Achieve Distinction: Guidance for Accounting Assignments
(Closing Entries for a Corporation) Presented below are selected account balances for Homer
Winslow Co. as of December 31, 2014.
Inventory 12/31/14 | $ 60,000 | Cost of Goods Sold | $225,700 |
Common Stock | 75,000 | Selling Expenses | 16,000 |
Retained Earnings | 45,000 | Administrative Expenses | 38,000 |
Dividends | 18,000 | Income Tax Expense | 30,000 |
Sales Returns and Allowances | 12,000 | ||
Sales Discounts | 15,000 | ||
Sales Revenue | 410,000 |
Instructions
P r epa r e closing entries for Homer W inslow Co. on December 31, 2014. (Omit explanations.)
31. Lars Linken opened Lars Cleaners on March 1, 2020. During March, the following...
Lars Linken opened Lars Cleaners on March 1, 2020. During March, the following transac-tions were completed. Man 1 Shareholders invested €15,000 cash in the business in exchange for ordinary shares. 1 Borrowed €6,000 cash by signing a 6-month, 6%, €6,000 note payable. Interest will be paid the first day of each subsequent month. 1 Purchased used truck for €8,000 cash. 2 Paid €1,500 cash to cover rent from March 1 through May 31. 3 Paid €2,400 cash on a 6-month insurance policy effective March 1. 6 Purchased cleaning supplies for €2,000 on account. 14 Billed customers €3,700 for cleaning services performed. 18 Paid €500 on amount owed on cleaning supplies. 20 Paid €1,750 cash for employee salaries. 21 Collected €1,600 cash from customers billed on March 14. 28 Billed customers €4,200 for cleaning services performed. 31 Paid €350 for gas and oil used in truck during month (use Maintenance and Repairs Expense). 31 Declared and paid a €900 cash dividend.
32. Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana...
Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $28 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below:
Required:
1. Using Exhibit 8—5 as a guide, prepare the first-stage allocation of costs to the activity cost pools.
2. Using Exhibit 8—6 as a guide, compute the activity rates for the activity cost pools.
3. The company recently completed a 5 hundred square foot carpet-cleaning job at the Flying N ranch—a 75-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.
4. The revenue from the Flying N ranch was $140 (5 hundred square feet @ $28 per hundred square feet). Using Exhibit 8—11 as a guide, prepare a report showing the margin from this job.
5. What do you conclude concerning the profitability of the Flying N ranch job? Explain.
6. What advice would you give the president concerning pricing jobs in thefuture?
33. Indicate which of these blood-spatter patterns (Sample A, B, C, or D) represents bleeding from: a. a
Indicate which of these blood-spatter patterns (Sample A, B, C, or D) represents bleeding from: a. a bullet wound that caused bleeding as the bullet entered the body and as the bullet passed through the body of one individual b. two separate instances of bleeding, possibly from two different individuals c. a single wound from one individual d. a change in position of a victim after a wound has been inflicted
34. Fielder Company obtained land by issuing 2,000 shares of its
Fielder Company obtained land by issuing 2,000 shares of its $10 par value common stock. The land was recently appraised at $85,000. The common stock is actively traded at $40 per share. Prepare the journal entry to record the acquisition of the land.
35. Cost of production and journal entries Lighthouse Paper Company manufactures newsprint. The...
Cost of production and journal entries
Lighthouse Paper Company manufactures newsprint. The product is manufactured in two departments, Papermaking and Converting. Pulp is first placed into a vessel at the begin- ning of papermaking production. The following information concerns production in the Papermaking Department for March:
ACCOUNT Work in Process—Papermaking Department
ACCOUNT NO.
Date |
Item |
Debit |
Credit | Balance | ||
Debit | Credit | |||||
Mar. | 1 | Bal., 2,600 units, 35% completed |
330,750 |
? | 9,139 |
|
31 | Direct materials, 105,000 units | 339,889 | ||||
31 | Direct labor | 40,560 | 380,449 | |||
31 | Factory overhead | 54,795 | 435,244 | |||
31 | Goods transferred, 103,900 units | ? | ||||
31 | Bal., 3,700 units, 80% completed | ? | ||||
a. Prepare the following March journal entries for the Papermaking Department:
1. The materials charged to production.
2. The conversion costs charged to production.
3. The completed production transferred to the Converting Department.
b. Determine the Work in Process—Papermaking Department March 31 balance.
36. Which of the following statements is correct concerning an auditor’s required communication with...
Which of the following statements is correct concerning an auditor’s required communication with those charged with governance of an audit client?
a. This communication is required to occur before the auditor’s report on the financial statements is issued.
b. This communication should include discussion of any significant disagreements with management concerning the financial statements.
c. Any significant matter communicated to the audit committee also should be communicated to management.
d. Significant audit adjustments proposed by the auditor and recorded by management need not be communicated to those charged with governance.
Landor Appliance Company makes and sells electric fans. Each fan regularly sells for $42. The following cost data per fan is based on a full capacity of 150,000 fans produced each period.
Direct materials = $8
Direct labor = $9
Manufacturing overhead
(70% variable and 30% unavoidable fixed) = $10
A speci...
38. Team creativity drivers include creative members, decision techniques, and ____________. (a) task...
Team creativity drivers include creative members, decision techniques, and ____________.
(a) task motivation
(b) task expertise
(c) long-term goals
(d) external support
Discounted cash flow techniques include all of the following except
a) profitability index.
b) internal rate of return.
c) net present value.
d) annual rate of return.
40: Which of the following items would be classified as an extraordinary item by the accounting profession?
a) None of these answer choices are correct.
b) Loss from damage to a southern California warehouse due to a minor earthquake.
c) Loss from fire damage in a chemical plant.
d) Loss from a foreign government's expropriation of a production facility.
41: Which of the following is not a limitation of financial analysis?
a) Using the same financial ratios in the analysis.
b) A fiscal year-end with atypical low data.
c) Basing financial statements on cost and not adjusted for price-level changes.
d) Diversification of comp
40. Bryant Ltd. factors receivables with a carrying amount of £200,000 to Warren Company for £190,000...
Bryant Ltd. factors receivables with a carrying amount of £200,000 to Warren Company for £190,000 and guarantees all credit losses.
Instructions
Prepare the appropriate journal entry to record this transaction on the books of Bryant Ltd.
Bryant Ltd factors receivables with a carrying amount of 200 000
41. Clark’s Landscaping bills customers subject to terms 3/10, n/50. 1. Compute the annual interest...
Clark’s Landscaping bills customers subject to terms 3/10, n/50.
1. Compute the annual interest rate implicit in the sales discount. (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
42. Hamilton Construction Company uses the percentage-of-completion
Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2012, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other details are as follows.
Instructions
(a) What portion of the total contract price would be recognized as revenue in 2012? In 2013 ?
(b) Assuming the same facts as those shown on page 1139 except that Hamilton uses the cost-recovery method of accounting, what portion of the total contract price would be recognized as revenue in2013?
43. What criterion should be used to evaluate trade-offs between information characteristics?
CA2-4 (Qualitative Characteristics) Accounting information provides useful information about business transactions and events. Those who provide and use financial reports must often select and evaluate accounting alternatives. The FASB statement on qualitative characteristics of accounting information examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information.
Instructions
(a) Describe briefly the following characteristics of useful accounting information.
(1) Relevance
(2) Faithful representation
(3) Understandability
(4) Comparability
(5) Consistency
(b) For each of the following pairs of information characteristics, give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other.
(1) Relevance and faithful representation.
(2) Relevance and consistency.
(3) Comparability and consistency.
(4) Relevance and understandability.
(c) What criterion should be used to evaluate trade-offs between information characteristics?
44. Kipling Company deposits all receipts and makes all payments by check
Kipling Company deposits all receipts and makes all payments by check. The following information is available from the cash records.
June 30 Bank Reconciliation
Balance per bank $ 7,000
Add: Deposits in transit 1,540
Deduct: Outstanding checks (2,000)
Balance per books $ 6,540
Month of July Results
Balance July 31 Per Bank $8,650 Per Books $9,250
July deposits Per bank 4,500 per books 5,810
July Checks per bank 4,000 per books 3,100
July note collected (not included in July deposits) per bank 1,500 per books—
July bank service charge per bank 15 per books—
July NSF check from a customer, returned by the per bank 335 per books —
(recorded by bank as a charge)
Instructions
(a) Prepare a bank reconciliation going from balance per bank and balance per book to correct cash balance.
(b) Prepare the general journal entry or entries to correct the Cash account
45. --A grocery store
A successful grocery store would probably have
a low volume
b low inventory turnover
c a high inventory turnover
d zero profit margin
Job-Order Costing Variables
On July 1, Job 46 had a beginning balance of $740. During July, prime costs added to the job totaled $620. Of that amount, direct materials were three times as much as direct labor. The ending balance of the job was $1,600.
Required:
1. What was overhead applied to the job during July?
$ 240
2. What was direct materials for Job 46 for July? Direct labor? If rounding is required, round your answers to the nearest cent.
Direct labor | $ 155 |
Direct materials | $ 465 |
3. Assuming that overhead is applied on the basis of direct labor cost, what is the overhead rate for the company? Round your answer to the nearest whole percent.
%
I cannot seem to get number 3.
Here are some hints:
1. Find overhead applied by adding beginning balance to prime costs and subtracting from ending balance.
2. Set up equation for prime cost using direct materials and direct labor. Let direct materials equal 3 times direct labor.
3. Divide overhead by the direct labor for the rate.
47. 1. _______ with the largest atoms and the smallest number of valence electrons and
1. _______ with the largest atoms and the smallest number of valence electrons and _______ with the smallest atoms and the greatest number of valence electrons are the most reactive.
A. Nonmetals; metals
B. Transition elements; metals
C. Metals; nonmetals
D. Nonmetals; transition elements
2. Which of the following is true regarding the inner transition elements
A. They occupy the d block of the periodic table.
B. These include all elements in groups 3 12.
C. These include the lanthanides and actinides and do not have f sublevels.
D. Their valence electrons can be located in both s and f sublevels.
3. When an atom of iron loses all of its 4s electrons and one of its 3d electrons, what is its charge
A. 5+
B. 3+
C. 7+
D. 52
4. When chromium loses two electrons, its configuration changes to
A. [Ar]4s13d5.
B. [Ar]4s13d4.
C. [Ar]3d4.
D. [Ar]4s1.
48. On June 1, Meadow Salad Dressings creates a petty cash fund with an imprest balance of $400. Duri...
On June 1, Meadow Salad Dressings creates a petty cash fund with an imprest balance of $400. During June, Al Franklin, the fund custodian, a signs the following petty cash tickets: On June 30, prior to replenishment, the fund contains these tickets plus cash of $170. The accounts affected by petty cash payments are Office Supplies, Travel Expense, Delivery Expense, Entertainment Expense, and Merchandise Inventory. Requirements 1. Explain the characteristics and the internal control features of an imprest fund. 2. On June 30, how much cash should the petty cash fund hold before it is replenished? 3. Journalize all required entries to create the fund and replenish it. Include explanations. 4. Make the July 1 entry to increase the fund balance to $500. Include an explanation, and briefly describe what the custodian does.
3.Mehta Ram of Ram Nagar purchased goods for his three departments as follows:
Department A – 200 pieces
Department B – 1,400 pieces
Department C – 400 pieces
Sales of three departments were as follows:
Department A – 180 pieces at Rs. 15 per piece.
Department B – 1,500 pieces at Rs. 18 per piece.
Department C – 450 pieces at Rs. 6 per piece.
Mehta Ram informs you that the rate of gross profit is the same in all departments.
You are required to find out the cost of purchases for each department.
50. 1. Which of the following ratios is most useful in evaluating solvency? LO12–3 a. Receivables...
1. Which of the following ratios is most useful in evaluating solvency? LO12–3
a. Receivables turnover ratio.
b. Inventory turnover ratio.
c. Debt to equity ratio.
d. Current ratio.
2. Which of the following is a positive sign that a company can quickly turn its receivables into cash? LO12–3
a. A low receivables turnover ratio.
b. A high receivables turnover ratio.
c. A low average collection period.
d. Both a high receivables turnover ratio and a low average collection period.