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Winter Accounting Module Assistance
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18 The following data pertain to Cowl Inc for the current year ended December 31:Net sales
Net income
Total assets, January 1
Total assets, December 31
$600,000
150,000
2,000,000
3,000,000
What was Cowl’s rate of return on assets?
a 5%
b 6%
c 20%
d 24%
19 Successful use of leverage is evidenced by a
a Rate of return on investment greater than the rate of return on stockholders’ equity
b Rate of return on investment greater than the cost of debt
c Rate of return on sales greater than the rate of return on stockholders’ equity
d Rate of return on sales greater than the cost of debt
20 How are dividend per share for common stock used in the calculation of the following?
Dividend per share
payout ratio
Earnings
per share
a Numerator Numerator
b Numerator Not used
C Denominator Not used
d Denominator Denominator
35. TRUE-FALSE STATEMENTS 1.Owners of business firms are the only people who need accounting...
TRUE-FALSE STATEMENTS
1.Owners of business firms are the only people who need accounting information.
2.Transactions that can be measured in dollars and cents are recorded in the financial information system.
3.The hiring of a new company president is an economic event recorded by the financial information system.
4.Management of a business enterprise is the major external user of information.
5.Accounting communicates financial information about a business enterprise to both internal and external users.
6.Accounting information is used only by external users with a financial interest in a business enterprise.
7.Financial statements are the major means of communicating accounting information to interested parties.
8.Bookkeeping and accounting are one and the same because the bookkeeping function includes the accounting process.
9.The origins of accounting are attributed to Luca Pacioli, a famous mathematician.
10.The study of accounting is not useful for a business career unless your career objective is to become an accountant.
36. Entries for costs in a job order cost system Royal Technology Company uses a job order cost...
Entries for costs in a job order cost system
Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:
a. Materials purchased on account, $770,000.
b. Materials requisitioned, $680,000, of which $75,800 was for general factory use.
c. Factory labor used, $756,000, of which $182,000 was indirect.
d. Other costs incurred on account for factory overhead, $245,000; selling expenses,
$171,500; and administrative expenses, $110,600.
e. Prepaid expenses expired for factory overhead were $24,500; for selling expenses,
$28,420; and for administrative expenses, $16,660.
f. Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900.
g. Factory overhead costs applied to jobs, $568,500.
h. Jobs completed, $1,500,000.
i. Cost of goods sold, $1,375,000.
Instruction
Journalize the entries to record the summarized operations.
37. PR 12-2A Bond discount, entries for bonds payable transactions On July 1, 2016, Merideth...
PR 12-2A Bond discount, entries for bonds payable transactions
On July 1, 2016, Merideth Industries Inc. issued $28,500,000 of 10-year, 8% bonds at a market (effective) interest rate of 9%, receiving cash of $26,646,292. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Instructions
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 2016, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar.)
b. The interest payment on June 30, 2017, and the amortization of the bond discount, us- ing the straight-line method. (Round to the nearest dollar.)
3. Determine the total interest expense for 2016.
4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?
5. (Appendix 1) Compute the price of $26,646,292 received for the bonds by using the present value tables in Appendix A at the end of the text. (Round to the nearest dollar.)
38. Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store...
Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the company’s stores are listed below for the past six months.
Month Total Hours of Operation
Total Utility Cost
January ........................................................... 550 ...................................................... $3,240
February ......................................................... 600 ...................................................... 3,400
March ............................................................. 700 ...................................................... 3,800
April ................................................................ 500 ...................................................... 3,200
May ................................................................ 450 ...................................................... 2,700
June ............................................................... 400 ...................................................... 2,600
Required:
1. Use the high-low method to estimate the cost behavior for the store’s utility costs. Express the cost behavior in formula form (Y 5 a 1 bX). What is the variable utility cost per hour of operation?
2. Draw a scatter diagram of the store’s utility costs. Visually fit a cost line to the plotted data. Estimate the variable utility cost per hour of operation.
3. Build a spreadsheet: Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior for the store’s utility cost. Express the cost behavior in formula form. What is the variable utility cost per hour of operation?
4. During July, the store will be open 300 hours. Predict the store’s total utility cost for July using each of the cost-estimation methods employed in requirements (1), (2), and (3).
5. Use your Excel sheet from requirement (3) to calculate and interpret the R2 value for the regression.
39. Gordon Beckham started his own delivery service, Beckham Deliveries, on June 1, 2012. The following...
Gordon Beckham started his own delivery service, Beckham Deliveries, on June 1, 2012. The following transactions occurred during the month of June.
June 1 Gordon invested $10,000 cash in the business.
2 Purchased a used van for deliveries for $12,000. Gordon paid $2,000 cash
and signed a note payable for the remaining balance.
3 Paid $500 for office rent for the month.
5 Performed $4,400 of services on account.
9 Withdrew $200 cash for personal use.
12 Purchased supplies for $150 on account.
15 Received a cash payment of $1,250 for services provided on June 5.
17 Purchased gasoline for $200 on account.
20 Received a cash payment of $1,300 for services provided.
23 Made a cash payment of $600 on the note payable.
26 Paid $250 for utilities.
29 Paid for the gasoline purchased on account on June 17.
30 Paid $1,000 for employee salaries.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using the following format.
Assets Liabilities Owner’s Equity
Accounts Notes Accounts Owner’s Owner’s
Date Cash + Receivable + Supplies + Equipment = Payable + Payable + Capital - Drawings + Revenues - Expenses
(b) Prepare an income statement for the month of June.
(c) Prepare a balance sheet at June 30, 2012.
40. Compare the calculated present values Question: Given the mixed streams of cash flows shown in the..
Compare the calculated present values
Question: Given the mixed streams of cash flows shown in the following table, answer parts (a) and (b):
Cash Flow Stream
Year A B
1 $ 50,000 $ 10,000
2 40,000 20,000
3 30,000 30,000
4 20,000 40,000
5 10,000 50,000
Totals $150,000 $150,000
a. Find the present value of each stream, using a 15 percent discount rate.
b. Compare the calculated present values, and discuss them in light of the fact that the undis-counted total cash flows amount to $150,000 in each case.
Compare the calculated present values
Accounting Basics
41. Which of the following is true regarding the theory of constraints?
Which of the following is true regarding the theory of constraints?
A) The theory of constraints does not apply to companies with multiple products because of capacity measurement difficulties.
B) In any profit-seeking company, there must be at least one constraint.
C) Constraints or bottlenecks stop organizations from selling an infinite number of
units or services.
D) both B and C above.
42. record the acquisition cost
Hull Company acquires land for $86,000 cash. Additional costs are as follows:
Removal of shed $300
Filling and grading 1,500
Salvage value of lumber of shed 120
Broker commission 1,130
Paving of parking lot 10,000
Closing costs 560
Hull will record the acquisition cost of the land as
$86,000.
$89,610.
$87,690.
$89,3...
43. The following data pertain to the Oneida Restaurant Supply Company for the year jus
The following data pertain to the Oneida Restaurant Supply Company for the year just ended. Budgeted sales revenue $205,000 Actual manufacturing overhead 336,000 Budgeted machine hours (based on practical capacity) 8,000 Budgeted direct-labor hours (based on practical capacity) 20,000 Budgeted direct-labor rate $13 Budgeted manufacturing overhead $364,000 Actual machine hours 11,000 Actual direct-labor hours 18,000 Actual direct-labor rate $17 Required: Prepare a journal entry to add to work-in-process inventory the total manufacturing overhead cost for the year, assuming 1. The firm uses actual costing. 2. The firm uses normal costing, with a predetermined overhead rate based on machine hours.
44. 1. Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as
1. Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as
a. selling expenses
b. general expenses
c. other expenses
d. administrative expenses
2. The form of income statement that derives its name from the fact that the total of all expenses is deduct...
45. Prepare Arturo’s journal entry to record its acquisition of Westmont
The following book and fair values were available for Westmont Company as of March 1.
Book Value Fair Value
Inventory $630,000 $600,000
Land 750,000 990,000
Buildings 1,700,000 2,000,000
Customer relationships –0– 800,000
Accounts payable -80,000 80,000
Common stock 2,000,000
Additional paid-in capital 500,000
Retained earnings 1/1 360,000
Revenues 420,000
Expenses 280,000
Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,000 and Arturo pays $42,000 for legal fees to complete the transaction. Prepare Arturo’s journal entry to record its acquisition of Westmont;
46. Charleville operates a continuous process producing three products and one by-product.
Charleville operates a continuous process producing three products and one by-product. Output from the process for a month was as follows:
Product Selling price per unit United of output from process
1 £18 10 000
2 £25 20 000
3 £20 20 000
4(by-product) £2 3 500
Total output costs were £277 000.
What was the unit valuation for product 3 using the sales revenue basis for allocating joint cost?
A £4.70
B £4.80
C £5.00
D £5.10
47. Which of the following events is not recorded in the accounting records?
Which of the following events is notrecorded in the accounting records?
(a) Equipment is purchased on account.
(b) An employee is terminated.
(c) A cash investment is made into the business.
(d) Company pays dividend to stockholders
48. Following are five series of costs A through E measured at various volume levels. Examine each...
Following are five series of costs A through E measured at various volume levels. Examine each series and identify which is fixed, variable, mixed, step-wise, or curvilinear.
Volume (Units) Series A Series B Series C Series D Series E
0 $0 $2,500 $0 $2,000 $4,000
200 3,600 3,100 6,000 2,000 4,000
400 7,200 3,700 6,600 4,000 4,000
600 10,800 4,300 7,200 4,000 4,000
800 14,400 4,900 8,200 6,000 4,000
1,000 18,000 5,500 9,600 6,000 4,000
1,200 21,600 6,100 13,500 8,000 4,000
49. T-Account and Journal
The account: The following transactions occurred during December, the first month of operations for Harris Company. Prepare journal entries and create a T-account for accounts payable that includes the following five transactions.
1. Purchased $500 of inventory on account.
2. Purchased $300 of inventory on account.
3. Paid suppliers $600
4. Purchased $400 of inventory on account.
5. Paid suppliers $300.
50. Honda Motor Corporation of Japan is a leading international manufacturer of automobiles,...
Honda Motor Corporation of Japan is a leading international manufacturer of automobiles, motorcycles, all-terrain vehicles, and personal watercraft. As a Japanese company, it follows Japanese GAAP and reports its financial statements in billions of yen (the sign for yen is A??Y). Its recent balance sheet contained the following items (in billions).
Cash and cash equivalents A??Y 690
Contributed capital 259
Accounts payable and other current liabilities 4,237
Inventories 1,244
Investments 639
Long-term debt 1,933
Net property, plant, and equipment 2,148
Other assets 6,244
Other liabilities 1,519
Retained earnings 3,871
Total assets 11,819
Total liabilities and stockholders' equity ?
Trade accounts, notes, and other receivables 854
________________________________________
Prepare a balance sheet as of March 31, 2009, solving for the missing amount. (Be sure to list the assets and liabilities in order of their liquidity. Enter your answers in billions. Omit the "A??Y" sign in your response.)
HONDA MOTOR CORPORATION
Balance Sheet
as of March 31, 2009
(in billions of Yen)
Assets
(Click to select) Long-term debt Inventory Trade assets, notes and other receivables Retained earnings Cash and cash equivalents A??Y
(Click to select) Retained earnings Inventories Long-term debt Trade accounts, notes, and other receivables Cash and cash equivalents
(Click to select) Long-term debt Inventories Trade accounts, notes, and other receivables Cash and cash equivalents Retained earnings
(Click to select) Other assets Retained earnings Long-term debt Net property, plant and equipment Investments
(Click to select) Investments Long-term debt Other assets Retained earnings Net property, plant and equipment
(Click to select) Long-term debt Other assets Investments Net property, plant and equipment Retained earnings
________________________________________
Total Assets A??Y
________________________________________________________________________________
Liabilities
(Click to select) Trade accounts, notes, and other receivables Accounts payable and other current liabilities Other liabilities Long-term debt Net property, plant and equipment A??Y
(Click to select) Net property, plant and equipment Long-term debt Accounts payable and other current liabilities Other liabilities Trade accounts, notes, and other receivables
(Click to select) Long-term debt Net property, plant and equipment Other liabilities Accounts payable and other current liabilities Trade accounts, notes, and other receivables
________________________________________
Total Liabilities
________________________________________________________________________________
Stockholders' Equity
(Click to select) Contributed capital Other liabilities Inventories Long-term debt Investments
(Click to select) Inventories Other liabilities Other assets Long-term debt Retained earnings
________________________________________
Total Stockholders' Equity
________________________________________
Total Liabilities and Stockholders' Equity A??Y
