Archives: Solution Manual

Comprehensive Problem (Continued) (Using weighted-average) Cost assignment and reconciliation Costs transferred out Direct materials (11,000 EUP x $2.90 per EUP)……………….$ 31,900 Part 3 — Journal entries (Using weighted-average) g. Finished Goods Inventory …………………………………….271,150 Work in Process Inventory………………………………. 271,150 Transferred goods […]

Problem 20-6B (Concluded) 4. Assignment of costs to output of department—FIFO Costs of goods transferred out Cost of beginning work in process inventory……….. Costs to complete beginning work in process Direct materials (37,500 EUP x $2.50 per EUP)…….. 93,750 Conversion […]

Problem 20-4B (80 minutes) Part 1 SWITCH CO. Process Cost Summary – Weighted Average Method For Month Ended January 31 Costs Charged to Production Costs of beginning work in process Direct materials………………………………………………………. $ 7,500 Unit cost information Units to account […]

Problem 20-7A (Continued) Cost per EUP Direct Materials Conversio n Costs incurred this period……………… $ 248,400 $1,082,970 Cost assignment and reconciliation Costs transferred out Cost of beginning Work in Process…………………….. $ 120,870 Cost to complete beginning Work in Process Direct […]

Problem 20-5A (80 minutes) Part 1 TAMAR CO. Process Cost Summary – FIFO Method For Month Ended May 31 Costs Charged to Production Costs of beginning work in process Direct materials……………………………………………………….$ 19,800 Unit cost information Units to account for Units […]

Problem 20-2A (50 minutes) Part 1 (a) and (b) Equivalent units with respect to direct materials and conversion Direct Equivalent units of production (EUP) Materials Conversion Units completed and transferred out………………. 700,000 700,000 Units of ending Work in Process…………………….. Part […]

Exercise 20-20 (30 minutes) 1. Units to account for Units Accounted For Beginning work in process………………… 2,000 Completed & transferred out………………………………………………………………………………..23,000 2. and 3. Equivalent Units of Production (EUP) Direct Materials Conversion Units completed and transferred out…………….. 23,000 EUP 23,000 […]

Exercise 20-14 (30 minutes) Part 1: Cost of goods transferred and cost of goods sold Weaving Sewing Finished Department Department Goods Beginning inventory……………………………. $ 300,000 $ 570,000 $1,266,000 Direct materials………………………………….. 240,000 75,000 Total costs—Sewing …………………………………. 3,915,000 Less ending inventory—Sewing ………… […]

Exercise 20-9 (20 minutes) 1. Cost per EUP Cost per equivalent unit – weighted-average Direct Materials Conversion Costs of beginning inventory $118,472 $48,594 Costs incurred this period 850,368 649,296 Total costs $968,840 $697,890 ÷ Equivalent units of production 365,600 324,600 […]

Quick Study 20-20 (10 minutes) The ending balance in Work in Process Inventory—Cutting is $7,100 and the ending balance in Work in Process Inventory—Binding is $17,042, as computed below. Work in Process—Cutting Beg. Inventory 3,445 Work in Process—Binding Beg. Inventory […]

Chapter 20 – Process Costing Chapter 20 Process Costing 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 3. Yes, […]

Problem 19-5B (Continued) j. The ending balance in Factory Overhead is computed as: Actual Factory Overhead Miscellaneous overhead………….. $36,800 Indirect materials…………………….. 864 Indirect labor…………………………… 12,000 Total actual factory overhead…… 49,664 Factory overhead applied…………… 50,400 Overapplied overhead………………… $ (736) SERIAL PROBLEM— […]

Problem 19-2B (Concluded) Part 4 (Concluded) CAVALLO MFG. Balance Sheet December 31, 2015 Assets Cash…………………………………………………………… $ 64,000 Accounts receivable……………………………………. 42,000 Inventories Raw materials inventory………………………………$11,700 Part 5 The $2,100 error would cause the costs for Job 604 to be understated. Since […]

Problem 19-5A (Continued) MATERIALS LEDGER CARD Item Material M Received Issued Date Receivin g Report Unit s Unit Pric e Total Price Requi- sition Unit s Unit Pric e Total Price Unit s Unit Pric e May 1 200 250 […]

Problem 19-2A (75 minutes) Part 1 a. Dec. 31 Work in Process Inventory…………………………………….28,800 b. Dec. 31 Work in Process Inventory…………………………………….59,800 Wages Payable……………………………………………….. 59,800 To record direct labor costs for Jobs 402 and 404 ($36,000 + $23,800). c. Dec. 31 Work […]

Exercise 19-16 (30 minutes) 1. Overhead rate = Total overhead costs / Total direct labor costs 2. Total cost of work in process inventory………………………….. $ 71,000 Deduct: Direct labor……………………………………………………… (20,000) Deduct: Factory overhead ($20,000 x 60%)…………………….. (12,000) Direct materials……………………………………………………………. $ […]

Exercise 19-4 (15 minutes) 1. 2. Direct materials…………………………………………………………………….. $15,350 Exercise 19-5 (20 minutes) Estimated overhead costs Estimated direct labor $747,500 $575,000 $600,000 $1,500,000 Overhead costs Direct material costs Direct labor…………………………………………………………………………… 3,200 Factory overhead ($3,200 x 130%)………………………………………….. 4,160 Total cost of […]

Chapter 19 – Job Order Costing CHAPTER 19 JOB ORDER COSTING 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 19-1, […]

Comparative Analysis — BTN 18-2 1. The purpose of Apple’s audit committee is to: a. Assist the Board in oversight and monitoring of: i. the Corporation’s financial statements and other financial information provided to shareholders and others; ii. compliance with […]

Problem 18-1B (continued) Part 2 Maxwell Calculation of Manufacturing Cost per BD For Year Ended December 31, 2015 Item Total cost (at 15,000 units) Per unit cost * Variable production costs Plastic for BDs $ 1,500 $ 0.10 Part 3 […]

PROBLEM SET A Problem 18-1A (45 minutes) Part 1 Cost classification and amounts Costs Variable Fixed Product Period 1. Plastic for casing—$17,000……………… $17,000 $17,000 2. Wages of assembly workers—$82,000…. 82,000 82,000 3. Property taxes on factory—$5,000……. $ 5,000 5,000 Part […]

Exercise 18-10 (20 minutes) Garcon Company Pepper Company 1. PRIME COSTS Direct materials Beginning raw materials inventory…………….. $ 7,250 $ 9,000 2. CONVERSION COSTS Direct labor…………………………………………………. Factory overhead $19,000 $35,000 Rental cost on factory equipment………………. 27,000 22,750 Factory utilities………………………………………… 9,000 […]

EXERCISES Exercise 18-1 (10 minutes) Exercise 18-2 (20 minutes) Most fixed costs are indirect. Fixed costs normally are resources acquired to For example, as production increases, the total cost of the laces consumed in production increases. These laces might be […]

Chapter 18 – Managerial Accounting Concepts and Principles CHAPTER 18 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 […]

SERIAL PROBLEM — SP 17 Serial Problem — SP 17, 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) […]

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% 100.00% Cost of goods sold……………………………… 54.77 51.91 46.04 * Some totals do not reconcile due to rounding. Gross […]

Problem 17-2A (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 17-8 (25 minutes) 1. Days’ sales uncollected 2. Accounts receivable turnover 2015: = 8.9 times 2014: = 9.4 times ($89,500 + $62,500)/2 $532,000 3. Inventory turnover ($62,500 + $50,200)/2 $411,225 ($82,500 + $54,000)/2 2015: = 4.2 times 2014: = […]

Chapter 17 – Analysis of Financial Statements CHAPTER 17 ANALYSIS OF FINANCIAL STATEMENTS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Explain the purpose and identify the building blocks of analysis. […]

Part 2 Adjusting Net Income to Cash Flow from Operating Activities Items to Add Items to Subtract a. Noncash expenses Noncash revenues b. Losses Gains c. Decreases in current assets Increases in current assets d. Increases in current liabilities Decreases […]

Problem 16-8BB (35 minutes) SATU COMPANY Statement of Cash Flows For Year Ended December 31, 2015 Cash flows from operating activities Cash received from customers (Note 1) ……………… $756,438 Cash flows from investing activities Cash paid for equipment …………………………………… (30,250) […]

PROBLEM SET B Problem 16-1B (35 minutes) SALT LAKE COMPANY Cash Flows from Operating Activities—Indirect Method For Year Ended December 31, 2015 Cash flows from operating activities Net income………………………………………………………………….. $ 20,000 Adjustments to reconcile net income to net cash provided […]

PROBLEM SET A Problem 16-1A (35 minutes) LANSING COMPANY Cash Flows from Operating Activities—Indirect Method For Year Ended December 31, 2015 Cash flows from operating activities Net income………………………………………………………………….. $ 6,000 Adjustments to reconcile net income to net cash provided by […]

Exercise 16-11 (40 minutes) Part 1 IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2015 Cash flows from operating activities Net income……………………………………………………………..$ 99,510 Adjustments to reconcile net income to net cash provided by operating activities […]

Quick Study 16-17 (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 2. Sykes’s cash flow on total assets ratio is slightly […]

Chapter 16 – Reporting the Statement of Cash Flows Chapter 16 Reporting the Statement of 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 […]

VISUAL #16-1 CLASSIFYING ACTIVITIES IN THE STATEMENT OF CASH FLOWS OPERATING ACTIVITIES Cash inflows from Cash outflows to Customers for cash sales Collections on credit sales Borrowers for interest Dividends received Lawsuit settlements Salaries and wages Lenders for interest Charities […]

Serial Problem — SP 15 Serial Problem, Business Solutions (35 minutes) Part 1 2016 April 16 Short-Term Investments—Trading (J&J)……………….20,300 30 Short-Term Investments—Trading (Starbucks)……. 4,650 Cash………………………………………………………. 4,650 Purchased Starbucks shares [(200 x $22) + $250]. Part 2 Adjusting entry at June […]

Problem 15-2B (40 minutes) Part 1 Feb. 6 Short-Term Investments—AFS (Nokia)………… 143,250 15 Short-Term Investments—AFS (T-bills)……….. 20,000 Cash………………………………………………….. 20,000 Purchased U.S. Treasury bills. Apr. 7 Short-Term Investments—AFS (Dell)…………… 48,655 Cash………………………………………………….. 48,655 Purchased 1,200 shares of Dell [(1,200 x $39.50) + […]

Problem 15-3A (Concluded) Part 2 12/31/2015 12/31/2016 12/31/2017 Long-Term AFS Securities (cost)………………. $117,100 $85,143 $212,160 Part 3 2015 2016 2017 Realized gains (losses) Sale of Johnson & Johnson shares……. $ 2,235 Sale of Mattel shares…………………………. (5,080) Sale of Sara Lee […]

Exercise 15-16A (25 minutes) Quarter ended June 30, 2015 May 8 recorded amount (800,000 x $0.1323)…………………. $105,840 June 30 balance sheet amount (800,000 x $0.1352)………. 108,160 Foreign exchange gain……………………………………………….. $ 2,320 Quarter ended September 30, 2015 June 30 balance sheet […]

EXERCISES Exercise 15-1 (10 minutes) 3. Short-term investments are securities that (1) management intends to convert to cash within one year or the operating cycle, whichever is longer, and (2) are readily convertible to cash. 4. Long-term investments in securities […]

Ethics Challenge — BTN 14-3 1. The ethics of the Traverse County officials are questionable. The financial impact of the leasing arrangement is the same as bond In reality, the taxpayers of Traverse County reacted very negatively to the actions […]

Problem 14-9BB (45 minutes) Part 1 Ten payments of $14,400…………………….. $144,000 Par value at maturity…………………………… 320 ,000 or: Ten payments of $14,400…………………….. $144,000 Less premium……………………………………. (12 ,988) Total bond interest expense………………… $131 ,012 Part 2 Semiannual Interest Period-End (A) Cash […]

Problem 14-3B (40 minutes) Part 1 2015 Jan. 1 Cash……………………………………………………………………4,192,932 Part 2 (a) Cash Payment = $3,400,000 x 10% x 6/12 year = $170,000 (b) Premium = $4,192,932 – $3,400,000 = $792,932 Straight-line premium amortization= $792,932/20 semiannual periods = $ […]

Problem 14-8AB (Concluded) Part 4 2015 June 30 Bond Interest Expense………………………………………….11,687 2015 Dec. 31 Bond Interest Expense………………………………………….11,830 Discount on Bonds Payable…………………………….. 3,705 Cash………………………………………………………………. 8,125 To record six months’ interest and discount amortization. Discount on Bonds Payable…………………………….. 3,562 Cash………………………………………………………………. 8,125 To […]

Problem 14-2A (40 minutes) Part 1 2015 Jan. 1 Cash……………………………………………………………………3,456,448 Sold bonds on stated issue date. 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 […]

Exercise 14-11 (20 minutes) 2015 Jan. 1 Cash……………………………………………………………………100,000 2015 Dec. 31 Interest Expense…………………………………………………..7,000 Notes Payable………………………………………………………22,523 Cash………………………………………………………………. 29,523 To record first installment payment. 2016 Dec. 31 Interest Expense…………………………………………………..5,423 Notes Payable………………………………………………………24,100 Cash………………………………………………………………. 29,523 To record second installment payment. 2017 Dec. 31 Interest […]

EXERCISES Exercise 14-1 (15 minutes) 2. Journal entries 2015 (a) Jan. 1 Cash……………………………………………………………………3,400,000 Bonds Payable……………………………………………….. 3,400,000 Sold bonds at par. (b) June 30 Bond Interest Expense………………………………………….153,000 Cash………………………………………………………………. 153,000 Paid semiannual interest on bonds. (c) Dec. 31 Bond Interest Expense………………………………………….153,000 Cash………………………………………………………………. […]

Alternate Demonstration Problem Chapter Fourteen Note: Instructor can choose the interest amortization method. Solution one demonstrates the straight line method and solution two demonstrates the effective interest method. ABC Company issued $200,000 face value bonds on January 1, 2015, with […]