1) The unearned revenues account is an example of a liability.
2) The excess of the cash flowing in from revenues over the cash flowing out for
expenses is termed net discounted cash flow.
3) The balance in the retained earnings account on the work sheet will equal the amount
presented in the balance sheet.
4) Investment in Bonds is listed on the balance sheet after Bonds Payable.
5) If the maker of a note fails to pay the debt on the due date, the note is said to be
dishonored.
6) If ending inventory for the year is understated, net income for the year is overstated.
7) If Division Q’s income from operations was $30,000 on invested assets of $200,000,
the rate of return on investment is 15%.
8) The last step in the accounting procedure for process costing is the calculation of
equivalent units of production.
9) The plant managers salary in a manufacturing business would be considered an
indirect cost.
10) A cash flow per share amount should be reported on the statement of cash flows.
11) On the work sheet, the capital stock and dividends account balances are extended to
the Balance Sheet columns.
12) If 30,000 units of materials enter production during the first year of operations,
25,000 of the units are finished, and 5,000 are 50% completed, the number of
equivalent units of production would be 28,500.
13) Receivables that are expected to be collected in cash in eighteen months or less are
reported in the Current Asset section of the balance sheet.
14) A budget can be an effective means of communicating managements plans to the
employees of a business.
15) The financial statements resulting from combining parent and subsidiary statements
are called consolidated statements.
16) In order to choose the proper activity base for a cost, managerial accountants must
be familiar with the operations of the entity.
17) Reporting unusual items separately on the income statement allows investors to
isolate the effects of these items on income and cash flows.
18) On the variable costing income statement, all of the fixed costs are deducted from
the contribution margin.
19) The first step in determining the cost of goods completed and ending inventory
valuation using process costing is to calculate equivalent units of production.
20) A company reports the following income statement and balance sheet information
for the current year:
Determine the rate earned on total assets. Round your answer to one decimal place.
21) At the beginning of the period, the Cutting Department budgeted direct labor of
$30,000 and supervisor salaries of $20,000 for 3,000 hours of production. The
department actually completed 5,000 hours of production. Determine the budget for the
department assuming that it uses flexible budgeting?
22) A $500,000 bond issue on which there is an unamortized discount of $35,000 is
redeemed for $475,000. Journalize the redemption of the bonds.
23) Xang Companys costs were over budget by $46,000. The Xang Company is divided
in two regions. The first regions costs were over budget by $7,000.
Required:
Determine the amount that the second regions cost was over or under budget.
24) Cariboo Pattern Company makes dressmakers’ patterns using a machine that stamps
the pattern outline onto tissue paper. The stamping center produced 40,000 patterns in
August, with a machine time per pattern of 20 seconds. Annual budgeted cell
conversion costs were as follows:
Cariboo planned 2,500 total machine hours for the year.
Calculate Cariboo’s budgeted cell conversion cost rate for the year.
25) To meet projected annual sales, Greenleaf Manufacturers, Inc. needs to produce
75,000 machines for 2012. The estimated January 1, 2012, inventory is 7,000 units, and
the desired December 31, 2012, inventory is 12,000 units. What are projected sales
units for 2012?
26) Master Designs Company has cash flows for operating activities of $350,000. Cash
flows used for investments in property, plant, and equipment totaled $65,000, of which
70% of this investment was used to replace machinery to maintain existing capacity.
What is the free cash flow for Master Designs?