Fundamental Accounting Principles 21st Edition

Appendix B Time Value of Money QUICK STUDIES Quick Study B-1 (10 minutes) 1. 2% 2. 12% 3. 3% 4. 1% Quick Study B-2 (10 minutes) In Table B.1, where n = 15 and p = $2,745/$10,000 = 0.2745, the i = 9%. Quick Study B-3 (10 minutes) In Table B.1, where i = 6% and p = $6,651/$10,000 = 0.6651,

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. Title: Question 1 QA_Ori: Manufacturing overhead costs cannot be directly traced to units of product like direct materials and direct labor. Assigning overhead costs to units of productrequires some sort of allocation on some reasonable basis. like direct materials and direct labor. Assigning overhead costs to units of productrequires some sort of allocation

Title: Exercise C-4 QA_Ori: 1. Total direct labor hours: Product A: 10,000 units x 0.20 DLH/unit = 2,000 DLH Product B: 2,000 units x 0.25 DLH/unit = 500 DLHTotal direct labor hours 2,500 DLH Product B: 2,000 units x 0.25 DLH/unit = 500 DLHTotal direct labor hours 2,500 DLH Product B: 2,000 units x 0.25

Title: Problem C-4A QA_Ori: 1. Plantwide overhead rate: Engineering support $24,500 Electricity 34,000Setup costs 52,500Total manufacturing overhead $111,000 6,200* direct labor hours = $17.90/DLH Electricity 34,000Setup costs 52,500Total manufacturing overhead $111,000 6,200* direct labor hours = $17.90/DLH Electricity 34,000 Setup costs 52,500 Total manufacturing overhead $111,000 6,200* direct labor hours = $17.90/DLH Product A 10,000 units x

Title: Problem C-3B QA_Ori: 1. The major costs of making the boxes are designing the boxes, setting up machines to make the right cuts, cutting the cardboard, printing the boxes, obtaining the cardboard material, labor, and utilities, and shipping the boxes.Some of the costs, such as design and setup, are not related to

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Student Name: Class: Liabilities + Equity Accounts Office Accounts H. Graham H. Graham Date Cash Receivable Equipment Payable Capital Withdrawals Revenues Expenses May 1 $40,000 40,000 1 (2,200) (2,200) 3 1,890 1,890 5 (750) (750) 8 5,400 5,400 12 2,500 2,500 15 (750) (750) 20 2,500 (2,500) 22 3,200 3,200 25 3,200 (3,200) 26 (1,890)

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Title: Problem 1-5B QA_Ori: HalfLife Co. Statement of Cash Flows For Year Ended December 31, 2013 Cash used by operating activities ($3,000 ) Cash from investing activities 1,600Cash from financing activities 1,800Net increase in cash $400 Cash, December 31, 2012 1,300Cash, December 31, 2013 $1,700 Cash from investing activities 1,600Cash from financing activities 1,800Net increase in

Title: Problem 1-8B QA_Ori: Parts 1 and 2 Assets = Liabilitie s + Equity Date Cash + Accounts Receivabl e +Office Supplies + Office Equipmen t + Excavatin g Equipmen t = Account s Payable +R. Truro, Capital - R. Truro, With-dr awals +Reve-n ues -Expen- ses July 1 + $80,000 = + $80,00 0 2 - 700 - $700 Bal . 79,300 = 80,000 - 700 3 - 1,000 + $5,000 + $4,000 Bal . 78,300 + 5,000 = 4,000 + 80,000 - 700 6 - 600 +

Title: Serial Problem SP 1 QA_Ori: Assets = Liabiliti es + Equity Date Cash + Accounts Receivab le + Comput er Supplies + Comput er System + Office Equipme nt = Accoun ts Payabl e + A. Lopez, Capital - A. Lopez, Withdraw als + Revenu es - Expens es Oct . 1+ $55,000 $20,000 + $8,000 + $83,000 3 + $1,420 + $1,420 Bal. 55,000 + 1,420 + 20,000 + 8,000 = 1,420 + 83,000 6 + $4,800 + $ 4,800 Bal. 55,000

Student Name: Class: Estimated Market Percent Apportioned Value of Total Cost Building $508,800 53% $477,000 - Correct! Land 297,600 31% 279,000 - Correct! Land Improvements 28,800 3% 27,000 - Correct! Vehicles 124,800 13% 117,000 - Correct! Totals $960,000 100% $900,000 - Correct! Trans.DateAccount Titlesno. Debit CreditJan. 1 477,000279,00027,000117,000900,000Correct!Part 2:Straight-line depreciation on building = $30,000 - Correct!Part 3:Double-declining-balancedepreciation on land improvements

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Title: Exercise 10-2 QA_Ori: Cost of land Purchase price for land..............................................................$ 280,000 Purchase price for old building................................................... 110,000Demolition costs for old building................................................33,500Costs to fill and level lot............................................................. 47,000Total cost of land........................................................................$ 470,500 Purchase price for old building................................................... 110,000Demolition costs for old building................................................33,500Costs to fill and level lot............................................................. 47,000Total cost of land........................................................................$ 470,500 Purchase price for

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Title: Problem 10-8A QA_Ori: 1. 2013 (a) June 25 Leasehold.......................................................................200,000 Cash......................................................................... 200,000 To record payment for sublease. June 25 Leasehold.......................................................................200,000 Cash......................................................................... 200,000 To record payment for sublease. June 25 Leasehold.......................................................................200,000 Cash......................................................................... 200,000 To record payment for sublease. (b) July 1 Prepaid Rent..................................................................80,000 Cash......................................................................... 80,000 To record prepaid annual lease rental. July 1 Prepaid Rent..................................................................80,000 Cash......................................................................... 80,000 To

Title: Problem 10-8B 1. 2013 (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 Leasehold Improvements...............................................20,000 Cash......................................................................... 20,000 To record costs of leasehold improvements. 2. 2013 (a) Dec. 31 Rent Expense.................................................................8,000 Accumulated AmortizationLeasehold.................... 8,000 To record

Student Name: Class: National Fargo Locust Bank Bank 1. May 19 Jul 8 Nov 28 90 120 60 Aug 17 Nov 5 Jan 27 Correct! Correct! Correct! 2.Interest due at maturity: 2.Interest due at maturity: 2. Interest due at maturity: $35,000 $80,000 $42,000 10% 9% 8% 90/360 120/360 60/360 $875 $2,400 $560 Correct! Correct! Correct!3.Accrued interest on Fargo note at end of 2012: Correct! Correct! Correct!3.Accrued interest on

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Title: Reporting in Action 1 QA_Ori: Times interest earned ($ thousands) 2011 2010 2009 Net income $227,575 $147,138 $101,017 Add income taxes 119,051 71,403 50,157Add interest expense 3,987 2,680 4,111Income before taxes and interest $350,613 $221,221 $155,285 Add income taxes 119,051 71,403 50,157Add interest expense 3,987 2,680 4,111Income before taxes and interest $350,613 $221,221 $155,285 Add income

Student Name: Class: Plans a and c 40% - Correct! 60% - Correct! Plan b 33.33% - Correct! 66.67% - Correct! Plans c and d 72,000$ - Correct! Plan d 4,200$ - Correct! 6,300 - Correct! Income (Loss) Year 1 Sharing Plan Calculations Watts Lyon (a) (14,400)$ Correct! (21,600)$ Correct!(b) (12,000)$ Correct! (24,000)$ Correct!(c) 72,000$ (43,200)$ 60% x $36,000 loss40% x $36,000 loss33 1/3% x $36,000 loss40%

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Title: Question 1 QA_Ori: 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 partnership ends when the project is completed. If the

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Title: Exercise 12-11 QA_Ori: a. Loss from selling assets Total book value of assets $126,000 Total liabilities before liquidation $78,000Total liabilities remaining after paying proceeds of asset sales to creditors (28,000)Cash proceeds from sale of assets (50,000)Loss on sale of assets $ 76,000 Total liabilities before liquidation $78,000Total liabilities remaining after paying proceeds of asset

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Title: Problem 12-5A QA_Ori: Note: All entries in this problem are dated May 31. 1. (a) Cash 600,000 Inventory 537,200 Gain on Sale of Inventory 62,800 Inventory 537,200 Gain on Sale of Inventory 62,800 Inventory 537,200 Gain on Sale of Inventory 62,800 (b) Gain on Sale of Inventory 62,800 Kendra, Capital ($62,800 x 3/6)

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Title: Problem 12-5B QA_Ori: Note: All entries in this problem are dated Jan. 18. 1. (a) Cash 650,000 Equipment 617,200 Gain on Sale of Equipment 32,800 Equipment 617,200 Gain on Sale of Equipment 32,800 Equipment 617,200 Gain on Sale of Equipment 32,800 (b) Gain on Sale of Equipment 32,800 Lasure, Capital ($32,800 x 2/5)

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Title: Question 1 QA_Ori: Organization expenses (costs) are incurred in creating a corporation. Examples include: legal fees, promoter fees, accountant fees, costs of printing stock certificates, and fees paid to obtain a state charter. Examples include: legal fees, promoter fees, accountant fees, costs of printing stock certificates, and fees paid to obtain

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Title: Exercise 13-7 QA_Ori: 1. Feb. 5 Retained Earnings* 480,000 Common Stock Dividend Distributable** 120,000 Paid-In Capital in Excess of Par Value, Common Stock*** 360,000 Declared 20% common stock dividend Shares to be issued: 60,000 shares x 20% = 12,000 shares *12,000 shares x $40 per share = $480,000 **12,000 shares

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Title: Problem 13-3A QA_Ori: Part 1 Explanations for each of the journal entries Oct. 2 Declared a cash dividend of $2 per share of common stock. ($60,000 / 30,000 shares) Oct. 25 Paid the cash dividend on common stock.Oct. 31 Declared a 10% stock dividend when the market value is $25 per share. ($36,000/$12

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Title: Serial Problem 1 QA_Ori: 1a. Journal entry for issuance of common stock to Cicely Cash 86,000 Common Stock 86,000 Issuance of common stock. Cash 86,000 Common Stock 86,000 Issuance of common stock. Cash 86,000 Common Stock 86,000 Issuance of common stock. 1b. Journal entry for issuance of preferred stock to Marcello Cash 86,000 Preferred Stock 86,000

Student Name: Class: Part 1. Date Account Titles Debit Credit 2013 Jan 1 3,456,448 543,552 - Correct! 4,000,000 Part 2. 120,000$ - Correct! 18,118 - Correct! 138,118 - Correct! Part 3. 3,600,000$ 4,000,000 7,600,000$ (3,456,448) 4,143,552$ - Correct!3,600,000$ 543,552 4,143,552$ - Correct!Part 4.Unamortized CarryingDiscount Value543,552 3,456,448 - Correct!525,434 3,474,566 - Correct!507,316 3,492,684 - Correct!489,198 3,510,802 - Correct!471,080 3,528,920 - Correct!Semiannual Period-End12/31/20146/30/201412/31/20136/30/20131/1/2013Total

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Title: Question 1 QA_Ori: Notes payable generally involve borrowing from a single creditor, whereas bonds payable are usually sold to many different lenders (bondholders). bonds payable are usually sold to many different lenders (bondholders). bonds payable are usually sold to many different lenders (bondholders). Title: Question 2 QA_Ori: A bond is a liability of the

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Title: Exercise 14-5 QA_Ori: 1. Premium = Issue price - Par value = $409,850 - $400,000 = $9,850 2. Total bond interest expense over the life of the bonds Amount repaid Six payments of $26,000* $ 156,000 Par value at maturity 400,000 Total repaid 556,000 Less amount borrowed (409,850) Total bond interest expense $ 146,150 *$400,000 x

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Title: Problem 14-1A QA_Ori: Part 1 Instructor note: The first printing of the textbook has an erroneous marginal check figure of $4,537 that should correctly read $5,437. a. Cash Flow Table Table Value* Amount Present Value Par value B.1 0.4564 $40,000 $18,256 Interest (annuity) B.3 13.5903 2,000** 27,181Price of bonds $45,437Bond premium $ 5,437 Interest (annuity) B.3 13.5903

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Title: Problem 14-8A QA_Ori: Part 1 2013 Jan. 1 Cash 184,566 Premium on Bonds Payable 4,566 Bonds Payable 180,000 Sold bonds on stated issue date. Premium on Bonds Payable 4,566 Bonds Payable 180,000 Sold bonds on stated issue date. Premium on Bonds Payable 4,566 Bonds Payable 180,000 Sold bonds on stated issue date. Part

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Title: Problem 14-7B QA_Ori: Part 1 2013 Jan. 1 Cash 198,494 Discount on Bonds Payable 41,506 Bonds Payable 240,000 Sold bonds on stated issue date. Discount on Bonds Payable 41,506 Bonds Payable 240,000 Sold bonds on stated issue date. Discount on Bonds Payable 41,506 Bonds Payable 240,000 Sold bonds on stated issue date. Part 2 Thirty payments of $7,200*$

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Title: question 1 QA_Ori: 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 investments as a source of cash to satisfy the needs of current operations (within one year or the operating cycle, whichever

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Title: Exercise 15-8 QA_Ori: 2013 (a) Feb. 15 Short-Term InvestmentsHTM (A.G.) 160,000 Cash 160,000 Purchased 90-day, 10% notes. Cash 160,000 Purchased 90-day, 10% notes. Cash 160,000 Purchased 90-day, 10% notes. (b) Mar. 22 Long-Term InvestmentsAFS (Fran) 35,850 Cash 35,850 Purchased 700 shares of Fran common stock ([700 x $51] + $150). Cash 35,850 Purchased 700 shares of Fran

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Title: Problem 15-3A QA_Ori: Part 1 2013 Jan. 20 Long-Term InvestmentsAFS (J&J) 20,740 Cash 20,740 Purchased Johnson & Johnson shares [(1,000 x $20.50) + $240]. Cash 20,740 Purchased Johnson & Johnson shares [(1,000 x $20.50) + $240]. Cash 20,740 Purchased Johnson & Johnson shares [(1,000 x $20.50) + $240]. Feb. 9 Long-Term InvestmentsAFS

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Title: Problem 15-1B QA_Ori: Part 1 2013 Mar. 10 Short-Term InvestmentsTrading (AOL) 143,505 Cash 143,505 Purchased AOL shares [(2,400 x $59.15) + $1,545]. Cash 143,505 Purchased AOL shares [(2,400 x $59.15) + $1,545]. 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

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Title: Problem 15-6B QA_Ori: Part 1 2013 May 26 Accounts ReceivableFuji 60,450 Sales 60,450 (6,500,000 yen x $0.0093/yen) June 1 Cash 64,800 Sales 64,800 July 25 Cash* 59,800 Foreign Exchange Loss 650 Accounts ReceivableFuji 60,450 *(6,500,000 yen x $0.0092/yen) Oct. 15 Accounts ReceivableMartinez Brothers 38,556 Sales 38,556 (378,000 pesos x $0.1020/peso) Dec. 6 Accounts ReceivableChi-Ying 35,975 Sales 35,975 (250,000 yuans x $0.1439/yuan) Dec.

Student Name: Class: 136,000$ (12,000) (75,000) 16,000 3,000 54,000 122,000$ - Correct! (36,000) - Correct! 60,000 (89,000) (29,000) - Correct! 57,000$ - Correct! 107,000 - Correct! 164,000$ - Correct! Net cash provided by operating activities Cash flows from investing activities: Cash paid for equipment Cash balance at December 31, 2013 Cash flows from financing activities: Cash received from issuing stock

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Title: Question 1 QA_Ori: 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

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Title: Quick Study 16-18 QA_Ori: 1. Under IFRS (as with U.S. GAAP), both the indirect method and directmethod of reporting operating cash flows are acceptable. 1. Under IFRS (as with U.S. GAAP), both the indirect method and directmethod of reporting operating cash flows are acceptable. 1. Under IFRS (as with U.S. GAAP), both

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Title: Exercise 16-11B QA_Ori: IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2013 Cash flows from operating activities Cash received from customers (Note 1)............... $664,000 Cash paid for merchandise (Note 2)..................... (393,300) Cash paid for operating expenses (Note 3).......... (75,000) Cash paid for income taxes (Note 4)..................... (44,290)

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Title: Problem 16-1A QA_Ori: Part 1 FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2013 Cash flows from operating activities Net income................................................................................$114,975 Adjustments to reconcile net income to net cash provided by operating activities: Increase in accounts receivable ($65,810 - $50,625)...................(15,185) Increase in inventory ($275,656 - $251,800)...................................(23,856) Decrease in prepaid

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Title: Problem 16-1B QA_Ori: Part 1 GAZELLE CORPORATION Statement of Cash Flows For Year Ended December 31, 2013 Cash flows from operating activities Net income................................................................................$158,100 Adjustments to reconcile net income to net cash provided by operating activities Decrease in accounts receivable ($80,750 - $77,100)................. 3,650 Decrease in inventory ($250,700 - $240,600)........................10,100 Decrease in

Title: Problem 16-5BA QA_Ori: SATU COMPANY Statement of Cash Flows For Year Ended December 31, 2013 Cash flows from operating activities Net income...................................................................... $202,767 Adjustments to reconcile net income to net cash provided by operating activities Decrease in accounts receivable ($25,860 - $20,222).......... 5,638 Increase in inventory ($165,667 - $140,320)........................ (25,347) Decrease in

Title: Taking It to the Net 1 QA_Ori: Mendocino Brewing Company uses the indirect method to construct the consolidated statement of cash flows. Title: Taking It to the Net 2 QA_Ori: The largest reconciling item is for depreciation and amortization totaling $1,488,000. Title: Taking It to the Net 3 QA_Ori: The following table shows the net

Student Name: Class: Assets Liabilities Ratio 52,390$ 22,800$ 2.3 - Correct! 37,924 19,960 1.9 - Correct! 51,748 20,300 2.5 - Correct! 2014 2013 2012 100.00% 100.00% 100.00% 51.08% 62.50% 55.36% 48.92% 37.50% 44.64% 18.54% 13.80% 18.27% 9.13% 8.80% 8.20% 27.67% 22.60% 26.47% 21.25% 14.90% 18.17% 7.35% 3.05% 5.64% 13.90% 11.85% 12.53% Correct! Correct! Correct! 2014 2013 2012 101.24% 73.29% 100.00% Correct! Correct! Correct! 0.00% 12.66% 100.00% Correct! Correct! Correct! 166.67% 160.00% 100.00% Correct!

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Title: Question 1 QA_Ori: Financial reporting includes the entire process of preparing and issuing financial information about a company. Financial statements are an important part of financialreporting but they are less than the whole. information about a company. Financial statements are an important part of financialreporting but they are less than the whole. information

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Title: Exercise 17-7 QA_Ori: Simon Company Common-Size Comparative Balance Sheets December 31, 2012-2014 At December 31 2014 2013*2012 Assets Cash.................................................................... 6.1% 8.0% 10.0% Accounts receivable, net..................................... 17.1 14.0 13.3Merchandise inventory........................................ 21.5 18.5 14.3Prepaid expenses................................................ 2.0 2.1 1.3Plant assets, net ................................................. 53.3 57.3 61.1Total assets .........................................................100.0% 100.0% 100.0% Accounts receivable, net..................................... 17.1 14.0 13.3Merchandise inventory........................................ 21.5 18.5 14.3Prepaid expenses................................................

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Title: Problem 17-2A QA_Ori: Part 1 HAROUN COMPANY Income Statement Trends For Years Ended December 31, 2014-2008 2014 2013 2012 2011 2010 2009 2008 Sales...................................... 182.5% 161.2% 147.6% 136.2% 127.8% 119.6% 100.0% Cost of goods sold.................212.6 176.1 153.9 136.9 128.3 121.2 100.0 Gross profit.............................131.0 135.7 136.8 135.1 126.9 117.0 100.0 Operating expenses...............279.7 216.9 198.3 144.1 123.7

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Title: Problem 17-2B QA_Ori: Part 1 TRIPOLY COMPANY Income Statement Trends For Years Ended December 31, 2014-2008 2014 2013 2012 2011 2010 2009 2008 Sales...................................... 65.1% 70.9% 73.3% 79.1% 86.0% 89.5% 100.0% Cost of goods sold................. 72.6 76.3 77.4 82.6 89.5 92.1 100.0 Gross profit............................. 59.2 66.7 70.0 76.3 83.3 87.5 100.0 Operating expenses............... 56.0

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Title: Serial Problem 2 QA_Ori: Current ratio = $105,209 / $875 = 120.2 Acid-test ratio = $100,205 / $875 = 114.5 QA_Edit: Title: Serial Problem 3 QA_Ori: Debt ratio = $875 / $129,909 = 0.7% Equity ratio = $129,034/$129,909 = 99.3% QA_Edit: Title: Serial Problem 4 QA_Ori: Current assets are 81.0% of total assets ($105,209/$129,909) Long-term assets are 19.0% of total assets ($24,700/$129,909) Title:

Student Name: Class: Merchandising Business 200,000$ 300,000 500,000 175,000 325,000$ Correct! Manufacturing BusinessPartial Income StatementSNO-BOARD MANUFACTURING Manufacturing BusinessPartial Income StatementSNO-BOARD MANUFACTURING Manufacturing Business Partial Income Statement SNO-BOARD MANUFACTURING 500,000$ 875,000 1,375,000 225,000 1,150,000$ Correct! Part 2To:Memorandum Part 2To:Memorandum Part 2 To: Memorandum From: Date: Subject: Problem 18-06A McGraw-Hill/Irwin Instructor For Year Ended December 31, 2013 Partial Income Statement SPORTS WORLD RETAIL have raw materials and goods in process inventory accounts. Cost of goods sold of

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Title: Question 1 QA_Ori: 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. The budget isused to compare actual results to planned performance. With this type of

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Title: Exercise 18-5 QA_Ori: 1. Cost by Behavior Cost by Traceability Product Cost Variable Fixed Direct Indirect 1. Leather cover for soccer balls................. X X 2. Annual flat fee paid for office security................................................. X X 3. Coolants for machinery........................... X X4. Wages of assembly workers................... X X5. Lace to hold the leather together............ X X6. Taxes on factory......................................

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Title: Exercise 18-15 QA_Ori: a. 1. C, D 2. A3. B 4. A 1. C, D 2. A3. B 4. A 1. C, D 2. A 3. B 4. A b. If customers rate any of the factors on the survey as anything other than very satisfied, managers should investigate the reasons for the customers lack ofsatisfaction. The survey

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Part 2 DE LEON COMPANY Income Statement For Year Ended December 31, 2013 Sales................................................................................ $4,525,000 Less sales discounts........................................................ 62,500Net sales.......................................................................... 4,462,500Cost of goods sold Finished goods inventory, December 31, 2012.............. $ Less sales discounts........................................................ 62,500Net sales.......................................................................... 4,462,500Cost of goods sold Finished goods inventory, December 31, 2012.............. $ Less sales discounts........................................................ 62,500 Net sales.......................................................................... 4,462,500 Cost of goods sold Finished

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Title: Problem 18-7B QA_Ori: Part 1 ELEGANT FURNITURE Manufacturing Statement For Year Ended December 31, 2013 Direct materials Raw materials inventory, December 31, 2012.............. $ 40,375 Raw materials purchases.............................................. 894,375 Raw materials available for use.................................... 934,750 Less raw materials inventory, December 31, 2013........ 70,430 Direct materials used.................................................... $ 864,320 Raw materials purchases.............................................. 894,375 Raw materials

Title: Ethics Challenge 1 QA_Ori: Raw materials are part of inventory and should be capitalized (set up as assets). Their costs are subsequently reported as part of cost of goods sold when the finished goods that require these materials are sold. If the CDraw materials were expensed in the current period, the financial

Student Name: Class: 1,500,000 - Correct! 2,500,000 - Correct! 60% - Correct! b. Overhead costs charged to jobs: Direct Applied Labor Overhead 604,000$ 362,400$ - Correct! 563,000 337,800 - Correct! 298,000 178,800 - Correct! 716,000 429,600 - Correct! 314,000 188,400 - Correct! 17,000 10,200 - Correct! 2,512,000$ 1,507,200$ - Correct! 1,520,000$ - Correct! 1,507,200 - Correct! 12,800$ - Correct! Account Debit Credit 12,800 12,800 - Correct! 202 Problem 19-04A McGraw-Hill/Irwin Instructor To

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Title: Question 1 QA_Ori: 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 perpetual system, weneed to estimate a predetermined overhead rate

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Title: Exercise 19-8 QA_Ori: 1. Raw Materials Inventory...................................................210,000 Cash........................................................................... 210,000 To record materials purchases. 2. Goods in Process Inventory.............................................186,000 Raw Materials Inventory............................................. 186,000 To assign direct materials to jobs. 3. Factory Overhead.............................................................15,000 Raw Materials Inventory............................................. 15,000 To record indirect materials. 2. Goods in Process Inventory.............................................186,000 Raw Materials Inventory............................................. 186,000

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Title: Problem 19-1A QA_Ori: Part 1 Total manufacturing costs and the costs assigned to each job 306 307 308 April Total From March Direct materials........................$ 29,000 $ 35,000 Direct labor............................... 20,000 18,000 Applied overhead*.................... 10,000 9,000Beginning goods in process............................. 59,000 62,000 $ 121,000For AprilDirect materials........................135,000 220,000 $100,000 455,000Direct labor .............................. 85,000 150,000 105,000 340,000Applied overhead*.................... 42,500

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Title: Problem 19-5A QA_Ori: JOB COST SHEET Customer's Name Worldwide Company Job No. 102 Direct Materials Direct Labor Overhead Costs Applied Date Requisition Number Amount Time Ticket Number Amount Date Rate Amount #35 33,750 #1-10 90,000 May --- 80% 72,000 #36 12,960SUMMARY OF COSTSDir. Materials..............................................................................................................46,710Dir. Labor....................................................................................................................90,000Overhead................................................................................................................... 72,000Total cost of Job.........................................................................................................208,710Total 46,710 Total 90,000 #36 12,960SUMMARY OF COSTSDir. Materials..............................................................................................................46,710Dir. Labor....................................................................................................................90,000Overhead................................................................................................................... 72,000Total cost of Job.........................................................................................................208,710Total

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Title: Problem 19-3B QA_Ori: Part 1 JOB COST SHEETS Job No. 487 Materials.........................$30,000 Labor..............................8,000Overhead........................ 16,000Total cost........................$54,000 Labor..............................8,000Overhead........................ 16,000Total cost........................$54,000 Labor..............................8,000 Overhead........................ 16,000 Total cost........................$54,000 Job No. 488 Materials.........................$20,000 Labor.............................. 7,000Overhead........................ 14,000Total cost........................$41,000 Labor.............................. 7,000Overhead........................ 14,000Total cost........................$41,000 Labor.............................. 7,000 Overhead........................ 14,000 Total cost........................$41,000 Job No. 489 Materials.........................$12,000 Labor.............................. 25,000Overhead........................ 50,000Total cost........................$87,000 Labor.............................. 25,000Overhead........................ 50,000Total cost........................$87,000 Labor.............................. 25,000 Overhead........................ 50,000 Total cost........................$87,000 Job No. 490 Materials.........................$14,000 Labor.............................. 26,000Overhead........................ 52,000Total cost........................$92,000 Labor.............................. 26,000Overhead........................

Title: Reporting in Action 1 QA_Ori: We would anticipate that at least two types of costs will increase as a percent of sales with Polariss growth in domestic sales. The first type is broadly classed into variable costs. Variable costs are the usual operating costsincluding selling, and administrative costs. Simply stated, it will

Student Name: Class: Date Explanation Debit Credit Mar 1 150,000 22,000 172,000 - Correct! 26,000 Prepaid Rent 26,000 Prepaid Rent 26,000 Prepaid Rent 6,000 - Correct! 33,000 Office Equipment 33,000 Office Equipment 33,000 Office Equipment 1,200 4,200 - Correct! 64,000 Cash 64,000 Cash 64,000 Cash 4,000 - Correct! 97,500 Accounts Receivable 97,500 Accounts Receivable 97,500 Accounts Receivable 7,500 - Correct! 12 4,200 Accounts Payable 12 4,200 Accounts Payable 12 4,200 Accounts Payable 4,200

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Title: Question 1 QA_Ori: a. Common asset accounts: cash, accounts receivable, notes receivable, prepaid expenses (rent, insurance, etc.), office supplies, store supplies,equipment, building, and land.b. Common liability accounts: accounts payable, notes payable, and unearnedrevenue, wages payable, and taxes payable.c. Common equity accounts: owner, capital and owner, withdrawals. prepaid expenses (rent, insurance, etc.), office

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Title: Exercise 2-8 QA_Ori: Cash Photography Equipment Aug. 1 6,500 Aug. 2 2,100 Aug. 1 33,50 0 20 3,331 5 88031 675 M. Harris, CapitalBalance 6,176 Aug. 1 40,000 20 3,331 5 88031 675 M. Harris, CapitalBalance 6,176 Aug. 1 40,000 20 3,331 5 880 31 675 M. Harris, Capital Balance 6,176 Aug. 1 40,000 Office Supplies

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Title: Exercise 2-22 QA_Ori: a. Co. Liabilities / Assets = Debt Ratio Net Income / Average Assets = ROA 1 $11,765 $ 90,500 0.13 $20,000 $100,000 0.200 2 46,720 64,000 0.73 3,800 40,000 0.095 3 26,650 32,500 0.82 650 50,000 0.013 4 55,860 147,000 0.38 21,000 200,000 0.105 5 31,280 92,000 0.34 7,520 40,000 0.188 6 52,250 104,500

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Title: Problem 2-3A QA_Ori: Part 1 1-Apr Cash 101 80,00 0 Office Equipment 1630 K. Tanner, Capital 301106,000Owner invested cash and equipment. Office Equipment 1630 K. Tanner, Capital 301106,000Owner invested cash and equipment. Office Equipment 163 0 K. Tanner, Capital 301 106,00 0 Owner invested cash and equipment. 26,00 2-Apr Prepaid Rent 131 9,000 Cash 101 9,000Prepaid twelve months rent. Cash 101 9,000Prepaid

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Part 3 HV Consulting Trial Balance 30-Sep Debit Credit Cash $12,665 Accounts receivable 2,250 Office supplies 2,000 Office equipment 50,900 Automobiles 16,500Building 160,000Land 40,000Accounts payable $5,600 Notes payable 170,000H. Venedict, Capital 101,500H. Venedict, Withdrawals 2,800Fees earned 14,250Salaries expense 3,600Utilities expense 635 Total $291,350 $291,350 Automobiles 16,500Building 160,000Land 40,000Accounts payable $5,600 Notes payable 170,000H. Venedict, Capital 101,500H. Venedict, Withdrawals 2,800Fees

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Title: Problem 2-4B QA_Ori: Part 1 TAMA CO. Balance Sheet December 31, 2012 Assets Liabilities Cash....................................$ 20,000 Accounts payable...............................................................................$ 4,000 Accounts receivable............ 35,000 Office supplies..................... 8,000Office equipment................. 40,000 Equity Machinery............................ 28,500 Total equity......................................................................................... 127,500Total assets.........................$131,500 Total liabilities & equity.......................................................................$131,500 Office supplies..................... 8,000Office equipment................. 40,000 Equity Machinery............................ 28,500 Total equity......................................................................................... 127,500Total assets.........................$131,500 Total liabilities & equity.......................................................................$131,500 Office supplies..................... 8,000 Office equipment................. 40,000 Equity

Part 3 SUCCESS SYSTEMS Trial Balance 30-Nov Debit Credit Cash $48,052 Accounts receivable 12,618 Computer supplies 2,545 Prepaid insurance 2,220Prepaid rent 3,300Office equipment 8,000Computer equipment 20,000Accounts payable $0 A. Lopez, Capital 83,000A. Lopez, Withdrawals 5,600Computer services revenue 25,659Wages expense 2,625Advertising expense 1,940Mileage expense 704Miscellaneous expense 250Repairs expenseComputer 805 Totals $108,659 $108,659 Prepaid insurance 2,220Prepaid rent 3,300Office equipment

Student Name: Class: Part 1 (a) and (b) Direct Direct Materials Labor 700,000 700,000 180,000 54,000 880,000 754,000 Correct! Correct! Direct Direct Materials Labor420,000$ 139,000$ Cost per equivalent unit of productionCosts of beginning goods in process Materials Labor420,000$ 139,000$ Cost per equivalent unit of productionCosts of beginning goods in process Materials Labor 420,000$ 139,000$ Cost per equivalent unit of

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Title: Question 1 QA_Ori: 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 system is

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Title: Problem 20-8B QA_Ori: Part 1: Equivalent units with respect to direct materials and direct labor Direct Direct Equivalent units of production (EUP) Materials Labor Units to complete beginning goods in process Direct materials (2,000 x 0%)................................. 0 Direct labor (2,000 x 15%).................................... Units started and completed..................................... 78,0001,30078,000Units in ending work in process

Part 2 (Using weighted-average) MAJOR LEAGUE BAT CO. Process Cost Summary (Weighted Average) For Month Ended July 31 Costs Charged to Production Costs of beginning goods in process Direct materials................................................................... $ 2,660 Direct labor.......................................................................... 3,650 Factory overhead................................................................ 1,825 $ 8,135 Costs incurred this period Direct materials................................................................... 52,440 Direct labor.......................................................................... 202,250 Factory overhead................................................................ 101,125 355,815Total costs to

Part 5: (Using weighted-average) Computation of gross profit for July Sales....................................................................................................$ 625,000 Cost of goods sold*.............................................................................. (279,575)Gross profit........................................................................................... $ 345,425* $279,575 = $265,700 + $13,875 (underapplied overhead) Cost of goods sold*.............................................................................. (279,575)Gross profit........................................................................................... $ 345,425* $279,575 = $265,700 + $13,875 (underapplied overhead) Cost of goods sold*.............................................................................. (279,575) Gross profit........................................................................................... $ 345,425 * $279,575

Title: Exercise 20-7 QA_Ori: a. Purchased raw materials on credit at a cost of $52,000. b. Used direct materials costing $42,000 in production. c. Incurred total labor costs of $26,000, all of which is paid in cash.d. Used direct labor costing $32,000 in production.e. Incurred overhead costs of $10,000, which is paid in cash.f.

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Title: Exercise 20-15 QA_Ori: ASHAD COMPANY Process Cost Summary Weighted Average Method For Month Ended July 31 Costs Charged to Production Costs of beginning goods in process ($18,550 + $760 + $1,520)..................$ 20,830Costs incurred this period ($357,500 + $62,890 + $125,780)........................ 546,170Total costs to account for................................................................................$567,000 Costs of beginning goods in process ($18,550 + $760 +

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Title: Exercise 20-22 QA_Ori: HI-TEST COMPANY Process Cost Summary (Weighted-Average Method) For Month Ended September 30 Costs Charged to Production Costs of beginning work in process Direct materials.........................................................................$ 45,000 Direct labor................................................................................25,600Factory overhead...................................................................... 30,720 $101,320Costs incurred this periodDirect materials.........................................................................375,000Direct labor................................................................................155,000Factory overhead ($155,000 x 120%).........................................(a) 186,000 (b) 716,000Total costs to account for................................................................ (c)$817,320 Direct labor................................................................................25,600Factory overhead...................................................................... 30,720 $101,320Costs incurred this

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Part 2 ELLIOTT COMPANY Process Cost Summary Weighted Average Method For Month Ended March 31 Costs Charged to Production Costs of beginning goods in process Direct materials................................................................... $ 2,500 Direct labor.......................................................................... 2,650 Factory overhead................................................................ 3,710 $ 8,860Costs incurred this period Direct materials................................................................... 168,000 Direct labor.......................................................................... 199,850 Factory overhead................................................................ 279,790 647,640Total costs to account for....................................................... $656,500

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Title: Problem 20-6A QA_Ori: Part 1 TAMAR CO. Process Cost Summary FIFO Method For Month Ended May 31 Costs charged to Production Costs of beginning goods in process Direct materials...................................................................$ 19,800 Direct labor.......................................................................... 123,300 Factory overhead................................................................ 98,640 $ 241,740Costs incurred this period Direct materials................................................................... 496,800 Direct labor..........................................................................1,203,300 Factory overhead................................................................ 962,640 2,662,740Total costs to account for....................................................... $2,904,480

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Title: Problem 20-9A QA_Ori: Part 1 DENGO CO. Process Cost Summary FIFO Method For Month Ended October 31 Costs Charged to Production Costs of beginning goods in process Direct materials...................................................................$ 9,900 Direct labor.......................................................................... 61,650 Factory overhead................................................................ 49,320 $ 120,870 Direct labor.......................................................................... 61,650 Factory overhead................................................................ 49,320 $ 120,870 Direct labor.......................................................................... 61,650 Factory overhead................................................................ 49,320 $ 120,870 Costs incurred

Title: Problem 20-3B QA_Ori: Part 1 a. May 31 Raw Materials Inventory...................................................221,120 Accounts Payable....................................................... 221,120 Raw materials purchased. Accounts Payable....................................................... 221,120 Raw materials purchased. Accounts Payable....................................................... 221,120 Raw materials purchased. b. May 31 Goods in Process Inventory.............................................197,120 Raw Materials Inventory............................................. 197,120 Direct materials used in production. Raw Materials Inventory............................................. 197,120 Direct materials used in production.

Title: Problem 20-5B QA_Ori: Part 1 SWITCH CO. Process Cost Summary Weighted Average Method For Month Ended January 31 Costs Charged to Production Costs of beginning goods in process Direct materials................................................................... $ 7,500 Direct labor.......................................................................... 14,240 Factory overhead................................................................ 35,600Costs incurred this period $ 57,340 Direct materials................................................................... 112,500 Direct labor.......................................................................... 176,000 Factory overhead................................................................ 440,000 728,500Total costs to

Student Name: Class: 270,000$ - Correct! 60$ - Correct! 4,500 - Correct! 270,000$ - Correct! 30.00% - Correct! 900,000$ - Correct! 900,000$ - Correct! 630,000 - Correct! 270,000$ - Correct! 270,000 - Correct! $0 - Correct! Problem 21-02A McGraw-Hill/Irwin Instructor XCITE EQUIPMENT CO. Contribution margin ratio Fixed costs Break-even in sales units: Break-even in sales dollars: Break-even point in units: Contribution margin per unit Fixed costs Net income Fixed costs Contribution

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Title: Question 1 QA_Ori: 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 units) are treated as variable costs with respect to the number of units produced. example, direct materials and direct labor (when the

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Title: Exercise 21-7 QA_Ori: The scatter diagram and line of estimated cost behavior appear below. Selecting 0 and 2,400 units sold as the activity levels yields $2,500 as the estimate of fixed costs and the following estimate of variable costs per unit: Change in cost =$6,100 - $2,500 =$3,600 =$1.50 per unitChange in

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Title: Problem 21-3A QA_Ori: Parts 1 and 2 The scatter diagram and its estimated line of cost behavior appear below. Part 2 Calculation of variable and fixed costs Variable costs = $220,000 - $64,000 = $0.60 per dollar of sales $340,000 - $80,000 Using the low point: $64,000 = Fixed costs + ($0.60/$ of sales x

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Kyo Company 0 20 40 60 80 100 $120 0 $50 $100 $150 $200 $250 Sales Dollars Total Costs Title: Problem 21-3B QA_Ori: Parts 1 and 2 The scatter diagram and its estimated line of cost behavior appear below. Sales and cost amounts are in thousands of dollars. Part 2 Calculation of variable and fixed costs Variable costs = $110 - $58 = $0.40 per

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Title: Problem 21-7B QA_Ori: Part 1 BREAK-EVEN ANALYSIS ASSUMING USE OF SAME MATERIALS Step 1: Compute break-even in composite unitsUse equation in Exhibit 21.27 Break-even in composite units = Fixed costs/Contribution margin per composite unit = $270,000 / $144*= 1,875 composite units = $270,000 / $144*= 1,875 composite units = $270,000 / $144* = 1,875

Student Name: Class: March April May 25,000 32,000 35,000 30% 30% 30% 7,500 9,600 10,500 15,000 25,000 32,000 22,500 34,600 42,500 (20,000) (7,500) (9,600) 2,500 27,100 32,900 Correct! Correct! Correct! March April May 90,000 95,000 90,000 30% 30% 30% 27,000 28,500 27,000 70,000 90,000 95,000 97,000 118,500 122,000 (80,000) (27,000) (28,500) 17,000 91,500 93,500 Correct! Correct! Correct! March April May 38,000 37,000 25,000 30% 30% 30% 11,400 11,100

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Title: Question 1 QA_Ori: A budget helps managers control and monitor a business by 1) communicating plans to employees, 2) coordinating the activities of different parts of the organization, and 3) providing a basis for deciding whether actual performance is acceptable (through benchmarking). Budgeting also helps 4) promote analysis, 5) focus on

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Title: Quick Study 22-25 QA_Ori: SCORA INC. Selling Expense Budget For January, February, and March January February March Budgeted sales (from QS 22-23) $60,000 $100,000 $80,000 Sales commission percent x 10% x 10% x 10%Sales commissions 6,000 10,000 8,000 Sales manager monthly salary 6,000 6,000 6,000Total selling expenses $12,000 $ 16,000 $14,000 Sales commission percent x

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Title: Exercise 22-12 QA_Ori: JASPER COMPANY Cash Receipts Budget For April, May, and June April May June Sales $525,000 $535,000 $560,000 Less ending accts. receivable (70%) 367,500 374,500 392,000 Cash receipts fromCash sales (30% of sales) 157,500 160,500 168,000 Collections of prior months receivables 400,000 367,500 374,500Total cash receipts $557,500 $528,000 $542,500 Cash receipts fromCash

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Title: Problem 22-3A QA_Ori: Part 1 Cash collections of credit sales (accounts receivable) From sales in Total % Collected June July April $ 720,000 28% $201,600 May 360,000 50 180,000 28 $100,800 June 1,080,000 20 216,000 50 540,000 July 900,000 20 _______ 180,000Total collected $597,600 $820,800 May 360,000 50 180,000 28 $100,800 June 1,080,000 20 216,000 50

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Title: Problem 22-7A QA_Ori: Part 1 ZIGBY MANUFACTURING Sales Budgets April, May, and June 2013 Budgeted Units Budgeted Unit Price Budgeted Total Dollars April 2013 20,500 $23.85 $ 488,925 May 2013 19,500 23.85 465,075June 2013 20,000 23.85 477,000Total for the second quarter 60,000 $1,431,000 May 2013 19,500 23.85 465,075June 2013 20,000 23.85 477,000Total for the second quarter 60,000 $1,431,000 May 2013 19,500 23.85 465,075 June

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Title: Problem 22-4B QA_Ori: Part 1 COMP-MEDIA Budgeted Income Statement For Months of July, August, and September, 2013 July August September Sales* $1,265,000 $1,391,500 $1,530,650 Cost of goods sold* 660,000 726,000 798,600 Gross profit 605,000 665,500 732,050 ExpensesSales commissions (10%) 126,500 139,150 153,065Advertising ($200,000 x 1.25) 250,000 250,000 250,000Store rent 24,000 24,000 24,000Administrative salaries 40,000 40,000 40,000Depreciation 50,000 50,000 50,000Other

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Title: Problem 22-7B QA_Ori: Part 1 NABAR MANUFACTURING Sales Budgets July, August, and September 2013 Budgeted Units Budgeted Unit Price Budgeted Total Dollars July 2013 21,000 $17.00 $ 357,000 August 2013 19,000 17.00 323,000September 2013 20,000 17.00 340,000Total for the first quarter 60,000 $1,020,000 August 2013 19,000 17.00 323,000September 2013 20,000 17.00 340,000Total for the first quarter 60,000 $1,020,000 August 2013 19,000 17.00 323,000 September

Student Name: Class: Units Cost Total 1,615,000 $4.10 $6,621,500 1,620,000 $4.00 6,480,000 $141,500 U Correct! Yes! Units Price Total 1,615,000 $4.10 $6,621,500 1,615,000 $4.00 6,460,000 $161,500 U Correct! Yes! 1,615,000 $4.00 $6,460,000 1,620,000 $4.00 6,480,000 $20,000 F Correct! Yes! $161,500 U $20,000 F $141,500 U Correct! Yes! Hours Cost Total 265,000 $13.75 $3,643,750 270,000 $14.00 3,780,000 $136,250 F Correct! Yes! Hours Rate Total 265,000 $13.75 $3,643,750 265,000 $14.00 3,710,000 $66,250 F Correct! Yes! 265,000 $14.00 $3,710,000 270,000 $14.00

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Title: Question 1 QA_Ori: Fixed budget performance reports have limited usefulness because they do not reflect differences in revenues and variable costs that can occur simply because actual volume is different from budgeted volume. This is a serious limitation when evaluating (benchmarking) the reasonableness of actual revenues and costs. reflect differences in revenues

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Title: Exercise 23-1 QA_Ori: Item Cost a. Bike frames Variable b. Screws for assembly Variable c. Repair expense for tools (If these costs are only remotely related to volume, they may be better classified as fixed) Variable d. Direct labor (If employees receive monthly salaries, this cost would be fixed)Variable e. Bike tires Variable

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Title: Exercise 23-9A QA_Ori: 1. Goods in Process Inventory 288,000 Direct Materials Price Variance* 2,200 Direct Materials Quantity Variance 24,000 Raw Materials Inventory 266,200 Direct Materials Price Variance* 2,200 Direct Materials Quantity Variance 24,000 Raw Materials Inventory 266,200 Direct Materials Price Variance* 2,200 Direct Materials Quantity Variance 24,000 Raw Materials Inventory 266,200 To record

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Title: Problem 23-5A QA_Ori: Part 1 Variable or Fixed Classification Per unit 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 Total variable costs $ 24.00 Indirect labor 12.00 Power 3.00 Repairs and maintenance 6.00 Total variable costs $ 24.00 Indirect labor

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Title: Problem 23-1B QA_Ori: Part 1 Direct Materials Variances Direct materials cost variances Actual units at actual cost [1,000,000 lbs. @ $4.25] $4,250,000 Standard units at standard cost [1,050,000 lbs. @ $4.00] 4,200,000Direct material cost variance $ 50,000 U Standard units at standard cost [1,050,000 lbs. @ $4.00] 4,200,000Direct material cost variance $ 50,000 U Standard units

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Part 3 Direct Materials Variances Preliminary computations Actual material used: 69,000 lbs. (given) Standard quantity of materials: 15,000 units x 4.5 lb./unit = 67,500 lb.Actual price: $6.10/lb. (given)Standard price: $6.00/lb. (given) Standard quantity of materials: 15,000 units x 4.5 lb./unit = 67,500 lb.Actual price: $6.10/lb. (given)Standard price: $6.00/lb. (given) Standard quantity of materials: 15,000

Part 4 GUADELUPE COMPANY Overhead Variance Report For Month Ended March 31 Volume Variance Expected production level 80% of capacity Production level achieved 90% of capacity Volume variance $6,000 (favorable) Flexible Actual Controllable Variance Budget Results Variances* Variable overhead costs Indirect materials $11,250 $10,000 $1,250 FIndirect labor 18,000 16,000 2,000 FPower 4,500 4,500 0 Maintenance 2,250 3,000 750

Student Name: Class: Square Footage Rate Total 1,000 8.25$ 8,250$ - Correct! 1,800 8.25 14,850$ - Correct! Value- Usage Total Based Based Costs Costs Costs 18,000$ 18,000$ 27,000 27,000 9,000 9,000 3,000 3,000$ 3,000 3,000 6,000 6,000 66,000$ 54,000$ 12,000$ Correct! Correct! Square Value per Footage Sq. Ft. Total 4,000 30$ 120,000$ 4,000 20 80,000 200,000$ Correct! Market % of Allocated Cost per Value

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Title: Question 1 QA_Ori: Many companies are divided into departments when they become too large to be effectively managed as single units. This division into departments is often needed so that the responsibilities for the activities of a unit do not overwhelm the managers abilityto oversee and control them effectively. Also, departments

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Title: Quick Study 24-15 QA_Ori: Average invested assets Return on investment (assets)= 12,994 (rounded)= 3,385 / 13,044 = 25.95% (rounded) Return on investment (assets)= 12,994 (rounded)= 3,385 / 13,044 = 25.95% (rounded) Return on investment (assets) = 12,994 (rounded) = 3,385 / 13,044 = 25.95% (rounded) = (12,888 + 13,099) / 2 Title: Quick Study 24-16 QA_Ori: a. Process time

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Title: Exercise 24-13 QA_Ori: Preliminary calculations Lobster cost (2,400 lbs. x $4.50) $10,800 Labor cost 1,800 Total cost of processed lobsters $12,600 Parts Quantity* Price Total Lobster tails 1,248 lbs. $21 $26,208 Lobster flakes 528 lbs. 14 7,392 Total market value $33,600 * Quantities are computed as: 52% x 2,400 lbs. = 1,248 lbs. 22% x 2,400 lbs. = 528

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Title: Problem 24-4A QA_Ori: Part 1 Allocations of joint costs on the basis of sales values Tree pruning and care: $405,000 Grade Sales Value Percent of Total Allocated Cost No. 1 $450,000 48.0% $194,400 No. 2 300,000 32.0 129,600 No. 3 187,500 20.0 81,000 Total $937,500 100.0% $405,000 Picking, sorting, and grading: $202,500 Grade Sales Value Percent of Total Allocated Cost No. 1 $450,000 48.0% $ 97,200 No. 2 300,000 32.0 64,800 No.

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Title: Problem 24-4B QA_Ori: Part 1 Allocations of joint cost on the basis of sales values Land preparation, seeding, and cultivating: $700,000 Grade Sales Value Percent of Total Allocated Cost No. 1 $ 900,000 62.5% $437,500 No. 2 500,000 34.7 242,900No. 3 40,000 2.8 19,600Total $1,440,000 100.0% $700,000 No. 2 500,000 34.7 242,900No. 3 40,000 2.8 19,600Total $1,440,000 100.0% $700,000 No. 2

Student Name: Class: 115,000$ Correct! Net Net Cash Income Flow 1,840,000$ 1,840,000$ (480,000) (480,000) (672,000) (672,000) (336,000) (336,000) (115,000) (160,000) (160,000) 77,000 (23,100) (23,100) 53,900$ Correct! 168,900$ Correct!2.84 yearsCorrect!Income taxesNet incomeNet cash flowPart 3 Payback periodPart 4 Accounting rate of return (23,100) (23,100) 53,900$ Correct! 168,900$ Correct!2.84 yearsCorrect!Income taxesNet incomeNet cash flowPart 3 Payback periodPart

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Title: Question 1 QA_Ori: Capital budgeting decisions require careful analysis because they are generally the most difficult and risky decisions that management faces. most difficult and risky decisions that management faces. most difficult and risky decisions that management faces. Title: Question 2 QA_Ori: Capital budgeting is the process of planning the acquisition or sale of

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Title: Exercise 25-7 QA_Ori: 1. PROJECT C1 Net Cash Flows Present Value of 1 at 12% Present Value of Net Cash Flows Year 1 $ 12,000 0.8929 $ 10,715 Year 2 108,000 0.7972 86,098Year 3 168,000 0.7118 119,582Totals $288,000 $216,395Amount invested (228,000)Net present value $ (11,605) Year 2 108,000 0.7972 86,098Year 3 168,000 0.7118 119,582Totals $288,000 $216,395Amount

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Title: Problem 25-2A QA_Ori: Part 1 PROJECT Y Net income $ 56,000 Depreciation expense* 87,500Net cash flow $143,500 *Annual depreciation = = $87,500$350,000 - $0 Depreciation expense* 87,500Net cash flow $143,500 *Annual depreciation = = $87,500$350,000 - $0 Depreciation expense* 87,500 Net cash flow $143,500 *Annual depreciation = = $87,500 $350,000 - $0 PROJECT Z Part 2PROJECT Y

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Title: Problem 25-6A QA_Ori: Part 1 ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Eliminated Continuing Expenses Expenses Expenses Cost of goods sold $469,000 $207,000 $262,000 Direct expenses Advertising 29,000 12,000 17,000 Store supplies used 7,800 3,800 4,000 DepreciationStore equipment 8,300 8,300Allocated expenses Sales salaries* 104,000 52,000 52,000 Rent expense 14,160 14,160

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Title: Problem 25-4B QA_Ori: WINDMIRE COMPANY COMPARATIVE INCOME STATEMENTS (1) (2) (3) Normal New Volume Business Combined Sales $1,200,000 $172,000 $1,372,000Costs and expenses Direct materials 384,000 64,000 448,000 Direct labor 96,000 24,000 120,000 Overhead 288,000 36,000 324,000 Selling expenses 120,000 120,000 Administrative expenses 80,000 4,000 84,000Total costs and expenses 968,000 128,000 1,096,000Operating income $

Student Name: Class: Parts 1 and 2 Unadj. Bal. 34,000 Unadj. Bal. 80,000 Bal. 34,000 Bal. 80,000 Correct! Correct! Unadj. Bal. 0 Unadj. Bal. 15,000 (f) 7,500 ( c) 13,200 Adj. Bal. 7,500 Adj. Bal. 28,200 Correct! Correct! Unadj. Bal. 8,000 Bal. 26,000 (b) 5,200 Adj. Bal. 2,800 Bal. 26,000 Correct! Correct! Unadj. Bal. 12,000 Unadj. Bal. 0 (a) 2,400 (g) 400 Adj. Bal. 9,600 Adj.

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Title: Question 1 QA_Ori: The cash basis of accounting reports revenues when cash is received while the accrual basis reports revenues when they are earned. The cash basisreports expenses when cash is paid while the accrual basis reports expenseswhen they are incurred and matched with revenues they generated. accrual basis reports revenues when

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Part 2 JKL CoMPANY Income Statement For Year Ended July 31, 2013 Revenues Consulting fees earned $134,24 0 Expenses Depreciation expenseOffice equipment $6,00 0 Salaries expense 0 Interest expense 2,200 Insurance expense 5,580 Rent expense 14,500 Office supplies expense 14,000 Advertising expense 13,000 Total expenses 129,280Net income $4,960 Salaries expense 0 Interest expense 2,200 Insurance

Title: Problem 3-5B Part 1 QA_Ori: SPEEDY COURIER Income Statement For Year Ended December 31, 2013 Revenues Delivery fees earned $611,80 0 Interest earned 34,000 Total revenues $645,80 0 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 Repairs expenseTrucks 35,600 Total expenses 559,800Net income

Title: Quick Study 3-18 QA_Ori: a. Step 1: Salaries Payable equals $0 Step 2: Salaries Payable should equal $15,500 (not yet recorded) Step 3: Adjusting entry to get from Step 1 to Step 2 Salaries Expense............................................................. 15,500 Salaries Payable.......................................................... 15,500 To record employee salaries earned but not yet paid. b. Step 1: Interest Payable equals $0 Step 2:

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Title: Exercise 3-10A QA_Ori: a. Dec. 1 Supplies Expense 2,000 Cash 2,000Purchased supplies. Cash 2,000Purchased supplies. Cash 2,000 Purchased supplies. b. Dec. 2 Insurance Expense 1,540 Cash 1,540Paid insurance premiums. Dec. 2 Insurance Expense 1,540 Cash 1,540Paid insurance premiums. Dec. 2 Insurance Expense 1,540 Cash 1,540 Paid insurance premiums. c. Dec. 15 Cash 13,00 0 Remodeling Fees Earned0Received fees for work to

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Title: Problem 3-4A QA_Ori: Part 1 Account Unadjusted Trial Balance Adjustments Adjusted Trial Balance Cash.......................... $ 34,000 $ 34,000 Accounts receivable...... 14,000 (a ) 8,000 22,000 Office supplies.............. 16,000 (b)14,000 2,000Prepaid insurance......... 8,540 (c) 5,580 2,960Office equipment.......... 84,000 84,000Accumulated depreciation Office equipment.....$14,000(d)6,000 $ 20,000Accounts payable......... 9,100 (e)900 10,000Interest payable............ (f) 1,000 1,000Salaries payable........... (g)7,000 7,000Unearned consulting fees...........................18,000 (h)3,000 15,000Long-term notes payable......................52,000 52,000J. Logan, Capital........... 40,000

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Title: Problem 3-3B Parts 1 and 2 QA_Ori: Cash Accounts Payable Bal. 60,000 Bal. 11,200 Bal. 60,000 Bal. 11,200 Bal. 60,000 Bal. 11,200 Accounts Receivable Salaries Payable Unadj. Bal. 0 Unadj. Bal. 0 (f) 5,750 (g) 450Adj. Bal. 5,750 Adj. Bal. 450 (f) 5,750 (g) 450Adj. Bal. 5,750 Adj. Bal. 450 (f) 5,750 (g) 450 Adj. Bal. 5,750 Adj. Bal. 450 Teaching Supplies Unearned Training Fees Unadj.

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Part 2 Profit margin = $86,000 / $645,800 = 13.3% Profit margin = $86,000 / $645,800 = 13.3% Profit margin = $86,000 / $645,800 = 13.3% SPEEDY COURIER Balance Sheet December 31, 2013 Assets Cash $ 58,000 Accounts receivable 120,000 Interest receivable 7,000Notes receivable (due in 90 days) 210,000Office supplies 22,000Trucks $ 134,000Accumulated depreciationTrucks (58,000) 76,000Equipment 270,000Accumulated depreciationEquipment (200,000) 70,000Land

Part 6 SUCCESS SYSTEMS Balance Sheet December 31, 2013 Assets Cash $58,16 0 Accounts receivable 5,668 Computer supplies 580 Prepaid insurance 1,665Prepaid rent 825Office equipment $8,000 Accumulated depreciationOffice equipment -400 7,600Computer equipment20,000Accumulated depreciationComputer equipment -1,250 18,750Total assets$93,248 Prepaid insurance 1,665Prepaid rent 825Office equipment $8,000 Accumulated depreciationOffice equipment -400 7,600Computer equipment20,000Accumulated depreciationComputer equipment -1,250 18,750Total assets$93,248 Prepaid insurance

Title: Quick Study 3-19 QA_Ori: a. Step 1: Accounts Receivable equals $0 Step 2: Accounts Receivable should equal $19,000 (not yet recorded) Step 3: Adjusting entry to get from Step 1 to Step 2 Accounts Receivable........................................................ 15,500 Services Revenue........................................................ 15,500 To record services revenue earned but not yet received. b. Step 1: Interest Receivable equals $0 Step 2:

Title: Exercise 3-11A QA_Ori: a. Initial credit recorded in the Unearned Fees account 1-Jul Cash Unearned Fees 3,000Received fees for work to be done for Solana. 3,000 Unearned Fees 3,000Received fees for work to be done for Solana. 3,000 Unearned Fees 3,000 Received fees for work to be done for Solana. 3,000 6-Jan Cash

Student Name: Class: NOTE: Ledger accounts begin at cell A150, and show all entries that need to be posted. Date Account Titles Acct. No. Debit Credit Apr 1 101 30,000 167 20,000 301 50,000 - Correct! 2640 1,800 101 1,800 - Correct! 3124 1,000 101 1,000 - Correct! 10 128 2,400 101 2,400 - Correct! 14 622 1,600

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Title: Question 1 QA_Ori: The four-step closing entry process is: (i) close the revenue (and gain) accounts to the Income Summary account, (ii) close the expense (and loss) accounts to the IncomeSummary account, (iii) close the Income Summary account to the owners capital account,and (iv) close the withdrawals account to the owners capital

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Title: Exercise 4-2 QA_Ori: 1. 2013 31-Dec Services Revenue 404 44,000 Income Summary 901 44,000 To close the revenue account. 31-Dec Income Summary 901 33,100 Depreciation ExpenseEquipment 612 3,000Salaries Expense 622 22,000Insurance Expense 637 2,500Rent Expense 640 3,400Supplies Expense 653 2,200To close the expense accounts.31-Dec Income Summary 901 10,900T. Cruz, Capital 301 10,900To close income summary.31-Dec T. Cruz,

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Title: Exercise 4-12 Part 1 QA_Ori: DYLAN DELIVERY COMPANY Work Sheet For Year Ended December 31, 2013 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet and Statement of Owners Equtiy Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash............................................. 16,000 16,000 16,000 Accounts receivable.......................... 34,000 34,000 34,000 Office supplies.................................. 5,000 (c) 3,000 2,000 2,000 Trucks............................................ 350,000 350,000 350,000 Accum. DepreciationTrucks............. 80,000 (a) 40,000 120,000

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Part 7 aDVENTURE TRAVEL Post-Closing Trial Balance 30-Apr-13 Debit Credit Cash $27,000 Accounts receivable 1,750 Office supplies 600Prepaid insurance 2,267Computer equipment 20,000Accumulated depreciation Computer equipment $500 Salaries payable 420J. Nozomi, Capital 50,697Totals $51,617 $51,617 Office supplies 600Prepaid insurance 2,267Computer equipment 20,000Accumulated depreciation Computer equipment $500 Salaries payable 420J. Nozomi, Capital 50,697Totals $51,617 $51,617 Office supplies 600 Prepaid insurance 2,267 Computer

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Title: Problem 4-5A QA_Ori: Part 1 Tybalt CONSTRUCTION Income Statement For Year Ended December 31, 2013 Revenues Professional fees earned $97,000 Rent earned 14,000 Dividends earned 2,000 Interest earned 2,100 Total revenues $115,100 Rent earned 14,000 Dividends earned 2,000 Interest earned 2,100 Total revenues $115,100 Rent earned 14,000 Dividends earned 2,000 Interest earned 2,100 Total

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Part 6 Closing entries 31-Jul Storage Fees Earned 40 1 10,950 Income Summary1 10,950 To close the revenue account. Income Summary1 10,950 To close the revenue account. Income Summary 1 10,950 To close the revenue account. 90 31-Jul Income Summary 90 1 8,225 Depreciation ExpBuildings 60 6 1,500 Salaries Expense2 2,100 Insurance Expense...637 400 Rent Expense640 2,000 Office Supplies Expense650 875

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Part 3 Closing entries (all dated December 31, 2013) Instructor note: Entries are shown without an account reference column because no posting is required. 1 Repair Fees Earned 54,700 Income Summary 54,700 To close the revenue account. 2 Income Summary 35,760 Depreciation Expense, Equipment 2,000 Wages Expense 26,400 Insurance Expense 600 Rent Expense 3,600 Store

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Title: Reporting in Action 1 QA_Ori: The revenue items from its income statement must be identified, and those would be credited to Income Summary as step 1 in the closing entry process. For Polaris year ended December 31, 2011, its revenue items consist of ($ thousands): (1) total revenue of $2,656,949, (2) Income from

Student Name: Class: Trans. Date Account Titles no. Debit Credit Jan. 31 4,050 4,050 - Correct! 31 1,400 1,400 - Correct! Prepaid Insurance 1,400 - Correct! Prepaid Insurance 1,400 - Correct! Prepaid Insurance 31 1,525 1,525 - Correct! 31 1,600 1,600 - Correct! 111,950$ 2,000$ 2,200 4,200 107,750 40,000 67,750 1,525 Depreciation expense - Store equipment 1,525 Depreciation expense - Store

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Title: Question 1 QA_Ori: Merchandising companies report Merchandise Inventory on the balance sheet, service companies do not. Also, merchandising companies reportboth Sales (of goods) and Cost of Goods Sold on the income statement,while service companies do not. sheet, service companies do not. Also, merchandising companies reportboth Sales (of goods) and Cost of Goods Sold

Title: Exercise 5-3 QA_Ori: 1. BUYER- Santa Fe Company a) Credit Purchase Merchandise Inventory 24,000 Accounts Payable 24,000Purchased merchandise on credit.b) Cash PaymentAccounts Payable 24,000 Merchandise Inventory* 720 Cash 23,280 *[24,000 x 3%] Paid account payable within 3% discount period. Accounts Payable 24,000Purchased merchandise on credit.b) Cash PaymentAccounts Payable 24,000 Merchandise Inventory* 720

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Title: Exercise 5-14 QA_Ori: Perpetual 1) 1-Nov Merchandise Inventory 1,50 0 Accounts Payable 1,500To record merchandise purchases on credit. Accounts Payable 1,500To record merchandise purchases on credit. Accounts Payable 1,500 To record merchandise purchases on credit. 2) 5-Nov Accounts Payable 1,50 0 Merchandise Inventory 30 Cash 1,470To record cash payment in discount period. Merchandise Inventory 30 Cash 1,470To record cash

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Part 4 Current assets Cash.............................................................................. $ 1,000 Merchandise inventory.................................................. 10,900 Store supplies............................................................... 1,750 Prepaid insurance......................................................... 1,000* Total current assets....................................................... $ 14,650Current liabilities............................................................... $ 10,000Current ratio ($14,650 / $10,000)..................................... 1.47 *$2,400 - $1,400 = $1,000Quick assets (Cash)......................................................... $ 1,000Current liabilities............................................................... $ 10,000Acid-test ratio ($1,000 / $10,000)..................................... 0.10Net Sales.......................................................................... $107,750Cost of Goods Sold..........................................................

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Title: Problem 5-2B QA_Ori: 3-Jul Merchandise Inventory 15,00 0 Accounts PayableOLB 15,000 Purchased goods on credit, terms 1/10, n/30. 4-Jul Accounts PayableOLB 150 Cash 150 Paid freight for OLB Corp. 7-Jul Accounts ReceivableBrill 11,500 Sales 11,500Sold goods on credit, terms 2/10, n/60.7-Jul Cost of Goods Sold 7,750 Merchandise Inventory 7,750To record cost of the July 7 sale.10-Jul Merchandise

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Title: Problem 5-6BB QA_Ori: FOSTER PRODUCTS COMPANY Work Sheet For Year Ended October 31, 2013 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash................................7,400 7,400 7,400 Merchandise inventory.........24,000 ( d ) 2,700 21,300 21,300 Store supplies....................9,700 ( a ) 6,000 3,700 3,700 Prepaid insurance...............6,600 ( b)2,800 3,800 3,800Store equipment.................81,800 81,800 81,800Accum. depreciationStore

Part 3 SUCCESS SYSTEMS Partial Work Sheet March 31, 2014 Acct. No. Account Title Unadjusted Trial Balance Adjustments Adjusted Trial Balance 101 Cash..................................77,845 77,845 106.1 Alexs Engineering Co............ 0 0 106.2 Wildcat Services...................2,800 2,800 106.3 Easy Leasing.......................8,900 8,900 106.4 IMF Co...............................5,220 5,220 106.5 Liu Corporation..................... 0 0106.6 Gomez Co.......................... 0 0106.7 Delta Co.............................. 0 0106.8 KC, Inc................................5,800 5,800106.9 Dream, Inc........................... 0 0119

Student Name: Class: 2012 2013 2014 615,000$ 957,000$ 780,000$ (56,000) 56,000 20,000 (20,000) 559,000$ 1,033,000$ 760,000$ Correct! Correct! Correct! 2012 2013 2014 230,000$ 285,000$ 241,000$ 56,000 (56,000) (20,000) 20,000 286,000$ 209,000$ 261,000$ Correct! Correct! Correct! 2012 2013 20141,255,000$ 1,365,000$ 1,200,000$ (c)Total current assets:Reported 2012 2013 20141,255,000$ 1,365,000$ 1,200,000$ (c)Total current assets:Reported 2012 2013 2014 1,255,000$ 1,365,000$ 1,200,000$ (c) Total current

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Title: Question 1 QA_Ori: (a) FIFO: The cost of the first (earliest) items purchased in inventory flow to cost of goods sold first. of goods sold first. of goods sold first. (b) LIFO: The cost of the last (most recent) items purchased in inventory flow to cost of goods sold first. of goods sold

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Title: Exercise 6-1 QA_Ori: The consignor is Harris Company. The consignee is Harlow Company. The consignor, Harris Company, should include any unsold and consigned goods in its inventory. consignor, Harris Company, should include any unsold and consigned goods in its inventory. consignor, Harris Company, should include any unsold and consigned goods in its inventory. The

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Title: Exercise 6-16B QA_Ori: At Cost At Retail Goods available for sale Beginning inventory $ 63,800 $128,400 Cost of goods purchased 115,060 196,800 Goods available for sale $178,860 325,200Deduct net sales at retail 260,000Ending inventory at retail $ 65,200Cost ratio: ($178,860/$325,200) = 0.55Ending inventory at cost ($65,200 x 55%) $ 35,860 Cost

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Title: Problem 6-4A QA_Ori: 1. Calculate cost of goods available for sale and units available for sale Beginning inventory 600 units @ $45.00 $27,00 0 Feb. 10 400 units @ $42.00 16,800 Mar. 13 200 units @ $27.00 5,400Aug. 21 100 units @ $50.00 5,000Sept. 5 500 units @ $46.00 23,000 Mar. 13 200 units @ $27.00

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QA_Ori: 1. Compute cost of goods available for sale and units available for sale Beginning inventory 20 units @ $3,000 $ 60,000 April 6 30 units @ $3,500 105,000 April 17 5 units @ $4,500 22,500April 25 10 units @ $4,800 48,000Units available 65 unitsCost of goods available for sale $235,500 April 17 5 units

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Title: Problem 6-7BA QA_Ori: Part 1 Number and total cost of units available for sale 6,500 units in beginning inventory @ $35 $ 227,500 11,500 units purchased @ $33 379,500 13,400 units purchased @ $32 428,800 11,000 units purchased @ $29 319,000 7,600 units purchased @ $27 205,200 50,000 units available for

Title: Teamwork in Action QA_Ori: Concepts and procedures to illustrate in expert presentation: Specific Identification Expert: (a) and (b) Concept: Purchases are always recorded at the actual specific costs. The specific identification cost flow assumption requires units sold be assigned their actual cost. Total cost of goods sold is tallied based on

Student Name: Class: Page 2 CHURCH COMPANY Sales Journal COGS Inv. Acct. Rec. Debit Debit Date No. PR Sales Cr. Inv. Credit Mar. 2 854 16,800 8,400 3855 10,200 5,800 10 856 5,600 2,900 27 857 14,910 7,220 28 858 4,315 3,280 31 51,825 27,600 Correct! Correct! Page 2 Accounts Office Other Inv. Payable Inventory Supplies Accounts Date Date Terms PR Credit Debit Debit Debit Mar. 1 3/1

Student Name: Class: Instructor McGraw-Hill/Irwin Problem 07A-06A Debit Credit 69,884$ 19,225 10,000 1,230 1,770 21,220 24,220$ 82,000 10,000 116,685 652 76,225 2,425 1,476 36,600 236,806$ 236,806$ Correct! Correct! 14,910$ 4,315 19,225$ Correct! 3,000$ 21,220 24,220$ Total accounts receivable Gabel Company Spell Supply Total accounts payable March 31 Schedule of Accounts Payable CHURCH COMPANY CHURCH COMPANY CHURCH COMPANY Sales Sales discounts Purchases Purchases Returns and Allowances Purchases Discounts Sales salaries expense Totals Jovita Albany Linda Witt Accounts

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Title: Question 1 QA_Ori: The five components of an accounting system are: source documents, input devices, information processors, information storage, and output devices. QA_Ori: The five components of an accounting system are: source documents, input devices, information processors, information storage, and output devices. QA_Ori: The five components of an accounting system are: source

Parts 2 and 3 QA_Ori GENERAL LEDGER Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Mar. 31 85,000Apr. 30 R3 213,863 298,863 Mar. 31 85,000Apr. 30 R3 213,863 298,863 Mar. 31 85,000 Apr. 30 R3 213,863 298,863 Accounts Receivable Acct. No. 106 Date Explanation PR Debit Credit Balance Apr. 30 S3 37,470 37,47030 R3 27,600 9,870 Apr. 30 S3

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Part 3 QA_Ori CHURCH COMPANY Trial Balance March 31 Debit Credit Cash $ 69,884 Accounts receivable 19,225 Inventory 17,694 Office supplies 1,230 Store supplies 1,770Office equipment 21,220Accounts payable $ 24,220Long-term notes payable 82,000Z. Church, Capital 10,000Sales 116,685 Sales discounts 652Cost of goods sold 64,630Sales salaries expense 36,600 ________Totals $232,905 $232,905 Store supplies 1,770Office equipment 21,220Accounts payable $ 24,220Long-term notes payable

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Title: Problem 7-3B Parts 1 and 2 QA_Ori SALES JOURNAL Page 2 Date Account Debited Invoice Number PR Accounts Receivable Dr. Sales Cr. Cost of Goods Sold Dr. Inventory Cr. Nov. 8 Cyd Rounder 439 6,550 3,910 10 Carlos Mantel 440 13,500 8,500 15 Tori Tripp 441 5,250 2,450 22 Carlos Mantel 442 3,695 2,060 24 Tori Tripp 443

McGraw-Hill Companies, Inc., 2013 McGraw-Hill Companies, Inc., 2013 McGraw-Hill Companies, Inc., 2013 Fundamental Accounting Principles, 21st Edition 478 Comprehensive Problem, Colo Company (Part 1Continued) PURCHASES JOURNAL Page 2 Date Account Date of Invoice Terms PR Accounts Payable Cr.

Part 2 QA_Ori: COLO COMPANY Work Sheet for Month Ended May 31, 2013 Unadjusted Trial Balance Adjustments Income Statement Balance Sheet or State-ment of Owners Equity Account Debit Credit Debit Credit Debit Credit Debit Credit Cash 135,911 135,911 Accounts receivable 18,200 18,200 Merchandise inventory 189,519 189,519 Office supplies 793 (c) 289 504 Store supplies 3,301 (b) 669 2,632 Prepaid insurance 3,318 (a) 553 2,765Office

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Title: Quick Study 7-12A PURCHASES JOURNAL Date Account Date of Invoice Terms PR Account s Payable Cr. Purchases Dr. Office Supplies Dr. Other Accounts Dr. May 1 Krause, Inc.................. 5/01 n/30 10,100 10,100 14 Store Supplies/ Chang Co................5/14 n/30 240 24017 Monder 5/17 n/30 260 260 14 Store Supplies/ Chang Co................5/14 n/30 240 24017 Monder 5/17 n/30

Title: Problem 7-5AA Part 4 WISET COMPANY Trial Balance April 30 Debit Credit Cash..............................................................$ 35,847 Inventory...................................................... 125,000 Office supplies............................................. 1,400 Store supplies.............................................. 830Store equipment........................................... 12,125Accounts payable......................................... $ 25,730Long-term notes payable............................. 110,000B. Wiset, Capital........................................... 100,000Purchases..................................................... 39,425Purchases returns and allowances............. 750Purchases discounts................................... 546Sales salaries expense................................ 21,500Advertising expense.................................... 899 _______Totals............................................................$237,026 $237,026 Store supplies.............................................. 830Store equipment........................................... 12,125Accounts payable......................................... $ 25,730Long-term notes payable.............................

Title: Problem 7-4BA ACCOUNTS RECEIVABLE LEDGER Ruth Blake Date Explanation PR Debit Credit Balance July 6 S3 7,500 7,500 16 R3 7,500 029 S3 17,500 17,500 16 R3 7,500 029 S3 17,500 17,500 16 R3 7,500 0 29 S3 17,500 17,500 Ashton Moore Date Explanation PR Debit Credit Balance July 13 S3 8,550 8,550 23 R3 8,550 030 S3

Title: Problem 7-6BA Parts 1 and 2 SALES JOURNAL Page 2 Date Account Debited Invoice Number PR Accounts Receivable Dr. Sales Cr. Nov. 8 Cyd Rounder......................................439 6,550 10 Carlos Mantel.....................................440 13,500 15 Tori Tripp............................................441 5,250 22 Carlos Mantel.....................................442 3,695 24 Tori Tripp............................................443 4,280 10 Carlos Mantel.....................................440 13,500 15 Tori Tripp............................................441 5,250 22 Carlos Mantel.....................................442 3,695 24 Tori

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Student Name: Class: 27,233$ 27,497$ 11,514 7,955 38,747 35,452 1,482$ NSF check 805$ 382 Service charge 25 2,281 4,145 Error (Check no. 3056) 20 850 34,602$ - Correct! Adjusted book balance 34,602$ - Correct! Date Account Title Debit Credit Jul 31 7,955 45 8,000 - Correct! 31 805 805 - Correct! 31 25 25 - Correct! 31 20 20 - Correct! To charge

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Title: Question 1 QA_Ori: 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; Perform regular and independent reviews. bond key employees; Separate recordkeeping from custody of assets; Divide responsibilities for related transactions;Apply technology

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QA_Ori: 1. E 3. A 5. D2. C 4. F 6. B 1. E 3. A 5. D2. C 4. F 6. B 1. E 3. A 5. D 2. C 4. F 6. B Title: Exercise 8-14B a. Recording inventory at gross amounts Oct. 2 Merchandise Inventory...................................................................................... 3,000 Accounts Payable........................................................................................ 3,000 To record merchandise purchases. 10

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Title: Problem 8-3B Part 1 Jan. 3 Petty Cash......................................................................................................... 150.00 Cash............................................................................................................ 150.00 To establish the petty cash fund. Jan. 14 Office Supplies Expense................................................................................... 14.29 Merchandise Inventory*.................................................................................... 19.60 Repairs ExpenseComputer............................................................................ 38.57 Miscellaneous Expenses.................................................................................... 12.82 Cash Over and Short......................................................................................... 2.44 Cash............................................................................................................ 87.72 To reimburse the petty cash fund. * Transportation-in costs are included in Merchandise Inventory under a

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Title: Question 1 QA_Ori: 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 and often are paid cashfrom the credit card company more quickly than if customers were granted credit directly. Moreover,they

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Title: Exercise 9-6 QA_Ori: a. Computation of the estimated balance of the allowance for uncollectibles: Not due: $396,000 x 0.01 = $ 3,960 1 to 30: 90,000 x 0.02 = 1,800 31 to 60: 36,000 x 0.05 = 1,80061 to 90: 18,000 x 0.07 = 1,260Over 90: 30,000 x 0.10 = 3,000$11,820 Credit 31

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Title: Problem 9-2A QA_Ori: 2012 a. Accounts Receivable............................................ 1,345,434 Sales............................................................... 1,345,434 To record sales on account.Cost of Goods Sold.........................................................975,000 Merchandise Inventory............................................. 975,000 To record cost of sales. Sales............................................................... 1,345,434 To record sales on account.Cost of Goods Sold.........................................................975,000 Merchandise Inventory............................................. 975,000 To record cost of sales. Sales............................................................... 1,345,434 To record sales on account. Cost

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Title: Problem 9-2B QA_Ori: 2013 e. Accounts Receivable.............................................. 870,220 Sales................................................................ 870,220 To record sales on account. Cost of Goods Sold.........................................................650,000 Merchandise Inventory............................................. 650,000 To record cost of sales. f. Cash....................................................................... 990,800 Accounts Receivable........................................ 990,800 To record cash received on account. g. Allowance for Doubtful Accounts........................... 11,090 Accounts Receivable........................................ 11,090 To record write-off of accounts. h. Bad

Title: Ethics Challenge Title: Question 1 QA_Ori: If the estimate for bad debts is reduced then less Bad Debts Expense will be recognized on the income statement resulting in a higher netincome. It also means that a lower allowance will be shown on the balancesheet, which will result in a higher realizable value

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1-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 01-C1 Topic: What is Accounting? 1-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 01-C1 Topic: What is Accounting? 1-1

1-21 Answer: D Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Difficulty: 2 Medium Learning Objective: 01-C1 Topic: Purpose of Accounting 1-21 Answer: D Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Difficulty: 2 Medium Learning Objective: 01-C1 Topic: Purpose of Accounting 1-21

1-41 Answer: C Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 01-A1 Topic: Accounting Equation Feedback: Assets = Liabilities + Owners Equity $700,000 = $200,000 + Owners Equity (or Claims of the Owners); Owners Equity = $500,000 1-41 Answer: C Blooms: Apply

1-61 172. Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash. A. $61,000 increase. B. $37,000 increase. C. $7,000 decrease. D. $7,000 increase. E. $34,000

1-81 Answer: a. +A +E b. +A +L c. +A +E d. +A - A e. +A - A f. -A - E g. -A - L Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 01-A1 Topic: Accounting Equation 1-81 Answer: a.

1-93 Blooms: Create AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 3 Hard Learning Objective: 01-P2 Topic: Financial Statements Blooms: Create AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 3 Hard Learning Objective: 01-P2 Topic: Financial Statements Blooms:

10-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 10-C1 Topic: Costs of Plant Assets 10-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 10-C1 Topic: Costs of Plant Assets

10-21 Answer: D Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 10-C2 Topic: Change in Estimates 10-21 Answer: D Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 10-C2 Topic: Change in Estimates 10-21 Answer: D

10-41 Answer: E Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 10-P3 Topic: Natural Resources 10-41 Answer: E Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 10-P3 Topic: Natural Resources 10-41 Answer: E Blooms:

10-65 Answer: Plant assets should be recorded at cost when acquired. Cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use. The cost of a lump-sum purchase is allocated among its individual assets based on their relative market (or estimated)

10-85 storm. Aug 25 Purchased used office equipment for $14,700 cash. Sales tax was $825, freight costs $250, and reconditioning costs $900, all of which were paid in cash. The estimated useful life of the equipment is 3 years and salvage value is $500. Oct 5 Purchased store equipment

10-100 196. Record the following events and transactions for Axle Company for the current year. 1. On January 2, Axle purchased a patent for $35,000 with a useful life of 10 years. Prepare the journal entry to amortize the patent at the end of the first year. 2. On

11-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 11-C1 Topic: Liabilities a 11-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 11-C1 Topic: Liabilities a 11-1 Answer: False Blooms:

11-21 Answer: C 11-21 Answer: C 11-21 Answer: C 63. The times interest earned ratio reflects: A. A company's ability to pay its operating expenses on time. B. A company's ability to pay interest even if sales decline. C. A company's profitability. D. The relation between income and

11-41 Answer: E Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 11-P5 Topic: Payroll Reports, Records and Procedures 11-41 Answer: E Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 11-P5 Topic: Payroll Reports, Records

11-61 Answer: 14.3 Blooms: Apply AACSB: Analytic AICPA BB: Resource Management AICPA FN: Risk Analysis Difficulty: 3 Hard Learning Objective: 11-A1 Topic: Times Interest Earned Ratio Feedback: Times Interest Earned Ratio = Income before Interest Expense and Income Taxes/Interest Expense Times Interest Earned Ratio = $5,698/$399 = 14.3 11-61 Answer:

11-75 Answer: May 31 Administrative Salaries Expense ....... ........ 2,000 Sales Salaries Expense ............................... 3,500 Shop Wages Expense ................................. 4,000 FICA-Social Security Taxes Payable ... 589 FICA-Medicare Taxes Payable ............ 138 Employee Federal Income Taxes Payable 1,300 Employee Medical Insurance Payable 415 Employee Union Dues Payable ............ 205 Salaries Payable

12-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Legal AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 12-C1 Topic: Characteristics of Partnerships 12-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Legal AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 12-C1 Topic: Characteristics of Partnerships 12-1 Answer:

12-21 Answer: B 12-21 Answer: B 12-21 Answer: B Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 12-P2 Topic: Allocation of Income and Loss Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 12-P2 Topic: Allocation

12-41 Answer: Four steps are involved in the liquidation process: (1) Record the sale of noncash assets for cash and any gain or loss from their liquidation; (2) Allocate any gains or losses from liquidation to the partners' capital accounts using their income-and-loss sharing ratio; (3) Liabilities of the partnership

12-54 Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 12-P4 Topic: Liquidation of a Partnership 12-54 Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 12-P4 Topic: Liquidation of a Partnership 12-54 Blooms: Apply AACSB: Analytic AICPA

13-1 Chapter 13 ACCOUNTING FOR CORPORATIONS True /False Questions 1. A corporation is a legal entity separate from its owners. Answer: True Blooms: Remember AACSB: Communication AICPA BB: Legal AICPA FN: Reporting Difficulty: 1 Easy Learning Objective: 13-C1 Topic: Corporations Answer: True Blooms: Remember

13-21 Answer: B Blooms: Remember AACSB: Communication AICPA BB: Legal AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 13-C1 Topic: Corporations 13-21 Answer: B Blooms: Remember AACSB: Communication AICPA BB: Legal AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 13-C1 Topic: Corporations 13-21 Answer: B Blooms: Remember AACSB: Communication

13-41 Answer: A Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 13-P2 Topic: Recording Stock Dividends 13-41 Answer: A Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 13-P2 Topic: Recording Stock Dividends 13-41 Answer:

13-61 Answer: Dawls Corporation Statement of Retained Earnings For the Year Ended December 31 Retained earnings, December 31 (prior year) $3,000,000 Plus net income .. 800,000 Less: Stock dividend (500,000 shares * 5% * $8) $(200,000) Cash dividend (525.000 shares * $0.30) .. (157,500) (357,500) Retained earnings, December 31 (current

13-77 Answer: (a) Mar. 25 Retained Earnings (20,000 shares * $2/share) 40,000 Common Dividend Payable. 40,000 Apr. 20 Common Dividend Payable 40,000 Cash 40,000 Dec. 31 Income Summary 52,000 Retained Earnings 52,000 (b) Retained earnings, January 1 $ 75,000 Plus net income 52,000 $127,000 Less dividends declared (40,000) ) Retained

14-1 Answer: False Blooms: Understand AACSB: Communication AICPA BB: Legal AICPA FN: Decision Making Difficulty: 2 Medium Learning Objective: 14-A2 Topic: Assessing Debt Features and Their Implications 14-1 Answer: False Blooms: Understand AACSB: Communication AICPA BB: Legal AICPA FN: Decision Making Difficulty: 2 Medium Learning Objective: 14-A2 Topic: Assessing

14-21 Answer: B 14-21 Answer: B 14-21 Answer: B 67. The contract between the bond issuer and the bondholders, which identifies the rights and obligations of the parties, is called a(n): A. Debenture. B. Bond indenture. C. Mortgage. D. Installment note. E. Mortgage contract. Answer: B Blooms:

14-41 113. A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $101,137 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest

14-62 Answer: Periods Payments Present value of 1 at 10% Present value of payments 1 $25,000 0.9091 $22,727.50 2 15,000 0.8264 12,396.00 3 5,000 0.7513 3,756.50 Total cash received $38,880.00 14-62 Answer: Periods Payments Present value of 1 at 10% Present value of payments 1 $25,000 0.9091 $22,727.50 2

14-75 Answer: 7/1 Bond Interest Expense ...................................... 32,714.40 Premium on Bonds ............................................ 3,285.60 Cash ......................................................... 36,000.00 Cash payment: $720,000 * 10% * year = $36,000.00 Interest expense: $817,860 * 8% * year = $32,714.40 Premium amortized: $36,000.00 - $32,714.40 = $3,285.60 Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 15-1 2013 by McGraw-Hill Education. This

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 15-21 2013 by McGraw-Hill Education. This

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 15-41 2013 by McGraw-Hill Education. This

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 15-61 2013 by McGraw-Hill Education. This

Answer: Apr. 18 Short-Term Investments AFS 132,850 Cash [(5,000 * $26.50) + $350] 132,850 May 01 Long-Term Investments HTM 200,000 Cash 200,000 Jun. 10 Short-Term Investments AFS 193,325 Cash [(4,000 * $48.25) + $325] 193,325 Nov. 01 Cash (200,000 * .07 * 1/2) 7,000 Interest Revenue 7,000 Nov. 15

16-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 16-C1 Topic: Measurement of Cash Flows 16-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 16-C1 Topic: Measurement of Cash Flows

16-21 Answer: D 16-21 Answer: D 16-21 Answer: D 69. If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n): A. Operating activity. B. Investing activity. C. Financing activity. D. Noncash investing and financing

16-41 110. The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $156,000 Cash dividends declared for the year $ 46,000 Proceeds from the sale

16-61 Answer: By separating cash flows into three categories, the statement of cash flows allows users to focus their analysis on specific areas of importance. The operating section of the statement reveals the net effect of cash inflows and cash outflows from the core activities of a business which directly

16-81 Answer: (a) Increase in inventory = $21,200 - $15,600 = $ 5,600 Cost of purchases = $165,600 + $5,600 = $171,200 Decrease in accounts payable = $32,400 - $27,400 = $ 5,000 Cash paid for purchases of merchandise = $171,200 + $5,000 = $176,200 (b) Decrease in accounts receivable

16-95 Answer: (1) Crockett Company Cash flows from operating activities: Net income $ 51,500 Adjustments to reconcile net income to net cash provided by operating activities: Increase in accounts receivable (32,000 ) Decrease in merchandise inventory 14,000 Decrease in prepaid expenses 9,200 Increase in accounts payable 13,500 Depreciation expense 45,000

17-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 17-C1 Topic: Financial Statement Analysis 17-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 17-C1 Topic: Financial Statement Analysis 17-1 Answer:

17-21 Answer: C Blooms: Understand AACSB: Communication AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 17-C2 Topic: Comparison Standards in Analysis 17-21 Answer: C Blooms: Understand AACSB: Communication AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 17-C2 Topic: Comparison Standards in Analysis 17-21 Answer:

17-41 A. 36.4% for Year 2 and 41.1% for Year 1. B. 55.0% for Year 2 and 56.0% for Year 1. C. 119.4% for Year 2 and 100.0% for Year 1. D. 117.2% for Year 2 and 100.0% for Year 1. E. 65.1% for Year 2 and 64.6% for

17-8 Answer: 2016 2015 2014 2013 2012 Sales 139.0% 130.0% 122.0% 112.0% 100% Cost of goods sold. 134.6% 125.9% 120.0% 110.4% 100% Gross profit. 147.2% 137.5% 125.6% 115.1% 100% 17-8 Answer: 2016 2015 2014 2013 2012 Sales 139.0% 130.0% 122.0% 112.0% 100% Cost of goods sold. 134.6% 125.9% 120.0% 110.4%

17-25 Answer: (a) Current assets = ($40,000 + $35,000 + $60,000) $135,000 Current liabilities 64,000 Working capital $71,000 (b) Acid-test ratio: ($40,000 + $35,000)/$64,000 = 1.17 (c) Current ratio: $135,000/$64,000 = 2.11 (d) Debt ratio: ($64,000 + $72,000)/$285,000 = .48 (e) Equity ratio: ($100,000 + $49,000)/$285,000 = .52 (f) Debt-to-equity

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 18-1 2013 by McGraw-Hill Education. This is

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 18-21 2013 by McGraw-Hill Education. This is

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 18-41 2013 by McGraw-Hill Education. This is

18-60 Answer: The differences include: (1) Users and decision makers Financial accounting focuses on external decision makers and managerial accounting focuses on internal decision makers. (2) Purpose of information External users of financial accounting information must often decide whether to invest in, or lend to a company or whether to

18-76 Beginning raw materials inventory _______ ______ Ending raw materials inventory _______ ______ Raw material purchases _______ ______ Depreciation of factory building _______ ______ Cost of goods manufactured _______ ______ Answer: Cost of Goods Cost of Goods Manufactured Sold Beginning finished goods inventory 0 + Ending finished

19-1 Answer: False Blooms: Understand AACSB: Communication AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 19-C1 Topic: Features of Job Order Production 19-1 Answer: False Blooms: Understand AACSB: Communication AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 19-C1 Topic: Features of Job Order Production

19-21 64. A source document that production managers use to request materials for production and that is used to assign materials costs to specific jobs or to overhead is a: A. Job cost sheet. B. Production order. C. Materials requisition. D. Materials purchase order. E. Receiving report. Answer:

19-41 Answer: C Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 19-P3 Topic: Flow of Overhead Costs in Job Order Cost Accounting Feedback: OH rate = $396,000/$220,000 = 180% Applied = $224,000 * 1.8 = $403,200; $413,200 - $403,200 = $10,000 underapplied 19-41

19-67 Answer: Direct labor in goods in process inventory . $12,000 Factory overhead in goods in process inventory ($12,000 * .125) 1,500 Total factory overhead and direct labor .. 13,500 Total cost in goods in process inventory . $36,000 Factory overhead and direct labor ... 13,500 Direct materials . $22,500

19-79 Answer: Dec. 31 Factory Overhead 9,000 Cost of Goods Sold . 9,000 19-79 Answer: Dec. 31 Factory Overhead 9,000 Cost of Goods Sold . 9,000 19-79 Answer: Dec. 31 Factory Overhead 9,000 Cost of Goods Sold . 9,000 Factory equipment rental 100,000 (a) Calculate

2-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 02-C1 Topic: Processing Transactions 2-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 02-C1 Topic: Processing Transactions 2-1

2-21 Answer: C Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 02-C4 Topic: Debits and Credits 2-21 Answer: C Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 02-C4 Topic: Debits and Credits

2-41 Answer: C Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 02-P2 Topic: Trial Balance Feedback: Total Debits on Trial Balance = Cash + Accounts Receivable + Rent Expense + Insurance Expense + Supplies + Sam, Withdrawals Total Debits on Trial Balance

2-61 Answer: Type of Account Normal Balance 2-61 Answer: Type of Account Normal Balance 2-61 Answer: Type of Account Normal Balance 149. Indicate whether a debit or credit entry would be made to record the following changes in each account. a. To decrease Cash

2-81 Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 02-P1 Learning Objective: 02-P2 Topic: Recording Transactions and Posting Entries Topic: Trial Balance Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 02-P1 Learning Objective:

20-1 Chapter 20 PROCESS COST ACCOUNTING 1. The managers of process manufacturing systems focus on the series of processes needed to complete the production of products. Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 20-C1

20-21 Answer: True Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 20-P4 Topic: Transfers of Goods upon Completion and Selling 20-21 Answer: True Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 20-P4 Topic: Transfers

20-41 Answer: B Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 20-P2 Topic: Flow of Direct Labor Costs 20-41 Answer: B Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 20-P2 Topic: Flow of Direct

20-61 Direct labor and overhead added 3,750 1.80 6,750 Total costs to process $ 20,600 Goods started and completed Direct materials added 40,000 $2.25 $ 90,000 Direct labor and overhead added 40,000 1.80 72,000 Total costs to process $162,000 Total costs transferred to finished goods $182,600 Cost

20-75 Answer: Direct Direct Factory Equivalent Units of Production Materials Labor Overhead Units completed and transferred out 50,000 50,000 50,000 Units of ending goods in process 9,600 6,000 6,000 Equivalent units of production 59,600 56,000 56,000 Materials EUP = 12,000 units * 80% Labor & Overhead EUP = 12,000

21-1 Answer: False Blooms: Understand AACSB: Communication AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 21-C1 Topic: Different Types of Cost Behavior 21-1 Answer: False Blooms: Understand AACSB: Communication AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 21-C1 Topic: Different Types of

21-21 Blooms: Apply AACSB: Analytic AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 21-C2 Topic: Applications of Cost-Volume-Profit Analysis Blooms: Apply AACSB: Analytic AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 21-C2 Topic: Applications of Cost-Volume-Profit Analysis

21-41 Answer: D Feedback: 3 units of M at $7 each $21 1 unit of N at $4 each.. 4 2 units of O at $6... 12 $37 Selling price of a composite unit.... 3 units of M at [$7 - 3] contribution margin per unit $12 1 unit of

21-66 Answer: To cover the cost increase, the increased fixed costs must be countered with an increase in contribution margin. Specifically: Sales increase * Contribution margin ratio = Increased contribution margin Sales increase * .40 = $5,000 Sales increase = $5,000/.40 = $12,500 Blooms: Apply AACSB: Analytic AICPA BB: Resource

21-79 Answer: 5 units of Product A @ $30 per unit = $1503 units of Product B @ $40 per unit = 1201 unit of Product C @ $50 per unit = 50 Selling price of a composite unit ..................... $3205 units of Product A @ $14 per unit =

22-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 22-C1 Topic: Important and Benefits of Budgeting Topic: Process of Budget Administration 22-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 1 Easy Learning Objective:

22-21 Answer: E 22-21 Answer: E 22-21 Answer: E 63. A plan that lists dollar amounts to be received from disposing of plant assets and dollar amounts to be spent on purchasing additional plant assets is called a: A. Cash budget. B. Capital expenditures budget. C. Rolling budget. D.

22-41 Answer: A Feedback: Required production for May: For sales 280 units For ending inventory (60% * 300) 180 units Less beginning inventory (60% * 280) (168)units To produce 292 units Required production for June: For sales 300 units For ending inventory (60% * 240) 144 units Less beginning inventory

22-65 January February March Sales budget: Sales in Units 1,200 1,000 1,600 Price per unit * $25 * $25 * $25 Dollar Sales $30,000 $25,000 $40,000 Cash receipts table: Cash sales (40% of current mo. sales) $ 12,000 $ 10,000 $ 16,000 Credit sales from prior month 10,000 18,000 15,000

22-77 Answer: Sweeny Co. Cash Budget For the Month of May Beginning cash balance .. $ 40,000 Cash receipts from sales (a) 145,500 Total $185,500 Cash disbursements: Payments for merchandise (b) $109,160 Payroll . 14,280 Advertising . 5,700 Rent 1,500 Interest ($16,000 * 1%) .. 160 Total cash disbursements $130,800

23-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 23-C1 Topic: Standard Costs and Their Usefulness 23-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 23-C1 Topic: Standard Costs and

23-21 60. Kyle, Inc. has collected the following data on one of its products. The direct materials quantity variance is: Direct materials standard (4 lbs. @ $1/lb.) $4 per finished unit Total direct materials cost varianceunfavorable $13,750 Actual direct materials used 150,000 lbs. Actual finished units produced

23-41 95. Bok Companys output for the current period was assigned a $200,000 standard direct materials cost. The direct materials variances included a $5,000 favorable price variance and a $3,000 unfavorable quantity variance. What is the actual total direct materials cost for the current period? A. $208,000. B.

23-12 Answer: Budget Actual Variance Units 21,000 21,000 Sales $630,000 $651,000 $ 21,000F Variable costs: Direct materials 210,000 231,000 21,000U Direct labor .. 168,000 168,000 0 Variable overhead 63,000 73,500 10,500U Variable operating expenses 42,000 39,500 2,500F Total variable costs .. $483,000 $512,000 $29,000U Contribution margin $147,000 $139,000 $ 8,000U

23-29 AH * SR 50,660 hours * $17/hr. $861,220 SH * SR 50,000** hours * $17/hr. 850,000 Direct labor efficiency variance $ 11,220 U **25,000 units * 2 hours/unit = 50,000 hours b. Goods in Process Inventory 228,750 Direct Material Price Variance 3,800 Direct Material Quantity Variance

24-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Resource Management AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 24-P1 Topic: Responsibility Report 24-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Resource Management AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 24-P1 Topic: Responsibility Report 24-1 Answer:

24-21 Answer: A Feedback: Per $660 Product Lb. lb. Total % allocated A 200 $8/lb. $1,600 50% $330 B 100 $16/lb. 1,600 50% 330 Total $3,200 $660 24-21 Answer: A Feedback: Per $660 Product Lb. lb. Total % allocated A 200 $8/lb. $1,600 50% $330 B 100 $16/lb. 1,600 50%

24-41 Answer: C Feedback: $200,000 20%$1,000,000= Blooms: Apply AACSB: Analytic AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 24-P3 Topic: Departmental Income Statements and Contribution Reports 24-41 Answer: C Feedback: $200,000 20%$1,000,000= Blooms: Apply AACSB: Analytic AICPA BB: Resource Management AICPA FN: Measurement Difficulty: 3 Hard

24-61 __________ (1) Investment center __________ (2) Performance report __________ (3) Cost center __________ (4) Departmental contribution to overhead __________ (5) Profit center __________ (6) Responsibility accounting system Answer: 1. B; 2. D; 3. E; 4. F; 5. A; 6. C Answer: 1. B; 2. D;

24-76 Depreciation (75% and 25%)........... 10,350 3,450 Maintenance (75% and 25%)........... 22,050 7,350 Office expenses (60% and 40%)...... 42,660 28,440 Total indirect expenses..................... $105,274 $ 53,226 Net income............................................ $ 97,330 $ 55,570 Depreciation (75% and 25%)........... 10,350 3,450 Maintenance (75% and 25%)........... 22,050 7,350 Office expenses (60% and 40%)......

25-1 Answer: False Blooms: Remember AACSB: Analytic AICPA BB: Resource Management AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 25-P4 Topic: Internal Rate of Return 25-1 Answer: False Blooms: Remember AACSB: Analytic AICPA BB: Resource Management AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 25-P4 Topic: Internal Rate

25-21 Answer: C 25-21 Answer: C 25-21 Answer: C 54. Marsden manufactures a cat food product called Special Export. Marsden currently has 10,000 bags of Special Export on hand. The variable production costs per bag are $1.80 and total fixed costs are $10,000. The cat food can be

25-41 Answer: C Feedback: Incremental cost = Purchase price less cost savings; $45 ($10 + $24 + (55% * $16) = $2.20 25-41 Answer: C Feedback: Incremental cost = Purchase price less cost savings; $45 ($10 + $24 + (55% * $16) = $2.20 25-41 Answer: C Feedback: Incremental

25-61 Answer: Per Unit For 1,000 Units Variable costs of producing the special order: Direct materials $ 10 $10,000 Direct labor 16 16,000 Variable overhead 4 4,000 Total variable costs $30,000 Additional fixed cost 2,000 Total incremental costs $32,000 Desired profit 3,000 Required revenue $35,000 Required revenue per unit ($35,000/1,000)

25-73 Answer: Present value of net Net cash flows* Present value factor cash flows Years 1 3 $18,000 2.4018 $43,232 Initial investment .. (45,000) Net present value... $ (1,768) *Annual cash flows = $3,000 + $15,000 = $18,000 Blooms: Apply AACSB: Analytic AICPA BB: Resource Management AICPA FN: Decision Making

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-1 2013 by McGraw-Hill Education. This is

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-21 2013 by McGraw-Hill Education. This is

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-41 2013 by McGraw-Hill Education. This is

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-61 2013 by McGraw-Hill Education. This is

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-81 2013 by McGraw-Hill Education. This is

2013 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 not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-94 2013 by McGraw-Hill Education. This is

4-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 04-C1 Topic: Closing Process 4-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 04-C1 Topic: Closing Process 4-1 Answer: True Blooms:

4-21 Answer: A Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Reporting Difficulty: 1 Easy Learning Objective: 04-C3 4-21 Answer: A Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Reporting Difficulty: 1 Easy Learning Objective: 04-C3 4-21 Answer: A Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA

4-41 115. Permanent accounts include all of the following except: A. Accumulated Depreciation - Equipment. B. Prepaid Rent. C. Unearned Consulting Revenue. D. Accounts Payable. E. Depreciation Expense - Equipment. Answer: E Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 04-C1

4-61 Answer: 4-61 Answer: 4-61 Answer: 144. The calendar year-end adjusted trial balance for Acosta Co. follows: ACOSTA CO. Adjusted Trial Balance December 31 Cash $ 100,000 Accounts receivable 7,000 Prepaid rent 15,000 Prepaid Insurance 9,000 Office supplies 3,300 Office equipment 8,000 Accumulated depreciationEquipment

4-80 Answer: a. Dec. 31 Salaries Expense ................. 3,500 Salaries Payable... 3,500 b. Jan. 1 Salaries Payable ................. 3,500 Salaries Expense.. 3,500 Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 04-P4 Topic: Reversing Entries 4-80 Answer: a. Dec. 31 Salaries Expense ................. 3,500

5-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 05-C1 Topic: Merchandising Companies and Activities 5-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 05-C1 Topic: Merchandising Companies and Activities

5-21 Answer: B Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 05-C2 Topic: Merchandise Inventory 5-21 Answer: B Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 05-C2 Topic: Merchandise Inventory 5-21 Answer: B Blooms:

5-41 114. An account used in the periodic inventory system that is not used in the perpetual inventory system is A. Merchandise Inventory B. Sales C. Sales Returns and Allowances D. Accounts Payable E. Purchases Answer: E Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty:

5-61 Answer: Part 1 Trico Duco Unico Cash $ 9,800 $10,500 $26,500 Short-term investments 6,400 8,200 12,500 Accounts receivable 12,500 8,500 14,350 Merchandise inventory 30,150 40,000 40,150 Prepaid expense 900 6,750 2,450 Total current assets $59,750 $73,950 $95,950 Accounts payable $19,400 $13,750 $26,800 Salary payable 1,200 3,500 6,250 Other current

5-78 Answer: June 10 Purchases. 9,000 Accounts Payable. 9,000 12 Accounts Payable... 600 Purchases Returns and Allow.. 600 19 Accounts Payable... 8,400 Cash.. 8,232 Purchases Discounts ($8,400 x .02).. 168 5-78 Answer: June 10 Purchases. 9,000 Accounts Payable. 9,000 12 Accounts Payable... 600 Purchases Returns and Allow.. 600 19 Accounts

6-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 06-C1 Topic: Merchandise Inventory 6-1 Answer: True Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Measurement Difficulty: 1 Easy Learning Objective: 06-C1 Topic: Merchandise Inventory 6-1 Answer: True Blooms: Remember AACSB:

6-21 Answer: E Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 06-C1 Topic: Merchandise Inventory Feedback: Start with beginning inventory of $412,000. The information in the first bullet point was handled correctly since inventory should include consigned goods for which the subject company

6-41 Answer: C Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 06-P1 Topic: Inventory Computations in a Perpetual System Feedback: Purchases Cost of goods sold Balance Unit Unit Date Units cost Total Units cost Total Units Unit cost Total June 1 15 $20

6-61 2013. 2013 2012 Net sales $647,500 $582,000 Cost of goods sold 388,500 360,840 Ending inventory 77,700 79,380 A. 8.33 B. 5.00 C. 4.95 D. 4.54 E. 7.33 Answer: C Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 06-A3 Topic:

6-81 Answer: Date Units Purchases Total Units Sales Total Units Balance Total Unit cost Unit cost Unit cost 1/1 100 $10 $1,000 1/5 40 $12 $480 100 $10 $1,000 40 $12 480 140 $1,480 1/10 60 $10 $600 40 $10 $ 400 40 $12 480 80 $ 880 1/15 70

6-93 Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 06-P4 Topic: Retail Inventory Method 6-93 Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 06-P4 Topic: Retail Inventory Method 6-93 Blooms: Apply AACSB: Analytic AICPA BB: Industry

7-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 07-C1 Topic: Principles of Accounting Information Systems 7-1 Answer: False Blooms: Remember AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 1 Easy Learning Objective: 07-C1 Topic: Principles of Accounting

7-21 66. Output devices include all of the following except: A. Printers. B. Monitors. C. LCD projectors. D. Web communications. E. Bar code readers. Answer: E Blooms: Understand AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Difficulty: 2 Medium Learning Objective: 07-C1 Topic: Accounting Information Systems Answer: E Blooms:

7-41 Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Difficulty: 2 Medium Learning Objective: 07-C1 Topic: Accounting Information Systems 7-41 Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Difficulty: 2 Medium Learning Objective: 07-C1 Topic: Accounting Information Systems 7-41 Blooms: Understand AACSB: Analytic AICPA

7-61 Answer: Sales Journal Date Account Debited Invoice Number PR Accounts Receivable Dr. Sales Cr. Cost of Goods Sold Dr. Inventory Cr. 8/4 Coe Co. 245 4,000 2,320 8/5 Delta Co. 246 3,000 1,740 Purchases Journal Date Account Date of Invoice Terms PR Accounts Payable Cr. Inventory Dr. Office Supplies

7-77 Answer: a. Cash receipts b. Purchases c. Cash disbursements d. Sales e. Cash receipts f. Cash disbursements g. Cash receipts h. Purchases i. General j. Sales Blooms: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Difficulty: 2 Medium Learning Objective: 07-P1 Topic: Special Journals 7-77 Answer: a.

8-1 Chapter 8 CASH AND INTERNAL CONTROLS 1. A properly designed internal control system is a key part of systems design, analysis, and performance. Answer: True Blooms: Remember AACSB: Technology AICPA BB: Industry AIPCA BB: Leveraging Technology AICPA FN: Leveraging Technology Difficulty: 1 Easy Learning

8-21 70. Internal control policies and procedures have limitations including: A. Human error. B. Human fraud. C. Cost-benefit principle. D. Collusion. E. All of the options are limitations. Answer: E Blooms: Understand AACSB: Technology AICPA BB: Industry AICPA BB: Leveraging Technology AICPA FN: Leveraging Technology Difficulty: 2 Medium Learning

8-41 Answer: C Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 08-P3 Topic: Bank Reconciliation Feedback: $794 - $749 = $45 8-41 Answer: C Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard Learning Objective: 08-P3 Topic: Bank Reconciliation

8-61 Answer: Aug. 17 Cash.. 965 Sales 957 Cash over and short 8 8-61 Answer: Aug. 17 Cash.. 965 Sales 957 Cash over and short 8 8-61 Answer: Aug. 17 Cash.. 965 Sales 957 Cash over and short 8 155. Marbel had $2,816 million in sales

8-75 Answer: Jan. 2 Merchandise Inventory ........................................ 19,600 Accounts Payable ($20,000 * 0.98) .............. 19,600 4 Accounts Payable ($4,000 * 0.98) ....................... 3,920 Merchandise Inventory ................................. 3,920 12 Merchandise Inventory ........................................ 14,550 Accounts Payable ($15,000 * 0.97) .............. 14,550 12 Discounts Lost ($16,000 * 0.02) .......................... 320 Accounts Payable .........................................

9-1 Answer: False Blooms: Understand AACSB: Communication AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 09-C1 Topic: Accounts Receivable 9-1 Answer: False Blooms: Understand AACSB: Communication AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 09-C1 Topic: Accounts Receivable 9-1 Answer: False Blooms: Understand AACSB:

9-21 67. A company receives a 10%, 90-day note for $1,500. The total interest due on the maturity date is: A. $ 50.00 B. $150.00. C. $ 75.00. D. $ 37.50. E. $ 87.50. Answer: D Blooms: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 3 Hard

9-41 107. Darby uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be .5% of sales, what is the amount of the

9-65 Answer: a. Dec. 31 Bad Debts Expense................................................................. 9,300 Allowance for Doubtful Accounts*..................................... 9,300 *($780,000 - $160,000) * .015 b. Dec. 31 Bad Debts Expense................................................................. 8,000 Allowance for Doubtful Accounts**................................... 8,000 **Required balance ($190,000 * 5%)..................................... $9,500 Balance before adjusting entries ($8,300-$6,800).................... 1,500 Required adjustment................................................................ $8000 Blooms: Apply AACSB: Analytic

9-77 Blooms: Apply AACSB: Analytic AACSB: Communication AICPA BB: Industry AICPA FN: Measurement AIPCA FN: Reporting Difficulty: 3 Hard Learning Objective: 09-C1 Learning Objective: 09-P2 Topic: Accounts Receivable Topic: Allowance Method 9-77 Blooms: Apply AACSB: Analytic AACSB: Communication AICPA BB: Industry AICPA FN: Measurement AIPCA FN: Reporting Difficulty: 3 Hard