ACCT-2301 Principles of Accounting I - Financial

Published: 11 months ago

ACCT-2301 Principles of Accounting I - Financial

26. A worker takes 9 hours to complete a job on daily wages and 6 hours on a scheme of payment by...

A worker takes 9 hours to complete a job on daily wages and 6 hours on a scheme of payment by results. His day rate is Rs 7.50 an hour, the material cost of the product is Rs 40 and the overheads are 150% of the total direct wages. Calculate the factory cost of the product under (a) piecework plan, (b) Rowan plan and (c) Halsey plan.

27. 21) Which performance appraisal tools requires a supervisor to maintain a log of positive and...

21) Which performance appraisal tools requires a supervisor to maintain a log of positive and negative examples of a subordinate's work-related behavior?

A) alternation ranking

B) paired comparison

C) critical incident

D) graphic rating

22) Which of the following is NOT a characteristic of the critical incident method for performance appraisal?

A) providing examples of excellent work performance

B) comparing and ranking employees within a group

C) reflecting performance throughout the appraisal period

D) compiling examples of ineffective work performance

23) Wilson Consulting is a management consulting firm with seventy employees. As associate vice president of marketing, Suzanne Boyle is responsible for conducting performance appraisals of the twelve employees under her direct supervision. Suzanne plans to use the critical incident method to evaluate the performance of her subordinates.

Which of the following, if true, most likely undermines the argument that the critical incident method is the most appropriate performance appraisal tool for Suzanne to use?

A) Employee performance standards are closely aligned with Wilson Consulting's long-term strategic plans.

B) Suzanne will be conducting performance appraisals in conjunction with the HR manager to ensure EEO compliance.

C) Wilson Consulting will be allowing employees to rate themselves as part of its organizational development strategy.

D) Due to economic difficulties, the firm will be laying off the two lowest performing employees in Suzanne's department.

24) Which appraisal method combines the benefits of narrative critical incidents and quantified scales by assigning scale points with specific examples of good or poor performance?

A) behaviorally anchored rating scale

B) constant sums rating scale

C) alternation ranking

D) forced distribution

25) Which of the following best describes a behaviorally anchored rating scale?

A) chart of paired subordinates ranked in order of performance

B) combination of narrative critical incidents and quantified performance scales

C) diary of positive and negative examples of a subordinate's work performance

D) list of subordinates from highest to lowest based on specific performance traits

26) The first step in developing a behaviorally anchored rating scale is to ________.

A) develop performance dimensions

B) generate critical incidents

C) compare subordinates

D) scale incidents

27) Stacey is using a behaviorally anchored rating scale as a performance appraisal tool. She has already asked employees and supervisors to describe critical incidents of effective and ineffective job performance. What should Stacey most likely do next?

A) create a final appraisal instrument

B) develop performance dimensions

C) reallocate the incidents

D) rate the incidents

28) Wilson Consulting is a management consulting firm with seventy employees. As associate vice president of marketing, Suzanne Boyle is responsible for conducting performance appraisals of the twelve employees under her direct supervision. Suzanne plans to use the behaviorally anchored rating scale (BARS) to evaluate the performance of her subordinates.

Which of the following, if true, supports the argument that BARS is the most appropriate performance appraisal tool for Suzanne to use?

A) Suzanne wants to provide her subordinates with specific examples of their good and poor job performance during the appraisal interview.

B) Suzanne encourages her subordinates to review and make comments about their appraisal during a formal appeals process.

C) Wilson Consulting recently installed an electronic performance monitoring system to help supervisors conduct appraisals.

D) Suzanne provides her subordinates with upward feedback as a way to illustrate the ratings she assigns to each employee.

29) What is the primary goal of using mixed standard scales?

A) improving validity

B) reducing rating errors

C) clarifying performance standards

D) illustrating feedback for subordinates

30) Which of the following terms refers to setting specific measurable goals with each employee and then periodically reviewing the progress made?

A) behaviorally anchored rating scale

B) management by objective

C) mixed standard scales

D) forced distribution

28. P13- 12 (Warranties and Premiums) Garison Music Emporium carries a wide variety of musical...

P13- 12 (Warranties and Premiums)

Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Garison uses two sales promotion techniques— warranties and premiums— to attract customers.

Musical instruments and sound equipment are sold with a one- year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales.

The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange 200 coupons and $ 20 for a CD player. Garison pays $ 32 for each CD player and estimates that 60% of the coupons given to customers will be redeemed.

Garison’s total sales for 2010 were $ 7,200,000—$ 5,700,000 from musical instruments and sound reproduction equipment and $ 1,500,000 from recorded music and sheet music. Replacement parts and labor for warranty work totaled $ 164,000 during 2010. A total of 6,500 CD players used in the premium program were purchased during the year and there were 1,200,000 coupons redeemed in 2010.

The accrual method is used by Garison to account for the warranty and premium costs for financial reporting purposes. The balances in the accounts related to warranties and premiums on January 1, 2010, were as shown below.

Inventory of Premium CD Players $ 37,600

Estimated Premium Claims Outstanding 44,800

Estimated Liability from Warranties 136,000

Instructions Garison Music Emporium is preparing its financial statements for the year ended December 31, 2010. Determine the amounts that will be shown on the 2010 financial statements for the following.

(1) Warranty Expense -

(2) Estimated Liability from Warranties -

(3) Premium Expense -

(4) Inventory of Premium CD Players -

(5) Estimated Premium Claims Outstanding –

29. If actual output is lower than budgeted output, which of the following costs would you expect to be...

If actual output is lower than budgeted output, which of the following costs would you expect to be lower than the original budget?

A Total variable costs

B Total fixed costs

C Variable costs per unit

D Fixed costs per unit

30. Lazy River Resort opened for business on June 1 with eight air-conditioned unit. Its trail balanc...

Lazy River Resort opened for business on June 1 with eight air-conditioned unit. Its trail balance before adjustment on August 31 is as follows. In addition to those accounts listed on the trial balance, the chart of accounts for Lazy River Resort also contains the following accounts and account numbers: No. 112 Accounts Receivable, No. 144 Accumulated Depreciation-Buildings. No. 158 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 631 Supplies Expense. No. 711 Depreciation Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: Insurance expires at the rate of $400 per month. A count on August 31 shows $900 of supplies on hand. Annual depreciation is $4, 500 on buildings and $2, 400 on equipment. Unearned rent revenue of $4, 100 was recognized for services performed prior to August 31. Salaries of $400 were unpaid at August 31. Rentals of $3, 700 were due from tenants at August 31. (Use Accounts Receivable.) The mortgage interest rate is 9% per year. (The mortgage was taken out on August 1.) (a) Journalize the adjusting entries on August 31 for the 3-month period June 1-August 31. (b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.) (c) Prepare an adjusted trial balance on August 31. (d) Prepare an income statement and a retained earnings statement for the 3 months ending August 31 and a balance sheet as of August 31.

31. Nonverbal communication includes all of the following except a. body language. b. explanations. c...

Nonverbal communication includes all of the following except

a. body language.

b. explanations.

c. tone of voice.

d. mannerisms.

32. Multiple-choice questions: a. Which of the following accounts wo

Multiple-choice questions:

a. Which of the following accounts would not appear on a conventional balance sheet?

1. Accounts Receivable

2. Accounts Payable

3. Patents

4. Gain from Sale of Land

5. Common Stock

b. Current assets typically include all but which of the following assets?

1. Cash restricted for the retirement of bonds

2. Unrestricted cash

3. Marketable securities

4. Receivables

5. Inventories

c. The Current Liabilities section of the balance sheet should include

1. Land.

2. Cash Surrender Value of Life Insurance.

3. Accounts Payable.

4. Bonds Payable.

5. Preferred Stock.

d. Inventories are the balance of goods on hand. In a manufacturing firm, they include all but which of the following?

1. Raw materials

2. Work in process

3. Finished goods

4. Supplies

5. Construction in process

e. Which of the following accounts would not usually be classified as a current liability?

1. Accounts Payable

2. Wages Payable

3. Unearned Rent Income

4. Bonds Payable

5. Taxes Payable

f. For the issuing firm, redeemable preferred stock should be classified where for analysis purposes?

1. Marketable security

2. Long-term investment

3. Intangible

4. Liabilities

5. Shareholders’ equity

g. Which of the following accounts would not be classified as an intangible?

1. Goodwill

2. Patent

3. Accounts Receivable

4. Trademarks

5. Franchises

h. Which of the following is not true relating to intangibles?

1. Research and development usually represents a significant intangible on the financial statements.

2. Goodwill arises from the acquisition of a business for a sum greater than the physical asset value.

3. Purchased goodwill is not amortized but is subject to annual impairment reviews.

4. The global treatment of goodwill varies significantly.

5. Intangibles are usually amortized over their useful lives or legal lives, whichever is shorter.

i. Growth Company had total assets of $100,000 and total liabilities of $60,000. What is the balance of the stockholders’ equity?

1. $0

2. $40,000

3. $60,000

4. $100,000

5. None of the above

j. The Current Assets section of the balance sheet should include

1. Inventory.

2. Taxes Payable.

3. Land.

4. Patents.

5. Bonds Payable.

k. Which of the following is not a typical current liability?

1. Accounts payable

2. Wages payable

3. Interest payable

4. Pension liabilities

5. Taxes payable

l. Which of the following is a current liability?

1. Unearned rent income

2. Prepaid interest

3. Land

4. Common stock

5. None of the above

m. Treasury stock is best classified as a

1. Current liability.

2. Current asset.

3. Reduction of stockholders’ equity.

4. Contra asset.

5. Contra liability.

n. Considering IFRSs, which of the following statements would be considered false?

1. IFRSs do not require a standard format for the balance sheet.

2. With IFRSs, usually nonconcurrent assets are presented first, followed by current assets.

3. Under IFRS for liabilities and owners’ equity, capital and listed reserves are usually listed first, then noncurrent liabilities and then current liabilities last.

4. The reserves section of capital and reserves would not be part of U.S. GAAP.

5. All of these items would be considered to be true.

o. Considering IFRSs, which of the following statements would be considered false?

1. When using IFRSs, local laws or psecurities regulations may specify disclosures in addition to those required by IFRSs.

2. IAS introduced a number of terminology changes. The new titles for the financial statements are not mandatory.

3. The IFRS model consolidated balance sheet, as presented by Deloitte Touche, puts an emphasis on liquidity.

4. Under IFRS, noncontrolling interests are usually presented as the last item in total equity.

5. None of these statements would be considered false.

33. 1. Which of the following may not be considered a “qualifying asset” under IAS 23? (a) A power...

1. Which of the following may not be considered a “qualifying asset” under IAS 23? (a) A power generation plant that normally takes two years to construct. (b) An expensive private jet that can be purchased from a local vendor. (c) A toll bridge that usually takes more than a year to build. (d) A ship that normally takes one to two years to complete. 2. Which of the following costs may not be eligible for capitalization as borrowing costs under IAS 23? (a) Interest on bonds issued to finance the construction of a qualifying asset. (b) Amortization of discounts or premiums relating to borrowings that qualify for capitalization. (c) Imputed cost of equity. (d) Exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to interest costs pertaining to a qualifying asset.

34. Stillicum Corporation makes ultra light-weight backpacking

Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company’s two product lines appear below:



The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:



Required:

1. Determine the unit product costs of the Deluxe and Standard products under the company’s traditional costing system.

2. The company is considering replacing its traditional costing system for determining unit product costs for external reports with an activity-based costing system. The activity-based costing system would have the following three activity cost pools:



Determine the unit product costs of the Deluxe and Standard products under the activity based costingsystem.

35. Payroll. Canada. Your organization, located in Manitoba, will be enhancing the group benefits...

Payroll. Canada. Your organization, located in Manitoba, will be enhancing the group benefits plan offered to employees in two months by adding accidental death and dismemberment (AD&D) coverage and vision care coverage. The organization will pay 50% of the cost of the AD&D premiums and 50% of the cost of the vision care premiums, with the employees paying the other 50% of each premium. The Manager of Finance, Laura Bruce, has requested that you, as the Payroll Supervisor, prepare a communication for the employees, explaining how these new benefits will impact their net pay.

36. Which of the following statements is best about inventory management? a. Inventory is a significant.

Which of the following statements is best about inventory management? a. Inventory is a significant component of Supply Chain Planning b. Inventory is usually insignificant on the balance sheet c. Inventory and production can be managed as separate entities d. Inventory is not important at the production planning level

37. Super Sales Company is the exclusive distributor for a revolutio

Super Sales Company is the exclusive distributor for a revolutionary bookbag. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $360,000 per year.



Required:

1. What are the variable expenses per unit?

2. Using the equation method:

a. What is the break-even point in units and in sales dollars?

b. What sales level in units and in sales dollars is required to earn an annual profit of $90,000?

c. Assume that through negotiation with the manufacturer the Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company’s new break-even point in units and in sales dollars?

3. Repeat (2) above using the contribution margin method.

38. A company has sales of 2,600 units. There are 1,400 units of opening stock while the closing...

A company has sales of 2,600 units. There are 1,400 units of opening stock while the closing stock is planned to be 1,800 units. What production is needed to satisfy sales?

39. From the following particulars, you are required to work out the earnings of a worker for a week...

From the following particulars, you are required to work out the earnings of a worker for a week under (a) straight piece-rate system, (b) differential piece-rate system, (c) Halsey's premium scheme (50% sharing) and (d) Rowan's premium scheme: