Archives: Solution Manual

Problem 16-7A (Continued) Cost per EUP Direct Materials Conversion Costs incurred this period……………… $ 248,400 $1,082,970 EUP EUP Cost assignment and reconciliation Costs transferred out Cost of beginning Work in Process…….….….….….…. $ 120,870 Cost to complete beginning Work in Process […]

Problem 16-2A (Concluded) Part 4 MEMORANDUM TO: FROM: DATE: RE: Percentage of Completion Error Analysis If the units in ending inventory are 60% complete instead of 30% with respect to conversion, the number of equivalent units in ending inventory Regarding […]

Exercise 16-19 (20 minutes) [Note: Solution key is on the following page.] Punching Bending Warehouse Beginning Work in Process $7,500 Direct Materials $60,000 Direct Labor $12,000 Factory Overhead $15,000 Total costs in process in punching department (1) $94,500 Ending Work […]

Exercise 16-10 (20 minutes) 1. Units Units Units in beginning inventory 60,000 60,000 60,000 2. Equivalent units of production – FIFO Direct Materials Conversion Complete beginning inventory (60,000 x 40% Mtl, 60% Conv.) 24,000 36,000 Units started and completed (240,000 […]

Quick Study 16-21 (15 minutes) Equivalent units under the FIFO method Equivalent EUP for materials—FIFO Units Equivalent units to complete beginning WIP (2,000 x 30%)…………. 600 Equivalent units started and completed*…………..……..………….………15,000 * Units completed – Units in beginning work in […]

Chapter 16 Process Costing and Analysis QUESTIONS 1. The main deciding factor in choosing between a job order costing system or a process costing system is the type of product or service. Examples where a process costing system is likely […]

Chapter Outline 3. Sources of amounts used in cost reconciliation: a. Cost assigned to units completed during the period equals: i. Direct material cost assigned during the period (equivalent units in units completed for direct materials x the related equivalent […]

CHAPTER 16 PROCESS COSTING AND ANALYSIS Related Assignment Materials Student Learning Objectives Discussion Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Explain process operations and the way they differ from job order operations. 2, 3, 15,16 16-1, […]

SERIAL PROBLEM— SP 15 Serial Problem—SP 15, Business Solutions (40 minutes) 1.The cost of direct materials requisitioned in the month equals the total direct materials costs accumulated on the three jobs less the amount of direct materials cost assigned to […]

Problem 15-3B (Concluded) Part 2 a. Raw Materials Inventory……………………….….….….….….125,000 b. Work in Process Inventory………………..………….….….…80,000 Factory Overhead………………..…………….…………….….…12,000 Raw Materials Inventory…………………..….….….….… 92,000 To record direct & indirect materials. c. Factory Overhead………………..……………..……………….…11,000 Cash…………………………………..……………………………. 11,000 To record other factory overhead. d. Work in Process […]

PROBLEM SET B Problem 15-1B (80 minutes) Part 1 Total manufacturing costs and the costs assigned to each job 114 115 116 Sept. Total From August Direct materials….….……….…………..$ 14,000 $ 18,000 Direct labor..……………………………….18,000 16,000 Direct labor ……..……….…….……….…30,000 68,000 120,000 218,000 […]

Problem 15-2A (concluded) Part 5 This $5,600 error would cause the costs for Job 404 to be understated. Since Job 404 is in process at the end of the period, work in process inventory and total assets would both be […]

Exercise 15-17 (20 minutes) 1. a. Work in Process Inventory………………….……….…………9,500 Raw Materials Inventory…………………..…………….… 9,500 To record direct materials used. d. Cost of Goods Sold*…………….……………..…………….…..16,000 Finished Goods Inventory………….…………………….. 16,000 To record cost of sale of job 120. e. Accounts Receivable……………..……………..…………….…22,000 Sales………………..………………..……………….…………… […]

Exercise 15-4 (15 minutes) 1. Rate = = = 130% 2. Direct materials……………….……………………………………..….…………… $15,350 Direct labor………………..……………….………………..……..…….…………… 3,200 Exercise 15-5 (20 minutes) 1. Rate = = = 40% 2. Total cost of job in process (given)………….……………………………….…..$ 50,000 Less materials cost of […]

Chapter 15 Job Order Costing and Analysis QUESTIONS 1. Factory overhead is not identified with specific units (jobs) or batches (job lots). Therefore, to assign costs, estimates of the relation between factory overhead cost 2. Several other factors (allocation bases) […]

VISUAL #15-1 Tracing Product Costs Through a Cost Accounting System Work in Process Finished Goods Materials Inventory Inventory Inventory (1) Buy Send (2) (2) Direct (7) Goods (7) Cost of (8) Goods (Cr. A/P) materials material completed Finished Sold to […]

CHAPTER 15 JOB ORDER COSTING AND ANALYSIS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe important features of job order production. 10, 11, 12, 13 15-1, 15-14 15-1 15-1, 15-2, […]

Taking It to the Net — BTN 14-5 1. Standards of Ethical Conduct for Management Accountants are posted at the Web site: http://www.IMAnet.org. These standards (in abbreviated form) are: Competence – maintain an appropriate level of professional competence. 2. The […]

Problem 14-4B (40 minutes) Part 1 Unit and dollar amounts of raw materials inventory in blades Note: 20,750 pairs of skates require 41,500 blades. Part 2 Topics of discussion for the memorandum include: General description of the JIT inventory system […]

Problem 14-3A (Continued) Part 2 LEONE COMPANY Income Statement For Year Ended December 31, 2015 Sales……………..……………………………..………………….…… $4,462,500 Cost of goods sold Finished goods inventory, December 31, 2014………$ 167,350 Cost of goods sold………..………………….….…………….. 1,966,510 Gross profit from sales………………………….…….……….. 2,495,990 Operating expenses […]

Exercise 14-12 (25 minutes) Account Balance Sheet Income Statement Schedule of COGM Overhead Report Accounts receivable…….……..…….……..  Computer supplies used in office……..  Beginning finished goods inventory…  Ending raw materials inventory………..   Factory maintenance wages…………….  Income taxes…….…….……..…………..…… […]

EXERCISES Exercise 14-1 (10 minutes) Exercise 14-2 (20 minutes) Most fixed costs are indirect. Fixed costs normally are resources acquired to support the production process rather than being traceable to individual For example, as production increases, the total cost of […]

Chapter 14 Managerial Accounting Concepts and Principles QUESTIONS 1. The managerial accountant plays an important role in preparing the information necessary for effective planning and control decisions. One example is the budget, continuously improve a business. 2. Financial Accounting Managerial […]

Chapter Outline Notes B. Manufacturer’s Balance Sheet—carry several unique assets and usually reports these three inventories: 1. Raw Materials Inventory—goods a company acquires to use in making products Includes both direct and indirect materials. 2. Work in Process Inventory— consists […]

CHAPTER 14 MANAGERIAL ACCOUNTING CONCEPTS AND PRINCIPLES Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Explain the purpose and nature of, and the role of ethics in, managerial accounting. 1, 2, […]

SERIAL PROBLEM — SP 13 Serial Problem — SP 13, Business Solutions (45 minutes) 1. Gross margin with services revenue Gross margin = Total revenue – Cost of goods sold Gross margin without services revenue Gross margin = Net (goods) […]

Problem 13-2B (60 minutes) Part 1 Current ratio: December 31, 2015: $54,860 / $22,370 = 2.5 to 1 Part 2 BLUEGRASS CORPORATION Common-Size Comparative Income Statements For Years Ended December 31, 2015, 2014, and 2013 2015 2014 2013 Sales……………..……………………..……….….…100.00% 100.00% […]

Problem 13-2A (Concluded) Part 3 KORBIN COMPANY Balance Sheet Data in Trend Percents December 31, 2015, 2014, and 2013 2015 2014 2013 Assets Current assets………….….……….……. 101.24% 73.29% 100.00% Liabilities and Equity Current liabilities……………..….……… 112.32% 98.33% 100.00% Common stock…………………………… 120.00 120.00 […]

Exercise 13-8 (25 minutes) 1. Days’ sales uncollected 2015: x 365 = 48.5 days 2. Accounts receivable turnover 2015: = 8.9 times 2014: = 9.4 times 3. Inventory turnover 2015: = 4.2 times 2014: = 5.1 times 4. Days’ sales […]

Chapter Outline Notes 3. Ratios in this block: a. Profit margin—net income divided by net sales; describes the ability to earn a net income from sales. b. Return on total assets—net income divided by average stockholders’ equity; measures the success […]

Teamwork in Action — BTN 12-6 Part 1 a. The reporting objective of the statement of cash flows is to provide information about important cash inflows and outflows for business decision makers. It answers specific questions such as: How does […]

SERIAL PROBLEM — SP 12 Serial Problem — SP 12, Business Solutions (45 minutes) BUSINESS SOLUTIONS Statement of Cash Flows (Indirect) For Quarter Ended March 31, 2016 Cash flows from operating activities Net income………………………………………..….……………….……..$ 18,833 Adjustments to reconcile net income […]

Problem 12-2BB (35 minutes) SALT LAKE COMPANY Cash Flows from Operating Activities—Direct Method For Year Ended December 31, 2015 Cash flows from operating activities Cash receipts from customers (1)…………………………….….…….….….…$ 155,400 Cash payments to suppliers (2)……………………………….…….….…….…..(72,080) Cash payments for salaries (3)…………….……………………….….….….…..(19,700) […]

Problem 12-3A (50 minutes) Part 1 FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2015 Cash flows from operating activities Net income………………………………..…….….…….…….….…….….$114,975 Adjustments to reconcile net income to net cash provided by operating activities: Increase in inventory […]

Exercise 12-11 (Part 1 continued) (1) Cost of equipment sold (Given)……………………………………………………….….. $ 48,600 Accumulated depreciation of equipment sold*………..……….….…..…..…..…. (40 ,600 ) Book value of equipment sold…………………………………………………..…….….. 8,000 Gain on sale of equipment (Given)……………………………………………….….….. 2 ,000 Equipment Accumulated Depreciation, Equipment Bal., […]

Quick Study 12-17 (10 minutes) 1. Moore is probably in the strongest position of the three competing companies on the basis of the statement of cash flows. Moore’s cash flows from 2. Sykes’s cash flow on total assets ratio is […]

Chapter 12 Reporting Cash Flows QUESTIONS 1. The purpose of the cash flow statement is to report all major cash receipts (inflows) and cash payments (outflows) during a period. It helps users to answer questions such as: 2. On a […]

12-17 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Alternate Demonstration Problem Chapter 12 The Carpet Company’s 2014 and 2015 balance sheets included the following items: December 31 […]

12-11 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. VISUAL #12-2 STEPS TO DETERMINE INFORMATION STATEMENT OF CASH FLOWS 1. Find change in Cash—This is the target number. […]

CHAPTER 12 REPORTING CASH FLOWS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Distinguish between operating, investing, and financing activities, and describe how noncash investing and financing activities are disclosed 1, […]

Reporting in Action — BTN 11-1 (All shares in thousands.) 1. As of September 28, 2013, the shares of common stock issued and outstanding are 899,213 (see balance sheet). As of September 29, 2012, For fiscal 2013, the shares outstanding […]

Problem 11-2B (Concluded) Part 2 BALTHUS CORP. Statement of Retained Earnings For Year Ended December 31, 2016 Retained earnings, December 31, 2015………………………. $2,160,000 Plus net income………………………………………………………… 1 ,072,000 3,232,000 Part 3 BALTHUS CORP. Stockholders’ Equity Section of the Balance Sheet […]

Exercise 11-18 (Concluded) Part 2 ALEXANDER CORPORATION Statement of Retained Earnings For Year Ended December 31, 2016 Retained earnings, December 31, 2015………………………. $340,000 Plus net income…………………………………………………….….. 52 ,000 392,000 Part 3 ALEXANDER CORPORATION Stockholders’ Equity Section of the Balance Sheet […]

Exercise 11-3 (15 minutes) 1. Cash……………………………………………..………………..….…… 35,000 Common Stock, $5 Par Value*…………….………………. 20,000 2. Organization Expenses……………………………..………….…. 40,000 Common Stock, $1 Stated Value……………………..….. 2,000 Paid-In Capital in Excess of Stated Value, Common Stock……………….……………….….….….…… 38,000 Issued stock to promoters. 3. Organization Expenses……………………………..………….…. […]

CHAPTER 11 CORPORATE REPORTING AND ANALYSIS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Identify characteristics of 1, 2, 3, 4 11-1 11-1 11-5 C2. Explain characteristics of, and distribute dividends […]

Comparative Analysis — BTN 10-2 1. Apple’s current year debt-to-equity ratio = $83,451 / $123,549 = 0.68 Apple’s prior year debt-to-equity ratio = $57,854 / $118,210 = 0.49 2. For both years, Apple’s debt-to-equity ratio is above that of the […]

Problem 10-8BB (Concluded) Part 4 2015 June 30 Bond Interest Expense……………..…..….….….….….….….7,940 discount amortization. 2015 Dec. 31 Bond Interest Expense……………..…..….….….….….….….7,969 Discount on Bonds Payable…………….……………..… 769 Cash…………………………………..……………………………. 7,200 To record six months’ interest and discount amortization. ©2016 by McGraw-Hill Education. This is […]

Problem 10-2B (Concluded) Part 3 Twenty payments of $170,000……………….$3,400,000 Par value at maturity…………….……………… 3,400,000 or: Twenty payments of $170,000 ………………$3,400,000 Plus discount…………..….……….…….….…… 390,000 Total bond interest expense…………………$3,790,000 Part 4 (Semiannual amortization: $390,000/20 = $19,500) Semiannual Period-End Unamortized Discount Carrying Value […]

Problem 10-7A (20 minutes) Part 1 Pulaski Company debt-to-equity = $360,000 / $500,000 = 0.72 Part 2 Scott’s debt-to-equity ratio is higher than Pulaski’s. This implies that Scott is more risky. However, before deciding if either company’s debt-to–equity ratio is […]

Problem 10-2A (40 minutes) Part 1 2015 Jan. 1 Cash………………………………………………………………………3,456,448 Part 2 [Note: The semiannual amounts for (a), (b), and (c) below are the same throughout the bonds’ life because this company uses straight-line amortization.] (a) Cash Payment = $4,000,000 […]