Winter Accounting Research Paper

Winter Accounting Research Paper
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Winter Accounting Research Paper

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28. Giuseppe’s buys supplies to make pizzas for $4. Operating expenses of the business are 110% of the..
Giuseppe’s buys supplies to make pizzas for $4. Operating expenses of the business are 110% of the cost and the profit made is 130% of cost. What is the regular selling price of each pizza?
29. Chart of accounts Monet Paints Co. is a newly organized business with a list of accounts arranged...
Chart of accounts
Monet Paints Co. is a newly organized business with a list of accounts arranged in alphabetical order, as follows:



Accounts Payable Accounts Receivable
Accumulated Depreciation—Office Equipment Accumulated Depreciation—Store Equipment Advertising Expense
Cash
Common Stock
Cost of Merchandise Sold Delivery Expense
Depreciation Expense—Office Equipment Depreciation Expense—Store Equipment Dividends
Income Summary Insurance Expense Interest Expense Land
Merchandise Inventory

Miscellaneous Administrative Expense Miscellaneous Selling Expense
Notes Payable Office Equipment
Office Salaries Expense Office Supplies
Office Supplies Expense Prepaid Insurance
Rent Expense Retained Earnings Salaries Payable Sales
Sales Salaries Expense Store Equipment Store Supplies
Store Supplies Expense


Construct a chart of accounts, assigning account numbers and arranging the accounts in balance sheet and income statement order, as illustrated in Exhibit 9. Each account number is three digits: the first digit is to indicate the major classification (1 for assets, and so on); the second digit is to indicate the subclassification (11 for current assets, and so on); and the third digit is to identify the specific account (110 for Cash, 112 for Accounts Receivable, 114 for Merchandise Inventory, 115 for Store Supplies, and so on).
30. Velocity, a consulting firm, enters into a contract to help Burger Boy, a fast-food restaurant,...
Velocity, a consulting firm, enters into a contract to help Burger Boy, a fast-food restaurant, design a marketing strategy to compete with Burger King. The contract spans eight months. Burger Boy promises to pay $60,000 at the beginning of each month. At the end of the contract, Velocity either will give Burger Boy a refund of $20,000 or will be entitled to an additional $20,000 bonus, depending on whether sales at Burger Boy at year-end have increased to a target level. At the inception of the contract, Velocity estimates an 80% chance that it will earn the $20,000 bonus and calculates the contract price based on the expected value of future payments to be received. After four months, circumstances change, and Velocity revises to 60% its estimate of the probability that it will earn the bonus. At the end of the contract, Velocity receives the additional consideration of $20,000.
Required:
1. Prepare the journal entry to record revenue each month for the first four months of the contract.
2. Prepare the journal entry that the Velocity Company would record after four months to recognize the change in estimate associated with the reduced likelihood that the $20,000 bonus will be received.
3. Prepare the journal entry to record the revenue each month for the second four months of the contract.
4. Prepare the journal entry after eight months to record receipt of the $20,000 cash bonus.
31. The cash account for Alpine Sports Co. on April 1,
The cash account for Alpine Sports Co. on April 1, 2006, indicated a balance of $16,911.95. During April, the total cash deposited was $65,500.40, and checks written totaled $68,127.47. The bank statement indicated a balance of $18,880.45 on April 30, 2006. Comparing the bank statement, the canceled checks, and the accompanying memorandums with the records revealed the following reconciling items:
a. Checks outstanding totaled $5,180.27.
b. A deposit of $3,481.70, representing receipts of April 30, had been made too late to appear on the bank statement.
c. A check for $620 had been incorrectly charged by the bank as $260.
d. A check for $479.30 returned with the statement had been recorded by Alpine Sports Co. as $497.30. The check was for the payment of an obligation to Bray & Son on account.
e. The bank had collected for Alpine Sports Co. $3,424 on a note left for collection. The face of the note was $3,200.
f. Bank service charges for April amounted to $25.
g. A check for $880 from Shuler Co. was returned by the bank because of insufficient funds.

Instructions
1. Prepare a bank reconciliation as of April 30.
2. Journalize the necessary entries. The accounts have not been closed.
32. fin-201
46. The Shoe Outlet has paid annual dividends of $0.65, $0.70, $0.72, and $0.75 per share over the last four years, respectively. The stock is currently selling for $26 a share. What is this firm's cost of equity?
A. 7.56 percent
B. 7.93 percent
C. 10.38 percent
D. 10.53 percent
E. 11.79 percent
33. On February 1, 2016, Arrow Construction Company entered into a three-year construction contract t...
On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,390,000. During 2016, costs of $2,130,000 were incurred with estimated costs of $4,130,000 yet to be incurred. Billings of $2,630,000 were sent and cash collected was $2,380,000.
In 2017, costs incurred were $2,630,000 with remaining costs estimated to be $3,795,000. 2017 billings were $2,880,000 and $2,605,000 cash was collected. The project was completed in 2018 after additional costs of $3,930,000 were incurred. The company’s fiscal year-end is December 31. Arrow recognizes revenue over time according to percentage of completion.
Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2016, 2017, and 2018 using the percentage-of-completion method?
2.
prepare journal entries for 2016 to record the transactions described (credit "various accounts" for construction costs incurred). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)
ento inheducation com/hm.tpx Assume Netwoks contracted to provide a customer with Internet infrastructure for s2.600.000 The poject began in 2016 and was completed in 2017. Data relating to the contract are summarized below: 2016 2017 348,000 1,995,000 Costs incumod during the year 1231 1,392,000 Estimated costs to complete as of 465,000 1,740,000 during the year 274,000 1,810,000 Cash colloctions during the year Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 201hassuming Nortel recognizes revenue over time according to percentage of completion. (Use percentages as should be and rounded in the table below to arrive at your final answer. Losses and expenses indicated with a minus sign.) Estimated total gross profit (loss) Percentages of completion Actual Choose denominator costs to date Estimated total costs complete to date 2016 S
34. 51. Which of the following is a true statement about cost behaviors in incremental analysis? 1.Fixed
51. Which of the following is a true statement about cost behaviors in incremental analysis?
1.Fixed costs will not change between alternatives.
2.Fixed costs may change between alternatives.
3.Variable costs will always change between alternatives.
a.1
b.2
c.3
d.2 and 3
52. A company is considering the following alternatives:
Alternative 1Alternative 2
Revenues$120,000$120,000
Variable costs60,00070,000
Fixed costs35,00035,000
Which of the following are relevant in choosing between the alternatives?
a.Variable costs
b.Revenues
c.Fixed costs
d.Variable costs and fixed costs
53. It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 3,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 3,000 scales. If the special order is accepted, what will be the effect on net income?
a.$6,000 increase
b.$6,000 decrease
c.$9,000 decrease
d.$45,000 increase
54. Baden Company manufactures a product with a unit variable cost of $100 and a unit sales price of $176. Fixed manufacturing costs were $480,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $140 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:
a.Income would decrease by $8,000.
b.Income would increase by $8,000.
c.Income would increase by $140,000.
d.Income would increase by $40,000.
55. In incremental analysis,
a.costs are not relevant if they change between alternatives.
b.all costs are relevant if they change between alternatives.
c.only fixed costs are relevant.
d.only variable costs are relevant.
56. If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then
a.only variable costs are relevant.
b.fixed costs are not relevant.
c.the order will likely be accepted.
d.the order will likely be rejected.
57. Miley, Inc. has excess capacity. Under what situations should the company accept a special order for less than the current selling price?
a.Never
b.When additional fixed costs must be incurred to accommodate the order
c.When the company thinks it can use the cheaper materials without the customer’s knowledge
d.When incremental revenues exceed incremental costs
58. If a company must expand capacity to accept a special order, it is likely that there will be
a.an increase in unit variable costs.
b.no increase in fixed costs.
c.an increase in variable and fixed costs per unit.
d.an increase in fixed costs.
59. Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity?
a.Net income will not be affected.
b.Net income will increase if the special sales price per unit exceeds the unit variable costs.
c.Net income will decrease.
d.Additional fixed costs will probably be incurred.
60. If a company anticipates that other sales will be affected by the acceptance of a special order, then
a.lost sales should be considered in the incremental analysis.
b.lost sales should not be considered in the incremental analysis.
c.the order should not be accepted.
d.the order will only be accepted if the plant is below capacity.

35. 61.Apple Co sells merchandise on credit to Zea Co in the amount of $8,000. The invoice is dated on..
61.Apple Co sells merchandise on credit to Zea Co in the amount of $8,000. The invoice is dated on September 15 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?
a.$160, September 30
b.$160, September 25
c.$80, September 30
d.$80, September 25
62.Apple Co sells merchandise on credit to Zea Co in the amount of $8,000. The invoice is dated on September 15 with terms of 1/15, net 45. If Zea Co. chooses not to take the discount, by when should the payment be made?
a.September 30
b.October 30
c.October 15
d.September 25
63.Discounts taken by a buyer because of early payment are recorded on the seller’s accounting records as
a.Purchases discount
b.Sales discount
c.Trade discount
d.Early payment discount
64.Taking advantage of a 2/10, n/30 purchases discount is equal to a savings yearly rate of approximately
a.2%
b.24%
c.20%
d.36%
65.Based on the following information, what would be recorded as purchases discount if the invoice is paid within the discount period?
1. $5,000 of merchandise inventory was ordered on April 2, 2007
2. $2,000 of this merchandise was received on April 5, 2007
3. On April 6, 2007, an invoice dated April 4, 2007, with terms of 2/10, net 30 for $2,150 which included a $150 prepaid freight cost, was received.
4. On April 10, 2007, $500 of the merchandise was returned to the seller.
a.$100
b.$30
c.$43
d.$33
66.Based on the following information, what would be recorded as the cash payment if the invoice is paid within the discount period?
1. $5,000 of merchandise inventory was ordered on April 2, 2007
2. $2,000 of this merchandise was received on April 5, 2007
3. On April 6, 2007, an invoice dated April 4, 2007, with terms of 2/10, net 30 for $2,150 which included a $150 prepaid freight cost, was received.
4. On April 10, 2007, $500 of the merchandise was returned to the seller.
a.$1,470
b.$1,520
c.$2,150
d.$1,620
67.Based on the following information, what would be recorded as net purchases amount after all of the transactions have been recorded?
1. $5,000 of merchandise inventory was ordered on April 2, 2007
2. $2,000 of this merchandise was received on April 5, 2007
3. On April 6, 2007, an invoice dated April 4, 2007, with terms of 2/10, net 30 for $2,150 which included a $150 prepaid freight cost, was received.
4. On April 10, 2007, $500 of the merchandise was returned to the seller.
a.$2,000
b.$2,150
c.$1,620
d.$1,470
68.Based on the following information, the entry for April 10, 2007 would include?
1. $5,000 of merchandise inventory was ordered on April 2, 2007
2. $2,000 of this merchandise was received on April 5, 2007
3. On April 6, 2007, an invoice dated April 4, 2007, with terms of 2/10, net 30 for $2,150 which included a $150 prepaid freight cost, was received.
4. On April 10, 2007, $500 of the merchandise was returned to the seller.
a.Debit to Merchandise Inventory $500
b.Debit to Purchases Returns $500
c.Credit to Merchandise Inventory $500
d.Credit to Accounts Payable $500
69. Based on the following information, by what date does the invoice need to be paid in order to take the advantage of the discount?
1. $5,000 of merchandise inventory was ordered on April 2, 2007
2. $2,000 of this merchandise was received on April 5, 2007
3. On April 6, 2007, an invoice dated April 4, 2007, with terms of 2/10, net 30 for $2,150 which included a $150 prepaid freight cost, was received.
4. On April 10, 2007, $500 of the merchandise was returned to the seller.
a.April 15, 2007
b.April 16, 2007
c.April 10, 2007
d.April 14, 2007
70.Based on the following information, what would be the cash payment if the company decides to payment the invoice on April 30, 2007?
1. $5,000 of merchandise inventory was ordered on April 2, 2007
2. $2,000 of this merchandise was received on April 5, 2007
3. On April 6, 2007, an invoice dated April 4, 2007, with terms of 2/10, net 30 for $2,150 which included a $150 prepaid freight cost, was received.
4. On April 10, 2007, $500 of the merchandise was returned to the seller.
a.$1,650
b.$1,620
c.$2,150
d.$2,000
36. Each year, Basu Company produces 18,000 units of a component used in microwave ovens. An outside...
Each year, Basu Company produces 18,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.38. The unit cost is: Direct materials ... $0.78 Direct labor ...... 0.34 Variable overhead ... 0.13 Fixed overhead ... 2.75 Total unit cost ...... $4.00 Required: 1. What are the alternatives for Basu Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production and of external purchase. 3. Which alternative is more cost effective and by how much? 4. What if $18,540 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much?
37. Law Management Services began business on January 1, 2012, with
Law Management Services began business on January 1, 2012, with a capital investment of $120,000. The company manages condominiums for owners (Service Revenue) and rents space in its own office building (Rent Revenue). The trial balance and adjusted trial balance columns of the worksheet at the end of the first year are as follows..

Instructions
(a) Prepare a complete worksheet.
(b) Prepare a classified balance sheet. (Note: $30,000 of the mortgage note payable is due for payment next year.)
(c) Journalize the adjusting entries.
(d) Journalize the closing entries.
(e) Prepare a post-closing trialbalance

38. In 2012, Gurney Construction Company agreed to construct an apartment building at a price of...
In 2012, Gurney Construction Company agreed to construct an apartment building at a price of $1,200,000. The information relating to the costs and billings for this contract is shown below.
2012 2013 2014
Costs incurred to date $280,000 $600,000 $ ?785,000
Estimated costs yet to be incurred 520,000 200,000 –0–
Customer billings to date 150,000 500,000 1,200,000
Collection of billings to date 120,000 320,000 940,000


Instructions
(a) Assuming that the percentage-of-completion method is used, (1) compute the amount of gross profit to be recognized in 2012 and 2013, and (2) prepare journal entries for 2013.
(b) For 2013, show how the details related to this construction contract would be disclosed on the balance sheet and on the i
39. On January 1, 2016, Hobart Mfg. Co. purchased a drill press at a cost of $36,000. The drill press...
On January 1, 2016, Hobart Mfg. Co. purchased a drill press at a cost of $36,000. The drill press is expected to last 10 years and have a residual value of $6,000. During its 10-year life, the equipment is expected to produce 500,000 units of product. In 2016 and 2017, 25,000 and 84,000 units, respectively, were produced. 1. Compute depreciation expense, accumulated depreciation and the book value of the drill press at December 31, 2016 and 2017, assuming the straight-line method is used. 2. Compute depreciation expense, accumulated depreciation and the book value of the drill press at December 31, 2016 and 2017, assuming the double-declining-balance method is used. 3. Compute depreciation expense, accumulated depreciation and the book value of the drill press at December 31, 2016 and 2017, assuming the units-of-production method is used. Document your work on another sheet or the back of this page for partial credit but list your final answers in the chart below. Bring the completed problem to class on exam day. Method Depreciation Accumulated Book Value Expense Depreciation Straight-line 2016 2017 Double Declining Balance 2016 2017 Units of Production 2016 2017
40. Bob and Karl are deciding how to split their time between writing music and lyrics for their new...
Bob and Karl are deciding how to split their time between writing music and lyrics for their new album. Their PPFs for 72 hours of work are shown below. Bob and Karl have to write music for 8 songs and lyrics for 12 songs (4 songs already have music). When they are done, they can go to a private island and relax from all their hard work. It is possible that they will use more than 72 hours. Once they start writing lyrics and music, assuming their hired help packs for them and their plane is waiting outside their door, in how many hours can they board the plane to their relaxing island getaway? Hours before thy board the plane: __ hours Bob will write music for: __ songs Bob wil write lyrics for: __ songs Karl will write music for: __ songs Karl will write lyrics for: __ songs
41. To expand operations, Aragon Consulting issued 1,000 shares of previously unissued common stock with...
To expand operations, Aragon Consulting issued 1,000 shares of previously unissued common stock with a par value of $1. The price for the stock was $50 per share. Analyze the accounting equation effects and record the journal entry for the stock issuance. Would your answer be different if the par value were $2 per share? If, so, analyze the accounting equation effects and record the journal entry for the stock issuance with a par value of $2.
42. Which of the following groups would be LEAST likely to receive detailed management accounting...
Multiple Choice

Which of the following groups would be LEAST likely to receive detailed management accounting reports?

a. Stockholders

b. Sales representatives

c. Production supervisors

d. Managers
43. In _____ price is set to match consumers’ perceived value
In _____ price is set to match consumers’ perceived value.
a.variable cost pricing
b.cost-plus pricing
c.cost-based pricing
d.value-based pricing
44. break even point - units
Minist Company sells a single product at a selling price of $15.00 per unit. Last year, the company’s sales revenue was $225,000 and its net income was $18,000. If fixed expenses total 72,000 for the year, the break-even point in unit sales was:
a) 15,000
b) 9,900
c) 14,100
d) 12,000
45. Rickety Company purchased 1,000 widgets and has 200 widgets in its ending inventory at a cost of $91...
Rickety Company purchased 1,000 widgets and has 200 widgets in its ending inventory at a cost of $91 each and a current replacement cost of $80 each. The ending inventory under lower-of-cost-or-market is:
a. $91,000.
b. $80,000.
c. $18,200.
d. $16,000.
46. A gang of workers normally consists of 30 men, 15 women and 10 boys. They are paid at standard rates...
A gang of workers normally consists of 30 men, 15 women and 10 boys. They are paid at standard rates per hour as follows:
Men—Re. 0.80; Women—Re. 0.60 and Boys—Re. 0.40.
In a normal working week of 40 hours, the gang is expected to produce 2,000 units of output.
During the week that ended on 31 December 2004, the gang that consisted of 40 men, 10 women and 5 boys were paid wages per hour @ Re. 0.70, Re. 0.65 and Re. 0.30, respectively. During the week, they produced 1,600 units and 4 hours were lost due to abnormal idle time.
Calculate Labour Variances.
47. Preferred stock is least likely to have which of the following characteristics?
Preferred stock is least likely to have which of the following characteristics?
a. Preference as to assets on liquidation of the corporation
b. Extra liability for the preferred stockholders
c. The right of the holder to convert to common stock
d. Preference as to dividends
48. When the accounts receivable of a company are sold outright to a company that normally buys accounts...
When the accounts receivable of a company are sold outright to a company that normally buys accounts receivable of other companies without recourse, the accounts receivable have been
a. Factored
b. Assigned
c. Pledged
d. Collateralized

49. The accounting principle of matching is best demonstrated by:
The accounting principle of matching is best demonstrated by:
a. not recognizing any expense unless some revenue is realized.
b.associating effort (expense) with accomplishment (revenue).
c. recognizing prepaid rent received as a revenue.
d. establishing an Appropriation for Contingencies account.
50. 15.00 points Problem 8-2A Depreciation methods LO P1 A machine costing $211,000 with a four-year ...
Show transcribed image text 15.00 points Problem 8-2A Depreciation methods LO P1 A machine costing $211,000 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on January 1. factory manager estimates the machine will produce 480,000 units of product during its life. It actually produces the following units: 122,000 in 1st year, 122,500 in 2nd year, year, 124,100 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate-this difference was not predicted. (The machine must not be depreciated estimated salvage Required total depreciation of all years combined) for the machine under Compute depreciation for each year (and to 2 decimal places. Round your each depreciation method. (Round your per unit depreciation answers to the nearest whole dollar.) ight-Line Depreciation Depreciation Year tabS