Ace Your Accounting Assignments with Confidence
Show transcribed image text Havermill Co. establishes a $490 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $97 for Office Supplies. $185 for merchandise inventory, and $46 for miscellaneous expenses. The fund has a balance of $162. On October 1, the accountant determines that the fund should be increased by $98. The journal entry to record the establishment of the fund on September 1 is. Debit Cash $490, credit Petty cash $490 Debit cash $490; credit Accounts Payable $490 Debit Petty cash $490; credit cash $490 Debit Petty Cash $490; credit Accounts Payable $490. Debit Miscellaneous Expense $490; credit Cash $490.
31. A flood recently destroyed many of the financial records of
A flood recently destroyed many of the financial records of Yak Manufacturing Company. Management has hired you to re-create as much financial information as possible for the month of July. You are able to find out that the company uses an average cost inventory valuation system. You also learn that Yak makes a physical count at the end of each month in order to determine monthly ending inventory values. By examining various documents, you are able to gather the following information:
Ending inventory at July 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000 units
Total cost of units available for sale in July . . . . . . . . . . . . . . . . . . . . $145,210
Cost of goods sold during July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $116,410
Cost of beginning inventory, July 1 . . . . . . . . . . . . . . . . . . . . . . . . . . $0.40 per unit
Gross profit on sales for July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $93,590
July purchases:
You are asked to provide the following information.
1. Number of units on hand, July 1
2. Units sold during July
3. Unit cost of inventory at July 31
4. Value of inventory at July 31
32. Jinx Company provided the following information for the current year in relation to account...
Jinx Company provided the following information for the current year in relation to account receivable What amount should be reported as net realizable value of accounts receivable on December 31?a.1.550.000b.1.250.000c.1.300.000d.1.500.000
33. Selected data concerning the past fiscal year's operations (000 omitted) of the Televans
Selected data concerning the past fiscal year's operations (000 omitted) of the Televans
Manufacturing Company are presented below.
Inventories
Beginning | Ending | |
Direct materials | $75 | $ 85 |
Work-in-process | 80 | 30 |
Finished goods | 90 | 110 |
Other data: | ||
Direct materials used | ||
Total manufacturing costs charged to production during the year (includes direct materials, direct labor, and factory overhead applied at a rate of 60% of direct labor cost) | 326 686 | |
Cost of goods available for sale | 826 | |
Selling and general expenses | 25 |
1. The cost of direct materials purchased during the year amounted to
(a) $411 (d) $336
(b) $360 (e) Some amount other than those shown above
(c) $316
2. Direct labor costs charged to production during the year amounted to
(a) $135 (d) $216
(b) $225 (e) Some amount other than those shown above
(c) $360
3. The cost of goods manufactured during the year was
(a) $636 (d) $716
(b) $766 (e) Some amount other than those shown above
(c) $736
4. The cost of goods sold during the year was
(a) $736 (d) $805
(b) $716 (e) Some amount other than those shown above
(c) $691
In January 2014, the management of Stefan Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred.
Feb. 1 Purchased 600 shares of Superior common stock for $31,800, plus brokerage fees of $600.
Mar. 1 Purchased 800 shares of Pawlik common stock for $20,000, plus brokerage fees of $400.
Apr. 1 Purchased 50 $1,000, 7% Venice bonds for $50,000, plus $1,000 brokerage fees.
Interest is payable semiannually on April 1 and October 1.
July 1. Received a cash dividend of $0.60 per share on the Superior common stock.
Aug. 1 Sold 200 shares of Superior common stock at $58 per share less brokerage fees of $200.
Sept. 1 Received a $1 per share cash dividend on the Pawlik common stock.
Oct. 1 Received the semiannual interest on the Venice bonds.
Oct. 1 Sold the Venice bonds for $50,000 less $1,000 brokerage fees.
At December 31, the fair value of the Superior common stock was $55 per share. The fair value of the Pawlik common stock was $24 per share.
Instructions:
a. Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T-account form.) (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
b. Prepare the adjusting entry at December 31, 2014, to report the investment securities at fair value. All securities are considered to be trading securities. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
c. Show the balance sheet presentation of investment securities at December 31, 2014.
35. Which of the following statements describes variable costs?
Which of the following statements describes variable costs?
A. Costs that vary on a per-unit basis as the level of activity changes.
B. Costs that vary in total in direct proportion to changes in the level of activity.
C. Costs that remain the same in total dollar amount as the level of activity changes.
D. Costs that vary on a per-unit basis, but remain the same in total as the level of activity changes
Bertha is considering taking an early retirement offered by her employer. She would receive $3,000 per month, indexed for inflation. However, she would no longer be able to use the company’s health facilities, and she would be required to pay her hospitalization insurance premiums of $8,000 each year. Bertha and her husband will file a joint return and take the standard deduction. She currently receives a salary of $55,000 a year. If she retires, she will spend approximately $300 less each month for commuting and clothing. Bertha and her husband have other sources of income and are in and will remain in the 25% marginal tax bracket. She currently pays Social Security and Medicare taxes of 5.65% on her salary, but her retirement pay would not be subject to this tax. According to Bertha, she and her husband could live well if her after-tax retirement income was at least 50% of her current income. Provide Bertha with information she will need to make her decision.
37. Tutors for Rent, Inc., performs adjusting entries every month, but closes its accounts only at...
Tutors for Rent, Inc., performs adjusting entries every month, but closes its accounts only at year-end. The company’s year-end adjusted trial balance dated December 31, 2011, was:
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TUTORS FOR RENT, INC. ADJUSTED TRIAL BALANCE DECEMBER 31, 2011
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nancial Statement P eparation
a. Prepare an income statement and statement of retained earnings for the year ended December 31, 2011. Also prepare the company’s balance sheet dated December 31, 2011.
b. Does the company appear to be liquid? Defend your answer.
c. Has the company been profitable in the past? Explain.
Wilderness Guide Services, Inc., performs adjusting entries every month, but closes its accounts
only at year-end. The company’s year-end adjusted trial balance dated December 31, 2011, follows:
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WILDERNESS GUIDE SERVICES, INC. ADJUSTED TRIAL BALANCE DECEMBER 31, 2011
Prepare an income statement and statement of retained earnings for the year ended December 31, 2011. Also prepare the company’s balance sheet dated December 31, 2011. (Hint: Unprofitable companies have no income taxes expense.)
a. Does the company appear to be liquid? Defend your answer.
b. Has the company been profitable in the past? Explain.
38. Explain why rewarding sales personnel on the basis of total
Explain why rewarding sales personnel on the basis of total sales might not be in the best interests of a business whose goal is to maximize profits.
39. (Purchase and Self-Constructed Cost of Assets) Worf Co. both purchases and constructs various
(Purchase and Self-Constructed Cost of Assets) Worf Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2014.
Pu r chase
Cash paid for equipment, including sales tax of $5,000 | $105,000 |
Freight and insurance cost while in transit | 2,000 |
Cost of moving equipment into place at factory | 3,100 |
Wage cost for technicians to test equipment | 4,000 |
Insurance premium paid during first year of operation on this equipment | 1,500 |
Special plumbing fixtures required for new equipment | 8,000 |
Repair cost incurred in first year of operations related to this equipment | 1,300 |
Construction Material and purchased parts (gross cost $200,000; failed to take 2% cash discount) | $200,000 |
Imputed interest on funds used during construction (stock financing) | 14,000 |
Labor costs | 190,000 |
Allocated overhead costs (fixed—$20,000; variable—$30,000) | 50,000 |
Profit on self-construction | 30,000 |
Cost of installing equipment | 4,400 |
Instructions
Compute the total cost for each of these two pieces of equipment. If an item is not capitalized as a cost of the equipment, indicate how it should be reported.