1) Which of the following organizations has developed the G4 Guidelines?
A) Global Reporting Initiative (GRI)
B) International Accounting Standards Board (IASB)
C) Carbon Disclosure Project (CDP)
D) International Organization for Standardization (ISO)
2) To follow is selected information about The Boston Company for the current year
and prior year.
What is the current year’s net income percentage (as would be found on a vertical
analysis of the income statement for the current year)?
A) 8.60%
B) 9.80%
C) 9.00%
D) 108.60%
3) The managerial accountant at Flat Screen Manufacturing reported that the
organization contains an automated production line to manufacture and produce its
products for consumers to enjoy in the marketplace. The managerial accountant
reported that the company uses the high-low method to estimate the costs in the new
budget. The managerial accountant reported the following information:
a.Compute the slope of the mixed cost, or the variable cost per unit of activity.
b.Compute the vertical intercept, or the fixed cost component of the mixed cost.
c.What is the mixed cost equation?
4) (Present value tables are needed.) Georgia Peach Farms is upgrading its fruit
washing/separating machine. Georgia has narrowed the decision down to two machines:
Machine A and Machine B. Pertinent information about each machine include :
Required:
a.Calculate the net present value of Machine A.
b.Calculate the net present value of Machine B.
c.Using the net present value method, which machine should Georgia select if it can
select only one investment?
5) On the line in front of each statement, enter the letter corresponding to the term that
best fits that statement. You may use a letter more than once and some letters may not
be used at all.
________has a single category of inventory
________resells products previously purchased ready-made from a supplier
________inventory is not sold for a profit
________produces its own inventory
________transforms raw materials into a new finished product
________completed goods that have not been sold
________partially completed items of manufacturers
________steel, glass, tires, upholstery, and fabric that Toyota uses to manufacture
products
6) On the line in front of each variance, put the letter of the department that is most
likely responsible for that variance. A letter may be used more than once or not at all.
A.Production department
B.Marketing department
C.Purchasing department
D.Personnel department
7) Selected information about The Staccato Company for the current year and prior year
is given below.
The current year’s selling and general expenses percentage (as would be found on a
vertical analysis of the income statement for the current year) is
A) 22.00%.
B) 23.96%.
C) 152.47%.
D) 14.43%.
8) The Stemple Corporation data for the current year:
What would a horizontal analysis report with respect to selling/general expenses show?
A) A 13.64% increase
B) Selling/general expenses as 7.39% of net sales revenue
C) A current ratio of 1.24
D) A 12% decrease
9) The Stemple Corporation data for the current year:
What would a horizontal analysis report with respect to current assets show?
A) Inventory turnover of 7.11 times
B) Current ratio of 1.24
C) A 22% increase in current assets
D) Current assets as 26.61% of total assets
10) The Bedford Corporation reported the following income statement and balance
sheet amounts and additional information for the end of the current year.
Inventory and prepaid expenses account for $30,000 of the current year’s current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the rate of return on total assets for the current year?
A) 34.40%
B) 37.49%
C) 30.17%
D) 0.53%
11) The Bedford Corporation reported the following income statement and balance
sheet amounts and additional information for the end of the current year.
Inventory and prepaid expenses account for $30,000 of the current year’s current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the price-earnings ratio for the current year?
A) 4.05
B) 0.25
C) 4.94
D) 5.12
12) The following information relates to Tappan Corporation.
Required:
a.What is the book value per share of common stock for the current year?
b.What is the price-earnings ratio for the current year?
c.What is the rate of return on total assets for the current year?
d.What is the times-interest-earned ratio for the current year?
13) An internal request to transfer raw materials requires personnel to complete a
A) materials requisition document.
B) bill of materials document.
C) purchase order document.
D) labor time record document.
14) Which of the following collects information from the world’s largest companies
each year and disseminates that information to institutional investors and other
stakeholders?
A) The Carbon Disclosure Project (CDP)
B) The International Accounting Standards Board (IASB)
C) Global Reporting Initiative (GRI)
D) The International Organization for Standardization (ISO)
15) In recent years, there has been an increasing awareness and growing interest in
________ and social responsibility by both consumers and corporations.
A) the bottom line.
B) total quality management.
C) sustainability.
D) just-in-time.
16) Using the direct method of cash flow, which of the following is a category in the
statement of cash flows?
A) Amortization expense
B) Loss on sale of equipment
C) Collections from customers
D) Net income
17) The Nichols Corporation data for the current year:
What would a horizontal analysis report with respect to net income before income tax
expense and net income?
A) Both net income before tax expense and net income were 11.26% of net sales
revenue.
B) Both net income before income tax expense and net income increased by $128,400.
C) The current ratio is 1:06.
D) There was an increase in both net income before income tax expense and net income
of 14.00%.
18) For each of the following transactions indicate the effect on the cash balance. Use +
for increase, – for decrease, and 0 for no effect.
19) The manager at Cyber Merchandising provided the following Cost of Quality
Report to the managers at the quarterly meeting.
The manager at Cyber Merchandising reported that the percentage of total costs to
quality incurred in each cost category. Which cost of quality in the Costs of Quality
Report are the highest expenditures at the firm? Rank the cost of quality in order from
the lowest percentage cost of quality to the highest percentage cost of quality category.
What can the manager at Cyber Manufacturing do to reduce the costs spent on the total
internal failure costs?
20) Describe the position of the CFO, the main function of the treasurer, and the main
function of the controller within the organization.
21) In 2013, the accountant at Star Incorporated, a national time-share company,
focused on an internal sales report that illustrates the sales projections to ensure the
sales representatives achieve their goals in 2013; however, the report was not prepared
in accordance with GAAP. The accountant observed that the total sales produced by the
sales representatives in 2012 were $250,000,000. The accountant is in the process of
establishing the new 2013 sales goals for the sales representatives and the accountant is
concerned about the new sales goals in 2013 since the economy is slow and many
individuals and groups are not purchasing time-share condos.
Is the accountant a management accountant or a financial accountant? What concept
concerns the accountant when the new sales goals are revealed to the sales
representatives and administrative staff? Why?
22) Jackie works at the Outer Banks Beach Shoppe. Jackie also works with employees
that represent various functions of the company such as R&D, Design, Production, and
Marketing. This role is effective because each member can address the business
decisions from a different viewpoint. Jackie reports to the vice president of operations.
What is Jackie’s role at the Outer Banks Beach Shoppe?
23) The new manager at Sailboat Manufacturing oversees the manufacturing operations
to ensure the effective manufacturing process of sails to accommodate the
special-orders of sails they receive for sailboats. The manager compiled a report that
contained the following data:
Compute the activity cost allocation rate for each of Sailboat Manufacturing’s
production activities listed in the report. What should the new manager understand
about the cost allocation rates at Sailboat Manufacturing? How will the new manager
use the activity cost allocation rates during the coming year at Sailboat Manufacturing?
24) What are the three primary responsibilities of managers that use managerial
accounting as described in the chapter? Give an example of each type of responsibility
applicable to a managerial accountant.
25) Use the indirect method of preparing a statement of cash flows to answer the
question.
Ending balances for Sunday Hut are listed below:
Net income for this year was $97,000.
What was the net cash inflow from financing activities?