At May 31, 2008, the accounts of Hannifan Manufacturing Company show the following

E2-9 At May 31, 2008, the accounts of Hannifan Manufacturing Company show the following.
1. May 1 inventories-finished goods $12,600, work in process $14,700, and raw materials $8,200.
2. May 31 inventories-finished goods $9,500, work in process $17,900, and raw materials $7,100.
3. Debit postings to work in process were: direct materials $62,400, direct labor $32,000, and manufacturing overhead applied $40,000.
4. Sales totaled $200,000.

Required:
a) Prepare a condensed cost of goods manufactured schedule.
b) Prepare an income statement for May through gross profit.
c) Indicate the balance sheet presentation of the manufacturing inventories at May 31, 2008.

Click here for the solution: At May 31, 2008, the accounts of Hannifan Manufacturing Company show the following

Caroline Company reports the following costs and expenses in May

ACC 560 Week 2 Assignment

E1-4 Caroline Company reports the following costs and expenses in May.

Factory utilities $ 11,500 Direct labor $69,100
Depreciation on factory equipment 12,650 Sales salaries 46,400
Depreciation on delivery trucks 3,800 Property taxes on factory building 2,500
Indirect factory labor 48,900 Repairs to office equipment 1,300
Indirect materials 80,800 Factory repairs 2,000
Direct materials used 137,600 Advertising 18,000
Factory manager's salary 8,000 Office supplies used 2,640

From the information, determine the total amount of: (a) Manufacturing overhead. (b) Product costs. (c) Period costs.

Click here for the solution: Caroline Company reports the following costs and expenses in May

The May transactions of StepAside Corporation were as follows

E3-9 The May transactions of StepAside Corporation were as follows.

May 4 Paid $700 due for supplies previously purchased on account.
7 Performed advisory services on account for $6,800.
8 Purchased supplies for $850 on account.
9 Purchased equipment for $1,000 in cash.
17 Paid employees $530 in cash.
22 Received bill for equipment repairs of $900.
29 Paid $1,200 for 12 months of insurance policy. Coverage begins June 1.

Instructions
Journalize the transactions. Do not provide explanations.

Click here for the solution: The May transactions of StepAside Corporation were as follows

The transactions completed by Over-Nite Express Company during May 2010, the first month of the fiscal year, were as follows

PR 5-5A The transactions completed by Over-Nite Express Company during May 2010, the first month of the fiscal year, were as follows:

May1: Issued check no. 205 for May rent. $1000
2. Purchased a vehicle on account from McIntyre Sales Co. $22,300
3. Purchased office equipment on account from Office Mate $520
5. Issued Invoice No. 91 to Martin Co., $5,200

AND SO ON

Check: 2. Total Cash Receipts $73,230

Click here for the solution: The transactions completed by Over-Nite Express Company during May 2010, the first month of the fiscal year, were as follows

Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008

P3-1B Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008. The trial balance at May 31 is as follows.

MODINE CONSULTING, INC.
Trial Balance
May 31, 2008
Account
Number Debit Credit
101 Cash $ 7,700
112 Accounts Receivable 4,000
126 Supplies 1,500
130 Prepaid Insurance 4,800
149 Office Furniture 9,600
201 Accounts Payable $ 3,500
209 Unearned Service Revenue 3,000
311 Common Stock 19,100
400 Service Revenue 6,000
726 Salaries Expense 3,000
729 Rent Expense 1,000
$31,600 $31,600

In addition to those accounts listed on the trial balance, the chart of accounts for Modine Consulting also contains the following accounts and account numbers: No. 150 Accumulated Depreciation—Office Furniture, No. 212 Salaries Payable, No. 229 Travel Payable, No. 631 Supplies Expense,No. 717 Depreciation Expense,No. 722 Insurance Expense, and No. 736 Travel Expense.

Other data:
1. $500 of supplies have been used during the month.
2. Travel expense incurred but not paid on May 31, 2008, $200.
3. The insurance policy is for 2 years.
4. $1,000 of the balance in the unearned service revenue account remains unearned at the end of the month.
5. May 31 is a Wednesday, and employees are paid on Fridays. Modine Consulting has two employees, who are paid $700 each for a 5-day work week.
6. The office furniture has a 5-year life with no salvage value. It is being depreciated at $160 per month for 60 months.
7. Invoices representing $1,000 of services performed during the month have not been recorded as of May 31.

Instructions
(a) Prepare the adjusting entries for the month of May. Use J4 as the page number for your journal.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column.
(c) Prepare an adjusted trial balance at May 31, 2008.

Check: (c) Adj. trial balance $33,800


Click here for the solution: Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008

On May 1, 2011, Newby Corp. issued $600,000, 9%, 5-year bonds at face value

P10-3A On May 1, 2011, Newby Corp. issued $600,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2011, and pay interest semiannually on May 1 and November 1. Financial statements are prepared annually on December 31.

Instructions
a) Prepare the journal entry to record the issuance of the bonds
b) Prepare the adjusting entry to record the accrual of interest on December 31, 2011
c) Show the balance sheet presentation on December 31, 2011.
d) Prepare the journal entry to record payment of interest of May 1, 2012, assuming no accrual of interest from January 1, 2012 to May 1, 2012.
e) Prepare the journal entry to record payment of interest on November 1, 2012
f) Assume that on November 1, 2012, Newby calls the bonds at 102. record the redemption of the bonds.


Click here for the solution: On May 1, 2011, Newby Corp. issued $600,000, 9%, 5-year bonds at face value

On May 31, the inventory balances of Princess Designs, a manufacturer of high-quality children’s clothing, were as follows

P 3. On May 31, the inventory balances of Princess Designs, a manufacturer of high-quality children’s clothing, were as follows: Materials Inventory, $21,360; Work in Process Inventory, $15,112; and Finished Goods Inventory, $17,120. Job order cost cards for jobs in process as of June 30 had these totals:

The predetermined overhead rate is 130 percent of direct labor costs. Materials
purchased and received in June were as follows:
June 4 $33,120
June 16 28,600
June 22 31,920
Direct labor costs for June were as follows:
June 15 payroll $23,680
June 29 payroll 25,960
Direct materials requested by production during June were as follows:
June 6 $37,240
June 23 38,960

On June 30, Princess Designs sold on account finished goods with a 75 percent markup over cost for $320,000.

Required
1. Using T accounts for Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Overhead, Accounts Receivable, Payroll Payable, Sales, and Cost of Goods Sold, reconstruct the transactions in June.
2. Compute the cost of units completed during the month.
3. What was the total cost of goods sold during June?
4. Determine the ending inventory balances.
5. Jobs 24-A and 24-C were completed during the first week of July. No additional materials costs were incurred, but Job 24-A required $960 more of direct labor, and Job 24-C needed an additional $1,610 of direct labor. Job 24-A was composed of 1,200 pairs of trousers; Job 24-C, of 950 shirts. Compute the product unit cost for each job. (Round your answers to two
decimal places.)


Click here for the solution: On May 31, the inventory balances of Princess Designs, a manufacturer of high-quality children’s clothing, were as follows

The cost of inventory reported on the balance sheet may include the cost of all the following EXCEPT

MULTIPLE CHOICE

1. The cost of inventory reported on the balance sheet may include the cost of all the following EXCEPT: (Points : 2)

2. The one cost that would be classified as part of both prime cost and conversion cost would be: (Points : 2)

3. Which of the following is NOT one of the three major customer value propositions discussed in the text? (Points : 2)

4. Which of the following is NOT a period cost? (Points : 2)

5. A plant manufactures several different products. The wages of the maintenance staff in the plant can be classified as a (an): (Points : 2)

6. Consider the following costs incurred in a recent period:
Direct materials $33,000
Depreciation on factory equipment $12,000
Factory janitor's salary $23,000
Direct labor $28,000
Utilities for factory $9,000
Selling expense $16,000
Production supervisor's salary $34,000
Administrative expenses $21,000
What was the total amount of the period costs listed above for the period?
(Points : 2)

7. Which of the following statements refers to management accounting information? (Points : 2)

8. The Institute of Management Accountants (IMA): (Points : 2)

9. Financial accounting: (Points : 2)

10. All of the following are characteristics of a pull production system EXCEPT: (Points : 2)

11. Conversion costs consist of: (Points : 2)

12. ____________ is an example of a line position. (Points : 2)

13. The accounting process is constrained by mandated reporting requirements by all of the following organizations EXCEPT the: (Points : 2)

14. The person MOST likely to use management accounting information is a(n): (Points : 2)

15. Which of the following types of information are used in management accounting? (Points : 2)

16. The Institute of Management Accountants' Standards of Ethical Conduct contains a policy regarding confidentiality that requires that management accountants: (Points : 2)

17. Manufacturing costs include: (Points : 2)

18. Which of the following groups would be LEAST likely to receive detailed management accounting reports? (Points : 2)

19. Which of the following is NOT one of the Institute of Management Accountants' five Standards of Ethical Conduct? (Points : 2)

20. Management accounting information can be used for all of the following except: (Points : 2)


Click here for the solution: The cost of inventory reported on the balance sheet may include the cost of all the following EXCEPT

Barbara Whitley had great expectations about her future as she sat in her graduation ceremony in May 2010

4-28 Barbara Whitley had great expectations about her future as she sat in her graduation ceremony in May 2010. She was about to receive her Master of Accountancy degree, and next week she would begin her career on the audit staff of Green, Thresher & Co., CPAs. Things looked a little different to Barbara in February 2011. She was working on the audit of Delancey Fabrics, a textile manufacturer with a calendar year- end. The pressure was enormous. Everyone on the audit team was putting in 70- hour weeks, and it still looked as if the audit wouldn’t be done on time. Barbara was doing work in the property area, vouching additions for the year. The audit program indicated that a sample of all items over $ 20,000 should be selected, plus a judgmental sample of smaller items. When Barbara went to take the sample, Jack Bean, the senior, had left the client’s office and couldn’t answer her questions about the appropriate size of the judgmental sample. Barbara forged ahead with her own judgment and selected 50 smaller items. Her basis for doing this was that there were about 250 such items, so 50 was a reasonably good proportion of such additions. Barbara audited the additions with the following results: The items over $ 20,000 contained no misstatements; however, the 50 small items contained a large number of misstatements. In fact, when Barbara projected them to all such additions, the amount seemed quite significant. A couple of days later, Jack Bean returned to the client’s office. Barbara brought her work to Jack in order to apprise him of the problems she found and got the following response: “ Gosh, Barbara, why did you do this? You were only supposed to look at the items over $ 20,000 plus 5 or 10 little ones. You’ve wasted a whole day on that work, and we can’t afford to spend any more time on it. I want you to throw away the schedules where you tested the last 40 small items and forget you ever did them.”
When Barbara asked about the possible audit adjustment regarding the small items, none of which arose from the first 10 items, Jack responded, “ Don’t worry, it’s not material anyway. You just forget it; it’s my concern, not yours.’’ a. In what way is this an ethical dilemma for Barbara? b. Use the six- step approach discussed in the book to resolve the ethical dilemma.

Click here for the solution: Barbara Whitley had great expectations about her future as she sat in her graduation ceremony in May 2010

The following selected transactions were completed during May between Sky Company and Big Co

Problem 6-6A Sales-Related and Purchase-Related Transactions for Seller and Buyer

The following selected transactions were completed during May between Sky Company and Big Co.:

AND SO ON

Instructions
1. Journalize the May transactions for Big Co. (the buyer).
2. Journalize the May transactions for Sky Company (the seller).

Note: 24th Edition
Click here for the solution: The following selected transactions were completed during May between Sky Company and Big Co

The Olathe Hotel opened for business on May 1, 2010

P4-3A The Olathe Hotel opened for business on May 1, 2010. Here is its trial balance before adjustment on May 31.

OLATHE HOTEL
Trial Balance
May 31, 2010
Debit Credit
Cash $ 2,500
Prepaid Insurance 1,800
Supplies 2,600
Land 15,000
Lodge 70,000
Furniture 16,800
Accounts Payable $ 4,700
Unearned Rent Revenue 3,300
Mortgage Payable 36,000
Common Stock 60,000
Rent Revenue 9,000
Salaries Expense 3,000
Utilities Expense 800
Advertising Expense 500
$113,000 $113,000

Other data:
1. Insurance expires at the rate of $300 per month.
2. A count of supplies shows $1,050 of unused supplies on May 31.
3. Annual depreciation is $3,600 on the lodge and $3,000 on furniture.
4. The mortgage interest rate is 7%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,500 has been earned.
6. Salaries of $750 are accrued and unpaid at May 31.

Instructions
(a) Journalize the adjusting entries on May 31.
(b) Prepare a ledger using T accounts. Enter the trial balance amounts and post the adjusting entries.
(c) Prepare an adjusted trial balance on May 31.
Check: Rent revenue $ 11,500
Tot. adj. trial balance $114,510
(d) Prepare an income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31.
Check: Net income $ 3,840
(e) Identify which accounts should be closed on May 31.

Click here for the solution: The Olathe Hotel opened for business on May 1, 2010

R&J Associates leased certain commercial real estate from T&C Associates, Inc., for a one-year period beginning May 1

R&J Associates leased certain commercial real estate from T&C Associates, Inc., for a one-year period beginning May 1. The lease required that T&C give R&J 10 days’ notice before canceling the lease. R&J operated the leased premises as a bar that featured seminude dancers but discontinued the business during the following March when it lost a necessary dance permit. In late March and early April, T&C noticed that the bar was not open and learned that R&J had lost its permit. R&J was behind on its rent at this time. Utility companies were seeking to shut off service to the premises because R&J was also behind on its utility bills. When T&C informed R&J that its monthly rent would be higher if it renewed the lease, R&J said it had no interest in renewing. For the above reasons, T&C took possession of the premises in April. T&C, however, did not give R&J the 10 days’ notice referred to in the lease. T&C leased the premises to a new tenant later that month. At approximately the same time, R&J demanded the return of certain personal property items it had left on the premises. T&C told R&J to contact the new tenant, adding that there should be no problem with the return of the items of personal property. R&J contacted the new tenant, who told R&J to submit a list of its personal property because other parties were also claiming rights to what had been left on the premises. R&J did not submit this list and did not contact T&C again about the personal property items. Later, R&J sued T&C for conversion of the personal property. Did R&J have a valid conversion claim?

Click here for the solution: R&J Associates leased certain commercial real estate from T&C Associates, Inc., for a one-year period beginning May 1

Ben and Jerry organize their new entity as an LLC on May 16th of the year 1

Problem 2-1 Ben and Jerry organize their new entity as an LLC on May 16th of the year 1. What is the default tax classification for this entity? Are there any alternative classification(s) available? If so, how do Ben and Jerry elect one of these alternate classification(s) and what are the tax consequences of doing so?

Click here for the solution: Ben and Jerry organize their new entity as an LLC on May 16th of the year 1

Special Delivery was started on May 1 with an investment of $45,000 cash

P1-3B Special Delivery was started on May 1 with an investment of $45,000 cash. Following are the assets and liabilities of the company on May 31, 2012, and the revenues and expenses for the month of May, its first month of operations.

Accounts receivable $ 6,200 Notes payable $28,000
Service revenue 10,400 Salaries and wages expense 2,000
Advertising expense 800 Equipment 56,000
Accounts payable 2,400 Maintenance and repairs expense 2,900
Cash 15,800 Insurance expense 400

No additional common stock was issued in May, but a dividend of $1,700 in cash was paid.

Instructions
a. Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2012.
b. Briefly discuss whether the company’s first month of operations was a success.
c. Discuss the company’s decision to distribute a dividend.

Check:
(a) Net income $4,300
Ret. earnings $2,600
Tot. assets $78,000


Click here for the solution: Special Delivery was started on May 1 with an investment of $45,000 cash

Troy Ridgell incorporated Ridgell Consulting, an accounting practice, on May 1, 2012

P3-5B Troy Ridgell incorporated Ridgell Consulting, an accounting practice, on May 1, 2012. During the first month of operations, these events and transactions occurred. May 1 Stockholders invested $40,000 cash in exchange for common stock of the corporation.

2 Hired a secretary-receptionist at a salary of $2,000 per month.
3 Purchased $800 of supplies on account from Fleming Supply Company.
7 Paid office rent of $1,400 for the month.
11 Completed a tax assignment and billed client $1,500 for services provided.
12 Received $4,200 advance on a management consulting engagement.
17 Received cash of $3,300 for services completed for Goodman Co.
31 Paid secretary-receptionist $2,000 salary for the month.
31 Paid 50% of balance due Fleming Supply Company.

The company uses the following chart of accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.

Instructions
(a) Journalize the transactions, including explanations.
(b) Post to the ledger T accounts.
(c) Prepare a trial balance on May 31, 2012.

Check:
(c) Cash $43,700
Tot. trial balance $49,400

Click here for the solution: Troy Ridgell incorporated Ridgell Consulting, an accounting practice, on May 1, 2012

Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012

P4-2B Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012. The trial balance at May 31 is as shown below.

Quinn CONSULTING
Trial Balance
May 31, 2012
Debit Credit
Cash$ 7,500
Accounts Receivable 3,000
Prepaid Insurance 3,600
Supplies 2,500
Equipment 12,000
Accounts Payable $ 3,500
Unearned Service Revenue 4,000
Common Stock 19,100
Service Revenue 7,500
Salaries and Wages Expense 4,000
Rent Expense 1,500
34,100 $34,100

In addition to those accounts listed on the trial balance, the chart of accounts for Quinn Consulting also contains the following accounts: Accumulated Depreciation Equipment, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.

Other data:
1. $750 of supplies have been used during the month.
2. Utility costs incurred but not paid are $260.
3. The insurance policy is for 2 years.
4. $1,500 of the balance in the Unearned Service Revenue account remains unearned at the end of the month.
5. Assume May 31 is a Thursday and employees are paid on Fridays. Quinn Consulting has two employees that are paid $600 each for a5-day work week.
6. The equipment has a 5-year life with no salvage value and is being depreciated at $200 per month for 60 months.
7. Invoices representing $1,980 of services performed during the month have not been recorded as of May 31.

Instructions
(a) Prepare the adjusting entries for the month of May.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts.
(c) Prepare an adjusted trial balance at May 31, 2012.

Check: (c) tot. trial balance $37,500

Click here for the solution: Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012

Jensen Company forecasts a need for 200,000 pounds of cotton in May

Jensen Company forecasts a need for 200,000 pounds of cotton in May. On April 11, the company acquires a call option to buy 200,000 pounds of cotton in May at a strike price of $0.3765 per pound for a premium of $814. Spot prices and options values at selected dates follow:

April 11 April 30 May 3
Spot price per pound $0.3718 $0.3801 $0.3842
Fair value of option 814 1,137 1,689

Jensen Company settled the option on May 3 and purchased 200,000 pounds of cotton on May 17 at a spot price of $0.3840 per pound. During the last half of May and the beginning of June the cotton was used to produce cloth. One third of the cloth was sold in June. The change in the option's time value is excluded from the assessment of hedge effectiveness.

Required:
a. Prepare all journal entries necessary through June to record the above transactions and events.
b. What would the effect on earnings have been if the forecasted purchase were not hedged?

Click here for the solution: Jensen Company forecasts a need for 200,000 pounds of cotton in May

Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May 2012

Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May 2012. The company expected to operate the department at 100% of normal capacity of 7,000 hours.

Variable Costs:
Indirect factory wages $22,050
Power and light 12,600
Indirect Materials 10,500
Total Variable Cost $45,150
Fixed Costs:
Supervisory salaries $12,000
Depreciation of plant and equipment 31,450
Insurance and property taxes 9,750
Total fixed costs $53,200
Total factory overhead $98,350

During May, the department operated at 7,400 standard hours, and the factory overhead costs incurred were indirect factory wages, $23,580; power and light, $13,120; indirect materials, $11,310; supervisory salaries, $12,000; depreciation of plant and equipment, $31,450; and insurance and property taxes, $9,750.

Required:
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 7,400 hours.

Click here for the solution: Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May 2012

Holden Graham started The Graham Co., a new business that began operations on May 1

Holden Graham started The Graham Co., a new business that began operations on May 1. The Graham Co. completed the following transactions during its first month of operations.

H. Graham invested $45,000 cash in the company in exchange for its common stock.

The company rented a furnished office and paid $2,300 cash for May's rent.

The company purchased $1,890 of office equipment on credit.

The company paid $790 cash for this month's cleaning services.

The company provided consulting services for a client and immediately collected $5,400

The company provided $2,600 of consulting services for a client on credit.

The company paid $750 cash for an assistant's salary for the first half of this month.

The company received $2,600 cash payment for the services provided on May 12.

The company provided $3,700 of consulting services on credit.

The company received $3,700 cash payment for the services provided on May 22.

The company paid $1,890 cash for the office equipment purchased on May 3.

The company purchased $85 of advertising in this month's (May) local paper on credit payment is due June 1.

The company paid $750 cash for an assistant's salary for the second half of this month

The company paid $350 cash for this month's telephone bill.

The company paid $300 cash icr this month's utilities.

The company paid $1,500 cash in dividends to the owner (sole shareholder).

Required:
2. Enter the amount of each transaction on individual items of the accounting equation.
3.1 Prepare Holden Graham Company's income statement for May.
3.2 Prepare Holden Graham company's statement of Retained Earnings for May.
3.3 Prepare Holden Graham Company's Balance Sheet for May 31.
3.4 Prepare Holden Graham Company's statemant of Cash Flows For Month Ended May 31

Click here for the solution: Holden Graham started The Graham Co., a new business that began operations on May 1