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1) Addams, Inc., is preparing its master budget for the second quarter. The following
sales and production data have been forecasted:
Finished goods inventory on March 31: 120 units
Raw materials inventory on March 31: 450 pounds
Desired ending inventory each month:
Finished goods: 30% of next month's sales
Raw materials: 25% of next month's production needs
Number of pounds of raw material required per finished unit: 4 lbs.
How many pounds of raw materials should be purchased in April?
2) Hubbard Company had the following trading securities in its portfolio at December
31. The Fair Value Adjustment-Trading account had a balance of zero prior to year-end
adjustment. Prepare the appropriate adjusting journal entry.
3) On September 12, Vander Company sold merchandise in the amount of $5,800 to
Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000.
Vander uses the periodic inventory system. On September 14, Jepson returns some of
the merchandise. The selling price of the returned merchandise is $500 and the cost of
the merchandise returned is $350. The entry or entries that Vander must make on
September 14 is:
4) Describe the purpose of vertical financial statement analysis and how it is applied.
5) _________________ are the amounts and timing of payment from a buyer to a seller.
6) Non-operating activities that include interest, dividend, and rent revenues, and gains
from asset disposals are called _____________________________.
