Financial & Managerial Accounting 18th Edition

B.1 15 Easy LO B.2 20 Medium LO B-3, B-4 B.3 15 Medium LO B.4 15 Medium LO B.5 20 Medium LO B.6 35 Strong LO B.7 25 Strong LO B-5, B-6 B-1, B-2, B-4 B-1, B-2, B-5 B-3, B-5, B-6 B-3, B-5, B-6 B-3, B-5, B-6 Use of Future Amount Tables A company sells land in exchange for a long-term note bearing an unrealistically low interest rate, but the

FORMS OF BUSINESS ORGANIZATIONS Problems C.1 E-Z Manufacturing Company 15 Easy LO C-3, C-10 Students are required to calculate partners share of net income, determine the effects of income taxes for partners, and prepare a statement of partners equity. C.2 Waffon Corporation 15 Easy LO C-6, C-7 Students must analyze the effects of stockholders investments, net income, and

45 Minutes, Strong PROBLEM C.8 S & X CO. a. General Journal (1) Nov 9 Cash 15,000 Saunder, Capital 15,000 To record additional investment by owner. 15 Saunder, Drawing 1,500 Cash 1,500 To record withdrawal from business.30 Saunder, Drawing 1,500 Cash 1,500 To record withdrawal from business.30 Saunder, Drawing 1,000 Cash 1,000 To record

Chapter 01Accounting: Information for Decision Making Financial and Managerial Accounting, 18e 1-1 1 ACCOUNTING: INFORMATION FOR DECISION MAKING Chapter Summary Our financial reporting system has changed greatly over the past 50 years and will continue to change. The financial world is experiencing unparalleled challenges, such as globalization, changing

5 to 6 hours Strong COMPREHENSIVE PROBLEM 1 Susquehanna Equipment Rentals A mini-practice set illustrating the complete accounting cycle for a service-type business. Includes computation of income taxes expense (as a percentage of income before taxes) and an evaluation of solvency. Can be done as a group assignment. SUSQUEHANNA EQUIPMENT RENTALS 5 to 6 hours, Strong

Brief Learning Exercises Topic Objectives Skills B. Ex. 1.1 Users of accounting information 1-1, 1-3, 1-5 Analysis B. Ex. 1.2 Components of internal control 1-2, 1-5 Analysis B. Ex. 1.3 Inexact or approximate measures 1-3, 1-4 Analysis, judgment B. Ex. 1.4 Standards for the preparation of 1-5, 1-6 Analysis accounting information B. Ex. 1.5 FASB conceptual framework

Brief Learning Exercises Objectives B. Ex. 10.1 Cash effects of borrowing 10-2 B. Ex. 10.2 Effective interest rate 10-5 B. Ex. 10.3 Bonds issued at a discount 10-6 B. Ex. 10.4 Bonds issued a premium 10-6 Analysis B. Ex. 10.5 10-6 Analysis B. Ex. 10.6 10-6 Analysis B. Ex. 10.7 Debt ratio 10-9 B. Ex. 10.8 Early retirement of bonds 10-7 B.

30 Minutes, Medium a. Liabilities: Income taxes payable 40,000$ 60,000 Mortgage note payable-current portion ( $750,000 - $739,000) 11,000 Accrued interest on mortgage note payable5,000 Trade accounts payable 250,000 Unearned revenue 15,000 Total current liabilities 381,000$ 500,000$ 739,000 Total long-term liabilities 1,239,000 1,620,000$ Long-term liabilities:Note payable to Northwest

Chapter 10Liabilities Financial and Managerial Accounting, 18e 10-1 10 LIABILITIES Chapter Summary At the outset, the chapter distinguishes between current and long-term liabilities before addressing the accounting issues surrounding each category. Among current liabilities, notes payable and payroll related costs are analyzed in detail. Journal entries are

15 Minutes, Easy PROBLEM 10.5B Sept 1 Cash 5,075,000 Bonds Payable 5,000,000 Bond Interest Payable 75,000 bonds at 100 plus accrued interest for threemonths ($5,000,000 x 6% x 3/12 = $75,000).Issued $5,000,000 face value of 6%, 10-year bonds at 100 plus accrued interest for threemonths ($5,000,000 x

Brief Learning Exercises Objectives Skills B. Ex. 11.1 Stockholders' equity 11-4 B. Ex. 11.2 Stockholders' equity 11-4 B. Ex. 11.3 Dividends on preferred stock 11-5 B. Ex. 11.4 Dividends on common and preferred stock 11-5 Analysis B. Ex. 11.5 11-5 B. Ex. 11.6 Book value 11-7 Analysis, communication B. Ex. 11.7 Book value 11-7 B. Ex. 11.8 Stock split 11-8 B. Ex.

25 Minutes, Medium a. Stockholders' equity shares authorized, issued, and outstanding 500,000$ $9 cumulative preferred stock, no-par value, 10,000 shares authorized, 5,000 shares issued and outstanding 512,000 shares issued and outstanding 200,000 600,000 Total paid-in capital 1,812,000$ 640,000 Total stockholders' equity 2,452,000$ Common stock, $2 par, 200,000 shares authorized, 100,000Additional

Chapter 11Stockholders Equity: Paid-In Capital Financial and Managerial Accounting, 18e 11-1 11 STOCKHOLDERS EQUITY: PAID-IN CAPITAL Chapter Summary This, the first of two chapters on stockholders equity, treats topics concerned with the paid-in capital of a corporation. Consideration of issues relative to retained earnings is deferred to

20 Minutes, Easy b. Stockholders' equity 100,000 shares, issued and outstanding 4,000 shares 400,000$ issued and outstanding 41,000 shares 41,000 391,000 Total paid-in capital 832,000$ 790,000 Total stockholders' equity 1,622,000$ -$ 810,000 (20,000) 790,000$ Retained earnings at December 31, 20xx. Additional paid-in capital: Common stockRetained earnings**Computation of retained

Brief Learning Exercises Objectives Skills B. Ex. 12.1 Unusual or infrequent item 12-1 Analysis B. Ex. 12.2 Unusual or infrequent item 12-1 Analysis B. Ex. 12.3 Discontinued operations 12-1 Analysis B. Ex. 12.4 Cash and stock dividends 12-4 Analysis B. Ex. 12.5 Statement of retained earnings 12-5 Analysis B. Ex. 12.6 Statement of retained earnings 12-5, 12-6

20 Minutes, Medium a. Capital Stock Additional Total ($1 par Paid-in Retained Treasury Stockholders' value) Capital Earnings Stock Equity Balances, January 1, 20xx 130,000$ 1,170,000$ 1,400,000$ -$ 2,700,000$ Prior period adjustment (net of income tax benefit) (47,000) (47,000) Issuance of common stock; 20,000 shares @ $15 20,000 280,000 300,000 Declaration

Chapter 12Income and Changes in Retained Earnings Financial and Managerial Accounting, 18e 12-1 12 INCOME AND CHANGES IN RETAINED EARNINGS Chapter Summary Chapter 12 continues the coverage of stockholders equity but shifts the focus from paid- in capital to retained earnings. The student is already aware that net

b. Retained earnings, December 31, 2017 As originally reported 7,285,000$ Less: prior period adjustment 350,000 As restated 6,935,000$ Net income 2,540,000 Subtotal 9,475,000$ Cash dividends (950,000) Retained earnings, December 31, 2018 8,525,000$ c. Total cash dividends declared during 2018 (data given) 950,000$ 500,000 Cash dividends to common stockholders 450,000$ Number of

25 Minutes, Medium a. Cash flows from operating activities: Net income 928,000$ Add: Depreciation expense 49,000$ Increase in accounts payable to suppliers 5,000 Increase in accrued interest payable 2,000 56,000 Subtotal 984,000$ Less: Increase in accounts receivable 10,000$ Increase in accrued interest receivable 4,000 Increase in inventories 25,000 Increase

25 Minutes, Easy a. Cash flows from investing activities: Purchases of marketable securities (75,000)$ Proceeds from sales of marketable securities (1) 132,000 Loans made to borrowers (210,000) Collections on loans 162,000 Cash paid to acquire plant assets (see part b) (60,000) Proceeds from sales of plant assets (2) 12,000 Net

Chapter 13Statement of Cash Flows Financial and Managerial Accounting, 18e 13-1 13 STATEMENT OF CASH FLOWS Chapter Summary The statement of cash flows was introduced in Chapter 1. This chapter begins by reviewing the purpose of the statement. Its usefulness to creditors and investors in evaluating

CHAPTER 13 STATEMENT OF CASH FLOWS Brief Learning Exercises Objectives Skills B. Ex. 13.1 Cash flows from operations (direct) 13-3 Analysis B. Ex. 13.2 Cash flows from operations (indirect) 13-7 Analysis B. Ex. 13.3 Cash flows from operations (direct) 13-3 Analysis B. Ex. 13.4 Cash flows from operations (indirect) 13-7 Analysis B. Ex. 13.5 Cash flows from investing

Chapter 14Financial Statement Analysis Financial and Managerial Accounting, 18e 14-1 14 FINANCIAL STATEMENT ANALYSIS Chapter Summary Although earlier chapters have touched on topics from financial statement analysis, we now present a comprehensive overview of the subject. The chapter is organized into three sections. We begin by introducing

e. The $5,400 decline in income tax does not represent either a favorable or an unfavorable trend. In both years, income tax amounted to 25% of income before income tax.operating expenses, which dropped from 35% to 27% of sales. The fact that management was able to reduce operating

Brief Learning Exercises Objectives Skills B. Ex. 14.1 Dollar and percentage change 14-1 Analysis B. Ex. 14.2 Trend percentages 14-1 Analysis B. Ex. 14.3 Component percentages 14-1 Analysis B. Ex. 14.4 Working capital and current ratio 14-4 Analysis B. Ex. 14.5 Current and quick ratios 14-4 Analysis B. Ex. 14.6 Debt ratio 14-4 Analysis B. Ex. 14.7 Net

25 Minutes, Easy (Dollars in Millions) a. Current assets: ( Cash 72.4$ Receivables 150.4 Merchandise inventories 1,400.0 Prepaid expenses 98.0 Total current assets 1,720.8$ Quick assets: (Cash 72.4$ Receivables 150.4 Total quick assets 222.8$ (Cash 72.4$ Receivables 150.4 Total

40 Minutes, Strong PROBLEM 15.6A WOLFE COMPUTER a. Oct 28 Inventory of Raw Materials 1,890,000 Accounts Payable (Mitsutonka) 1,890,000 To record purchase of 20,000 disk drives from Mitsutonka for 180,000,000 due in 30 days. Exchange rate, $.0105 (180,000,000 X $.0105 = $1,890,000). Nov9 Accounts Receivable (Bank of England) 997,425 Cost of Goods Sold 518,000Inventory of Finished

OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL THINKING CASES Brief Exercises Topic Skills B. Ex. 15.1 Foreign currency translations Analysis B. Ex. 15.2 Purchases in a foreign currency Analysis, communication B. Ex. 15.3 Currency strength Analysis B. Ex. 15.4 Exchange rate fluctuations Analysis, communication B. Ex. 15.5 Currency choice Analysis, communication B. Ex. 15.6 Currency strength and gains

Chapter 15Global Business and Accounting Financial and Managerial Accounting, 18e 15-1 15 GLOBAL BUSINESS AND ACCOUNTING Chapter Summary The chapter focuses on some of the aspects of the global environment that have an impact on accounting. We begin with a brief introduction to the process of globalization

Brief Exercises Topic Skills B. Ex. 16.1 Product vs. period costs Analysis, communication B. Ex. 16.2 Direct material used Analysis B. Ex. 16.3 Cost of goods sold Analysis B. Ex. 16.4 Materials inventory Analysis B. Ex. 16.5 Direct labor journal entries Analysis B. Ex. 16.6 Manufacturing overhead assigned Analysis B. Ex. 16.7 Inventory balances Analysis B. Ex. 16.8 Work

PROBLEM 16.5B VALLEYVIEW MANUFACTURING (concluded) b. Work in process inventory, beginning of year 8,000$ Add: Manufacturing costs assigned to production: Direct materials used [part a(2)] 235,000$ Direct labor 210,000 Manufacturing overhead 420,000 Total manufacturing costs 865,000 Cost of all goods in process during the year 873,000$ Less: Work in process, end of

PROBLEM 16.5A ANDITON MANUFACTURING (concluded) b. Work in process inventory, beginning of year 75,000$ Add: Manufacturing costs assigned to production: Direct materials used [part a (2) ]2,506,000$ Direct labor 992,000 Manufacturing overhead 893,600 Total manufacturing costs 4,391,600 Cost of all goods in process during the year4,466,000$ Less: Work in process, end of

Chapter 16Management Accounting: A Business Partner Financial and Managerial Accounting, 18e 16-1 16 MANAGEMENT ACCOUNTING: A BUSINESS PARTNER Chapter Summary The introduction to management accounting begins with an overview of the design requirements of a managerial accounting system. The system must allocate decision-making authority over a companys

Chapter 17Job Order Cost Systems and Overhead Allocations Financial and Managerial Accounting, 18e 17-1 . 17 JOB ORDER COST SYSTEMS AND OVERHEAD ALLOCATIONS Chapter Summary Cost accounting systems are typically designed to accommodate the specific needs of individual companies. In this chapter, we demonstrate a widely used accounting

CHAPTER 17 JOB ORDER COST SYSTEMS AND OVERHEAD ALLOCATIONS Brief Learning Exercises Topic Objectives Skills B. Ex. 17.1 Accounting for overhead 17-5 Analysis B. Ex. 17.2 Transferring costs 17-5 Analysis B. Ex. 17.3 Overhead application rates 17-3 Analysis B. Ex. 17.4 Actual and applied overhead 17-3, 17-5 Analysis B. Ex. 17.5 Selecting a cost system 17-1, 17-2 Analysis B. Ex.

Ex. 17.10 a. Materials Inventory ..... 125,000 Accounts Payable . b.Work in Process Inventory ..... 100,000 Materials Inventory . 100,000 To record the cost of direct materials used.c.Work in Process Inventory ....50,000 Direct Labor . 50,000 To record the cost of direct labor in December.d.Manufacturing Overhead ......150,000 Cash . 150,000 To

SOLUTIONS TO PROBLEMS SET B 20 Minutes, Easy PROBLEM 17.1B WINONA ENTERPRISES a. Manufacturing overhead charged to jobs in process, April 30: Direct labor charged to jobs in process, April 30: 20,000$ Overhead application rate 250% Manufacturing overhead applied to jobs, April 30: 50,000$ Direct materials charged to jobs in process, April 30:Total cost of

Ex. 18.9 (concluded) e. 161,000 Work in Process: Baking Department 161,000 Cost of beginning inventory on August 1 5,880$ 54,500 33,060 67,560 Total cost of units transferred 161,000$ To record the transfer of 11,500 cakes to Finished GoodsInventory in August:August mixed materials (10,900 equivalent units $5)August direct materials (11,020 equivalent units

Chapter 18Process Costing Financial and Managerial Accounting, 18e 18-1 18 PROCESS COSTING Chapter Summary Costing systems provide information that is used for a large variety of business decisions including planning production of goods and services, pricing products, and controlling associated costs of production. Thus the choice of

CHAPTER 18 PROCESS COSTING Brief Learning Exercises Topic Objectives Skills B. Ex. 18.1 Selecting a cost accounting system 18-1 Analysis, judgment B. Ex. 18.2 Real World: Walmart and J & J 18-1 Analysis, judgment Selecting a cost accounting system B. Ex. 18.3 Understanding cost flows 18-2 Analysis B. Ex. 18.4 Process costing journal entries 18-2 Analysis B. Ex.

PROBLEM 18.8A WILSON DYNAMICS (continued) b. (1) 4,000 72,000 76,000 (16,000) 60,000 (4,000) 56,000 Units in ending inventory, July 31Units transferred to Finished Goods in JulyUnits in beginning inventory, July 1Units started and completed in JulyUnits in process during July 76,000 (16,000) 60,000 (4,000) 56,000 Units in ending inventory, July 31Units transferred to Finished Goods

CHAPTER 19 COSTING AND THE VALUE CHAIN Brief Learning Exercises Topic Objectives Skills B. Ex. 19.1 Value chain components 19-1 Analysis B. Ex. 19.2 Capturing market share with target prices 19-4 Analysis B. Ex. 19.3 Cost of quality 19-7 Analysis, judgment B. Ex. 19.4 Cost reduction non-value-added activities 19-2 Analysis, judgment B. Ex. 19.5 Manufacturing efficiency in a JIT system 19-6 Analysis B.

PROBLEM 19.2A THE KALLAPUR COMPANY (continued) c. Allocation Rate Fixed Overhead $2,000,000per Unit Total Direct 125,000 hoursLabor Hours===$16 per hour Allocation Rate Fixed Overhead $2,000,000per Unit Total Direct 125,000 hoursLabor Hours===$16 per hour Allocation Rate Fixed Overhead $2,000,000 per Unit Total Direct 125,000 hours Labor Hours = = = $16 per hour KAP1 QUIN 24 60 6 15 32 80 92$ 200$ Since

PROBLEM 19.2B THE BITMORE COMPANY a. b. Allocation Rate Fixed Overhead $2,500,000per Unit Total Units 30,000 + 10,000of ProductionBIT MORE25.00$ 40.00$ 20.00 50.00 5.00 12.50 62.50 62.50 Total manufacturing cost per unit .. 112.50$ 165.00$ ===$62.50 per unitSince the cost per unit of BIT is above the target cost of $105.60, it is not

Chapter 19Costing and the Value Chain Financial and Managerial Accounting, 18e 19-1 19 COSTING AND THE VALUE CHAIN Chapter Summary The value chain is used to organize the discussion of several aspects of strategic cost management. These include activity-based management, target costing, just-in-time inventory procedures, and total

BASIC FINANCIAL STATEMENTS Brief Learning Exercises Topic Objectives Skills B. Ex. 2.1 Recording transactions 2 - 3 Analysis, communication B. Ex. 2.2 Recording transactions 2 - 3 Analysis, communication B. Ex. 2.3 Computing retained earnings 2 - 4 Analysis B. Ex. 2.4 Computing total liabilities 2 - 4 Analysis B. Ex. 2.5 Computing net income 2

COMPREHENSIVE PROBLEM 2 2 to 3 hours Strong Music-Is-Us, Inc. (1) prepare a bank reconciliation, (2) make adjusting entriesincluding adjustments related to marketable securities, uncollectible accounts, inventory shrinkage, and depreciation, (3) prepare an income statement, a statement of retained earnings, and a balance sheet, and (4) assess the financial condition of the business from

Irrigation system 10,200 Wages payable 1,200 Farm machinery 20,000 Total liabilities 79,000$ 14,100 Owners' equity:Barns and sheds 19,100 Capital stock 100,000 Land 50,000 Retained earnings * 47,700 Total 226,700$ Total 226,700$ Fences & gates Irrigation system 10,200 Wages payable 1,200 Farm machinery 20,000 Total liabilities 79,000$ 14,100 Owners' equity:Barns and sheds

Chapter 02Basic Financial Statements Financial and Managerial Accounting, 18e 2-1 2 BASIC FINANCIAL STATEMENTS Chapter Summary Financial statements are the primary means of communicating financial information to users. Chapter 2 covers the income statement, balance sheet, and statement of cash flows. Chapter 1 set forth the objectives

15 Minutes, Medium Owners' Assets = Equity Office Notes Accounts Capital Cash + Equipment Building + Land = Payable + Payable + Stock December 31 balances 37,000$ 51,250$ 125,000$ 95,000$ 80,000$ 28,250$ 200,000$ (1) 35,000 35,000 Balances 72,000$ 51,250$ 125,000$ 95,000$ 80,000$ 28,250$ 235,000$ (2) (22,500) 55,000 35,000 67,500 Balances 49,500$

Divided by unit selling prices 120 300 50Unit contribution margin ratios 50% 30% 80%Average CM% x Mix % = CMVests 50% 20% 10%Skis 30% 70% 21%Ropes 80% 10% 8%Average contribution margin ratio 39%$741,000 39% = $1,900,000b.($741,000 + $234,000) 39% = $2,500,000(Fixed Costs + Operating Income)/CM% = Sales Revenue RequiredFixed Costs

CHAPTER 20 COST-VOLUME-PROFIT ANALYSIS Brief Learning Exercises Topic Objectives Skills B. Ex. 20.1 Cost behavior patterns 20-1 Analysis B. Ex. 20.2 Cost classifications 20-1 Analysis B. Ex. 20.3 Using a cost formula 20-1, 20-9 Analysis B. Ex. 20.4 Using a cost formula 20-1, 20-4, 20-5, 20-9 Analysis B. Ex. 20.5 Computing required sales volumes 20-420-6 Analysis B. Ex. 20.6 Computing required

Budgeted sales revenue 5,360,000 Sales price per unit ($5,360,000 80,000 units) 67$ Budgeted sales revenue 5,360,000 Sales price per unit ($5,360,000 80,000 units) 67$ Budgeted sales revenue 5,360,000 Sales price per unit ($5,360,000 80,000 units) 67$ 25 Minutes, Medium PROBLEM 20.2B SNUG-AS-A-BUG a. Sales price per unit: Budgeted costs 4,800,000$ Add: Budgeted operating

Chapter 20Cost-Volume-Profit Analysis Financial and Managerial Accounting, 18e 20-1 20 COST-VOLUME-PROFIT ANALYSIS Chapter Summary The relationship between costs and revenue and the level of business activity is the foundation of profit planning. We begin our presentation of cost-volume-profit analysis with an introduction to cost behavior relationships. Fixed,

CHAPTER 21 INCREMENTAL ANALYSIS Brief Learning Exercises Topic Objectives Skills B. Ex. 21.1 Using average unit costs 21-1, 3 Analysis B. Ex. 21.2 Make or buy 21-24 Analysis, judgment B. Ex. 21.3 Joint cost allocation 21-1, 2, 4 Analysis, judgment B. Ex. 21.4 Outsource a product 21-2, 4, 5 Analysis, judgment B. Ex. 21.5 Opportunity costs 21-2

Chapter 21Incremental Analysis Financial and Managerial Accounting, 18e 21-1 21 INCREMENTAL ANALYSIS Chapter Summary The short-run planning problems covered in Chapter 21 are a natural extension of cost-volume-profit analysis from the previous chapter. The chapter begins with a simple illustration to explain the nature of relevant cost

Variable manufacturingoverhead (2/3 of total) 24 48 Variable selling expense 30 15 Total costs and expenses 138 131 Contribution margin per unit 62$ 84$ Machine-hours required2 4 Contribution margin per31$ 21$ to produce one unitmachine-hour Variable manufacturingoverhead (2/3 of total) 24 48 Variable selling expense 30 15 Total costs and expenses

60 Minutes, Strong PROBLEM 22.4B FREEZE, INC. a. FREEZE, INC. Responsibility Income Statement Northern Territory For January Northern Territory Economy Efficiency Dollars Percent Dollars Percent Dollars Percent Sales 1,500,000$ 100.0 500,000$ 100.0 1,000,000$ 100.0 Variable costs 850,000 56.7 150,000 30.0 700,000 70.0 Contribution margin650,000$ 43.3 350,000$ 70.0 300,000$ 30.0 Fixed costs traceable to product lines 290,000 19.3

PROBLEM 22.3A GIANT CHEF EQUIPMENT COMPANY (concluded) b. Division Sales = [Division Fixed Costs + Responsibility Margin] Contribution Margin Ratio= [$180,000 + $500,000] 50% = $1,360,000 Division Sales = [Division Fixed Costs + Responsibility Margin] Contribution Margin Ratio= [$180,000 + $500,000] 50% = $1,360,000 Division Sales = [Division Fixed Costs + Responsibility Margin] Contribution Margin

Chapter 22Responsibility Accounting and Transfer Pricing Financial and Managerial Accounting, 18e 22-1 22 RESPONSIBILITY ACCOUNTING AND TRANSFER PRICING Chapter Summary Chapter 22 surveys the accounting information needs of a decentralized organization. Three types of business responsibility centers are analyzed: cost, profit, and investment centers. The decision-making authority

CHAPTER 22 RESPONSIBILITY ACCOUNTING AND TRANSFER PRICING Brief Learning Exercises Topic Objectives Skills B. Ex. 22.1 Contribution margin effects 22-5 Analysis B. Ex. 22.2 Contribution margin vs. responsibility margin 22-2, 22-3 Analysis, judgment B. Ex. 22.3 Responsibility center design 22-1, 22-2 Analysis, judgment B. Ex. 22.4 Transfer Prices 22-6 Analysis B. Ex. 22.5 Contribution margin ratios 22-2,

Chapter 23Operational Budgeting Financial and Managerial Accounting, 18e 23-11 23 OPERATIONAL BUDGETING Chapter Summary The master budget can be a powerful tool for successful planning and control. Organizations benefit from an effective budgeting process in several ways. First, the budget assigns responsibility for decision-making to specific

40 Minutes, Strong PROBLEM 23.4A FORMER CORPORATION a. Budgeted cash receipts for the quarter: Collections on prior period receivables 210,000$ Add: Collections on 65% of $500,000 sales 325,000 Add: Collections on 65% of $500,000 sales 325,000 Add: Collections on 65% of $500,000 sales 325,000 Total receipts collected during the quarter 535,000$ Beginning current

CHAPTER 23 OPERATIONAL BUDGETING Brief Learning Exercises Topic Objectives Skills B. Ex. 23.1 Budgeting philosophies 23-3 Analysis, judgment B. Ex. 23.2 Cash flow at Body Builders 23-1, 23-5 Analysis, judgment B. Ex. 23.3 Production budget 23-4 Analysis B. Ex. 23.4 Estimating direct materials inventory 23-4 Analysis B. Ex. 23.5 Benefits of budgeting 23-2 Analysis, communication, judgment B. Ex. 23.6

CHAPTER 24 STANDARD COST SYSTEMS Brief Learning Exercises Topic Objectives Skills B. Ex. 24.1 Variances and normal capacity 24-1, 24-2, 24-5 Analysis, judgment B. Ex. 24.2 Standard cost applied to production 24-3 Analysis B. Ex. 24.3 Expected volume variance 24-4 Analysis B. Ex. 24.4 Volume and spending variances 24-4, 24-5 Analysis B. Ex. 24.5 Normal vs. ideal

g. 844,920 844,920**The $844,920 figure equals the total direct materials, direct labor, and manufacturing overhead charged to production at standard cost during June ($820,000 + $19,800 + $5,120).Work in Process Inventory (at standard cost) .To transfer 160 batches of crow bait to finished goods in June. 844,920**The $844,920 figure equals the total direct

Chapter 24Standard Cost Systems Financial and Managerial Accounting, 18e 24-1 24 STANDARD COST SYSTEMS Chapter Summary The analysis of standard cost systems begins with the development of standards for direct materials, direct labor, and manufacturing overhead. These discussions emphasize that standards are set in accordance with normal

g. 651,504 651,504**The $651,504 figure equals the total direct materials, direct labor, and manufacturing overhead charged to production at standard cost during April ($629,748 + $17,493 + $4,263).Work in Process Inventory (at standard cost) To transfer 147 batches of puppy meal to finished goods in April. 651,504**The $651,504 figure equals the total direct

CHAPTER 25 REWARDING BUSINESS PERFORMANCE Brief Learning Exercises Topic Objectives Skills B. Ex. 25.1 Motivating employee performance 25-1, 25-6 Analysis, judgment B. Ex. 25.2 Evaluate business performance using ROI 25-2, 25-3 Analysis B. Ex. 25.3 Comparing ROI and residual income 25-2, 25-4 Analysis, judgment B. Ex. 25.4 Balanced scorecard perspectives 25-5 Analysis, judgment B. Ex. 25.5 Computations

United Mexico and United States Canada States $ 821,335 $ 25,402 $ 832,260 $ 55,074 $ 1,200 $ 42,554 6.7% 4.7% 5.1%Net Earnings $ 1,399 ROINet Assets $ 25,740 5.4% $ 821,335 $ 25,402 $ 832,260 $ 55,074 $ 1,200 $ 42,554 6.7% 4.7% 5.1%Net Earnings $ 1,399 ROINet Assets

Chapter 25Rewarding Business Performance Financial and Managerial Accounting, 18e 25-1 25 REWARDING BUSINESS PERFORMANCE Chapter Summary Incentives are formal and informal rewards based on performance that enhance managerial effort towards the organizational goals. The chapter focuses on motivating business employees, customers, suppliers, and others to help

25 Minutes, Medium PROBLEM 26.5B I.C. CREAM a. (1) (2) (3) Net present value, discounted at 12%: Total present value of eight annual net cash flows ($800,000 4.968) 3,974,400$ Less: Amount to be invested 4,000,000 Net present value of proposal (25,600)$ Total present value of eight annual net cash flows ($800,000 4.968) 3,974,400$ Less: Amount to

CHAPTER 26 CAPITAL BUDGETING Brief Learning Exercises Topic Objectives Skills B. Ex. 26.1 Understanding payback period 26-3 Analysis B. Ex. 26.2 Use of return on investment 26-3 Analysis B. Ex. 26.3 Comparing NPV and required rate of return 26-3, 26-4 Analysis B. Ex. 26.4 Net present value computations 26-3 Analysis B. Ex. 26.5 Computations for payback period

25 Minutes, Medium PROBLEM 26.4 MARENGO a. (1) (2)($80,000 - $38,000) [($400,000 + $20,000) 2]$42,000 $210,000 = 20%$400,000 $80,000 = 5.0 yearsReturn on average investment: (2)($80,000 - $38,000) [($400,000 + $20,000) 2]$42,000 $210,000 = 20%$400,000 $80,000 = 5.0 yearsReturn on average investment: (2) ($80,000 - $38,000) [($400,000 + $20,000) 2] $42,000 $210,000 = 20% $400,000 $80,000 = 5.0 years Return

Chapter 26Capital Budgeting Financial and Managerial Accounting, 18e 26-1 26 CAPITAL BUDGETING Chapter Summary Capital investment decisions are among the most strategically important challenges faced by investment center managers. Three capital budgeting or investment selection techniques are explored in detail. These are the payback method, return on

b. Cash Sep. 2 1,170,000 Sep. 4 120,000 Sep. 19 216,000 Sep. 30 132,000 Sep. 30 132,000 Sep. 29 72,000 Sep. 30 bal. 1,110,000 Sep. 30 bal. 84,000Office Supplies LandSep. 12 600 Sep. 4 240,000Sep. 30 bal. 600 Sep. 30 bal. 240,000Building Notes PayableSep. 4 840,000 Sep. 4 960,000Sep. 30 bal. 840,000

Debit Credit Balance Mar. 30 1,200 1,200 Debit Credit Balance Mar. 2 80,000 80,000 Debit Credit Balance Mar. 30 1,200 1,200 Current Yr. Current Yr.Dividends DateExplanation ExplanationCapital StockDate Debit Credit Balance Mar. 2 80,000 80,000 Debit Credit Balance Mar. 30 1,200 1,200 Current Yr. Current Yr.Dividends

Brief Exercises B. Ex. 3.1 B. Ex. 3.2 B. Ex. 3.3 B. Ex. 3.4 Analysis B. Ex. 3.5 B. Ex. 3.6 B. Ex. 3.7 B. Ex. 3.8 B. Ex. 3.9 B. Ex. 3.10 Exercises 3.1 3.2 3.3 3.4 3.5 3.6 Analysis 3.7 3.8 Revenue, expenses, and dividends Analysis 3.9 Financial statement effects Analysis 3.10 Preparing a trial balance Analysis 3.11 Preparing a trial balance Analysis 3.12 3.13 3.14 Analysis 3.15 CHAPTER 3 THE ACCOUNTING CYCLE: CAPTURING ECONOMIC EVENTS Communication, analysis 3-13-3, 3-7,

COMPREHENSIVE PROBLEM 3 sheet, in that order. It emphasizes the articulation of these three financial statements as net income is carried into the statement of retained earnings, and ending retained earnings is then carried forward into the balance sheet. sheet, in that order. It emphasizes the articulation of these three financial statements

Chapter 03The Accounting Cycle: Capturing Economic Events Financial and Managerial Accounting, 18e 3-1 3 THE ACCOUNTING CYCLE: CAPTURING ECONOMIC EVENTS Chapter Summary Maintaining a set of accounting records is not optional for a business. The IRS requires businesses to maintain records that can be audited. In addition,

b. May 1 480,000 Capital Stock 480,000 4 84,000 216,000 Cash 120,000 Notes Payable 180,000 9156,000 Cash 156,000 16 60,000 Cash 24,000 Accounts Payable 36,000 Office Fixtures and Equipment Medical Instruments Building Purchased land and building. Purchased medical instruments. Purchased fixtures and equipment. 216,000 Cash 120,000 Notes Payable 180,000

Brief Exercises B. Ex. 4.1 B. Ex. 4.2 B. Ex. 4.3 B. Ex. 4.4 Analysis B. Ex. 4.5 B. Ex. 4.6 B. Ex. 4.7 B. Ex. 4.8 B. Ex. 4.9 B. Ex. 4.10 Learning Objectives 4.1 4-14-9 4.2 4-14-6, 4-9 4.3 4-1-4-7 4.4 Deferred expenses and revenue 4-1-4-7 Analysis 4.5 Accrued revenue 4-1-4-7 Analysis 4.6 4-1, 4-2, 4-4 Analysis 4.7 Accruals and deferrals 4-1-6, 4-9 Analysis 4.8 Notes payable and

Chapter 04The Accounting Cycle: Accruals and Deferrals Financial and Managerial Accounting, 18e 4-1 4 THE ACCOUNTING CYCLE: ACCRUALS AND DEFERRALS Chapter Summary In order for revenues and expenses to be reported in the accounting period in which they are earned or incurred, adjusting entries must be made at

COMPREHENSIVE PROBLEM 4 If you work this problem as a group assignment, each group member should be prepared to discuss the groups findings and conclusions in class. A good starting point for understanding the financial statements of a company such as Home Depot, Inc. , is to understand the accounting policies used in

25 Minutes, Strong a. (1) (2)At June 30, two months of prepaid airport rent have been converted to expense (May and June). Thus, four months of prepaid airport rent remain at June 30. Remaining prepaid amount $9,000/4 months remaining = $2,250 per month.Useful life is given as 15 years, or 180

30 Minutes, Medium Sept. 30 600 Prepaid Costume Rental 600 30 500 Accumulated Depreciation: Buildings 500 To record September depreciation expense ($150,000 300 months). (2) Depreciation Expense: Buildings 30 500 Accumulated Depreciation: Buildings 500 To record September depreciation expense ($150,000 300 months). (2) Depreciation Expense: Buildings

COMPREHENSIVE PROBLEM 5 The Gilster This problem covers various topics from Chapters 15 through 21. 60 minutes The emphasis is on job costing, overhead allocation, target costing, Strong and incremental decision making. 60 Minutes, Strong COMPREHENSIVE PROBLEM 5 THE GILSTER COMPANY a. $1,000,000 50,000 hrs.Overhead Rate===Total Expected Overhead($250,000 + $150,000 + $600,000)(35,000 hrs. + 15,000 hrs.) =

Brief Exercises B. Ex. 5.1 B. Ex. 5.2 B. Ex. 5.3 B. Ex. 5.4 Analysis B. Ex. 5.5 B. Ex. 5.6 B. Ex. 5.7 B. Ex. 5.8 B. Ex. 5.9 B. Ex. *5.10 Learning Objectives 5.1 5-1-5-7 5.2 5-1, 5-2, 5-6 5.3 5-1, 5-2, 5-6 5.4 5-2, 5-4, 5-5 5.5 5-2, 5-4, 5-5 5.6 5-3 5.7 2, 4 5.8 2, 4 5.9 2, 4 5.10 5-6 Analysis 5.11 5-6 Analysis 5.12 Interim results 5-1,

b. Dec. 31 232,800 Income Summary 232,800 31 180,480 Insurance Expense 2,160 Office Rent Expense 33,600 Supplies Expense 6,720 Salary Expense 86,400 Depreciation Expense: Trucks 19,200 Depreciation Expense: Equipment 4,800 Repair & Maintenance Expense 6,360 Fuel Expense 2,640 Miscellaneous Expense 3,240 Interest Expense 4,560 Income Taxes Expense 10,800

Ex. 5.8 a. 60,000 240,000 300,000To close revenue accounts to income summary.412,500 24,000 36,000 14,400 6,600 86,700 4,950 2,850 233,250 3,750 112,500 112,500 37,500 37,500 Retained EarningsInterest Expense..Salaries Expense..To transfer a net loss for the period to retained earnings.Retained Earnings.Income SummaryTo close expense accounts to income summary.Dividends..To close dividends to

Dec. 31 250 Accumulated Depreciation: Office Equip. 250 31 2,500 Agency Fees Earned 2,500 31 1,360 Salaries Payable 1,360 To convert unearned revenue to earned revenue Unearned Agency FeesDecember. (3) in December.To record salary expense accrued at the end ofSalaries Expense 31 2,500 Agency Fees Earned 2,500 31

a. (cont'd.) 51,402$ 4,200 132 Prepaid rent 1,080 216 64,800 43,200$ 1,680 10,800 2,820 1,200 2,280 504 Interest payableAccounts payableAccumulated depreciation: office equipmentNotes payable (Due 3/1/Next Year)Income taxes payableSalaries payableUnearned consulting services revenueOffice equipmentUnexpired insurance 216 64,800 43,200$ 1,680 10,800 2,820 1,200 2,280 504 Interest payableAccounts payableAccumulated depreciation: office equipmentNotes payable

Chapter 05The Accounting Cycle: Reporting Financial Results Financial and Managerial Accounting, 18e 5-1 5 THE ACCOUNTING CYCLE: REPORTING FINANCIAL RESULTS Chapter Summary Chapter 5 completes the treatment of the accounting cycle for service type businesses. It focuses on the year-end activities culminating in the annual report. These include

35 Minutes, Medium Nov. 5 13,390 Sales 13,390 5 9,105 Inventory 9,105 9 3,800 Accounts Payable (Owatonna Tool Co.) 3,800 Purchased merchandise on credit.To record the cost of goods sold relating to the sales of merchandise to Bemidji Construction. Inventory 9 3,800 Accounts Payable (Owatonna Tool Co.)

Brief Exercises B. Ex. 6.1 B. Ex. 6.2 B. Ex. 6.3 Analysis B. Ex. 6.4 B. Ex. 6.5 Analysis B. Ex. 6.6 B. Ex. 6.7 B. Ex. 6.8 B. Ex. 6.9 B. Ex. 6.10 B. Ex. 6.11 6.1 6-1, 6-6 6.2 6-1 6.3 6-2, 6-5, 6-8 6.4 6-3, 6-8 6.5 Evaluating performance 6-6, 6-8 6.6 6-3 6.7 6-4 6.8 6-4 6.9 6-5, 6-8 6.10 Cash discounts 6-6 6.11 Evaluating performance 6-8 6.12 6-3,

Chapter 06Merchandising Activities Financial and Managerial Accounting, 18e 6-1 6 MERCHANDISING ACTIVITIES Chapter Summary The introduction of merchandising provides a rich set of challenges for the student. These range from the problem of how to best account for the acquisition and sale of inventory to the development of

COMPREHENSIVE PROBLEM 6 60 minutes, Strong Utease Corporation This problem covers various topics from Chapters 22, 23, 24, and 25. Students are asked to prepare budget schedules, calculate variances, determine possible causes for differences between budgeted and actual results, and to perform ROI analysis. COMPREHENSIVE PROBLEM 6 UTEASE CORPORTION a. Units 20,000 2,000 22,000022,000Units budgeted to be available for sale

20 Minutes, Medium Year 2-Year 3 Year 1-Year 2 2.Change in net sales per square foot(1.4%) (3) (3.8%) (4)3. Change in comparable store sales (1.5%) (5) (1.7%) (6)(1)($18,480 - $17,800) $17,800 = 3.8%(2)($17,800 - $16,560) $16,560 = 7.5%(3)[($18,480 12.0) - ($17,800 11.4)] ($17,800 11.4) = (1.4%)(4)[($17,800 11.4) - ($16,560 10.2)]

Chapter 07Financial Assets Financial and Managerial Accounting, 18e 7-1 7 FINANCIAL ASSETS Chapter Summary This is the first in a series of chapters analyzing major balance sheet items. Topical coverage includes cash, short-term investments in marketable securities, and receivables. Accounting practices concerning these assets are often highly procedural.

Ex. 7.3 a. b. It is also unethical for employees to borrow funds from their employers without formal permission (even if one has the intent of eventually paying back the full amount). It is also unethical for employees to borrow funds from their employers without formal permission (even if one has the intent

Chapter 08Inventories and the Cost of Goods Sold Financial and Managerial Accounting, 18e 8-1 8 INVENTORIES AND THE COST OF GOODS SOLD Chapter Summary The chapter is a detailed introduction to the cost flow assumptions used to value inventories and measure the cost of goods sold. Application of

30 Minutes, Strong (1) Average-cost method: (a) Cost of goods sold on April 28: 8,111$ 40,555$ (b) Ending inventory (7 units) at June 30: 32,444$ 25,500 57,944$ 8,278$ 57,946$ Average unit cost as of May 8 ($57,944 7 units) Total 3 units purchased on May 8 at

b. Inventory subsidiary ledger records: (1) Specific identification method: Date Units Unit Cost Total Units Unit Cost Cost of Goods Sold Units Unit Cost Balance Dec 12 600 29$ 17,400$ 600 29$ 17,400$ Jan 09 900 32 28,800$ 600 29 900 32 46,200 Jan 15 500 29$ 100 29 500 32 30,500$ 400

11,000$ 375 550 75 12,000$ Sales taxesInstallation of furnitureTotal cost to be depreciated 550 75 12,000$ Sales taxesInstallation of furnitureTotal cost to be depreciated 550 75 12,000$ Sales taxes Installation of furniture Total cost to be depreciated Book Value $800 $800 $11,200 1,200 2,000 10,0001,200 3,200 8,8001,200 4,400 7,600$12,000 x 1/10$12,000 x 1/10$12,000 x 1/10202020212019 1,200

Chapter 09Plant and Intangible Assets Financial and Managerial Accounting, 18e 9-1 9 PLANT AND INTANGIBLE ASSETS Chapter Summary The material on plant assets is organized into sections for tangible assets, intangible assets, and natural resources. For all three categories of plant assets the chapter focuses on three

b. c. 29,000$ (38,000) (9,000)$ Loss on disposalBook value at the end of the fourth year (38,000) (9,000)$ Loss on disposalBook value at the end of the fourth year (38,000) (9,000)$ Loss on disposal Book value at the end of the fourth year 2. 200% Declining-Balance: 29,000$ (18,662) 10,338$ Book value at the end of the fourth