_____________________ preferred stock has a feature that allows preferred
stockholders to share with common stockholders in any dividends paid in excess of the
percent or dollar amount stated on the preferred stock.
Duval, Inc. budgets direct materials at $1/liter and requires 4 liters per unit of finished
product. April’s activities show usage of 832 liters to complete 196 units at a cost of
$798.72
Required:
Calculate the direct materials price and quantity variances.
_____________ is increased by owner’s investments and revenues. It is decreased by
withdrawals and expenses.
How is the retirement of stock recorded?
The account used to record a premium on issued stock is titled
______________________________________________.
Describe the two alternate methods used to account for prepaid expenses.
What are some of the variables that make a plant asset’s useful life difficult to predict?
A company produces two products, X and Y, from a single raw material called ZZ. ZZ
is purchased in 55-gallon drums, and the contents of one drum are sufficient to produce
30 gallons of X and 15 gallons of Y. X sells for $10.00 per gallon and Y sells for $30.00
per gallon. During the current period, the company used 400 drums of ZZ to produce X
and Y. The cost of ZZ was $90 per drum.
(1) If the cost of ZZ is allocated to the X and Y products on the basis of the number of
gallons produced, how much of the total cost of the 400 drums should be charged to
each product?
(2) If the cost of ZZ is allocated to the X and Y products in proportion to their market
values, how much of the total cost of the 400 drums should be charged to each product?
(3) Which basis of allocating the cost is most likely to be used by the company?
Check one and briefly explain.
_______ The relative number of gallons of each product produced.
_______ The relative market values of each product at the point of separation.
List the principles of internal control.