1) Selected financial information for Rockufeler Company for 2012 follows:
Required:
How many times did Rockufeler’s merchandise inventory turn over during 2012?
2) Indicate how the event affects the elements of the financial statements. Use the
following letters to record your answer in the box shown below each element:
You do not need to enter amounts.
Warren Corporation acquired cash by issuing common stock to investors.
Indicate whether each of the following statements is true or false.
1>A cost that is relevant to one decision may be irrelevant to another3) 2>To be
relevant in decision making, cost information must be exactly correct
3>For making decisions in business, information that cannot be quantified (expressed in
numbers) is not relevant
4>The sacrifice represented by a lost opportunity is a sunk cost
5>Eliminating a segment of a business may eliminate some facility-level costs
4) How would an organization benefit from conducting postaudits of its capital
investment decisions?
5) Tokyo Corporation is considering two projects, A and B, and it has gathered the
following estimates for the projects:
Based only on net present value, which project would you recommend that the
company accept?
6) Indicate whether each of the following statements is true or false.
1>The inventory purchases budget indicates the amount expected for ending inventory,
which is reported on the pro forma balance sheet
2>An inventory purchases budget is prepared based on sales projections from the sales
budget
3>The amount of budgeted purchases of inventory equals cost of goods sold plus the
beginning inventory less ending inventory
4>The amount of cost of goods sold reported on the pro forma income statement comes
from the sales budget
5>The inventory purchases budget generally includes a schedule of cash receipts for the
period
7) Based on the information given, calculate the dollar amount of the variance and
indicate whether it is favorable or unfavorable.
8) What are mixed or semivariable costs? Give an example of a mixed cost.
9) Indicate how each event affects the elements of financial statements. Use the
following letters to record your answer in the box shown below each element. You do
not need to enter amounts.
On December 31, 2012, Spencer Corporation had a balance of $20,000 on a line of
credit with Mid-Rivers Bank. Spencer made a payment of $11,200, which included
$10,000 on the principal and $1,200 interest. Show the effects of this transaction on
Spencer’s financial statements.