Published:
8 months ago
Accounting Module Discussion Posts: Achieve Distinction
categories:
Online course help
38. Horizontal Analysis of Income Statement For 20Y2, McDade Company reported a decline in net income...Horizontal Analysis of Income Statement
For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement:
McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y1
Sales $768,635 $665,000
Cost of goods sold 554,400 420,000
Gross profit $214,235 $245,000
Selling expenses $78,400 $56,000
Administrative expenses 45,080 35,000
Total operating expenses $123,480 $91,000
Income from operations $90,755 $154,000
Other income 3,469 2,800
Income before income tax $94,224 $156,800
Income tax expense 26,400 47,000
Net income $67,824 $109,800
Required:
1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate a decrease in the "Difference" columns. If required, round to one decimal place.
McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y1 Difference - Amount Difference - Percent
Sales $768,635 $665,000 $ %
Cost of goods sold 554,400 420,000 %
Gross profit $214,235 $245,000 $ %
Selling expenses $78,400 $56,000 $ %
Administrative expenses 45,080 35,000 %
Total operating expenses $123,480 $91,000 $ %
Income from operations $90,755 $154,000 $ %
Other income 3,469 2,800 %
Income before income tax $94,224 $156,800 $ %
Income tax expense 26,400 47,000 %
Net income $67,824 $109,800 $ %
2. Net income has (increased or decreased) from 20Y1 to 20Y2. Sales have (increased or decreased); however, the cost of goods sold has (increased or decreased) , causing the gross profit to (increased or decreased)
39. Using the Information below for Laurels Company; determine the cost of goods manufactured during ...
Using the Information below for Laurels Company; determine the cost of goods manufactured during the current year: Direct materials used 5,400 Direct labor 7400 Total Factory overhead Beginning 5,500 work in process Ending work process 3,400 4,800 O $19700 O $16,900. O $18.300 O $12,800 O $14,800.
40. 126.A company has net sales of $752,000 and cost of goods sold of $543,000. Its net income is...
126.A company has net sales of $752,000 and cost of goods sold of $543,000. Its net income is $17,530. The company's gross margin and operating expenses, respectively, are:
A.$209,000 and $191,470
B.$191,470 and $209,000
C.$525,470 and $227,000
D.$227,000 and $525,470
E.$734,000 and $191,470
127.Which of the following accounts is used in the periodic inventory system but not used in the perpetual inventory system?
A.Merchandise Inventory
B.Sales
C.Sales Returns and Allowances
D.Accounts Payable
E.Purchases
128.When preparing an unadjusted trial balance using a periodic inventory system, the amount shown for Merchandise Inventory is:
A.The ending inventory amount.
B.The beginning inventory amount.
C.Equal to the cost of goods sold.
D.Equal to the cost of goods purchased.
E.Equal to the gross profit.
129.On September 12, Vander Company sold merchandise in the amount of $5,800 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the periodic inventory system. The journal entry or entries that Vander will make on September 12 is:
A.Sales5,800
Accounts receivable5,800
B.Sales5,800
Accounts receivable5,800
Cost of goods sold4,000
Merchandise Inventory4,000
C.Accounts receivable5,800
Sales5,800
D.Accounts receivable5,800
Sales5,800
Cost of goods sold4,000
Merchandise inventory4,000
E.Accounts receivable4,000
Sales4,000
130.On September 12, Vander Company sold merchandise in the amount of $5,800 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the periodic inventory system. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Vander makes on September 18 is:
A.Cash5,800
Accounts receivable5,800
B.Cash4,000
Accounts receivable4,000
C.Cash3,920
Sales discounts80
Accounts receivable4,000
D.Cash5,684
Accounts receivable5,684
E.Cash5,684
Sales discounts116
Accounts receivable5,800
131.On September 12, Vander Company sold merchandise in the amount of $5,800 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the periodic inventory system. On September 14, Jepson returns some of the merchandise. The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Vander must make on September 14 is:
A.Sales returns and allowances500
Accounts receivable500
Merchandise inventory350
Cost of goods sold350
B.Sales returns and allowances500
Accounts receivable500
C.Accounts receivable500
Sales returns and allowances500
D.Accounts receivable500
Sales returns and allowances500
Cost of goods sold350
Merchandise inventory350
E.Sales returns and allowances350
Accounts receivable350
132.On September 12, Vander Company sold merchandise in the amount of $5,800 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the periodic inventory system. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Vander makes on September 18 is:
A.Cash5,800
Accounts receivable5,800
B.Cash4,000
Accounts receivable4,000
C.Cash5,194
Sales discounts106
Accounts receivable5,300
D.Cash5,684
Accounts receivable5,684
E.Cash5,684
Sales discounts116
Accounts receivable5,800
133.Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. Cost of goods sold equals:
A.$150,000.
B.$450,000.
C.$800,000.
D.$350,000.
E.$200,000.
134.Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Gross profit equals:
A.$770,000.
B.$115,000.
C.$390,000.
D.$402,000.
E.$408,000.
135.Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Net income equals:
A.$770,000.
B.$402,000.
C.$390,000.
D.$115,000.
E.$408,000.
41. If selected to own and operate a Delivery Service Partner, what personal and business goals would...
If selected to own and operate a Delivery Service Partner, what personal and business goals would you hope to achieve by starting your company? What three words would you use to describe the culture you would foster at your company? Explain why you chose each word to represent your company’s culture.
42. A company manufactures 1,000,000 units of a product yearly A new design of the product will reduce m
A company manufactures 1,000,000 units of a product yearly A new design of the product will reduce materials cost by 12%, but will increase processing cost by 2% If materials cost is $120 per unit and processing will cost $040 per unit, how much can the company afford to pay for the preparation of making the new design and making changes in equipment?
43. Why do firms have separate departments for warehousing and shipping? What about warehousing and...
Why do firms have separate departments for warehousing and shipping? What about warehousing and inventory control? Doesn’t this just create more paperwork?
44. Supreme Videos, Inc., produces short musical videos for sale
Supreme Videos, Inc., produces short musical videos for sale to retail outlets. The company’s balance sheet accounts as of January 1, the beginning of its fiscal year, are given on the following page.
Because the videos differ in length and in complexity of production, the company uses a job- order costing system to determine the cost of each video produced. Studio (manufacturing) overhead is charged to videos on the basis of camera-hours of activity. At the beginning of the year, the company estimated that it would work 7,000 camera-hours and incur $280,000 in studio overhead cost. The following transactions were recorded for the year:
a. Film, costumes, and similar raw materials purchased on account, $185,000.
b. Film, costumes, and other raw materials issued to production, $200,000 (85% of this material was considered direct to the videos in production, and the other 15% was considered indirect).
c. Utility costs incurred in the production studio, $72,000.
d. Depreciation recorded on the studio, cameras, and other equipment, $84,000. Three-fourths of this depreciation related to actual production of the videos, and the remainder related to equipment used in marketing and administration.
e. Advertising expense incurred $130,000.
f. Costs for salaries and wages were incurred as follows:
g. Prepaid insurance expired during the year, $7,000 (80% related to production of videos, and 20% related to marketing and administrative activities).
h. Miscellaneous marketing and administrative expenses incurred, $8,600.
i. Studio (manufacturing) overhead was applied to videos in production. The company recorded 7,250 camera-hours of activity during the year.
j. Videos that cost $550,000 to produce according to their job cost sheets were transferred to the finished videos warehouse to await sale and shipment.
k. Sales for the year totaled $925,000 and were all on account. The total cost to produce these videos according to their job cost sheets was $600,000.
l. Collections from customers during the year totaled $850,000.
m. Payments to suppliers on account during the year, $500,000; payments to employees for salaries and wages, $285,000.
Required:
1. Prepare a T-account for each account on the company’s balance sheet and enter the beginning balances.
2. Record the transactions directly into the T-accounts. Prepare new T-accounts as needed. Key your entries to the letters (a) through (m) above. Compute the ending balance in each account.
3. Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? Make an entry in the T-accounts to close any balance in the Studio Overhead account to Cost of Goods Sold.
4. Prepare an income statement for the year. (Do not prepare a schedule of cost of goods manufactured; all of the information needed for the income statement is available in theT-accounts.)
45. Weighted-average method. Hoffman Company manufactures car seats in its Boise plant. Each car seat...
Weighted-average method. Hoffman Company manufactures car seats in its Boise plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Hoffman Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Hoffman Company uses the weighted-average method of process costing. Data for the assembly department for October 2017 are as follows:
1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule.
2. What issues should the manager focus on when reviewing the equivalent-unit calculations?
3. For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit.
4. Assign costs to units completed and transferred out and to units in ending work in process.
46. The company has just hired a new marketing manager who insists that unit sales can be dramatically i
The company has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling price from $8 to $7. The marketing manager would like to use the following projections in the budget:
Data Year 2 Quarter Year 3 Quarter
1 2 3 4 1 2
Budgeted unit sales 45,000 70,000 115,000 70,000 80,000 95,000
Selling price per unit $7 per unit
A B C D E F F
1
2
3 Data Year 2 Quarter Year 3 Quarter
4 1 2 3 4 1 2
5 Budgeted unit sales 45,000 70,000 115,000 70,000 80,000 95,000
6
7 Ac€?c Selling price per unit $7 per unit
8 Ac€?c Accounts receivable, beginning balance $65,000
9 Ac€?c Sales collected in the quarter sales are made 75%
10 Ac€?c Sales collected in the quarter after sales are made 25%
11 Ac€?c Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter
12 Ac€?c Finished goods inventory, beginning 12,000 units
13 Ac€?c Raw materials required to produce one unit 5 pounds
14 Ac€?c Desired ending inventory of raw materials is 10% of the next quarter's production needs
15 Ac€?c Raw materials inventory, beginning 23,000 pounds
16 Ac€?c Raw material costs $0.80 per pound
17 Ac€?c Raw materials purchases are paid 60% in the quarter the purchases are made
18 and 40% in the quarter following purchase
19 Ac€?c Accounts payable for raw materials, beginning balance $81,500
Questions:
a. What are the total expected cash collections for the year under this revised budget?
b. What is the total cost of raw materials to be purchased for the year under this revised budget?
c. What are the total expected cash disbursements for raw materials for the year under this revised budget?
d. What is the total required production for the year under this revised budget?
47. Wilhelm Kohl started a business in May 20-- called Kohl’s Home Repair. Kohl hired a part-time...
Wilhelm Kohl started a business in May 20-- called Kohl’s Home Repair. Kohl hired a part-time college student as an assistant. Kohl has decided to use the following accounts for recording transactions: Assets Owner’s Equity Cash Wilhelm Kohl. Capital Accounts Receivable Wilhelm Kohl, Drawing Office Supplies Revenue Prepaid Insurance Service Fees Equipment Expenses Van Rent Expense Liabilities Wages Expense Accounts Payable Telephone Expense Gas and Oil Expense The following transactions occurred during May: (a) Invested cash in the business, $25,000. (b) Purchased a used van for cash, $6,000. (c) Purchased equipment on account, $4,000. (d) Received cash for services rendered, $7,500. (e) Paid cash on account owed from transaction (c), $2,300. (f) Paid sent for the month, $850. (g) Paid telephone bill, $230. (h) Earned revenue on account, $4,500. (i) Purchased office supplies for cash, $160. (j) Paid wages to an assistant, $800. (k) Purchased a one-year insurance policy, $1,100. (l) Received cash from services performed in transaction (h), $3,400. (m) Paid cash for gas and oil expense on the van, $155. (n) Purchased additional equipment for $4,200, paying $1,500 cash and spreading the remaining payments over the next 10 months. (o) Earned service fees for the remainder of the month of $3,500: $1,900 in cash and $1,600 on account.
(p) Withdrew cash at die end of the month, $2,900. Required 1. Enter the transac
48. Assuming Brokerage fees of $6000, calculate the amount of cash needed to retire Baldwin's 12.4S2021.
Assuming Brokerage fees of $6000, calculate the amount of cash needed to retire Baldwin's 12.4S2021 bond early. Select: 1 $5,757,941 $5,504,834 $5,498,834 Download Attachment: 20140820160850676.pdf Additional Requirements Level of Detail: Only answer needed Other Requirements: Only need the answer
49. (Income Statement, Irregular Items) W ade Corp. has 150,000 sha r es of common stock outstanding. In
(Income Statement, Irregular Items) W ade Corp. has 150,000 sha r es of common stock outstanding.
In 2014, the company reports income from continuing operations before income tax of $1,210,000. Addi- tional transactions not considered in the $1,210,000 are as follows.
1. In 2014, Wade Corp. sold equipment for $40,000. The machine had originally cost $80,000 and had accumulated depreciation of $30,000. The gain or loss is considered ordinary.
2. The company discontinued operations of one of its subsidiaries during the cur r ent year at a loss of
$190,000 befo r e taxes. Assume that this transaction meets the criteria for discontinued operations.
The loss f r om operations of the discontinued subsidiary was $90,000 befo r e taxes; the loss f r om
disposal of the subsidiary was $100,000 befo r e taxes.
3. An internal audit discove r ed that amortization of intangible assets was understated by $35,000 (net
of tax) in a prior period. The amount was cha r ged against r etained earnings.
4. Th e compan y ha d a gai n o f $125,00 0 o n th e condemnatio n o f muc h o f it s p r opert y . Th e gai n is
taxe d a t a tota l e f fectiv e rat e o f 40% . Assum e tha t th e transactio n meet s th e r equi r ement s o f an
extrao r dinar y item.
Instructions
Analyze the above information and prepare an income statement for the year 2014, starting with income from continuing operations before income tax. Compute earnings per share as it should be shown on the face of the income statement. (Assume a total effective tax rate of 38% on all items, unless otherwise indicated.)
50. The adjusted trial balance of Erickson Real Estate Appraisal at June 30, 2016, follows: EEE (Clic...
The adjusted trial balance of Erickson Real Estate Appraisal at June 30, 2016, follows: EEE (Click the icon to view the adjusted trial balance.) Read the requirements. Requirement 1. Prepare the company's income statement for the year ended June 30, 2016. (lfa Erickson Real Estate Appraisal Income Statement Year Ended June 30, 2016 Net Income (Loss)
