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© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. (4) expense + asset – (5) asset + revenue + (6) liability – asset […]

b. Work in Process—Molding Department Increase Work in Process—Blending Department Decrease c. Work in Process—Packing Department Increase Work in Process—Molding Department Decrease d. Finished Goods Increase Work in Process—Packing Department Decrease e. Cost of Goods Sold Increase Finished Goods Decrease […]

Name: Section: Score: 0% Key Code: 1. Revenues: Expenses: 2. Retained earnings, December 31, Year 1 Retained earnings, January 1, Year 1 3. Problem 1-5 Instructions 2 Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds […]

Name: Section: Score: 0% Key Code: 1. Fees earned Operating expenses: 2. Retained earnings, April 30, 20Y6 Retained earnings, May 1, 20Y5 3. Problem 1-1 Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are […]

Name: Section: Score: 0% Key Code: 1. Fees earned (a) Operating expenses: Wages expense 33,120$ 2. Less dividends (e) (f) Retained earnings, December 31, 20Y4 (g) Retained earnings, December 1, 20Y4 (d) Net income for December 57,500$ 3. Cash (h) […]

Name: Section: Score: 32% *Since some answer boxes are correct when left blank, the beginning score is greater than 0%. Key Code: 1. = Liabilities + Notes Capital Retained Cash + Land = Payable + Stock + Earnings a. Investment […]

Problem 3-1 Name: Section: Score: 44% *Since some answer boxes are correct when left blank, the beginning score is greater than 0%. Key Code: Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and […]

15,000 28,500 Retained earnings, January 31, 20Y5 256,000$ 13,200 136,800$ 120,000 Total property, plant, and equipment Current liabilities: 6,300$ 12,500 1,700 Total current liabilities 20,500$ Long-term liabilities 30,000 Total liabilities 50,500$ 75,000$ 256,000 Total stockholders’ equity 331,000 Total liabilities and […]

Problem 4-1 Total administrative expenses Total expenses Income from operations Other expense: Net income Name: Section: Score: 0% Key Code: 1. Revenues from sales: Sales Less: Sales returns and allowances Sales discounts Net sales Cost of merchandise sold Total selling […]

Name: Section: Score: 0% Key Code: 1. 2. = Liabilities + Stockholders’ Equity Notes Accounts Retained Cash + Receivable = Payable + Earnings Effects of note collection and correcting company error Int. revenue Effect of recording bank service charge Misc. […]

Name: Section: Score: 45% *Since some answer boxes are correct when left blank, the beginning score is greater than 0%. Key Code: 1. Not Past Over Customer Balance Due 1–30 31–60 61–90 91–120 120 AAA Beauty 19,500$ 20,000$ Amelia’s Wigs […]

Name: Section: Score: 71% *Since some answer boxes are correct when left blank, the beginning score is greater than 0%. Key Code: Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be […]

Name: Section: Score: 0% Key Code: 1. Maximum yearly total preferred dividend: Total Year Dividends Total Per Share Total Per Share 128,000$ 2. Average annual dividend for preferred: Average annual dividend for common: 3. a. Return on initial investment, preferred: […]

Name: Section: Score: 0% Key Code: a. Amount Percent Amount Percent Sales Cost of goods sold b. Exercise 9-1 Instructions 2 SEARLE TECHNOLOGIES CO. Comparative Income Statement A red asterisk (*) will appear in the column to the right of […]

Chapter 1: The Role of Accounting in Business 78. Expressing financial data as if a business will continue operating for an indefinite period time refers to which concept? a. Business entity concept b. Going concern concept c. Objectivity concept d. […]

1 CHAPTER 1 THE ROLE OF ACCOUNTING IN BUSINESS CLASS DISCUSSION QUESTIONS 1. The objective of most businesses is to max– imize profits. Profit is the difference between the amounts received from customers for goods or services provided and the […]

16 PROBLEMS P1–1 1. UTAH TRAVEL SERVICE Income Statement For the Year Ended April 30, 20Y6 Fees earned …………………………………………………………… $ 1,594,200 Operating expenses: Wages expense …………………………………………………. $890,200 Rent expense ……………………………………………………. 226,800 Utilities expense ……………………………………………….. 135,000 Supplies expense ……………………………………………… 42,600 Taxes […]

F Fu un nc ct ti io on na al li it ty y o of f t th he e E Ex xc ce el l T Te em mp pl la at te es s w wi it […]

CHAPTER 1: THE ROLE OF ACCOUNTING IN BUSINESS 1. The objective of most businesses is to maximize profits. a. True b. False ANSWER: True 2. A limited liability company combines attributes of a partnership and a corporation. a. True b. […]

Name: Section: Score: Key Code: 1. Schedule of manufacturing costs incurred during June: Direct Direct Factory Materials Labor Overhead Total 2. Schedule of cost of jobs finished during June: Direct Direct Factory Materials Labor Overhead Total No. 6001 No. 6002 […]

295 CHAPTER 10 ACCOUNTING SYSTEMS FOR MANUFACTURING BUSINESSES CLASS DISCUSSION QUESTIONS 1. Managerial accounting differs from financial accounting in the following ways: (1) Financial accounting records and re- ports transactions and events using generally accepted accounting princi- ples (GAAP), while […]

313 E10–26 Piecework compensation is a characteristic of a traditional manufacturing philos- ophy that is inconsistent with just–in-time. Under just-in-time, workers are viewed not just as laborers but as valuable assets of the company. The company wants workers to also […]

Chapter 10: Accounting Systems for Manufacturing Businesses 78. The recording of the jobs completed would increase: a. Factory Overhead. b. Finished Goods. c. Work-in-Process. d. Cost of Goods Sold. ANSWER: b 79. The recording of the jobs completed would decrease: […]

CHAPTER 10: ACCOUNTING SYSTEMS FOR MANUFACTURING BUSINESSES 1. Managerial accounting reports information primarily for stakeholders that are external to the company. a. True b. False ANSWER: False 2. Reporting under managerial accounting is not restricted by specific rules such as […]

CHAPTER 11: COST BEHAVIOR AND COST-VOLUME-PROFIT ANALYSIS 1. Cost behavior refers to the manner in which a cost changes as a related activity changes. a. True b. False ANSWER: True 2. Cost behavior refers to the manner in which a […]

347 PROBLEMS P11–1 Fixed Variable Mixed Cost Cost Cost Cost a. X b. X c. X d. X e. X f. X g. X h. X i. X j. X k. X l. X m. X n. X o. X […]

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 11 COST BEHAVIOR AND COST-VOLUME-PROFIT ANALYSIS CLASS DISCUSSION QUESTIONS 1. Total variable costs […]

Name: Section: Score: 0% Key Code: 1. Sales Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold 2. – 3. 4. Use the Autoshapes line feature to construct a cost-volume-profit chart indicating the break-even point. […]

Chapter 11: Cost Behavior and Cost-Volume-Profit Analysis 83. Which ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit? a. Margin of safety ratio b. Contribution margin ratio c. Costs […]

Name: Section: Score: 0% Key Code: 1. Ethylene Butane Ester 2. Ethylene Butane Ester Reactor (bottleneck) hours per unit  Contribution margin per reactor hour Contribution margin per unit Which product is the most profitable? Explain: 3. Revised Price of […]

379 E12–21 a. Large Medium Small Total Units produced …………………… 5,000 5,000 5,000 Revenues …………………………… $ 900,0001 $750,0002 $675,0003 $ 2,325,000 Less variable costs …………….. 720,0004 650,0005 550,0006 1,920,000 Contribution margin …………… $ 180,000 $ 100,000 $ 125,000 $ 405,000 […]

Name: Section: Score: 0% Key Code: a. Differential revenue from alternatives: Revenue from lease Proceeds from sale b. Explain: Is it advisable to lease or sell the machinery? Exercise 12-1 . Instructions 2 Answers are entered in the cells with […]

363 CHAPTER 12 DIFFERENTIAL ANALYSIS AND PRODUCT PRICING CLASS DISCUSSION QUESTIONS 1. a. Differential revenue is the amount of increase or decrease in revenue ex- pected from a particular course of action compared with an alternative. b. Differential cost is […]

Chapter 12: Differential Analysis and Product Pricing 64. The condensed income statement for a business for the past year is as follows: Product A B Sales $800,000 $550,000 Less variable costs 720,000 430,000 Contribution margin $ 80,000 $120,000 Less fixed […]

CHAPTER 12: DIFFERENTIAL ANALYSIS AND PRODUCT PRICING 1. If the total unit cost of manufacturing Product Y is currently $40 and the total unit cost after modifying the style is estimated to be $48, the differential cost for this situation […]

Chapter 13: Budgeting and Standard Cost Systems 107. Which of the following conditions normally would not indicate that standard costs should be revised? a. The engineering department has revised product specifications in responding to customer suggestions. b. The company has […]

Name: Section: Score: See student sheet for student’s score Scoring: March April May For the Three Months Ending May 31 ON Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. […]

Name: Section: Score: 0% Key Code: 1. Unit Sales Unit Selling Plus desired inventory, April 30 Total Less estimated inventory, April 1 Total units to be produced Product and Area Volume Price Total Sales Model SJ30: East Region 2. Model […]

Name: Section: Score: 0% Key Code: Total sales Variable cost: Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. A red asterisk (*) will appear in the column immediately to […]

Name: Section: Score: 0% Key Code: Variable factory overhead costs: For the Month Ending November 30 Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. A red asterisk (*) will […]

395 CHAPTER 13 BUDGETING AND STANDARD COST SYSTEMS CLASS DISCUSSION QUESTIONS 1. The three major objectives of budgeting are (1) to establish specific goals for future oper- ations, (2) to direct and coordinate plans to achieve the goals, and (3) […]

415 E13–23 a. Rate variance: Direct Labor Rate Variance = (Actual Rate per Hour – Standard Rate per Hour) × Actual Hours = ($17.20 – $16.75) × 4,200 hrs. = $1,890 Unfavorable Variance Time variance: Direct Labor Time Variance = […]

434 P13–2, Concluded 7. A B C 1 JUPITER HELMETS INC. 2 Selling and Administrative Expenses Budget 3 For the Month Ending May 31 4 Selling expenses: 5 Sales salaries expense $175,000 6 Advertising expense 120,000 7 Travel expense—selling 50,000 […]

CHAPTER 13: BUDGETING AND STANDARD COST SYSTEMS 1. A formal written statement of management’s plans for the future, expressed in financial terms, is called a budget. a. True b. False ANSWER: True 2. Budgets are normally used by both profit-making […]

Chapter 13: Budgeting and Standard Cost Systems The standard factory overhead rate of Quaker Inc. is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor […]

Name: Section: Score: 0% Key Code: 1. Would the market price of $60 per unit be an appropriate transfer price for Pendray Scientific Inc.? 2. 3. Systems Total Sales: 75,000 units  per unit 25,000 units  per unit 140,000 […]

Name: Section: Score: 24% *Since some answer boxes are correct when left blank (zero), the beginning score is greater than 0%. Key Code: 1. Budget Actual Over Budget Under Budget Customer service salaries Insurance and property taxes 2. For the […]

453 CHAPTER 14 PERFORMANCE EVALUATION FOR DECENTRALIZED OPERATIONS CLASS DISCUSSION QUESTIONS 1. In a cost center, the department manager is responsible for and has authority over costs only. In a profit center, the manager’s re- sponsibility and authority extend to […]

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. E14–21 a. Operations from Income sing‘Manufactur Retina in Increase = Price Market – Unit […]

Chapter 14: Performance Evaluation for Decentralized Operations The following financial information was summarized from the accounting records of Globe Corporation for the current year ended December 31: Northern Southern Corporate Division Division Total Cost of goods sold $310,000 $175,000 Direct […]

CHAPTER 14: PERFORMANCE EVALUATION FOR DECENTRALIZED OPERATIONS 1. Separation of businesses into more manageable operating units is termed centralization. a. True b. False ANSWER: False 2. The process of measuring and reporting operating data by areas of responsibility is termed […]

enough investment money for one project. T Name: Section: Score: 0% Key Code: 1. Net present value analysis: Site A: Annual net cash flow (at the end of each of 6 years) Site B: Present value of annual cash flows […]

506 PROBLEMS P15–1 1. a. Average annual rate of return for both projects: ( ) 2÷ 0$+000,800$ 5÷ 000,330$ = 000,400$ 000,66$ = 16.5% b. Net present value analysis: Present Value of Net Cash Flows Net Cash Flows Present Value […]

Name: Section: Score: 0% Key Code: 1. a. Average annual rate of return for both projects:   b. Net present value analysis: Year Dist. Center Expansion Tracking Technology Dist. Center Expansion Tracking Technology 1 2. Which of the following […]

489 CHAPTER 15 CAPITAL INVESTMENT ANALYSIS CLASS DISCUSSION QUESTIONS 1. The principal objections to the use of the average rate of return method are its failure to consider the expected cash flows from the proposals and the timing of these […]

Chapter 15: Capital Investment Analysis The management of London Corporation is considering the purchase of a new machine costing $750,000. The company’s desired rate of return is 6%. The present value factors for $1 at compound interest of 6% for […]

CHAPTER 15: CAPITAL INVESTMENT ANALYSIS 1. The process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets is called capital investment analysis. a. True b. False ANSWER: True 2. The process by which management plans, evaluates, […]

31 CHAPTER 2 BASIC ACCOUNTING CONCEPTS CLASS DISCUSSION QUESTIONS 1. The basic elements of a financial accounting system include (1) a set of rules for deter- mining what, when, and the amount that should be recorded; (2) a framework for […]

48 P2–2, Concluded 4. UP-DATE COMPUTER SERVICES Statement of Cash Flows For the Month Ended August 31, 20Y4 Cash flows from operating activities: Cash receipts from operating activities ……………… $27,000 Deduct cash payments for operating activities …… (9,000) Net cash […]

Chapter 2: Basic Accounting Concepts 74. Anthony, Inc. buys land for $50,000 cash. The net effect on assets is: a. $50,000 increase. b. $0. c. $50,000 decrease. d. $25,000 increase. ANSWER: b 75. Declaring and paying cash dividends affects which […]

CHAPTER 2: BASIC ACCOUNTING CONCEPTS 1. The basic elements of a financial accounting system include a framework for preparing financial statements. a. True b. False ANSWER: True 2. The accounting equation is expressed as follows: Assets = Liabilities + Stockholders’ […]

CHAPTER 3 ACCRUAL ACCOUNTING CONCEPTS CLASS DISCUSSION QUESTIONS 1. AT&T and Microsoft use the accrual basis of accounting. Generally accepted accounting principles (GAAP) require all but very small businesses to use the accrual basis of accounting. This is because the […]

P3–2 Statement of Balance Cash Flows Assets Accts. Prepaid Acc. Cash + Rec. + Insurance + Supplies + Building – Depr. + Balances 40,500 69,000 4,900 2,800 150,000 –11,200 Jan. 31. Insurance exp. –800 Balances 40,500 69,000 4,100 2,800 150,000 […]

Chapter 3: Accrual Accounting Concepts 81. Which transaction would be recorded in a cash basis system of accounting? a. Purchase of equipment by signing a note b. Purchase of supplies on credit c. Sale of goods against a note d. […]

CHAPTER 3: ACCRUAL ACCOUNTING CONCEPTS 1. Receiving cash in advance of performing a service creates a liability for the company. a. True b. False ANSWER: True 2. The accrual basis recognizes liabilities at the time the business incurs the obligation […]

CHAPTER 4: ACCOUNTING FOR MERCHANDISING BUSINESSES 1. Operating expenses are subtracted from fees earned for a service business and from gross profit for a merchandising business. a. True b. False ANSWER: True 2. Net sales is equal to sales plus […]

99 CHAPTER 4 ACCOUNTING FOR MERCHANDISING BUSINESSES CLASS DISCUSSION QUESTIONS 1. Merchandising businesses acquire mer- chandise for resale to customers. It is the selling of merchandise, instead of a service, that makes the activities of a merchandising business different from […]

119 P4–1, Concluded 4. a. The multiple-step form of income statement contains various sections for revenues and expenses, with intermediate balances, and concludes with net income. In the single-step form, the total of all expenses is deducted from the total […]

Chapter 4: Accounting for Merchandising Businesses 101. Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a(n): a. decrease in Bank Credit Card Sales, increase in Credit Card Expense, and increase in […]

155 PROBLEMS P5–1 Strengths: a, d, e, g Weaknesses: b. An independent person (for example, a supervisor) should count the cash in each cashier’s cash register, unlock the record, and compare the amount of cash with the amount on the […]

139 CHAPTER 5 SARBANES-OXLEY, INTERNAL CONTROL, AND CASH CLASS DISCUSSION QUESTIONS 1. a. Congress passed the Sarbanes-Oxley Act because of the Enron, WorldCom, Tyco, Adelphia, and other financial scan– dals that caused stockholders, creditors, and other investors to lose millions […]

Chapter 5: Sarbanes-Oxley, Internal Control, and Cash 76. Receipts from cash sales of $5,700 were recorded incorrectly by the depositor as $7,500. The $1,800 difference would be included on the bank reconciliation as a(n): a. addition to the cash balance […]

CHAPTER 5: SARBANES-OXLEY, INTERNAL CONTROL, AND CASH 1. The Sarbanes-Oxley Act of 2002 applies to all publicly held companies. a. True b. False ANSWER: True 2. The Sarbanes-Oxley Act of 2002 requires companies to maintain strong and effective internal controls […]

171 CHAPTER 6 RECEIVABLES AND INVENTORIES CLASS DISCUSSION QUESTIONS 1. Receivables are normally classified as (1) accounts receivable, (2) notes receivable, or (3) other receivables. 2. Transactions in which merchandise is sold or services are provided on credit generate accounts […]

185 P6–1, Continued 5. Balance Sheet Statement of Assets = Liabilities + Stockholders’ Equity Income Cash Flows Accounts Allowance for Statement Receivable – Doubtful Accounts 20Y8 Aug. 17. 4,350 –4,350 Balance Sheet Statement of Assets = Liabilities + Stockholders’ Equity […]

Chapter 6: Receivables and Inventories 67. Inventory costing methods place primary emphasis on assumptions about: a. flow of goods. b. flow of costs. c. flow of goods or costs depending on the method. d. flow of values. ANSWER: b 68. […]

CHAPTER 6: RECEIVABLES AND INVENTORIES 1. All receivables that are expected to be realized in cash within a year are presented in the current assets section of the balance sheet. a. True b. False ANSWER: True 2. Receivables not expected […]

P7–5 1. a. Loss on impairment of goodwill, $3,000,000 b. $920,000 ÷ 8 years = $115,000; ½ of $115,000 = $57,500 c. $1,350,000 ÷ 15,000,000 board feet = $0.09 per board foot; 3,300,000 board feet × $0.09 per board foot […]

199 CHAPTER 7 FIXED ASSETS AND INTANGIBLE ASSETS CLASS DISCUSSION QUESTIONS 1. Fixed assets have the following characteris- tics: (a) They exist physically and thus are tan- gible assets. (b) They are owned and used by the com- pany in […]

FIXED ASSETS AND INTANGIBLE ASSETS 1. Expenditures made to extend an asset’s life are called revenue expenditures. a. True b. False ANSWER: False 2. The acquisition costs of property, plant, and equipment should include all costs necessary to get the […]

Fixed Assets and Intangible Assets 63. Which of the following is not an intangible asset? a. Goodwill b. Trademark c. Copyright d. Long-term receivable ANSWER: d 64. Which of the following intangible assets are amortized over their useful life? a. […]

Chapter 8: Liabilities and Stockholders’ Equity 90. When the contract rate of interest on bonds is higher than the market rate of interest, the bonds sell at: a. a premium. b. their face value. c. their maturity value. d. a […]

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 8 LIABILITIES AND STOCKHOLDERS’ EQUITY CLASS DISCUSSION QUESTIONS 1. Most current liabilities arise […]

PROBLEMS P8–1 1. and 2. Deferred Income Income Tax Tax Payable Deducted Income Tax on Income Payments for Year’s Addition Year-End Year Statement the Year (40%) (Deduction) Balance First $ 170,000 $ 140,000 $ 30,000 $ 30,000 Second 300,000 260,000 […]

CHAPTER 8: LIABILITIES AND STOCKHOLDERS’ EQUITY 1. Liabilities that are due and payable beyond one year or paid out of noncurrent assets are termed long-term liabilities. a. True b. False ANSWER: True 2. During the first year of operations, a […]

CHAPTER 9: FINANCIAL STATEMENT ANALYSIS 1. The percentage analysis of increases and decreases in corresponding items in comparative financial statements is referred to as horizontal analysis. a. True b. False ANSWER: True 2. The percentage analysis of the relationship of […]

275 E9–21 a. Earnings per Share = gOutstandin Shares Common Dividends Preferred IncomeNet – shares 100,000 $150,000 –– $1,300,000 = $11.50 b. Price-Earnings Ratio = Share per Earnings Share per PriceMarket $11.50 $92.00 = 8.0 c. Dividends per Share = […]

255 CHAPTER 9 FINANCIAL STATEMENT ANALYSIS CLASS DISCUSSION QUESTIONS 1. Horizontal analysis is the percentage analy- sis of increases and decreases in compara- tive financial statements. Each item on the most recent statement is compared with the related item on […]

Chapter 9: Financial Statement Analysis 59. Based on the following data for the current year, compute the inventory turnover. Net sales on account during the year $585,000 Cost of merchandise sold during the year 380,000 Accounts receivable, beginning of year […]