. In addition, the auditor may decide to use analytical procedures during the substantive testing phase, to obtain evidence about specific accounts to be audited. While analytical procedures may involve similar types of procedures in both the planning and final review phases of the audit, they meet different objectives and require different conclusions and actions on the part of the auditor based on the results. In the planning phase, they are used to help the auditors identify unusual transactions or amounts to highlight the risk of material misstatement. In the final phases of the audit, they are used to assist the auditor in forming the ending conclusions and to ensure all necessary conclusions have been reached. Woo Industries was being audited by BK&D CPAs. Analytical procedures were performed as part of the risk assessment procedures and helped to identify increased accounts receivable balances as the result of loosened credit policies prompted by heightened competition. As a result, BK&D decided to increase their assessment of inherent risk relative to accounts receivable and sent an increased number of confirmations. Analytical procedures were also used during the substantive testing phase to audit the increases in property, plant, and equipment. After the testing, BK&D determined that they had met the audit standard requirements as they had performed two sets of analytical procedures. 1.) What step did BK&D CPAs fail to perform? 2.) Why do audit standards require the second (final) set of analytical procedures? 3.) Does it make a difference that analytical procedures were performed in testing property, plant, and eqipment, as indicated by BK&D CPAs?
26. On June 1, 20--, a depreciable asset was acquired for
On June 1, 20--, a depreciable asset was acquired for $5,400. The asset has an estimated useful life of five years (60 months) and no salvage value. Using the straight-line depreciation method, calculate the book value as of December 31, 20--.
27. 1. Explain why using the Canons of Proportions on teenagers to estimate height would provide less...
1. Explain why using the Canons of Proportions on teenagers to estimate height would provide less accurate data than using the canons of proportions on adults.
2. Describe a crime scene that could use the Canons of Proportions to help estimate the height of a person.
28. Zoe Parker opened Fresh Step Carpet Cleaners, Ltd. on March 1. During March, the following...
Zoe Parker opened Fresh Step Carpet Cleaners, Ltd. on March 1. During March, the following transactions were completed. Mar. 1 Shareholders invested £14,000 cash in the business in exchange for ordinary shares. 1 Purchased used truck for £10,000, paying £3,000 cash and the balance on account. 3 Purchased cleaning supplies for £1,200 on account. 5 Paid £1,800 cash on one-year insurance policy effective March 1. 14 Billed customers £4,500 for cleaning services performed. 18 Paid £1,500 cash on amount owed on truck and £500 on amount owed on cleaning supplies. Mar. 20 Paid £1,800 cash for employee salaries. 21 Collected £1,600 cash from customers billed on March 14. 28 Billed customers £2,500 for cleaning services performed. 31 Paid £320 for the monthly gasoline bill for the truck. 31 Declared and paid £800 cash dividends. The chart of accounts for Fresh Step Carpet Cleaners, Ltd. contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation-Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 311 Share Capital-Ordinary, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gasoline Expense, No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense. Instructions (a) Journalize and post the March transactions
29. Predetermined Overhead Rates, Overhead Variances, Unit Costs
Primera Company produces two products and uses a predetermined overhead rate to apply
overhead. Primera currently applies overhead using a plantwide rate based on direct labor
hours. Consideration is being given to the use of departmental overhead rates where overhead
would be applied on the basis of direct labor hours in Department 1 and on the basis of machine
hours in Department 2. At the beginning of the year, the following estimates are provided:
Department 1 Department 2
Direct labor hours 640,000 128,000
Machine hours 16,000 192,000
Overhead cost $384,000 $1,152,000
Actual results reported by department and product during the year are as follows:
Department 1 Department 2
Direct labor hours 627,200 134,400
Machine hours 17,600 204,800
Overhead cost $400,000 $1,232,000
Product 1 Product 2
Direct labor hours:
Department 1 480,000 147,200
Department 2 96,000 38,400
Machine hours:
Department 1 8,000 9,600
Department 2 24,800 180,000
Required:
1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to
each product.
2. Calculate the predetermined departmental overhead rates and calculate the overhead
assigned to each product.
3. Using departmental rates, compute the applied overhead for the year. What is the under- or
overapplied overhead for thefirm?
4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement
3, assuming it is not material in amount. What additional information would you need if
the variance is material to make the appropriate journal entry?
30. Assume the following income statement and balance sheet information:...
CP 14-8
Assume the following income statement and balance sheet information:
Service revenue (all cash) Operating expenses Salaries (all cash) Net income
$175
85
$90
Current assets 2020 2019 Cash $1,250 $1,600 Short-term invest. 100 200 $1,350 $1,800 Liabilities Borrowings 600 1,000 Stockholders' equity Common stock 200 300 Retained earnings 550 500 750 800 $1,350 $1,800
Other information: The short-term investments are riskless and will be converted to a known amount of cash in 60 days. Borrowings are non-current. No gain or loss occurred when common stock was repurchased.
Required: 1. Calculate cash flow from operating activities. 2. Prepare the 2020 statement of changes in equity. 3. Calculate cash flow from financing activities. 4. (Appendix) Prepare a cash flow table. Show that cash effects net to a $450 outflow.
31. Direct labour cost Rs. 16,000 (160% of factory overhead); Cost of goods sold Rs. 56,000;...
You are required to prepare a statement showing cost of sales and profit earned from the following particulars:
1 January 2009 | 30 June 2009 | |
Raw materials | 8,000 | 8,600 |
Work-in-progress | 8,000 | 12,000 |
Finished Goods | 14,000 | 18,000 |
Direct labour cost Rs. 16,000 (160% of factory overhead); Cost of goods sold Rs. 56,000; Administration expenses Rs. 2,600; Selling expenses 5% of sales; Sales of the month Rs. 75,000
(Model: Valuation of closing stock and profit)