Connect 2 Semester Access Card for Financial and Managerial Accounting 6th Edition

APPENDIX B TIME VALUE OF MONEY Related Assignment Materials Student Learning Objectives Quick Studies* Exercises* Conceptual objectives: C1. Describe the earning of interest and the concepts of present and future values. B-1 B-11, B-19 Procedural objectives: P1. Apply present value concepts to a single amount by using interest tables. B-2, B-3, B-4 B-1, B-2, B-12, B-13, B-18,

Appendix B Time Value of Money QUICK STUDIES Quick Study B-1 (10 minutes) 1. 2% n = 8 periods 2. 12% n = 2 periods 3. 3% n = 4 periods4. 1% n = 24 periods 3. 3% n = 4 periods4. 1% n = 24 periods 3. 3% n = 4 periods 4. 1% n = 24 periods Quick

APPENDIX C INVESTMENTS AND INTERNATIONAL OPERATIONS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Distinguish between debt and equity securities and between long-term investments and short-term investments. 1, 2, 5 C-1, C-2 C-1, C-11 C-5, C-6 C2. Describe how to report equity securities with controlling influence. 17, 18 C-12, C-13 C-13

Appendix C Investments and International Operations QUESTIONS 1. To be classified as current assets, investments must be (i) capable of being converted into cash quickly and (ii) management must intend to sell the investmentsas a source of cash to satisfy the needs of current operations (within one year or the converted into cash quickly

Exercise C-3 (20 minutes) 1. 2015 Dec. 31 Fair Value AdjustmentTrading......................... 6,000 Unrealized GainIncome.............................. 6,000 To reflect an unrealized gain in fair values of trading securities. 2. The accounts in part (1) are reported on different financial statements. i. The $6,000 debit balance in the Fair Value AdjustmentTrading account is an adjunct asset account in the balance

Exercise C-16A (25 minutes) Quarter ended June 30, 2015 May 8 recorded amount (800,000 x $0.1323)...................... $105,840 June 30 balance sheet amount (800,000 x $0.1352)........... 108,160 Foreign exchange gain.........................................................$ 2,320Quarter ended September 30, 2015 June 30 balance sheet amount............................................ $108,160 Sept. 30 balance sheet amount (800,000 x $0.1368).......... 109,440 Foreign

Problem C-3A (Continued) 2017 Feb. 27 Long-Term InvestmentsAFS (Microsoft).................................161,325 Cash ....................................................................................161,325 Purchased Microsoft shares [(2,400 x $67.00) + $525]. Feb. 27 Long-Term InvestmentsAFS (Microsoft).................................161,325 Cash ....................................................................................161,325 Purchased Microsoft shares [(2,400 x $67.00) + $525]. Feb. 27 Long-Term InvestmentsAFS (Microsoft).................................161,325 Cash ....................................................................................161,325 Purchased Microsoft shares [(2,400 x $67.00) + $525]. June 21 Cash ..........................................................................................56,720 Gain

PROBLEM SET B Problem C-1B (60 minutes) Part 1 2015 Mar. 10 Short-Term InvestmentsTrading (AOL)....................143,505 Cash................................................................... 143,505 Purchased AOL shares [(2,400 x $59.15) + $1,545].May 7 Short-Term InvestmentsTrading (MTV)...............184,105 Cash................................................................... 184,105 Purchased MTV shares [(5,000 x $36.25) + $2,855]. Mar. 10 Short-Term InvestmentsTrading (AOL)....................143,505 Cash................................................................... 143,505 Purchased AOL shares [(2,400 x $59.15) + $1,545].May

Problem C-4B (50 minutes) Part 1 1. Journal entries (assuming significant influence) 2015 Jan. 5 Long-Term InvestmentsBloch.............................................200,500 Cash.....................................................................................200,500 Purchased Bloch shares.Aug. 1 Cash...........................................................................................21,000 Long-Term InvestmentsBloch.......................................... 21,000 Received cash dividend (20,000 x $1.05). Purchased Bloch shares.Aug. 1 Cash...........................................................................................21,000 Long-Term InvestmentsBloch.......................................... 21,000 Received cash dividend (20,000 x $1.05). Purchased Bloch shares. Aug. 1 Cash...........................................................................................21,000 Long-Term InvestmentsBloch..........................................

Comparative Analysis BTN C-2 1. Apples return on total assets Current Year: $37,037 / [($207,000 + $176,064) / 2] = 19.3% One Year Prior: $41,733 / [($176,064 + $116,371) / 2] = 28.5% Googles return on total assets Current Year: $12,920 / [($110,920 + $93,798) / 2] = 12.6%One Year Prior: $10,737 / [($93,798 +

APPENDIX D ACCOUNTING FOR PARTNERSHIPS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Identify characteristics of partnerships and similar organizations. 1, 2, 3, 4, 5, 8 D-1 D-1, D-2 D-1, D-2, D-4, D-7, D-8 Analytical objectives: Al. Compute partner return on equity and use it to evaluate partnership performance. D-8 D-12 Procedural

Appendix D Accounting for Partnerships QUESTIONS 1. Under the circumstances described, the death, bankruptcy, or legal inability of a partner to execute a contract ends a partnership. In addition, if a partnership is organized for the purpose of completing a specific business project, the partnershipends when the project is completed. If the business for

Exercise D-6 (25 minutes) 1a. 2015 Mar. 1 Cash........................................................................... 82,500 Land........................................................................... 60,000 Building.....................................................................100,000 Long-Term Note Payable................................... 92,500 Eckert, Capital.................................................... 82,500 Kelley, Capital..................................................... 67,500 To record initial capital investments. Long-Term Note Payable................................... 92,500 Eckert, Capital.................................................... 82,500 Kelley, Capital..................................................... 67,500 To record initial capital investments. Long-Term Note Payable................................... 92,500 Eckert, Capital.................................................... 82,500 Kelley, Capital..................................................... 67,500 To

Problem D-3A (40 minutes) Part 1 Income (Loss) Sharing Plan Calculations Bill Bruce Barb Total (a) $450,000/3.....................................................................$150,000 $150,000 $150,000 $450,000 (b) $450,000 x ($67,500/$750,000).......................................... 40,500 $450,000 x ($262,500/$750,000)........................................157,500$450,000 x ($420,000/$750,000)........................................_______ _______ 252,000 $450,000 x ($262,500/$750,000)........................................157,500$450,000 x ($420,000/$750,000)........................................_______ _______ 252,000 $450,000 x ($262,500/$750,000)........................................ 157,500 $450,000 x ($420,000/$750,000)........................................ _______ _______ 252,000 Total allocated..............................................................$ 40,500 $157,500 $252,000 $450,000 Total allocated..............................................................$ 40,500 $157,500

Problem D-2B (50 minutes) 1. Dec. 31 Income Summary.....................................................270,000 Mark Albin, Capital............................................. 90,000 Roland Peters, Capital....................................... 90,000 Sam Ramsey, Capital......................................... 90,000 To close Income Summary. Roland Peters, Capital....................................... 90,000 Sam Ramsey, Capital......................................... 90,000 To close Income Summary. Roland Peters, Capital....................................... 90,000 Sam Ramsey, Capital......................................... 90,000 To close Income Summary. 2. Dec. 31 Income Summary.....................................................270,000

Comparative Analysis BTN D-2 1. Apple was organized/founded in 1976, and Google was organized/founded in 1998 (although the research project that led toGoogle started in 1996 and the domain name was registered in 1997). organized/founded in 1998 (although the research project that led toGoogle started in 1996 and the domain name was registered

APPENDIX E ACCOUNTING WITH SPECIAL JOURNALS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Identify the fundamental principles and components of accounting information systems. 1, 2, 3, 4, 5, 6 E-1, E-2 E-3 C2. Explain the goals and uses of special journals. 7, 9, 10, 11, 12 E-3, E-4, E-7,

Feb. 14 Issued Check No. 415, payable to Payroll, in payment of sales salaries for the first half of the month, $855. Cashed the check and paid the employees. 14 Cash sales for the first half of the month, $18,460. Cost of this merchandise was $ 9,500. (Normally, cash sales are

Appendix E Accounting with Special Journals QUESTIONS 1. The five components of an accounting system are: source documents, input devices, information processors, information storage, and output devices. 2. Source documents contain data about business transactions or events that are put into the accounting system and processed. Examples of source documents areinvoices from suppliers,

Exercise E-5 (15 minutes) a) Accounts Payable Ledger ACCOUNTS PAYABLE LEDGER Bailey Company Date Explanation PR Debit Credit Balance Jan. 9 P1 14,000 14,000 19 D1 10,100 3,900 Johnson Brothers Date Explanation PR Debit Credit Balance Jan. 18 P1 6,600 6,60027 D1 6,600 0 Jan. 18 P1 6,600 6,60027 D1 6,600 0 Jan. 18 P1 6,600 6,600 27 D1 6,600

Problem E-1A (Continued) ACCOUNTS RECEIVABLE LEDGER Jovita Albany Date Explanation PR Debit Credit Balance Mar. 10 S2 5,600 5,60020 R2 5,600 027 S2 14,910 14,910 Mar. 10 S2 5,600 5,60020 R2 5,600 027 S2 14,910 14,910 Mar. 10 S2 5,600 5,600 20 R2 5,600 0 27 S2 14,910 14,910 Min Cho Date Explanation PR Debit Credit Balance Mar. 2

Parts 2 and 3 GENERAL LEDGER Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Mar. 31 85,000 Apr. 30 D3 49,153 35,847 Inventory Acct. No. 119 Date Explanation PR Debit Credit Balance Mar. 31 125,000Apr. 23 G3 750 124,25030 P3 39,425 163,67530 D3 546 163,129 Mar. 31 125,000Apr. 23 G3 750 124,25030 P3 39,425

Problem E-1B (Continued) Accounts Payable Acct. No. 201 Date Explanation PR Debit Credit Balance Nov. 17 G2 557 (557) 26 G2 922 (1,479)30 P2 42,614 41,13530 D2 35,500 5,635 Long-Term Notes Payable Acct. No. 251Date Explanation PR Debit Credit BalanceNov. 2 R2 88,500 88,500 26 G2 922 (1,479)30 P2 42,614 41,13530 D2 35,500 5,635

Problem E-2B (Concluded) Part 4continued ACORN INDUSTRIES Schedule of Accounts Receivable July 31 Ruth Blake...............................................................$17,500 Ashton Moore......................................................... 16,820Total accounts receivable..................................$34,320Part 5Analysis componentTo find the error(s), first re-add the account balances on the schedule of accounts receivable to confirmthat the addition is correct. Then, trace the balances listed on the schedule of accounts receivable backto the subsidiary

Serial Problem (Continued) 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in anymanner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Solutions Manual, Appendix E61 2016 by McGraw-Hill Education. This is

CHAPTER 1 ACCOUNTING IN BUSINESS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives C1. Explain the purpose and importance of accounting. 1, 5 1-1 1-1, 1-4, 1-6 1-6 C2. Identify users and uses of, and opportunities in accounting. 2, 3, 4, 6, 7, 8, 9, 10, 11, 12, 23

Chapter Outline Notes 3. Equityowners claim on assets; assets minus liabilities. Also called stockholders equity, shareholders equity or capital, net assets or residual equity. Changes in Equityresult from stock issuances or owner investments, revenues, dividends, and expenses. a. Common stockpart of contributed capital include cash and other net assets from stockholders in

EXERCISES Exercise 1-1 (10 minutes) C 1. Analyzing and interpreting reports C 2. Presenting financial information R 3. Keeping a log of service costs R 4. Measuring the costs of a product C 5. Preparing financial statements I 6. Seeing revenues generated from a service I 7. Observing employee tasks behind

Problem 1-2A (40 minutes) Part 1 Company A (a) Equity on December 31, 2014: Assets.......................................................... $55,000 Liabilities..................................................... (24 ,500 )Equity.......................................................... $30 ,500 Liabilities..................................................... (24 ,500 )Equity.......................................................... $30 ,500 Liabilities..................................................... (24 ,500 ) Equity.......................................................... $30 ,500 (b) Equity on December 31, 2015: Equity, December 31, 2014........................ $30,500 Plus stock issuances................................. 6,000 Plus net income.......................................... 8,500 Less

Problem 1-8A (Concluded) Part 3 Biz Consultings net income = $6,800 - $2,300 = $4,500 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Notauthorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated,forwarded, distributed, or posted on a website, in whole or

Problem 1-2B (Continued) Part 3 Company X First, calculate the beginning and ending equity balances: 12/31/2014 12/31/2015 Assets.............................. $141,500 $186,500 Liabilities......................... (68,500) (65,800)Equity.............................. $ 73,000 $120,700 Liabilities......................... (68,500) (65,800)Equity.............................. $ 73,000 $120,700 Liabilities......................... (68,500) (65,800) Equity.............................. $ 73,000 $120,700 Then, find the amount of investments by owner during 2015 as follows: Equity, December 31, 2014................................ $ 73,000 Plus stock issuances........................................

Problem 1-9B (Continued) Part 3 Rivera Roofing Company Income Statement For Month Ended July 31 Revenues Roofing fees earned .................................. $20,800 Expenses Rent expense.............................................. $ 700 Salaries expense........................................ 1,560 Utilities expense ........................................ 295 Total expenses............................................ 2 ,555 Net income........................................................... $18 ,245 Utilities expense ........................................ 295 Total expenses............................................ 2 ,555 Net income........................................................... $18 ,245 Utilities expense ........................................

Serial Problem SP 1 Business Solutions Assets =Liabilities + Equity Date Cash +Accounts Receivable +Computer Supplies +Computer System +Office Equipment =Accounts Payable +Common Stock -Dividends +Revenues -Expenses Oct. 1+$45,000 $20,000 + $8,000 + $73,000 3 + $1,420 + $1,420 Bal. 45,000 + 1,420 + 20,000 + 8,000 = 1,420 + 73,000 6 + $4,800 + $ 4,800 Bal. 45,000 + 4,800

Chapter 10 ACCOUNTING FOR LONG-TERM LIABILITIES Student Learning Objectives and Related Assignment Materials* Student Learning Objectives Discussion Questions Quick Studies Exercises Problems Beyond the Numbers Conceptual objectives: C1. Explain the types and payment patterns of notes. 1 10-11 10-10, 10-11, 10-20 10-6 C2. Explain and compute the present value of an amount to be paid at a future date. (Appendix 10A) C3.

Chapter Outline Notes VIII. Issuing Bonds Between Interest Dates (Appendix 10C) A. Procedure used to simplify recordkeeping: 1. Buyers pay the purchase price plus any interest accrued since the prior interest payment date. 2. This accrued interest is repaid to these buyers on the next interest date. 3. Entry to record issuance of bonds between interest

Chapter 10 Accounting for Long-Term Liabilities QUESTIONS 1. Notes payable generally involve borrowing from a single creditor, whereas bonds payable are usually sold to many different lenders (bondholders). payable are usually sold to many different lenders (bondholders). payable are usually sold to many different lenders (bondholders). 2. A bond is a liability of the issuing company. A

Exercise 10-2 (30 minutes) 1. Discount = Par value - Issue price = $180,000 - $170,862 = $9,138 2. Total bond interest expense over the life of the bonds Amount repaid Six payments of $7,200*.................. $ 43,200 Par value at maturity....................... 180,000 Total repaid....................................... 223,200 Less amount borrowed...................... (170,862 )Total bond interest expense..............$

Exercise 10-11 (20 minutes) 2015 Jan. 1 Cash.................................................................................100,000 Notes Payable........................................................... 100,000 Borrowed $100,000 by signing a 7% installment note.2015Dec. 31 Interest Expense.............................................................7,000Notes Payable.................................................................22,523 Cash........................................................................... 29,523 To record first installment payment. Jan. 1 Cash.................................................................................100,000 Notes Payable........................................................... 100,000 Borrowed $100,000 by signing a 7% installment note.2015Dec. 31 Interest Expense.............................................................7,000Notes Payable.................................................................22,523 Cash........................................................................... 29,523 To record first

Problem 10-2A (40 minutes) Part 1 2015 Jan. 1 Cash.................................................................................3,456,448 Discount on Bonds Payable..........................................543,552 Bonds Payable.......................................................... 4,000,000 Sold bonds on stated issue date. Discount on Bonds Payable..........................................543,552 Bonds Payable.......................................................... 4,000,000 Sold bonds on stated issue date. Discount on Bonds Payable..........................................543,552 Bonds Payable.......................................................... 4,000,000 Sold bonds on stated issue date. Part 2 [Note: The semiannual amounts

Problem 10-7A (20 minutes) Part 1 Pulaski Company debt-to-equity = $360,000 / $500,000 = 0.72 Scott Company debt-to-equity = $240,000 / $200,000 = 1.20 Scott Company debt-to-equity = $240,000 / $200,000 = 1.20 Scott Company debt-to-equity = $240,000 / $200,000 = 1.20 Part 2 Scotts debt-to-equity ratio is higher than Pulaski's. This implies that Scott is more

Problem 10-2B (Concluded) Part 3 Twenty payments of $170,000...................$3,400,000 Par value at maturity.................................. 3,400,000 Total repaid................................................. 6,800,000Less amount borrowed............................. (3,010,000 )Total bond interest expense.....................$3,790,000 Total repaid................................................. 6,800,000Less amount borrowed............................. (3,010,000 )Total bond interest expense.....................$3,790,000 Total repaid................................................. 6,800,000 Less amount borrowed............................. (3,010,000 ) Total bond interest expense.....................$3,790,000 or: Twenty payments of $170,000 ..................$3,400,000 Plus discount............................................. 390,000 Total bond interest expense.....................$3,790,000 Plus

Problem 10-8BB (Concluded) Part 4 2015 June 30 Bond Interest Expense..................................................7,940 Discount on Bonds Payable.................................... 740 Cash........................................................................... 7,200 To record six months interest and Discount on Bonds Payable.................................... 740 Cash........................................................................... 7,200 To record six months interest and Discount on Bonds Payable.................................... 740 Cash........................................................................... 7,200 To record six months interest and

Comparative Analysis BTN 10-2 1. Apples current year debt-to-equity ratio = $83,451 / $123,549 = 0.68 Apples prior year debt-to-equity ratio = $57,854 / $118,210 = 0.49 Googles current year debt-to-equity ratio = $23,611 / $87,309 = 0.27Googles prior year debt-to-equity ratio = $22,083 / $71,715 = 0.31 Googles current year debt-to-equity ratio =

CHAPTER 11 CORPORATE REPORTING AND ANALYSIS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Identify characteristics of corporations and their organization. corporations and their organization. corporations and their organization. 1, 2, 3, 4 11-1 11-1 11-5 C2. Explain characteristics of, and distribute dividends between common and preferred stock. 5, 6, 7,8, 9,

Exercise 11-3 (15 minutes) 1. Cash................................................................................... 35,000 Common Stock, $5 Par Value*................................... 20,000 Paid-In Capital in Excess of Par Value, Common Stock**..................................................... 15,000 Issued common stock for cash. *4,000 shares x $5 per share = $20,000 **$35,000 - $20,000 = $15,000 Paid-In Capital in Excess of Par Value, Common Stock**..................................................... 15,000

Exercise 11-18 (Concluded) Part 2 ALEXANDER CORPORATION Statement of Retained Earnings For Year Ended December 31, 2016 Retained earnings, December 31, 2015............................ $340,000 Plus net income.................................................................. 52 ,000 392,000 Less:Cash dividends declared......................................... (99,900)Treasury stock reissuances*................................... (1 ,500 )*Retained earnings, December 31, 2016............................ $290 ,600 *From August 27 transaction of reissuance of treasury shares. Less:Cash dividends declared......................................... (99,900)Treasury stock

Problem 11-2B (Concluded) Part 2 BALTHUS CORP. Statement of Retained Earnings For Year Ended December 31, 2016 Retained earnings, December 31, 2015............................ $2,160,000 Plus net income.................................................................. 1 ,072,000 3,232,000 Less: Cash dividends declared........................................ (740,000)Treasury stock reissuances................................... (16 ,000 )Retained earnings, December 31, 2016............................ $2 ,476,000 Less: Cash dividends declared........................................ (740,000)Treasury stock reissuances................................... (16 ,000 )Retained earnings, December

Reporting in Action BTN 11-1 (All shares in thousands.) 1. As of September 28, 2013, the shares of common stock issued and outstanding are 899,213 (see balance sheet). As of September 29, 2012, the number of shares of common stock issued and outstanding is939,208.The weighted-average common shares used in calculating earnings pershare are disclosed

CHAPTER 12 REPORTING CASH FLOWS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Distinguish between operating, investing, and financing activities, and describe how noncash investing and financing activities are disclosed 1, 2, 3, 5, 7, 8, 9,14 12-1, 12-20 12-1, 12-14 12-3, 12-8, 12-7, 12-8, 12-9, 12-10 Analytical objectives: A1. Analyze

Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent ofMcGraw-Hill Education. Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent ofMcGraw-Hill Education. Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent

Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent ofMcGraw-Hill Education. Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent ofMcGraw-Hill Education. Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent

Chapter 12 Reporting Cash Flows QUESTIONS 1. The purpose of the cash flow statement is to report all major cash receipts (inflows) and cash payments (outflows) during a period. It helps users to answer questions such as: How does a company obtain its cash?Where does a company spend its cash?What explains the change in the

Quick Study 12-17 (10 minutes) 1. Moore is probably in the strongest position of the three competing companies on the basis of the statement of cash flows. Moores cash flows from operations are able to finance reinvestment in operating assets as well as helpin paying down some debt. Sykes is in the second

Exercise 12-11 (Part 1 continued) (1) Cost of equipment sold (Given)..................................................................... $ 48,600 Accumulated depreciation of equipment sold*............................................ (40 ,600 ) Book value of equipment sold....................................................................... 8,000 Gain on sale of equipment (Given)................................................................ 2 ,000 Cash receipt from sale of equipment............................................................ $ 10 ,000 Cost of equipment sold.................................................................................. $ 48,600Plus net increase in the

Problem 12-3A (50 minutes) Part 1 FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2015 Cash flows from operating activities Net income..............................................................................$114,975 Adjustments to reconcile net income to net cash provided by operating activities: Income statement items not affecting cash Depreciation expense...........................................................20,750 Loss on disposal of equipment............................................ 5,125 Changes in current

Problem 12-2BB (35 minutes) SALT LAKE COMPANY Cash Flows from Operating ActivitiesDirect Method For Year Ended December 31, 2015 Cash flows from operating activities Cash receipts from customers (1)........................................................$ 155,400 Cash payments to suppliers (2)............................................................(72,080) Cash payments for salaries (3).............................................................(19,700) Cash payments for rent (4)....................................................................(4,900) Cash payments for insurance (5)..........................................................(2,560) Cash payments for utilities

SERIAL PROBLEM SP 12 Serial Problem SP 12, Business Solutions (45 minutes) BUSINESS SOLUTIONS Statement of Cash Flows (Indirect) For Quarter Ended March 31, 2016 Cash flows from operating activities Net income..............................................................................$ 18,833 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expenseOffice Equipment.............................

Teamwork in Action BTN 12-6 Part 1 a. The reporting objective of the statement of cash flows is to provide information about important cash inflows and outflows for business decision makers. It answers specific questions such as: How does a company obtain its cash? Where does a company spend its cash? What is the change in the

Chapter Outline Notes 3. Ratios in this block: a. Profit marginnet income divided by net sales; describes the ability to earn a net income from sales. b. Return on total assetsnet income divided by average total assets; a summary measure of operating efficiency, comprises profit margin and total asset turnover.c. Return on common

Exercise 13-8 (25 minutes) 1. Days' sales uncollected 2015: x 365 = 48.5 days 2014: x 365 = 42.9 days 2014: x 365 = 42.9 days 2014: x 365 = 42.9 days 2. Accounts receivable turnover 2015: = 8.9 times 2014: = 9.4 times 2014: = 9.4 times 2014: = 9.4 times 3. Inventory turnover 2015: = 4.2 times 2014: = 5.1 times 2014:

Problem 13-2A (Concluded) Part 3 KORBIN COMPANY Balance Sheet Data in Trend Percents December 31, 2015, 2014, and 2013 2015 2014 2013 Assets Current assets.................................. 101.24% 73.29% 100.00% Long-term investments.................... 0.00 12.66 100.00Plant assets, net............................... 166.67 160.00 100.00Total assets....................................... 131.71 116.19 100.00 Long-term investments.................... 0.00 12.66 100.00Plant assets, net............................... 166.67 160.00 100.00Total assets....................................... 131.71 116.19 100.00 Long-term investments.................... 0.00 12.66

Problem 13-2B (60 minutes) Part 1 Current ratio: December 31, 2015: $54,860 / $22,370 = 2.5 to 1 December 31, 2014: $32,660 / $19,180 = 1.7 to 1December 31, 2013: $36,300 / $16,500 = 2.2 to 1 December 31, 2014: $32,660 / $19,180 = 1.7 to 1December 31, 2013: $36,300 / $16,500 = 2.2

SERIAL PROBLEM SP 13 Serial Problem SP 13, Business Solutions (45 minutes) 1. Gross margin with services revenue Gross margin = Total revenue Cost of goods sold = $44,000 - $14,052 = $29,948Gross margin ratio = $29,948 / $44,000 = 68.1 % = $44,000 - $14,052 = $29,948Gross margin ratio = $29,948 /

CHAPTER 14 MANAGERIAL ACCOUNTING CONCEPTS AND PRINCIPLES Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Explain the purpose and nature of, and the role of ethics in, managerial accounting. 1, 2, 3, 13 14-1 14-1, 14-14 14-1, 14-3, 14-5, 14-7, 14-8, 14-9 C2. Describe accounting concepts useful in classifying

Chapter Outline Notes B. Manufacturers Balance Sheetcarry several unique assets and usually reports these three inventories: 1. Raw Materials Inventorygoods a company acquires to use in making products Includes both direct and indirect materials. 2. Work in Process Inventory consists of products in the process of being manufactured but not yet complete. 3. Finished

Chapter 14 Managerial Accounting Concepts and Principles QUESTIONS 1. The managerial accountant plays an important role in preparing the information necessary for effective planning and control decisions. One example is the budget, which is a quantitative expression of a companys long-run and short-run plans. Thebudget is used to compare actual results to planned performance.

EXERCISES Exercise 14-1 (10 minutes) Exercise 14-2 (20 minutes) Most fixed costs are indirect. Fixed costs normally are resources acquired to support the production process rather than being traceable to individual products or batches of product. However, not all indirect costs are fixed.Some, like indirect materials, are variable. products or batches of product. However,

Exercise 14-12 (25 minutes) Account Balance Sheet Income Statement Schedule of COGM Overhead Report Accounts receivable.............................. Computer supplies used in office........ Beginning finished goods inventory... Beginning work in process inventory.............................................. Cash........................................................ Depreciation expenseFactory building................................................ Depreciation expenseOffice building................................................ Direct labor............................................. Ending work in process inventory....... Beginning work in process inventory.............................................. Cash........................................................ Depreciation expenseFactory building................................................ Depreciation expenseOffice building................................................ Direct labor............................................. Ending work

Problem 14-3A (Continued) Part 2 LEONE COMPANY Income Statement For Year Ended December 31, 2015 Sales................................................................................ $4,462,500 Cost of goods sold Finished goods inventory, December 31, 2014.........$ 167,350 Cost of goods manufactured......................................1,935,650 Goods available for sale..............................................2,103,000 Less finished goods inventory, December 31, 2015....... 136,490 Cost of goods manufactured......................................1,935,650 Goods available for sale..............................................2,103,000 Less finished goods

Problem 14-4B (40 minutes) Part 1 Unit and dollar amounts of raw materials inventory in blades Note: 20,750 pairs of skates require 41,500 blades. Part 2 Topics of discussion for the memorandum include: General description of the JIT inventory system and how it operates. Cutting the blade inventory in half would free up $60,000 of workingcapital (6,000

Taking It to the Net BTN 14-5 1. Standards of Ethical Conduct for Management Accountants are posted at the Web site: http://www.IMAnet.org. These standards (in abbreviated form) are: Competence maintain an appropriate level of professional competence. Confidentiality refrain from disclosing confidential information.Integrity professional behavior at all times; for example, avoid conflictof interest situations.Objectivity communicate information fairly

CHAPTER 15 JOB ORDER COSTING AND ANALYSIS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe important features of job order production. 10, 11, 12, 13 15-1, 15-14 15-1 15-1, 15-2, 15-4, 15-5, 15-6, 15-7, 15-9 C2. Explain job cost sheets and how they are used in

VISUAL #15-1 Tracing Product Costs Through a Cost Accounting System Work in Process Finished Goods Materials Inventory Inventory Inventory (1) Buy Send (2) (2) Direct (7) Goods (7) Cost of (8) Goods (Cr. A/P) materials material completed Finished Sold to factory costs Goods (4) Direct labor costs (6) Overhead costs Factory Overhead Factory Payroll Cost of Goods Sold (2) Indirect (6) Overhead (3) Labor

Chapter 15 Job Order Costing and Analysis QUESTIONS 1. Factory overhead is not identified with specific units (jobs) or batches (job lots). Therefore, to assign costs, estimates of the relation between factory overhead cost and job or job lot are necessary. Also, since job order cost accounting is a perpetualsystem, we need to estimate a

Exercise 15-4 (15 minutes) 1. Rate = = = 130% 2. Direct materials.................................................................................. $15,350 Direct labor......................................................................................... 3,200 Factory overhead ($3,200 x 130%)................................................... 4,160 Total cost of Job No. 13-56................................................................ $22,710 Factory overhead ($3,200 x 130%)................................................... 4,160 Total cost of Job No. 13-56................................................................ $22,710 Factory overhead ($3,200 x 130%)................................................... 4,160 Total cost of Job No. 13-56................................................................ $22,710 Exercise 15-5

Exercise 15-17 (20 minutes) 1. a. Work in Process Inventory............................................9,500 Raw Materials Inventory.......................................... 9,500 To record direct materials used. b. Work in Process Inventory............................................8,000 Factory Payroll Payable........................................... 8,000 To record direct labor used.c. Work in Process Inventory............................................6,400 Factory Overhead..................................................... 6,400 To apply overhead at 80% of direct labor cost. b. Work in Process

Problem 15-2A (concluded) Part 5 This $5,600 error would cause the costs for Job 404 to be understated. Since Job 404 is in process at the end of the period, work in process inventory and total assets would both be understated on the balance sheet. In addition, the over- or underapplied overhead would change

PROBLEM SET B Problem 15-1B (80 minutes) Part 1 Total manufacturing costs and the costs assigned to each job 114 115 116 Sept. Total From August Direct materials................................$ 14,000 $ 18,000 Direct labor.......................................18,000 16,000 Applied overhead*............................ 9,000 8,000 Beginning goods In process......................................41,000 42,000 $ 83,000For SeptemberDirect materials................................100,000 170,000 $ 80,000 350,000 Applied overhead*............................ 9,000 8,000 Beginning goods In process......................................41,000

Problem 15-3B (Concluded) Part 2 a. Raw Materials Inventory................................................125,000 Accounts Payable.................................................... 125,000 To record materials purchases. Accounts Payable.................................................... 125,000 To record materials purchases. Accounts Payable.................................................... 125,000 To record materials purchases. b. Work in Process Inventory............................................80,000 Factory Overhead...........................................................12,000 Raw Materials Inventory.......................................... 92,000 To record direct & indirect materials. c. Factory Overhead...........................................................11,000 Cash........................................................................... 11,000 To record other

SERIAL PROBLEM SP 15 Serial ProblemSP 15, Business Solutions (40 minutes) 1.The cost of direct materials requisitioned in the month equals the total direct materials costs accumulated on the three jobs less the amount of direct materials cost assigned to Job 602 in May: Job 602 ...........................................................................$1,500 Less prior costs............................................................. (600 ) $ 900 Job 603 ...........................................................................

CHAPTER 16 PROCESS COSTING AND ANALYSIS Related Assignment Materials Student Learning Objectives Discussion Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Explain process operations and the way they differ from job order operations. 2, 3, 15,16 16-1, 16-3 16-1, 16-2, 16-3 16-2, 16-3, 16-4, 16-5, 16-6, 16-9 C2. Define equivalent units and explain

Chapter Outline 3. Sources of amounts used in cost reconciliation: a. Cost assigned to units completed during the period equals: i. Direct material cost assigned during the period (equivalent units in units completed for direct materials x the related equivalent cost per unit). ii. Conversion cost assigned during the period (equivalent units in

Chapter 16 Process Costing and Analysis QUESTIONS 1. The main deciding factor in choosing between a job order costing system or a process costing system is the type of product or service. Examples where a process costing system is likely appropriate include chemicals, cleaning fluids, mail processing, and oil refinement. Examples where a job order costing

Quick Study 16-21 (15 minutes) Equivalent units under the FIFO method Equivalent EUP for materialsFIFO Units Equivalent units to complete beginning WIP (2,000 x 30%)............. 600 Equivalent units started and completed*............................................15,000 Equivalent units in ending WIP (3,000 x 80%)..................................... 2,400 Equivalent units of production............................................................. 18,000 Equivalent units in ending WIP (3,000 x 80%)..................................... 2,400 Equivalent units

Exercise 16-10 (20 minutes) 1. Units Units Units in beginning inventory 60,000 60,000 60,000 Units started 322,000 322,000 240,000 Units in ending inventory (82,000) 382,000 300,000 Units transferred out 300,000 82,000 Units started 322,000 322,000 240,000 Units in ending inventory (82,000) 382,000 300,000 Units transferred out 300,000 82,000 Units started 322,000 322,000 240,000

Exercise 16-19 (20 minutes) [Note: Solution key is on the following page.] Punching Bending Warehouse 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Notauthorized for sale or distribution in any manner. This document may not be copied, scanned,duplicated, forwarded, distributed, or posted on a website, in whole or part.Solutions

Problem 16-2A (Concluded) Part 4 MEMORANDUM TO: FROM: DATE: RE: Percentage of Completion Error Analysis If the units in ending inventory are 60% complete instead of 30% with respect to conversion, the number of equivalent units in ending inventory with respect to conversion is understated, and the total equivalent unitsproduced for the period is also understated. If the correct

Problem 16-7A (Continued) Cost per EUP Direct Materials Conversion Costs incurred this period.................. $ 248,400 $1,082,970 EUP..................................................... 21,600 22,920 Cost per EUP........................................ $11.50 per$47.25 per EUP..................................................... 21,600 22,920 Cost per EUP........................................ $11.50 per$47.25 per EUP..................................................... 21,600 22,920 Cost per EUP........................................ $11.50 per $47.25 per EUP EUP Cost assignment and reconciliation Costs transferred out Cost of beginning Work

Problem 16-5B (80 minutes) Part 1 SWITCH COMPANY Process Cost Summary FIFO Method For Month Ended January 31 Costs Charged to Production Costs of beginning work in process Direct materials................................................................. $ 7,500 Conversion......................................................................... 49,840 $ 57,340 Costs incurred this period Direct materials................................................................. 112,500 Conversion......................................................................... 616,000 728,500 Total costs to account for................................................... $785,840 Conversion......................................................................... 616,000 728,500 Total costs

Comprehensive Problem (Continued) (Using weighted-average) Cost assignment and reconciliation Costs transferred out Direct materials (11,000 EUP x $2.90 per EUP)...................$ 31,900 Conversion (11,000 EUP x $21.75 per EUP)......................... 239,250 $271,150 Costs of ending Work in Process Direct materials (8,000 EUP x $2.90 per EUP)..................... 23,200 Conversion (3,200 EUP x $21.75 per EUP)........................... 69,600 92,800

Reporting in Action BTN 16-1 1. These costs are part of getting the products that Apple sells to its customers and costs to fulfill warranties to its customers. Appleconsiders these costs to be as much a cost of its products as theactual cost to make the items themselves. customers and costs to fulfill

CHAPTER 17 ACTIVITY-BASED COSTING AND ANALYSIS Related Assignment Materials Student Learning Objectives Discussion Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Distinguish among the plant wide overhead rate method, the departmental overhead rate method, and the activity-based costing method. 1, 2, 3, 4 17-1, 17-2 C2. Explain cost flows for activity- based costing. 10, 12, 13, 14, 15,

Exercise 17-8 (25 minutes) 1. Components $1,004,000/6,000 MH $167.33/machine hour* Finishing $465,300/3,000 WH $155.10/welding hourSupport $232,000/450 PO $515.56/purchase order* Finishing $465,300/3,000 WH $155.10/welding hourSupport $232,000/450 PO $515.56/purchase order* Finishing $465,300/3,000 WH $155.10/welding hour Support $232,000/450 PO $515.56/purchase order* *rounded Model 145 Model 212 Component Overhead 1,800 MH x $167.33/MH $ 301,194* 4,200 MH x $167.33/MH $ 702,786* Finishing 800 WH x $155.10/WH

Exercise 17-15 (40 minutes) Part 1 Determination of cost per driver unit Cost Center Cost Driver Cost per Driver Professional salaries.......................$1,600,000 10,000 hours $160 per hour Patient services & supplies............. $ 27,000 600 patients $45 per patientBuilding cost.....................................$ 150,000 1,500 sq. ft. $100 per sq. ft.Total costs.........................................$1,777,000 Patient services & supplies............. $ 27,000 600 patients

Problem 17-5A (45 minutes) 1. Plantwide overhead rate: Total overhead cost = $128,250 + $268,000 + $182,000 = $578,250 . Total volume 20,000 + 100,000 cases 120,000 cases = $4.82/case (rounded)Using this plantwide rate, the same overhead cost would be assigned toeach case of salsa, regardless of whether it is Extra Fine or

Problem 17-5B (continued) 4. Pattern alignment $64,400/560 batches $115/batch Cutting $50,430/12,300 machine hours $4.10/MH Moving product $100,800/2,400 moves $42/move Sewing $327,600/4,200 direct labor hours $78/DLH Inspecting $24,000/600 inspections $40/inspectionFolding $47,880/22,800 units $2.10/unitDesign $280,000/280 mod. orders $1,000/mod.orderProviding space $51,600/8,600 square feet $6/sq. ft.Material handling $184,000/920,000 square yards $0.20/sq. yd. Inspecting $24,000/600 inspections $40/inspectionFolding $47,880/22,800 units $2.10/unitDesign $280,000/280

CHAPTER 18 COST BEHAVIOR AND COST-VOLUME-PROFIT ANALYSIS Related Assignment Materials Student Learning Objectives Discussion Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe different types of cost behavior in relation to production and sales volume. 1,2, 3, 5, 10, 12, 19 18-1, 18-2, 18-1, 18-2, 18-3 18-1, 18-3, 18-5,

Chapter Outline C. Sensitivity Analysisknowing the effects of changing some estimates used in CVP analysis by substituting new estimated amounts (in total or per unit as appropriate) in the related formula can be helpful in making predictions. Can also use the contribution margin income statement. D. Multiproduct Break-Even PointModify basic CVP analysis

Chapter 18 Cost Behavior and Cost-Volume-Profit Analysis QUESTIONS 1. A variable cost is one that varies proportionately with the volume of activity. For example, direct materials and direct labor (when the workers are paid for completed example, direct materials and direct labor (when the workers are paid for completed example, direct materials and direct labor

Exercise 18-5 (20 minutes) The scatter diagram and its estimated line of cost behavior appear below. The cost pattern appears to exhibit a step-wise pattern. 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Notauthorized for sale or distribution in any manner. This document may not be copied, scanned,duplicated,

Exercise 18-23 (25 minutes) 1. Selling price per composite unit 5 Easy returns @ $50 each............................................................. $ 250 3 Moderate returns @ $125 each.................................................... 3752 Business returns @ $275 each....................................................Selling price per composite unit.................................................... 550 $1,175 3 Moderate returns @ $125 each.................................................... 3752 Business returns @ $275 each....................................................Selling price per composite unit.................................................... 550

Problem 18-5A (65 minutes) Part 1 Instructor note: Use the equation in Exhibit 18.12 Break-even in dollar sales = Fixed costs / Contribution margin ratio Product T: = $125,000 / 20%*= $625,000Product O:= $1,475,000 / 87.5%*= $1,685,714 (rounded to the nearest dollar) = $125,000 / 20%*= $625,000Product O:= $1,475,000 / 87.5%*= $1,685,714 (rounded to

Problem 18-4B (75 minutes) Part 1 Instructor note: Use the equation in Exhibit 18.12 2015 break-even in dollar sales = Fixed costs / Contribution margin ratio = $200,000 / 20%* = $1,000,000*To compute contribution margin ratioSales price per unit ($750,000 / 20,000)....................................................................$37.50Variable costs per unit ($600,000 / 20,000)...............................................................$30.00Contribution margin ratio ($37.50- $30) / $37.50).....................................................

in fixed assets can lower variable costs (as is the case here), which lowers its break-even point, making it easier to make a profit with less sales. 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Notauthorized for sale or distribution in any manner. This document may not

CHAPTER 19 VARIABLE COSTING AND PERFORMANCE REPORTING Student Learning Objectives and Related Assignment Materials* Student Learning Objectives Discussion Questions Quick Studies Exercises Problems** (A & B set) Beyond the Numbers Conceptual objectives: C1. Describe how absorption costing can result in overproduction. 2, 3, 4, 5, 8 19-16 19-12 19-3 19-3 C2. Explain the role of variable costing in pricing special orders. 6 19-18 Analytical objectives:

Chapter 19 Variable Costing and Analysis QUESTIONS 1. Variable costing includes direct materials, direct labor, and variable overhead as product costs. Fixed overhead is treated as a period cost and is not included as aproduct cost. product costs. Fixed overhead is treated as a period cost and is not included as aproduct cost. product costs. Fixed

Quick Study 19-17 (10 minutes) Per unit Direct materials............................................................................................ $50 Direct labor................................................................................................... 12 Variable overhead........................................................................................ 6 Fixed overhead............................................................................................. 2 Total production cost using absorption costing...................................... $70Target profit ($70 x 40%). 28Target selling price $98 Fixed overhead............................................................................................. 2 Total production cost using absorption costing...................................... $70Target profit ($70 x 40%). 28Target selling price $98 Fixed overhead............................................................................................. 2 Total production

Exercise 19-8 (concluded) Part 2 The company sold 170 ATVs and its contribution margin totals $265,200 for the year. Consequently, the contribution of each ATV toward covering fixedcosts and toward earning income was $1,560 ($265,200 170 ATVs). We the year. Consequently, the contribution of each ATV toward covering fixedcosts and toward earning income was

Problem 19-2B (25 minutes) Part 1 ELONTE COMPANY Variable Costing Income Statement Sales (250,000 x $18)............................................................... $4,500,000 Variable expenses Variable production costs (250,000 x $6*)...........................$1,500,000 Variable selling & admin. expenses (250,000 x $4)............. 1,000,000 Total variable expenses......................................................... 2,500,000 Contribution margin................................................................. 2,000,000 Fixed expenses Fixed manufacturing costs...................................................450,000 Fixed selling & administrative expenses............................. 1,200,000 Total fixed

CHAPTER 2 ACCOUNTING FOR BUSINESSTRANSACTIONS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Explain the steps in processing transactions and the role of source documents. 3, 6, 9 2-1 2-1 2-6 2-3, 2-4, 2-6, 2-9C2. Describe an account and its use in recording transactions. 1,2, 14 2-2 2-2 2-5

Exercise 2-8 (30 minutes) Cash Photography Equipment Aug. 1 6,500 Aug. 2 2,100 Aug. 1 33,500 Aug. 1 6,500 Aug. 2 2,100 Aug. 1 33,500 Aug. 1 6,500 Aug. 2 2,100 Aug. 1 33,500 20 3,331 5 880 31 675 Common Stock Balance 6,176 Aug. 1 40,000 Balance 6,176 Aug. 1 40,000 Balance 6,176 Aug. 1 40,000 Office Supplies

Exercise 2-21 (15 minutes) a. The debit column is correctly stated because the erroneous debit (to Accounts Payable) is deducted from an account with a (larger assumed) credit balance. b. The credit column is understated by $37,900 because Accounts Payablewas debited it should have been credited. b. The credit column is understated by $37,900 because

Problem 2-2A (Concluded) Part 3 ARACEL ENGINEERING Trial Balance June 30 Debit Credit Cash............................................................. $ 22,945 Accounts receivable.................................. 29,000 Prepaid insurance...................................... 3,000 Office equipment........................................ 6,150 Drafting equipment.................................... 80,000 Building....................................................... 55,000 Land............................................................. 49,000 Accounts payable....................................... $ 1,333 Notes payable............................................. 53,200 Common stock........................................... 165,000 Dividends.................................................... 9,480 Engineering fees earned............................ 42,200 Wages expense........................................... 2,400 Equipment rental expense......................... 1,333

Problem 2-5A (90 minutes) Part 1 NETTLE DISTRIBUTION Balance Sheet December 31, 2014 Assets Liabilities Cash............................... $ 64,300 Accounts payable................$ 3,500 Accounts receivable.... 26,240 Office supplies.............. 3,160 Trucks............................ 148,000 EquityOffice equipment.......... 44,000 Total equity........................... 282,200Total assets................... $285,700 Total liabilities and equity... $285,700 Office supplies.............. 3,160 Trucks............................ 148,000 EquityOffice equipment.......... 44,000 Total equity........................... 282,200Total assets................... $285,700 Total liabilities

Problem 2-2B (Concluded) Part 3 SOFTWORKS Trial Balance April 30 Debit Credit Cash .............................................................. $ 17,262 Accounts receivable..................................... 9,350 Prepaid insurance......................................... 5,000 Office equipment........................................... 6,700 Computer equipment.................................... 34,500 Building.......................................................... 34,500 Land............................................................... 22,000 Accounts payable......................................... $ 580 Notes payable................................................ 20,700 Common stock.............................................. 100,750Dividends....................................................... 6,230 Fees earned................................................... 19,050Wages expense............................................. 3,600 Computer rental expense............................. 580 Advertising expense..................................... 750 Repairs

Debt ratio = $262,000 / $412,000 = 63.6%2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Notauthorized for sale or distribution in any manner. This document may not be copied, scanned,duplicated, forwarded, distributed, or posted on a website, in whole or part.Solutions Manual, Chapter 2 119 Debt

Serial Problem SP 20 Serial Problem, Business Solutions (50 minutes) Part 1 BUSINESS SOLUTIONS Budgeted Income Statements For Months of April, May, and June April May June Sales*......................................................... $69,600 $75,550 $81,500 Cost of goods sold**................................ 54,000 57,750 61,500 Gross profit............................................... 15,600 17,800 20,000 Expenses Sales commissions (10%)...................... 6,960 7,555 8,150 Advertising ($3,000 x 1.10).................... 3,300 3,300 3,300Other fixed expenses.............................

Quick Study 20-19 (10 minutes) GUITAR SHOPPE Cash Receipts Budget For Month Ended September 30 Cash receipts from September cash sales (40% x $170,000)............ $ 68,000 Collection of prior months receivables (60% x $150,000)................. 90,000 Total cash receipts................................................................................. $158,000 Collection of prior months receivables (60% x $150,000)................. 90,000 Total cash receipts................................................................................. $158,000 Collection of prior months receivables

Exercise 20-9 (15 minutes) 1. RAD CO. Direct Labor Budget For April, May, and June April May June Budgeted production (units)....................... 442 570 544 Direct labor hours per unit.......................... x 0.50 x 0.50 x 0.50 Total labor hours needed............................. 221 285 272 Labor rate (per hour).................................... x $16 x $16 x $16Labor cost..................................................... $3,536 $4,560 $4,352

Exercise 20-22 (30 minutes) Mike's Motors Corp. Cash Budget For July, August, and September July August September Beginning cash balance $34,000 $30,000 $30,000 Cash receipts 85,000 111,000 150,000 Total cash available 119,000 141,000 180,000 Cash disbursements (113,000) (99,900) (127,400) Interest expense (2% per month) 0 (480) (268) Preliminary cash balance 6,000 40,620 52,332 Additional loan (loan

Exercise 20-30 (continued) CASTOR, INC. Cash Receipts Budget For April, May, and June April May June Sales.............................................................. $32,000 $40,000 $24,000 Less ending accts. receivable (50%).......... 16,000 20,000 12,000 Cash receipts from Cash sales (50% of sales) ........................... 16,000 20,000 12,000 Collections of prior months receivables...... 12,000 16,000 20,000 Total cash receipts ......................................$28,000 $36,000 $32,000 Cash

Problem 20-4A (130 minutes) Part 1 ZIGBY MANUFACTURING Sales Budgets April, May, and June 2015 Budgeted Units Budgeted Unit Price Budgeted Total Dollars April 2015..............................................................20,500 $23.85 $ 488,925 May 2015...............................................................19,500 23.85 465,075 June 2015..............................................................20,000 23.85 477,000 Total for the second quarter................................60,000 $1,431,000 June 2015..............................................................20,000 23.85 477,000 Total for the second quarter................................60,000 $1,431,000 June 2015..............................................................20,000 23.85 477,000 Total for the second quarter................................60,000 $1,431,000 Part 2 ZIGBY MANUFACTURING Production Budget April,

Problem 20-7A (Continued) Part 4 Cash payments on product purchases (for June and July) From purchases in Total % Paid June July May................................................$308,000 40% $123,200 June...............................................638,000 60 382,800 ................................................. 40 $255,200 July................................................523,600 60 ________ 314,160 Total paid....................................... $506,000 $569,360 July................................................523,600 60 ________ 314,160 Total paid....................................... $506,000 $569,360 July................................................523,600 60 ________ 314,160 Total paid....................................... $506,000 $569,360 Part 5 AZTEC COMPANY Cash Budget June

Problem 20-2B (continued) (2) A1 MANUFACTURING Cash Budget For July, August, and September July August Sept. Beginning cash balance*............................. $12,900 $12,600 $24,371 Cash receipts (from part 1).......................... 59,680 66,840 74,200 Total cash available ..................................... 72,580 79,440 98,571 Cash disbursements Payments for direct materials..................... 12,480 9,900 10,140 Payments for direct labor............................ 10,400 8,250 8,450 Payments for

Problem 20-6B (50 minutes) SONY STEREO Cash Budgets For April, May, and June April May June Beginning balance.......................................... $ 3,000 $ 53,000 $ 44,000 Cash receipts Collection on accounts receivable*............ 136,000 210,000 290,200 Receipts from bank loan.............................. 80,000 _______ _______Total cash available........................................ 219,000 263,000 334,200Cash disbursements Collection on accounts receivable*............ 136,000 210,000 290,200 Receipts from

Chapter Outline 5. To help identify factors causing the overhead cost variance managers will analyze the variance separately for controllable and volume variances. a. The controllable variance is the difference between the actual overhead costs incurred and the budgeted overhead costs based on a flexible budget; named because it refers to activities

(Total variable overhead variance) Quick Study 21-20 (15 minutes) Sales Actual Flexible Budget Fixed Budget Units 50 50 45 Price per unit $9,000 $9,500 $9,500 Total dollars(50 x $9,000) (50 x $9,500) (45 x $9,500)$450,000 $475,000 $427,500 $25,000 U $47,500 F (Sales price variance) (Sales volume variance) Total dollars(50 x $9,000) (50 x $9,500) (45 x $9,500)$450,000

Exercise 21-13 (30 minutes) 1. Preliminary computations Actual quantity: 22,000 bd. ft. (given) Standard quantity: 3,000 units x 8 bd. ft./unit = 24,000 bd. ft. Actual price: $266,200/22,000 bd. ft. = $12.10/bd. ft. Standard price: $12.00/bd. ft. (given) Direct material cost variancesActual units at actual cost [22,000 bd. ft. @ $12.10].................................$266,200Standard units at standard cost

EX Exercise 21-21 (25 minutes) Preliminary calculations: Variable overhead rate per DL hour = $48,000/24,000 = $2 per hour Fixed overhead rate per DL hour = $44,400/24,000 = $1.85 per hour Fixed overhead rate per DL hour = $44,400/24,000 = $1.85 per hour Fixed overhead rate per DL hour = $44,400/24,000

Problem 21-3A (60 minutes) Part 1 Variable or Fixed Classification Amount Variable costs (total divided by 15,000 units) Indirect materials............................................................................. $ 3.00 Indirect labor.................................................................................... 12.00 Power................................................................................................ 3.00 Repairs and maintenance............................................................... 6.00 Power................................................................................................ 3.00 Repairs and maintenance............................................................... 6.00 Power................................................................................................ 3.00 Repairs and maintenance............................................................... 6.00 Total variable costs.......................................................................... $ 24.00 Fixed costs (per month) DepreciationBuilding...................................................................

Problem 21-1B (Continued) Part 2 TOHONO COMPANY Flexible Budgets For Year Ended December 31, 2015 Flexible Budget Flexible Flexible Variable Amount per Unit Total Fixed Cost Budget for Unit Sales of 18,000 Budget for Unit Sales of 24,000 Sales...................................... $150.00 $2,700,000 $3,600,000 Variable costs Direct materials................. 60.00 1,080,000 1,440,000Direct labor........................ 13.00 234,000 312,000Machinery repairs.............. 2.85 51,300 68,400Utilities............................... 2.50 45,000 60,000Packaging.......................... 4.00 72,000 96,000 Direct materials................. 60.00

Problem 21-4B (Continued) Part 3 Overhead Variances Overhead controllable variance Actual overhead incurred [$1,960,000 + $1,200,000]................$ 3,160,000 Budgeted overhead [from flexible budget]................................ 3,276,000Controllable overhead cost variance.........................................$ 116,000 F Budgeted overhead [from flexible budget]................................ 3,276,000Controllable overhead cost variance.........................................$ 116,000 F Budgeted overhead [from flexible budget]................................ 3,276,000 Controllable overhead cost variance.........................................$ 116,000 F Fixed overhead volume variance Budgeted fixed overhead

Reporting in Action BTN 21-1 1. For foreign subsidiaries that do not use the U.S. dollar as their functional currency, Apple reports the annual adjustment (translation gains and losses) as a component of Accumulated Other Comprehensive Income(AOCI) in the shareholders equity section of its consolidated balancesheet. losses) as a component of Accumulated Other

Average invested assets = (12,888 + 13,099) / 2 = 12,944 (rounded) = 12,944 (rounded) = 12,944 (rounded) Return on investment (assets) = 3,385 / 12,944 = 26.05% (rounded)2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may

Exercise 22-11 (20 minutes) (1) Investment center Operating income Average assets* Return on investment Beverage....................... $349 $2,628 13.28% Cheese........................... 634 4,428 14.32% Cheese........................... 634 4,428 14.32% Cheese........................... 634 4,428 14.32% (2) Investment center Operating income Sales Profit margin Beverage....................... $349 $2,681 13.02% Cheese........................... 634 3,925 16.15% Cheese........................... 634 3,925 16.15% Cheese........................... 634 3,925 16.15% (3) Investment center Sales Average assets* Investment turnover Beverage....................... $2,681 $2,628 1.02 Cheese........................... 3,925 4,428 0.89 Cheese........................... 3,925 4,428 0.89 Cheese........................... 3,925

Problem 22-2A (Continued) Value-based costs are allocated to departments in two steps (i) Compute market value of each floor Floor Square Footage Value per Sq. Ft. Total First floor.................................4,000 $30 $120,000 Second floor...........................4,000 20 80,000 Total market value.................. $200,000 (ii) Allocate $54,000 to each floor based on its percent of market value Floor Market Value % of Total Allocated Cost Cost per Sq. Ft. First floor.................................$120,000

Reporting in Action BTN 22-1 1. Apple revenues by product line ($ in millions) September 28, 2013 September 29, 2012 September 24, 2011 Total revenues..............................................$170,910 $156,508 $108,249 iPhone* (53%)............................................... 90,583 82,949 57,373 iPad and iPod (21%)..................................... 35,891 32,867 22,732Mac (13%)...................................................... 22,218 20,346 14,072iTunes, Software and Services, and 22,218 20,346 14,072 iPad and iPod (21%)..................................... 35,891 32,867 22,732Mac (13%)...................................................... 22,218 20,346 14,072iTunes, Software

CHAPTER 23 RELEVANT COSTING FOR MANAGERIAL DECISIONS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe the importance of relevant costs for short-term decisions. 23-1,23-2, 23-3, 23-4, 23-5, 23-7, 23-8 23-5 23-1 23-1, 23-2, 23-3, 23-9 Analytical objectives: A1. Evaluate short-term managerial decisions using relevant costs. 23-9 23-2, 23-4, 23-6, 23-7, 23-8,

Exercise 23-4 (20 minutes) Make Buy Variable costs (65,000 @ $1.95).......................... $126,750 ---- Incremental fixed costs....................................... Cost to buy (65,000 @ $3.25) ............................. --- $211,250 Cost to buy (65,000 @ $3.25) ............................. --- $211,250 Cost to buy (65,000 @ $3.25) ............................. --- $211,250 75,000 Total....................................................................... $201,750 $211,250 Total....................................................................... $201,750 $211,250 Total....................................................................... $201,750 $211,250 RECOMMENDATION : Note that the allocated fixed costs

Problem 23-3A (30 minutes) Part 1 INCREMENTAL COST OF MAKING RX5 Variable costs: Direct materials (50,000 units x $5.00 per unit)............................ $250,000 Direct labor (50,000 units x $8.00 per unit)................................... 400,000 Variable overhead ($450,000* x 20%)............................................ 90,000Total incremental cost of making 50,000 units................................ $740,000 Variable overhead ($450,000* x 20%)............................................ 90,000Total incremental cost of

Problem 23-2B (concluded) Total overhead................................................................ $1,375,000 Fixed overhead (20%)..................................................... 275,000 Variable overhead........................................................... $1,100,000Units of output................................................................ 550,000Cost per unit................................................................... $ 2.00New business volume.................................................... 50,000 Variable overhead........................................................... $1,100,000Units of output................................................................ 550,000Cost per unit................................................................... $ 2.00New business volume.................................................... 50,000 Variable overhead........................................................... $1,100,000 Units of output................................................................ 550,000 Cost per unit................................................................... $ 2.00 New business volume.................................................... 50,000 New business variable overhead cost.......................... $ 100,000 Total

Problem 23-6B (Continued) Part 3 ESME COMPANY Reconciliation of Combined Income with Forecasted Income Combined net income ............................................................................$ 48,600 Less Dept. Z's lost sales........................................................................(175,000) Plus Dept. Zs eliminated expenses...................................................... 181,960Forecasted net income...........................................................................$ 55,560 Plus Dept. Zs eliminated expenses...................................................... 181,960Forecasted net income...........................................................................$ 55,560 Plus Dept. Zs eliminated expenses...................................................... 181,960 Forecasted net income...........................................................................$ 55,560 ANALYSIS Department Z's avoidable expenses of $181,960 are $6,960

CHAPTER 24 CAPITAL BUDGETING AND INVESTMENT ANALYSIS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Analytical objectives: A1. Analyze a capital investment project using break-even time. 24 24-15 24-16 24-5, 24-6 Procedural objectives: A1. Analyze a capital investment project using break-even time. 24 24-15 24-16 24-5, 24-6 Procedural objectives: A1.

Chapter Outline 4. When cash flows are unequal, trial and error must be used; select any reasonable discount rate and compute the NPV. a. If amount is positive, recompute NPV using higher discount rate; if amount is negative, recompute NPV using lower discount rate. b. Continue steps until two consecutive computations result in NPVs

Chapter 24 Capital Budgeting and Investment Analysis QUESTIONS 1. Capital budgeting decisions require careful analysis because they are generally the most difficult and risky decisions that management faces. the most difficult and risky decisions that management faces. the most difficult and risky decisions that management faces. 2. Capital budgeting is the process of planning the acquisition

Exercise 24-5 (20 minutes) a. Payback period = = = 2.21 years where Annual after-tax income...................................................................$150,000Plus depreciation*............................................................................. 85,000 Annual after-tax income...................................................................$150,000Plus depreciation*............................................................................. 85,000 Annual after-tax income...................................................................$150,000 Plus depreciation*............................................................................. 85,000 Annual net cash flow........................................................................$235,000 *Annual depreciation = = $85,000 b. Payback period = = = 3.62 years where Annual after-tax income...................................................................$ 60,000Plus depreciation*............................................................................. 45,000Annual net cash flow........................................................................$105,000*Annual depreciation = = $45,000$380,000 -

PROBLEM SET A Problem 24-1A (50 minutes) Part 1 Annual straight-line depreciation = = $115,000 Annual straight-line depreciation = = $115,000 Annual straight-line depreciation = = $115,000 Part 2 Net Net Cash Income Flow Expected annual sales of new product...................$1,840,000 $1,840,000 Expected costs of new product Direct materials...................................................... (480,000) (480,000) Direct labor............................................................. (672,000) (672,000) Overhead excluding depr. on new asset..............

Problem 24-6A (Concluded) Part 5 While the total cash flows are identical to those in Problem 24-5A, the cash flows are reversed, with the largest cash flows coming in the early years of the project. This will shorten the payback period and the break-even time.In addition, it will increase the net present value of

Problem 24-6B (40 minutes) Part 1: Payback period Period Cash flow Cumulative cash flow 0.............................................................................$(800,000) $(800,000) 1.............................................................................450,000 (350,000) 2.............................................................................400,000 50,0003.............................................................................350,000 400,0004.............................................................................300,000 700,000$350,000 / $400,000 = 0.9 (rounded) 2.............................................................................400,000 50,0003.............................................................................350,000 400,0004.............................................................................300,000 700,000$350,000 / $400,000 = 0.9 (rounded) 2.............................................................................400,000 50,000 3.............................................................................350,000 400,000 4.............................................................................300,000 700,000 $350,000 / $400,000 = 0.9 (rounded) The payback period is about 1.9 years. Part 2: Break-even time Period Cash Flow Present

Taking It to the Net BTN 24-5 Period Cash flow Cumulative cash flow 0.............................................................................$(15,000) $(15,000) 1.............................................................................1,000 (14,000) 2.............................................................................2,000 (12,000)3.............................................................................3,000 (9,000)4.............................................................................6,000 (3,000)5.............................................................................7,000 4,000 2.............................................................................2,000 (12,000)3.............................................................................3,000 (9,000)4.............................................................................6,000 (3,000)5.............................................................................7,000 4,000 2.............................................................................2,000 (12,000) 3.............................................................................3,000 (9,000) 4.............................................................................6,000 (3,000) 5.............................................................................7,000 4,000 $3,000/$7,000 = 0.43 The project has a payback period of 4.43 years, about 1.77 years more than the original cash flows provided on the website. Present Present Value of Net

CHAPTER 3 ADJUSTING ACCOUNTS FOR FINANCIAL STATEMENTS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Explain the importance of periodic reporting and role of accrual accounting. 1, 2, 3, 20 3-1, 3-2 3 3-3, 3-73-8, 3-9C2. Identify steps in the accounting cycle. 20 3-23C3. Explain and prepare

VISUAL #3-1 ACCRUAL BASIS ACCOUNTING (Follows GAAP) Requires that the Income Statement (for a period) report ALL REVENUES EARNED in period (Collected or Not) Minus ALL EXPENSES INCURRED in period (Paid or Not) Equals Net Income or Net Loss for the period ACCOUNTS MUST BE ADJUSTED TO FOLLOW PRINCIPLES Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution

Chapter 3 Adjusting Accounts for Financial Statements QUESTIONS 1. The cash basis of accounting reports revenues when cash is received while the accrualbasis reports revenues when they are earned. The cash basis reports expenses whencash is paid while the accrual basis reports expenses when they are incurred andmatched with revenues they generated. 1.

Serial Problem, SP 3 (Continued) Part 4 BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2015 Revenue Computer services revenue....................................... $31,284 Expenses Depreciation expenseOffice equipment................ $ 400 Depreciation expenseComputer equipment......... 1,250 Wages expense........................................................... 3,875 Insurance expense...................................................... 555 Rent expense............................................................... 2,475 Computer supplies expense...................................... 3,065 Advertising expense................................................... 2,753 Mileage expense.........................................................

Reporting in Action BTN 3-1 1. The revenue recognition principle requires that revenue be recorded when realized or realizable and earned, not before and not after. Most companiesearn revenue when they provide services and products to customers. realized or realizable and earned, not before and not after. Most companiesearn revenue when they provide

Quick Study 3-15 (15 minutes) Accounts Debited and Credited Financial Statement a. Debit Unearned Revenue Balance Sheet Credit Revenue Earned Income Statement b. Debit Wages Expense Income Statement Credit Wages Payable Balance Sheet c. Debit Accounts Receivable Balance SheetCredit Revenue Earned Income Statementd. Debit Insurance Expense Income StatementCredit Prepaid Insurance Balance Sheete. Debit Depreciation Expense Income

Exercise 3-4 (30 minutes) a. Unearned Fee Revenue..................................................... 5,000 Fee Revenue.................................................................. 5,000 To record earned portion of fee received in advance ($15,000 x 1/3). b. Wages Expense................................................................. 8,000 Wages Payable.............................................................. 8,000 To record wages accrued but not yet paid. c. Depreciation ExpenseEquipment................................. 18,000Accumulated DepreciationEquipment..................... 18,000To record depreciation expense for the year.d. Office Supplies Expense.................................................. 5,000Office Supplies*............................................................. 5,000To

Exercise 3-15C (30 minutes) 1. Adjusting entries Oct. 31 Rent Expense................................................ 2,800 Rent Payable.......................................... 2,800 To record accrued rent expense. 31 Rent Receivable............................................ 850 Rent Earned........................................... 850 To record accrued rent income. 2. Subsequent entries without reversing Nov. 5 Rent Payable................................................. 2,800Rent Expense................................................ 2,800Cash........................................................ 5,600To record payment of 2 months rent. 8 Cash............................................................... 1,700Rent Receivable..................................... 850Rent

Problem 3-4A (Continued) Part 2 JKL COMPANY Income Statement For Year Ended July 31, 2015 Revenues Consulting fees earned ................................ $134,240 Expenses Depreciation expenseOffice equipment. . $ 6,000 Salaries expense .......................................... 74,000 Interest expense ........................................... 2,200 Insurance expense ....................................... 5,580 Rent expense ................................................ 14,500 Office supplies expense .............................. 14,000 Advertising expense ....................................

Problem 3-6A (Continued) Part 6 Closing entries April 30 Commissions Earned...................................405 9,750 Income Summary..................................901 9,750 To close the revenue account. 30 Income Summary..........................................901 7,553 Depreciation ExpComputer Equip.....612 500 Salaries Expense...................................622 3,620 Insurance Expense................................637 133 Rent Expense.........................................640 1,800Office Supplies Expense......................650 400Repairs Expense...................................684 350Telephone Expense...............................688 750To close the expense accounts. 30 Income Summary..........................................901 2,197Retained Earnings.................................318 2,197To close the Income Summary

Problem 3-3B (90 minutes) Parts 1 and 2 Cash Accounts Payable Bal. 60,000 Bal. 11,200 Accounts Receivable Salaries Payable Unadj. Bal. 0Unadj. Bal. 0(f) 5,750 (g) 450Adj. Bal. 5,750 Adj. Bal. 450 Unadj. Bal. 0Unadj. Bal. 0(f) 5,750 (g) 450Adj. Bal. 5,750 Adj. Bal. 450 Unadj. Bal. 0Unadj. Bal. 0 (f) 5,750 (g) 450 Adj. Bal. 5,750 Adj.

Problem 3-5B (50 minutes) Part 1 SPEEDY COURIER Income Statement For Year Ended December 31, 2015 Revenues Delivery fees earned..................................... $611,800 Interest earned............................................... 34,000 Total revenues............................................... $645,800 Expenses Depreciation expenseTrucks.................... 29,000 Depreciation expenseEquipment............. 48,000 Salaries expense........................................... 74,000 Wages expense.............................................. 300,000 Interest expense............................................ 15,000 Office supplies expense............................... 31,000 Advertising expense..................................... 27,200

Problem 3-6B (Continued) Common Stock Acct. No. 307 Date Explanation PR Debit Credit Balance July 1 180,000 180,000 July 1 180,000 180,000 July 1 180,000 180,000 Retained Earnings Acct. No. 318 Date Explanation PR Debit Credit Balance July 31 Closing 2,725 2,725 31 Closing 2,000 725 Dividends Acct. No. 319 Date Explanation PR Debit Credit Balance July 31 2,000 2,000 31

CHAPTER 4 ACCOUNTING FOR MERCHANDISING OPERATIONS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe merchandising activities and identify income components for a merchandising company. 1, 2, 3, 4 4-1, 4-18 4-1, 4-3, 4-13 4-3, 4-5, 4-6, 4-7, 4-8 C2. Identify and explain the inventory asset and cost flows of a merchandising

VISUAL #4-2 COMPONENTS OF NET INCOME (FROM OPERATIONS) Steps: (a) Net Sales X (b) Cost of Goods Sold* X (c) Gross Profit on Sales X (d) Operating Expenses X (e) Net Income (Loss) from Operations X COMPONENTS OF COST OF GOODS SOLDSteps: (a) Inventory, Beginning of Period X(b) +Cost of Goods Purchased + X(c) Cost of

Alternate Demonstration Problem #1 Chapter Four The following data was taken from ledger account balances and supplementary data for the Whisk Company. Whisk Company uses periodic inventory method to account for its inventory. Merchandise inventory, beginning................................................ $ 20,000 Merchandise inventory, ending...................................................... 23,000 Purchases........................................................................................ 215,000 Purchases discounts...................................................................... 6,000 Purchases returns and allowances............................................... 3,000 Sales................................................................................................. 400,000 Sales discounts............................................................................... 3,200 Sales returns and allowances........................................................ 1,800 Transportation-in.............................................................................

EXERCISES Exercise 4-1 (30 minutes) Note: The original missing numbers are blocked. (a) (b) (c) (d) (e) Sales............................. $62,000 $43,500 $46,000 $79,000 $25,600 Cost of goods sold Merch. inv. (beg.)........ 8,000 17,050 7,500 8,000 4,560 Total cost of merch. purchases................. 38,000 1,950 43,750 32,000 6,600 Merch. inv. (end.)........ (11 ,950 ) (3 ,000 ) (9

Exercise 4-12 (10 minutes) Multiple-Step Income Statement Sales Related Information Only Sales (gross)................................................................ $200,000 Less: Sales discounts............................................. $ 4,000 Sales returns and allowances..................... 16 ,000 20,000Net sales....................................................................... 180,000 Sales returns and allowances..................... 16 ,000 20,000Net sales....................................................................... 180,000 Sales returns and allowances..................... 16 ,000 20,000 Net sales....................................................................... 180,000 Exercise 4-13 (20 minutes) The employees oversight in

Problem 4-2A (Concluded) Aug. 15 Cash.................................................................... 4,508 Sales Discounts*................................................ 92 Accounts ReceivableLaird..................... 4,600 Collected receivable within 2% discount period. *[($5,200 - $600) x 2%] 18 Accounts PayableWaters.............................. 4,840Merchandise Inventory *............................ 47Cash............................................................. 4,793Paid payable within discount period*(1% x $4,700). 19 Accounts ReceivableTux............................... 4,800Sales............................................................ 4,800Sold goods on credit, terms 1/10, n/30. 19 Cost of Goods Sold........................................... 2,400Merchandise

PROBLEM SET B Problem 4-1B (40 minutes) May 2 Merchandise Inventory...................................... 10,000 Accounts PayableHavel......................... 10,000 Purchased goods on credit, terms 1/15, n/30. 4 Accounts ReceivableHeather........................ 11,000Sales............................................................ 11,000Sold goods on credit, terms 2/10, n/60. 4 Cost of Goods Sold........................................... 5,600Merchandise Inventory.............................. 5,600To record cost of the May 4 sale. 4 Accounts ReceivableHeather........................ 11,000Sales............................................................ 11,000Sold goods

Problem 4-5B (Concluded) Part 4 Current assets Cash ........................................................................... $ 7,400 Merchandise inventory ............................................. 21,300 Store supplies ........................................................... 3,700 Prepaid insurance ..................................................... 3 ,800 * Total current assets................................................... $ 36,200 Current liabilities.......................................................... $ 18,000 Current ratio ($36,200 / $18,000)..................................... 2.01 *$6,600 - $2,800 = $3,800 Quick assets (Cash in

Serial Problem SP 4 (Continued) Part 2 Ledger accounts as of March 31 before posting of March 31 adjusting entries Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Dec. 31 Balance 48,372 Jan. 4 625 47,747 5 25,000 72,747 9 2,668 75,415 15 600 74,815 16 4,000 78,815

Serial Problem SP 4 (Concluded) Part 6 BUSINESS SOLUTIONS Balance Sheet March 31, 2016 Assets Current assets Cash............................................................................. $ 68,057 Accounts receivable*.................................................. 22,867 Merchandise inventory............................................... 704 Computer supplies...................................................... 2,005 Prepaid insurance....................................................... 1,110 Prepaid rent................................................................. 825 Total current assets.................................................... 95,568 Plant assets Office equipment......................................................... $8,000 Accumulated depreciationOffice equipment........ (800) 7,200 Computer equipment..................................................

CHAPTER 5 INVENTORIES AND COST OF SALES Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Identify the items making up merchandise inventory. 2, 12, 16 5-1, 5-23 5-1 5-8 C2. Identify the costs of merchandise inventory. 3, 15, 17 5-2, 5-23 5-2 5-1, 5-8 Analytical objectives: A1. Analyze the effects

VISUAL #5-2 Schedule of Cost of Goods Available Units Cost* Total Jan. 1 Beginning Inventory 60 @ $10 = $ 600 Mar. 27 Purchase 90 @ 11 = 990 Aug. 15 Purchase 100 @ 13 = 1,300 Nov. 6 Purchase 50 @ 16 = 800 Goods available for sale 300 $3,690 Units in physical count at year

Quick Study 5-22B (15 minutes) Goods available for sale Inventory, January 1.......................................................................$190,000 Cost of goods purchased (net)..................................................... 352,000 Goods available for sale (at cost).................................................542,000 Net sales at retail.............................................................................. $685,000Estimated cost of goods sold [$685,000 x (1 - 44%)].......................... (383,600 )Estimated September 5 inventory destroyed................................$158,400 Net sales at retail.............................................................................. $685,000Estimated cost of goods

Exercise 5-13 (20 minutes) 2014 Inventory turnover 2014 Days' Sales in Inventory$426,650/[($92,500 + $87,750)/2] $87,750/$426,650 x 365 days = 75.1 days = 4.7 times 2014 Inventory turnover 2014 Days' Sales in Inventory$426,650/[($92,500 + $87,750)/2] $87,750/$426,650 x 365 days = 75.1 days = 4.7 times 2014 Inventory turnover 2014 Days' Sales in

Problem 5-3A (Continued) 3b. LIFO perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance 1/1 600 @ $45.00 = $27,000 2/10 400 @ $42.00= $16,800 600 @ $45.00 400 @ $42.00 = $43,800 3/13 200 @ $27.00= $ 5,400 600 @ $45.00 400 @ $42.00 = $49,200 200 @ $27.00 3/15 200 @ $27.00400 @ $42.00200 @

Problem 5-9AB (25 minutes) Part 1 ALASKA COMPANY Estimated Inventory December 31 At Cost At Retail Goods available for sale Beginning inventory............................................ $ 469,010 $ 928,950 Cost of goods purchased................................... 3,376,050 6,381,050 Goods available for sale ..................................... $3,845,060 $7,310,000 Sales....................................................................... $5,595,800 Less: Sales returns............................................. (42,800 )Net sales................................................................. $5,553,000Ending inventory at retail ($7,310,000 - $5,553,000) $1,757,000Cost-to-retail ratio: $3,845,060/$7,310,000

Problem 5-3B (Continued) 3b. LIFO perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance May 1 150 @ $300 = $ 45,000 May 6 350 @ $350 = $122,500 150 @ $300 350 @ $350 = $167,500 May 9 180 @ $350 = $ 63,000 150 @ $300 170 @ $350 = $104,500 May 17 80

Problem 5-8BA (Concluded) Part 2 If Shepard Company had been experiencing decreasing costs in the acquisition of inventory, we would observe the opposite results in our comparisons. Specifically, LIFO would have resulted in a higher endinginventory, lower cost of goods sold, higher gross profit, and higher netincome. FIFO would have resulted in a lower

Comment: Its inventory turnover is higher (more favorable) than the industry average turnover of 40. Similarly, its days sales in inventory is lower (more favorable) than the industry norm of 9 days.2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Notauthorized for sale or distribution in

CHAPTER 6 CASH AND INTERNAL CONTROL Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Define internal control and its purpose and principles. 1, 2, 3, 4, 6 6-1, 6-11 6-1, 6-2 6-1 6-3, 6-5, 6-6 6-7, 6-8 C2. Define cash and cash equivalents and explain how to report

Chapter Outline Notes VI. Controls of Purchases DiscountsAppendix 6B A. Recording inventory purchases using net method provides more control than gross method. B. Gross method in a perpetual inventory systemrecords the purchase (debit inventory, credit accounts payable) at the gross amount and later reduces the inventory account by the amount of the discount

Chapter 6 Cash and Internal Controls QUESTIONS 1. The seven broad principles are: Establish responsibilities; Maintain adequate records;Insure assets and bond key employees; Separate recordkeeping from custody of assets;Divide responsibilities for related transactions; Apply technology controls; Performregular and independent reviews. 1. The seven broad principles are: Establish responsibilities; Maintain adequate records;Insure assets and bond

Exercise 6-6 (20 minutes) 1. Jan. 1 Petty Cash............................................................... 200 Cash................................................................... 200 To establish a petty cash fund. 2. Jan. 8 Postage Expense.................................................... 74 Merchandise Inventory*......................................... 29 Delivery Expense.................................................... 16Miscellaneous Expenses....................................... 43 Cash................................................................... 162 To reimburse the petty cash fund.*Transportation-in costs are included in Merchandise Inventory under a perpetual system. Delivery Expense.................................................... 16Miscellaneous Expenses....................................... 43 Cash................................................................... 162

Problem 6-4A (30 minutes) Part 1 BRANCH COMPANY Bank Reconciliation July 31, 2015 Bank statement balance..... $27,233 Book balance............................................................$27,497 Add Add Deposit of July 31........... 11,514 38,747 Proceeds of note less collection charge................................................................ 7,955 35,452 Deduct Deduct Checks No. 3031....$1,482 NSF check..............$ 8053065.... 382 Service charge....... 253069.... 2,281 4,145 Error (Check 3056). 20 850 Deduct

Problem 6-5B (Concluded) Part 3 There are several possible reasons why some prenumbered checks are missing from the sequence of canceled checks returned with a bank statement. Reasons include: (1) Some of the checks in the numbered sequence may have cleared the bank in a previous period and were returned with the bank statement in that previous

Communicating in Practice BTN 6-4B Memorandum To: Owner From: Consultant Date: __________ Subject: Advice on monitoring purchase discounts [Instructors Note: The response should acknowledge the owners concern and recommend the net method of recording purchases. It should explain how this method results in the recording of Discounts Lost, which will flow through to the income statement, thus providing the

CHAPTER 7 ACCOUNTING FOR RECEIVABLES Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe accounts receivable and how they occur and are recorded. 1 7-1, 7-13 7-1, 7-2 7-1, 7-4 7-5, 7-7, 7-8, 7-9 C2. Describe a note receivable, the computation of its maturity date and recording of its existence.

VISUAL # 7-1 METHODS OF ACCOUNTING FOR BAD DEBTS DIRECT WRITE-OFF METHOD Accounts for bad debts from an uncollectible account receivable at the time account is determined to be uncollectible. ALLOWANCE METHOD At the end of each accounting period, bad debts expense is estimated and recorded. Year-end No adjusting entry Adjusting entry required: Bad Debt Expense XXX Allowance for Uncollectible

Chapter 7 Accounting for Receivables QUESTIONS 1. When customers use credit cards, the selling companies can avoid having to directly evaluate the credit standing of their customers. They also avoid the risk of bad debts andoften are paid cash from the credit card company more quickly than if customers weregranted credit directly. Moreover,

Exercise 7-6 (Concluded) b. Dec. 31 Bad Debts Expense.............................................. 8,220 Allowance for Doubtful Accounts................. 8,220 To record estimated bad debts.* *Unadjusted balance....................................$ 3,600 credit Estimated balance....................................... 11,820 creditRequired adjustment...................................$ 8,220 credit *Unadjusted balance....................................$ 3,600 credit Estimated balance....................................... 11,820 creditRequired adjustment...................................$ 8,220 credit *Unadjusted balance....................................$ 3,600 credit Estimated balance....................................... 11,820 credit Required adjustment...................................$ 8,220 credit c. Dec. 31

Problem 7-3A (35 minutes) Part 1 Calculation of the estimated balance of the allowance for uncollectibles Not due: $830,000 x .0125 = $10,375 1 to 30: 254,000 x .0200 = 5,080 31 to 60: 86,000 x .0650 = 5,59061 to 90: 38,000 x .3275 = 12,445Over 90: 12,000 x .6800 = 8,160$41,650 credit 31

Problem 7-4B (35 minutes) 2014 a. Accounts Receivable.......................................... 685,350 Sales............................................................... 685,350 To record sales on account.Cost of Goods Sold......................................................500,000 Merchandise Inventory........................................... 500,000 To record cost of sales. To record sales on account.Cost of Goods Sold......................................................500,000 Merchandise Inventory........................................... 500,000 To record cost of sales. To record sales on account. Cost of Goods Sold......................................................500,000 Merchandise

Ethics Challenge BTN 7-3 1. If the estimate for bad debts is reduced then less Bad Debts Expense will be recognized on the income statement resulting in a higher net income. It also means that a lower allowance will be shown on thebalance sheet, which will result in a higher realizable value forreceivables

CHAPTER 8 ACCOUNTING FOR LONG-TERM ASSETS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Explain the cost principle for computing the cost of plant asset. 1, 2, 3, 4, 20 8-1, 8-2, 8-15 8-1, 8-2, 8-3, 8-21 8-1, 8-3, 8-4, 8-6 8-3 C2. Explain depreciation for partial years and

Chapter Outline Notes B. Accounting for Intangiblessimilarities and differences are consistent with accounting for plant assets however the requirements for recording increases in value of intangibles is very restrictive and rare. VII. Decision AnalysisTotal Asset Turnover A. Measure of companys efficiency using assets to generate sales. B. Calculated by dividing net sales by average total

Chapter 8 Accounting for Long-Term Assets QUESTIONS 1. A plant asset is tangible; it is used in the production or sale of other assets or services; and it has a useful life longer than one accounting period. 2. The cost of a plant asset includes all normal and reasonable expenditures necessary toget the

Exercise 8-6 (15 minutes) Double-declining-balance Double-declining-balance rate = (100% / 10 years) x 2 = 20% per year First years depreciation = $43,500 x 20% = $8,700Book value at beginning of second year = $43,500 - $8,700 = $34,800Second years depreciation = $34,800 x 20% = $6,960 First years depreciation = $43,500 x 20%

PROBLEM SET A Problem 8-1A (50 minutes) Part 1 Estimated Market Value Percent of Total Apportioned Cost Building.......................... $508,800 53% $477,000 Land................................ 297,600 31 279,000 Land improvements...... 28,800 3 27,000Vehicles.......................... 124 ,800 13 117 ,000 Total................................ $960 ,000 100 % $900 ,000 Land improvements...... 28,800 3 27,000Vehicles.......................... 124 ,800 13 117 ,000 Total................................ $960 ,000 100 % $900

PROBLEM SET B Problem 8-1B (50 minutes) Part 1 Estimated Market Value Percent of Total Apportioned Cost Building........................... $ 890,000 50% $ 900,000 Land................................. 427,200 24 432,000 Land improvements....... 249,200 14 252,000Trucks............................. 213 ,600 12 216 ,000 Total................................. $1 ,780,000 100 % $1 ,800,000 Land improvements....... 249,200 14 252,000Trucks............................. 213 ,600 12 216 ,000 Total................................. $1 ,780,000 100

Problem 8-8B (20 minutes) 1. 2015 (a)Jan. 1 Leasehold......................................................................40,000 Cash......................................................................... 40,000 To record payment for sublease. 2015 (a)Jan. 1 Leasehold......................................................................40,000 Cash......................................................................... 40,000 To record payment for sublease. 2015 (a) Jan. 1 Leasehold......................................................................40,000 Cash......................................................................... 40,000 To record payment for sublease. (b) Jan. 1 Prepaid Rent.................................................................36,000 Cash......................................................................... 36,000 To record prepaid annual lease rental. (c) Jan. 3

CHAPTER 9 ACCOUNTING FOR CURRENT LIABILITIES Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe current and long-term liabilities and their characteristics. 1 9-1, 9-14 9-1 9-5 C2. Identify and describe known current liabilities. 3, 4, 16, 17 9-2, 9-3, 9-14 9-2 9-6 C3. Explain how to account for contingent

Exercise 9-5 (20 minutes) Subject to Tax Rate Tax Explanation a. FICA--Social Security...... $ 800 6.20% $ 49.60 Full amount is subject to tax. FICAMedicare............. 800 1.45 11.60 Full amount is subject to tax. FUTA............................... 600 0.60 3.60 $200 is over the maximum. FUTA............................... 600 0.60 3.60 $200 is over the maximum. FUTA............................... 600 0.60 3.60 $200 is

Exercise 9-18 (25 minutes) (in SEK millions) 1. Warranty Expense.................................................... 7,706 Estimated Warranty Liability............................. 7,706 To record warranty expense and liability. Estimated Warranty Liability............................. 7,706 To record warranty expense and liability. Estimated Warranty Liability............................. 7,706 To record warranty expense and liability. 2. Estimated Warranty Liability................................... 6,677 Inventory............................................................. 6,677 To record cost of

Problem 9-5A (Continued) 6. Sales decrease by 10% (multiply prior sales by 0.9) Miller Co. Weaver Co. Sales........................................ $900,000 $900,000 Variable expenses.................. 720,000 540,000 Income before interest........... 180,000 360,000 Interest expense (fixed)......... 60,000 260,000Net income.............................. $120,000 $100,000Net income decreases by...... -14% -29% Interest expense (fixed)......... 60,000 260,000Net income.............................. $120,000 $100,000Net income decreases by...... -14% -29% Interest expense (fixed).........

Problem 9-5B (60 minutes) 1. Ellis Company = = 1.33 = = 1.33 = = 1.33 2. Seidel Company = = 2.0 = = 2.0 = = 2.0 3. Sales increase by 10% (multiply prior sales by 1.10)Ellis Co. Seidel Co.Sales........................................ $264,000 $264,000Variable expenses.................. 132,000 198,000Income before interest........... 132,000 66,0004. Sales increase by 40% (multiply prior sales by 1.40)Ellis

Comprehensive Problem (Continued) Part 4 BUG-OFF EXTERMINATORS Income Statement For Year Ended December 31, 2015 Revenues Extermination services revenue............... $57,760 Sales............................................................ 71,026 Interest revenue.......................................... 924 Total revenues............................................ $129,710Expenses Cost of goods sold..................................... 46,300 Depreciation expenseTrucks................. 6,000 Depreciation expenseEquipment.......... 6,100 Interest revenue.......................................... 924 Total revenues............................................ $129,710Expenses Cost of goods sold..................................... 46,300 Depreciation expenseTrucks................. 6,000 Depreciation expenseEquipment..........

Taking It to the Net BTN 9-5 1. McDonalds 2013 current liabilities include the following: Accounts payable Income taxes Other taxesAccrued interest Other taxesAccrued interest Other taxes Accrued interest Accrued payroll and other liabilities 2. The portion of long-term debt maturing in the next 12 months ($ millions) is: $530 / $14,129.8 = 3.75 % Note: McDonalds states in its