Attain Excellence in Your Accounting Assignments with Assistance

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Attain Excellence in Your Accounting Assignments with Assistance

1. Cutlass Company’s projected profit for the coming year is as follows: Total Per Unit Sales...

Cutlass Company’s projected profit for the coming year is as follows:

1.       Compute the variable cost ratio. Compute the contribution margin ratio.

2.       Compute the break-even point in units.

3.       Compute the break-even point in sales dollars.

4.       How many units must be sold to earn a profit of $30,000?

5.       Using the contribution margin ratio computed in Requirement 1, compute the additional profit that Cutlass would earn if sales were $25,000 more than expected.

6.       For the projected level of sales, compute the margin of safety in units and in sales dollars.

7.       Calculate the degree of operating leverage. Now suppose that Cutlass revises the forecast to show a 30% increase in sales over the original forecast. What is the percent change in oper- ating income expected for the revised forecast? What is the total operating income expected by Cutlass after revising the sales forecast?

2. Which department is responsible for initiating the purchase of materials?

a. Which department is responsible for initiating the purchase of materials?

b. What is the name of the document generated by the department identified in (a) above?

c. Typically, multiple copies of a purchase order are prepared. One copy should go to the vendor, and one is retained in the purchasing department. To achieve proper control, which other departments should receive copies of the purchase order?

d. What documents does the accounts payable clerk review before setting up a liability?

e. Which document transfers responsibility for goods sold to a common carrier?

3. The Jenkins Corporation has purchased an executive jet. The company has agreed to pay $200,000 pe...

The Jenkins Corporation has purchased an executive jet. The company has agreed to pay $200,000 per year for the next 10 years and an additional $1,000,000 at the end of the 10th year. The seller of the jet is charging 6% annual interest. Determine the liability that would be recorded by Jenkins. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Present value ________________

4. Which of the following sequence of actions describes the proper order in the accounting cycle? j...

Show transcribed image text Which of the following sequence of actions describes the proper order in the accounting cycle? journalize, post, close, prepare financial statements, adjust, and analyze transactions prepare financial statements, journalize. post, adjust, analyze transactions and close analyze transactions, journalize, post, adjust, prepare financial statements, and close post, close prepare financial statements, adjust, analyze transactions, and journalize Reset Selection

5. The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 2010.

Givens Graphics Company was organized on January 1, 2010, by Sue Givens. At the end of the first 6 months of operations, the trial balance contained the accounts on the page.

Analysis reveals the following additional data.

1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June 30,

$1,300 of supplies was on hand.

2. The note payable was issued on February 1. It is a 9%, 6-month note.

3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 2010.

4. Consulting fees are credited to revenue when received. At June 30, consulting fees of $1,500 are unearned.

5. Graphic revenue earned but unrecorded at June 30 totals $2,000.

6. Depreciation is $2,000 per year.

Instructions

(a) Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6 months.)

(b) Prepare an adjusted trial balance.

(c) Prepare an income statement and owner’s equity statement for the 6 months ended June 30 and a balance sheet at June 30.

6. Revenue and production budgets. CPA, adapted

Revenue and production budgets. (CPA, adapted) The Scarborough Corporation manufactures and sells two products: Thingone and Thingtwo. In July 2009, Scarborough’s budget department gathered the following data to prepare budgets for 2010:





The following direct materials are used in the two products:





Projected data for 2010 with respect to direct materials are as follows:





Projected direct manufacturing labor requirements and rates for 2010 are as follows:





Manufacturing overhead is allocated at the rate of $20 per direct manufacturing labor-hour.

Based on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2010:

1. Revenues budget (in dollars)

2. Production budget (in units)

3. Direct material purchases budget (in quantities)

4. Direct material purchases budget (in dollars)

5. Direct manufacturing labor budget (in dollars)

6. Budgeted finished goods inventory at December 31, 2010 (in dollars)

7. 11. Which of the following statements is true for a company that uses variable costing?...

11. Which of the following statements is true for a company that uses variable costing? 

A. The unit product cost changes because of changes in the number of units manufactured.

B. Profit fluctuates with sales.

C. Any underapplied overhead is included in the product cost.

D. Product costs include variable administration costs.

12. Which of the following statements is true for a company that uses variable costing? 

A. The unit product cost changes as a result of changes in the number of units manufactured.

B. Both variable selling costs and variable production costs are included in the unit product cost.

C. Net operating income moves in the same direction as sales.

D. Net operating income is greatest in periods when production is highest.

13. Which of the following costs at a sofa manufacturing company would be treated as a period cost under the variable costing method? 

A. the cost of glue used to assemble the wood frame of each sofa produced

B. depreciation on sales vehicles

C. the salary of a factory manager

D. both B and C above

14. A cost that would be included in product costs under both absorption costing and variable costing would be: 

A. supervisory salaries.

B. equipment depreciation.

C. variable manufacturing costs.

D. variable selling expenses.

15. Which of the following costs at a manufacturing company would be treated as a product cost under the absorption costing method? 

A. sales commissions

B. fire insurance cost on factory building

C. advertising costs

D. all of the above

16. Assuming that direct labor is a variable cost, product costs under variable costing include only: 

A. direct materials and direct labor.

B. direct materials, direct labor, and variable manufacturing overhead.

C. direct materials, direct labor, variable manufacturing overhead, and variable selling and administrative expenses.

D. direct material, variable manufacturing overhead, and variable selling and administrative expenses.

17. What is the cause of the difference between absorption costing net operating income and variable costing net operating income? 

A. Absorption costing deducts all manufacturing costs from net operating income; variable costing deducts only prime costs.

B. Absorption costing allocates fixed manufacturing costs between cost of goods sold and inventories; variable costing considers all fixed manufacturing costs to be period costs.

C. Absorption costing includes variable manufacturing costs in product costs; variable costing considers variable manufacturing costs to be period costs.

D. Absorption costing includes fixed administrative costs in product costs; variable costing considers fixed administrative costs to be period costs.

18. The gross margin for a manufacturing company is the excess of sales over: 

A. cost of goods sold, excluding fixed manufacturing overhead.

B. all variable costs, including variable selling and administrative expenses.

C. cost of goods sold, including fixed manufacturing overhead.

D. variable costs, excluding variable selling and administrative expenses.

19. Weber Company computes net operating income under both the absorption costing approach and the variable costing approach. For a given year the absorption costing net operating income was greater than the variable costing net operating income. This fact suggests that: 

A. variable manufacturing costs were less than fixed manufacturing costs.

B. more units were produced during the year than were sold.

C. more units were sold during the year than were produced.

D. common costs were greater than variable costs for the year.

20. Net operating income computed using variable costing would exceed net operating income computed using absorption costing if: 

A. units sold exceed units produced.

B. units sold are less than units produced.

C. units sold equal units produced.

D. the average fixed cost per unit is zero.

8. Which of the following is not an activity listed in the statement of cash flows?a. Investing Activit

Which of the following is not an activity listed in the statement of cash flows?a. Investing Activitiesb. Funding Activitiesc. Operating Activitiesd. Financing Activitiese. None of the options listed

9.  Exercise 5-4 Assume that Denis Savard Inc. has the following accounts at the end of the current year

Exercise 5-4 Assume that Denis Savard Inc. has the following accounts at the end of the current year. 1. Common Stock 14. Accumulated Depreciation-Buildings. 2. Discount on Bonds Payable. 15. Cash Restricted for Plant Expansion. 3. Treasury Stock (at cost). 16. Land Held for Future Plant Site. 4. Notes Payable (short-term). 17. Allowance for Doubtful Accounts. 5. Raw Materials 18. Retained Earnings. 6. Preferred Stock (Equity) Investments (long-term). 19. Paid-in Capital in Excess of Par-Common Stock. 7. Unearned Rent Revenue. 20. Unearned Subscriptions Revenue. 8. Work in Process. 21. Receivables-Officers (due in one year). 9. Copyrights. 22. Inventory (finished goods). 10. Buildings. 23. Accounts Receivable. 11. Notes Receivable (short-term). 24. Bonds Payable (due in 4 years). 12. Cash 25. Noncontrolling Interest. 13. Salaries and Wages Payable. Prepare a classified balance sheet in good form. (List Current Assets in order of liquidity. For Land, Treasury Stock, Notes Payable, Preferred Stock Investments, Notes Receivable, Receivables-Officers, Inventory, Bonds Payable, and Restricted Cash, enter the account name only and do not provide the descriptive information provided in the question.) Denis Savard Inc. Balance Sheet December 31, 20- Assets Current Assets Cash $XXX Less Restricted Cash XXX $XXX Accounts Receivable xxx Less Allowance for Doubtful Accounts Less Allowance for Doubtful Accounts XXX XXX Notes Receivable XXX Receivables-Officers XXX Inventory Raw Materials Work-in-Process XXX Finished Goods XXX Total Current Assets $XXX Long-term Investments Preferred Stock Investments XXX Land XXX Restricted Cash XXX Total Long-term Investments XXX Property, plant and Equipment Buildings XXX Buildings Less .. Accumulated Depreciation-Building Total Property, Plant and Equipment - Copyrights XXX Total Assets $XXX Liabilities and Stockholders' Equity Current Liabilities Salaries and Wages Payable $XXX Notes Payable XXX Unearned Rent Revenue XXX Unearned Subscriptions Revenue XXX Total Current Liabilities $XXX Long-term Debt Bonds Payable $XXX Less : Discount on Bonds Payable (XXX) XXX Total Liabilities XXX Stockholders' Equity Total Liabilities XXX Stockholders' Equity Capital Stock Common Stock Additional Paid-in Capital Paid-in Capital in Excess of Par - Common Stock XXX Total Paid-in Capital XXX Retained Earnings XXX Total Paid-in Capital and Retained Earnings XXX Less : Treasury Stock (XXX) XXX XXX Total Stockholders' Equity XXX Total Liabilities and Stockholders' Equity $XXX

10. Financial accounting data are not entirely suitable for use in evaluating capital expenditures....

Financial accounting data are not entirely suitable for use in evaluating capital expenditures. Explain.

11. Average rate of return—cost savings Midwest Fabricators Inc. is considering an investment in...

Average rate of return—cost savings

Midwest Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $132,000 with a $16,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $34,000 per year. In addition, the equipment will have operating and energy costs of $5,380 per year.

Determine the average rate of return on the equipment, giving effect to straight-line depreciation  on  the investment.

12. EX 6-13 Periodic inventory by three methods; cost of merchandise sold The units of an item...

EX 6-13  Periodic inventory by three methods; cost of merchandise sold

The units of an item available for sale during the year were as follows:

There are 104 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost and the cost of merchandise sold by three methods, presenting your answers in the following form:

Cost

13. What are the key features of CPFR? Why would a company consider adopting CPFR?

What are the key features of CPFR? Why would a company consider adopting CPFR?

14. Montoure Company uses a perpetual inventory system. entered into the following calendar-year 2015...

Montoure Company uses a perpetual inventory system. entered into the following calendar-year 2015 purchases and sales transactions. Units sold at Retail Date Activities Units Acquired at Cost Jan. 1 Beginning inventory 620 units 45 per unit Feb. 10 Purchase 380 units 42 per unit Mar. 13 Purchase 100 units 30 per unit 735 units a $70 per unit Mar. 15 Sales Aug. 21 Purchase 170 units 50 per unit Sept. 5 Purchase 400 units 46 per unit 570 units 70 per unit Sept. 10 Sales Totals 1,670 units 1,305 units Required 1. Compute cost of goods available for sale and the number of units available for sale Cost of goods available for sale Number of units available for sale units 2. Compute the number of units in ending inventory nding inventory units

15. Multiple-choice questions 1.The preparation of consolidated financial statements involves: a.adding.

Multiple-choice questions

1.The preparation of consolidated financial statements involves:

a.adding together the financial statements of the investor and the associate.

b.adjusting entries in the accounting records of the subsidiary.

c.adding together the financial statements of the parent and the subsidiaries.

d.adjusting entries in the accounting records of the parent.

2.If a subsidiary’s reporting date does not coincide with the parent entity’s reporting date, adjustments must be made for the effects of significant transactions that occur between the two reporting dates provided the reporting dates differ by no more than:

a.nine months.

b.three months.

c.one month.

d.six months.

3.Kerri Limited has two subsidiary entities, Emily Limited and Georgia Limited. Kerri Limited owns 100% of the shares in both entities. Details of the issued share capital are:

- Kerri Limited $200 000

- Emily Limited $60 000

- Georgia Limited $30 000

The consolidated share capital amount of the Kerri Emily Georgia group is:

a.$230 000.

b.$90 000.

c.$200 000.

d.$290 000.

4. Which of the following statements is incorrect?

a. Where consolidated financial statements are prepared over a number of years, consolidation entries need to be made every time a consolidation worksheet is prepared.

b. Consolidation adjusting entries affect the ledger accounts of the parent and subsidiaries.

c. A consolidation worksheet is used to help the process of adding together the financial statements of the parent and its subsidiaries.

d. There are no consolidated ledger accounts.

5.If the consideration transferred is greater than the acquired interest in the net fair value of               the identifiable assets, liabilities and contingent liabilities of the acquiree:

a.a gain on bargain purchase results.

b.goodwill has been purchased and must be recognised on consolidation.

c.the difference is treated as a special equity reserve in the acquirer’s accounting records.

d.the difference is immediately charged to profit or loss in the period in which the business combination occurred.

6.Which of the following statements is incorrect?

a.The business combination valuation reserve is an account recorded in the               subsidiary’s records.

b.The acquisition analysis may include the recognition of assets and liabilities not recognised in the subsidiary’s records.

c. The acquisition analysis will determine whether any goodwill or gain on bargain purchase has arisen as a part of the business combination.

d.An acquisition analysis is prepared at acquisition date to identify the identifiable assets and liabilities of the subsidiary at fair value.

7. Unity Limited acquired 100% of the share capital of Bellvista Limited. Bellvista had issued share capital of $200 000.  The book values of Bellvista Limited’s assets were: buildings $100 000, machinery $120 000. The fair values of these assets were: buildings $180 000, machinery $140 000.  The tax rate is 30%. The fair value of the identifiable net assets is:

a. $270 000.

b. $220 000.

c. $320 000.

d. $200 000.

8.The pre-acquisition entry is necessary to:

a.avoid overstating the equity and net assets of the parent.

b.record the ‘Shares in subsidiary’ account in the parents records.

c.avoid overstating the equity and net assets of the group.

d.avoid understating the equity and net assets of the group.

9.Sippy Ltd acquired 100% of the share capital of Downs Ltd when the carrying value of Downs Ltd’s plant and machinery was $100 000. The fair value of the plant on acquisition date was $150 000. The company tax rate was 30%. What is the amount of the business combination valuation reserve that must be recognised on consolidation?

a.$15 000

b.$35 000

c.$50 000

d.$150 000

10.Water Limited acquired Boy Limited for a purchase consideration of $110 000. At acquisition date the fair value of the Boy Limited’s Land asset was $80 000 and the carrying amount was $60 000. If the company tax rate is 30%, which of the following is the appropriate adjustment to recognise the tax effect of the business combination revaluation of land?

a.DRDeferred tax liability$6 000

b.CRDeferred tax liability$6 000

c.DRDeferred tax asset$6 000

d.CRDeferred tax asset$6 000