MULTIPLE CHOICE
1. The standard cost card contains quantities and costs for _______. (Points : 1)
2. A total variance is best defined as the difference between total _______. (Points : 1)
3. The term standard hours allowed measures _______. (Points : 1)
4. Which of the following factors should not be considered when deciding whether to investigate a variance? (Points : 1)
5. A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when ______. (Points : 1)
6. The standard predominantly used in Western cultures for motivational purposes is a(n) ____ standard. (Points : 1)
7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance _______. (Points : 1)
8. A variable overhead spending variance is caused by ________. (Points : 1)
9. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).
Standards:
Material 3.5 pounds per unit @ $4.50 per pound
Labor 5.0 hours per unit @ $10.25 per hour
Actual:
Material purchased 12,300 pounds @ $4.25
Material used 11,750 pounds
17,300 direct labor hours @ $10.20 per hour
What is the labor rate variance? (Points : 1)
10. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).
Standards:
Material 3.5 pounds per unit @ $4.50 per pound
Labor 5.0 hours per unit @ $10.25 per hour
Actual:
Material purchased 12,300 pounds @ $4.25
Material used 11,750 pounds
17,300 direct labor hours @ $10.20 per hour
What is the labor efficiency variance? (Points : 1)
11. Joint costs are useful for _______. (Points : 1)
12. Each of the following is a method to allocate joint costs except _______. (Points : 1)
13. When allocating joint process cost based on tons of output, all products will _______. (Points : 1)
14. Scrap is defined as a _______. (Points : 1)
15. Waste created by a production process is _______. (Points : 1)
16. In a lumber mill, which of the following would most likely be considered a primary product? (Points : 1)
17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should _______. (Points : 1)
18. The split-off point is the point at which _______. (Points : 1)
19. A product may be processed beyond the split-off point if management believes that _______. (Points : 1)
20. Which of the following is a commonly used joint cost allocation method? (Points : 1)
Click here for the solution: The standard cost card contains quantities and costs for
Showing posts with label contains. Show all posts
Showing posts with label contains. Show all posts
Tuesday, November 10, 2015
Thursday, September 24, 2015
The post-closing trial balance of Chen Corporation at December 31, 2011, contains the following stockholders’ equity accounts
P11-6B The post-closing trial balance of Chen Corporation at December
31, 2011, contains the following stockholders’ equity accounts.
Preferred Stock (15,000 shares issued) $750,000
Common Stock (250,000 shares issued) 2,500,000
Paid-in Capital in Excess of Par Value-Preferred 250,000
Paid-in Capital in Excess of Par Value-Common 400,000
Common Stock Dividends Distributable 250,000
Retained Earnings 902,000
A review of the accounting records reveals the following.
1. No errors have been made in recording 2011 transactions or in preparing the closing entry for net income.
2. Preferred stock is $50 par, 8%, and cumulative; 15,000 shares have been outstanding since January 1, 2010.
3. Authorized stock is 20,000 shares of preferred, 500,000 shares of common with a $10 par value.
4. The January 1 balance in Retained Earnings was $1,170,000.
5. On July 1, 20,000 shares of common stock were sold for cash at $16 per share.
6. On September 1, the company discovered an understatement error of $90,000 in computing depreciation in 2010. The net of tax effect of $63,000 was properly debited directly to Retained Earnings.
7. A cash dividend of $250,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2010.
8. On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18.
9. Net income for the year was $495,000.
10. On December 31, 2011, the directors authorized disclosure of a $200,000 restriction of retained earnings for plant expansion. (Use Note X.)
Instructions
a. Reproduce the Retained Earnings account for the year.
b. Prepare a retained earnings statement for the year.
(b) Retained earnings $902,000
c. Prepare a stockholders’ equity section at December 31.
(c) Total stockholders’ equity $5,052,000
d. Compute the earnings per share of common stock using 240,000 as the weighted-average shares outstanding for the year.
e. Compute the allocation of the cash dividend to preferred and common stock.
Click here for the solution: The post-closing trial balance of Chen Corporation at December 31, 2011, contains the following stockholders’ equity accounts
Preferred Stock (15,000 shares issued) $750,000
Common Stock (250,000 shares issued) 2,500,000
Paid-in Capital in Excess of Par Value-Preferred 250,000
Paid-in Capital in Excess of Par Value-Common 400,000
Common Stock Dividends Distributable 250,000
Retained Earnings 902,000
A review of the accounting records reveals the following.
1. No errors have been made in recording 2011 transactions or in preparing the closing entry for net income.
2. Preferred stock is $50 par, 8%, and cumulative; 15,000 shares have been outstanding since January 1, 2010.
3. Authorized stock is 20,000 shares of preferred, 500,000 shares of common with a $10 par value.
4. The January 1 balance in Retained Earnings was $1,170,000.
5. On July 1, 20,000 shares of common stock were sold for cash at $16 per share.
6. On September 1, the company discovered an understatement error of $90,000 in computing depreciation in 2010. The net of tax effect of $63,000 was properly debited directly to Retained Earnings.
7. A cash dividend of $250,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2010.
8. On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18.
9. Net income for the year was $495,000.
10. On December 31, 2011, the directors authorized disclosure of a $200,000 restriction of retained earnings for plant expansion. (Use Note X.)
Instructions
a. Reproduce the Retained Earnings account for the year.
b. Prepare a retained earnings statement for the year.
(b) Retained earnings $902,000
c. Prepare a stockholders’ equity section at December 31.
(c) Total stockholders’ equity $5,052,000
d. Compute the earnings per share of common stock using 240,000 as the weighted-average shares outstanding for the year.
e. Compute the allocation of the cash dividend to preferred and common stock.
Click here for the solution: The post-closing trial balance of Chen Corporation at December 31, 2011, contains the following stockholders’ equity accounts
Tuesday, September 15, 2015
The ledger of Amid Moshref and Alex Weekley, lawyers, contains the following accounts and balances after adjustments
The ledger of Amid Moshref and Alex Weekley, lawyers, contains the following accounts and balances after adjustments have been recorded on December 31, 2010:
Debit Credit
Balances Balances
Cash 24,200
Accounts Receivable 41,300
Supplies 6,700
Land 120,000
Building 160,000
Accumulated Amortization—Building 52,300
Office Equipment 53,000
Accumulated Amortization—Office Equipment 21,300
Accounts Payable 3,400
Salaries Payable 5,200
Amid Moshref, Capital 125,000
Amid Moshref, Withdrawals 50,000
Alex Weekley, Capital 160,000
Alex Weekley, Withdrawals 60,000
Professional Fees 562,200
Salaries Expense 312,300
Amortization Expense 81,700
Property Tax Expense 3,500
Heating and Lighting Expense 11,200
Supplies Expense 3,400
Miscellaneous Expense 2,100
929,400 929,400
The balance in Weekley’s capital account includes an additional investment of $20,000 made on April 5, 2010.
Instructions
1. Prepare an income statement for the current fiscal year, indicating the division of net income as shown on page 568. The articles of partnership provide for salary allowances of $60,000 to Moshref and $75,000 to Weekley, allowances of 12% on each partner’s capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.
2. Prepare a statement of partners’ equity for 2010.
3. Prepare a balance sheet as of the end of 2010.
Check: 2. Dec. 31 capital—Weekley, $182,400
Click here for the solution: The ledger of Amid Moshref and Alex Weekley, lawyers, contains the following accounts and balances after adjustments
Debit Credit
Balances Balances
Cash 24,200
Accounts Receivable 41,300
Supplies 6,700
Land 120,000
Building 160,000
Accumulated Amortization—Building 52,300
Office Equipment 53,000
Accumulated Amortization—Office Equipment 21,300
Accounts Payable 3,400
Salaries Payable 5,200
Amid Moshref, Capital 125,000
Amid Moshref, Withdrawals 50,000
Alex Weekley, Capital 160,000
Alex Weekley, Withdrawals 60,000
Professional Fees 562,200
Salaries Expense 312,300
Amortization Expense 81,700
Property Tax Expense 3,500
Heating and Lighting Expense 11,200
Supplies Expense 3,400
Miscellaneous Expense 2,100
929,400 929,400
The balance in Weekley’s capital account includes an additional investment of $20,000 made on April 5, 2010.
Instructions
1. Prepare an income statement for the current fiscal year, indicating the division of net income as shown on page 568. The articles of partnership provide for salary allowances of $60,000 to Moshref and $75,000 to Weekley, allowances of 12% on each partner’s capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.
2. Prepare a statement of partners’ equity for 2010.
3. Prepare a balance sheet as of the end of 2010.
Check: 2. Dec. 31 capital—Weekley, $182,400
Click here for the solution: The ledger of Amid Moshref and Alex Weekley, lawyers, contains the following accounts and balances after adjustments
Sunday, September 13, 2015
4-56 The following table contains calculations of several key ratios for Indianola Pharmaceutical Company, a maker of proprietary and prescription drugs
4-56 (Analytical Review and Planning the Audit) The following table contains calculations of several key ratios for Indianola Pharmaceutical Company, a maker of proprietary and prescription drugs. The company is publicly held and is considered a small-to medium-size pharmaceutical company. Approximately 80% of its sales have been in prescription drugs; the remaining 20% are in medical supplies normally found in a drugstore. The primary purpose of the auditor’s calculations is to identify potential risk areas for the upcoming audit. The auditor recognizes that some of the data may signal the need to gather other industry- or company-specific data.
A number of the company’s drugs are patented. Its number-one selling drug, Anecillin, which will come off of patent in two years, has accounted for approximately 20% of the company's sales ‘during the past five years.
INDIANOLA PHARMACEUTICAL RATIO ANALYSIS
Ratio Current One Year Two Years Three Years Current
Year Previous Previous Previous Industry
Current ratio -----1.85 1.89 2.28 2.51 2.13
Quick ratio ------------------------------- 0.85 0.93 1.32 1.76 1.40
Interest coverage:
Times Interest earned------------------- 1.30 1.45 5.89 6.3 4.50
Days’ sales in receivables-------------- 109 96 100 72 69
Inventory turnover---------------------- 2.40 2.21 3.96 5.31 4.33
Days’ sales in inventory---------------- 152 165 92 69 84
Research & development as a
Percent of sales -------------------------- 1.3 1.4 1.94 2.03 4.26
Cost of goods sold as percent
Of sales------------------------------------ 38.5 40.2 41.2 43.8 44.5
Debt/equity ratio------------------------- 4.85 4.88 1.25 1.13 1.25
Earnings per share----------------------- $1.12 $2.50 $4.32 $4.26 n/a
Sales/tangible assets--------------------- 0.68 0.64 0.89 0.87 0.99
Sales/total assets------------------------- 0.33 0.35 0.89 0.87 0.78
Sales growth over past year---- 3% 15% 2% 4% 6%
Required
a. What major conclusions regarding financial reporting risk can be drawn from the information show in the table? Be specific in identifying specific account balances that have a high risk of misstatement. State how that risk analysis will be used in planning the audit. Be very specific in your answer. You should identify a minimum of four financial reporting risks that should be addressed during the audit and how they should be addressed.
b. What other critical background information might you want to obtain as part of the planning of the audit or would you gather during the conduct of the audit? Briefly indicate the probable sources of the information.
c. Based on the information, what major actions did the company take during the immediately preceding year? Explain.
Click here for the solution: The following table contains calculations of several key ratios for Indianola Pharmaceutical Company, a maker of proprietary and prescription drugs
A number of the company’s drugs are patented. Its number-one selling drug, Anecillin, which will come off of patent in two years, has accounted for approximately 20% of the company's sales ‘during the past five years.
INDIANOLA PHARMACEUTICAL RATIO ANALYSIS
Ratio Current One Year Two Years Three Years Current
Year Previous Previous Previous Industry
Current ratio -----1.85 1.89 2.28 2.51 2.13
Quick ratio ------------------------------- 0.85 0.93 1.32 1.76 1.40
Interest coverage:
Times Interest earned------------------- 1.30 1.45 5.89 6.3 4.50
Days’ sales in receivables-------------- 109 96 100 72 69
Inventory turnover---------------------- 2.40 2.21 3.96 5.31 4.33
Days’ sales in inventory---------------- 152 165 92 69 84
Research & development as a
Percent of sales -------------------------- 1.3 1.4 1.94 2.03 4.26
Cost of goods sold as percent
Of sales------------------------------------ 38.5 40.2 41.2 43.8 44.5
Debt/equity ratio------------------------- 4.85 4.88 1.25 1.13 1.25
Earnings per share----------------------- $1.12 $2.50 $4.32 $4.26 n/a
Sales/tangible assets--------------------- 0.68 0.64 0.89 0.87 0.99
Sales/total assets------------------------- 0.33 0.35 0.89 0.87 0.78
Sales growth over past year---- 3% 15% 2% 4% 6%
Required
a. What major conclusions regarding financial reporting risk can be drawn from the information show in the table? Be specific in identifying specific account balances that have a high risk of misstatement. State how that risk analysis will be used in planning the audit. Be very specific in your answer. You should identify a minimum of four financial reporting risks that should be addressed during the audit and how they should be addressed.
b. What other critical background information might you want to obtain as part of the planning of the audit or would you gather during the conduct of the audit? Briefly indicate the probable sources of the information.
c. Based on the information, what major actions did the company take during the immediately preceding year? Explain.
Click here for the solution: The following table contains calculations of several key ratios for Indianola Pharmaceutical Company, a maker of proprietary and prescription drugs
Monday, August 31, 2015
On January 1, 2008, the ledger of Mane Company contains the following liability accounts
P11-1A On January 1, 2008, the ledger of Mane Company contains the following liability accounts.
Accounts Payable $52,000
Sales Taxes Payable 7,700
Unearned Service Revenue 16,000
During January the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $22,680, which includes 8% sales taxes.
12 Provided services for customers who had made advance payments of $10,000. (Credit Service Revenue.)
14 Paid state revenue department for sales taxes collected in December 2007 ($7,700).
20 Sold 800 units of a new product on credit at $50 per unit, plus 8% sales tax.
21 Borrowed $18,000 from UCLA Bank on a 3-month, 8%, $18,000 note.
25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.
Instructions
(a) Journalize the January transactions.
(b) Journalize the adjusting entries at January 31 for the outstanding notes payable. (Hint: Use one-third of a month for the UCLA Bank note.)
(c) Prepare the current liabilities section of the balance sheet at January 31, 2008. Assume no
change in accounts payable.
Click here for the solution: On January 1, 2008, the ledger of Mane Company contains the following liability accounts
Accounts Payable $52,000
Sales Taxes Payable 7,700
Unearned Service Revenue 16,000
During January the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $22,680, which includes 8% sales taxes.
12 Provided services for customers who had made advance payments of $10,000. (Credit Service Revenue.)
14 Paid state revenue department for sales taxes collected in December 2007 ($7,700).
20 Sold 800 units of a new product on credit at $50 per unit, plus 8% sales tax.
21 Borrowed $18,000 from UCLA Bank on a 3-month, 8%, $18,000 note.
25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.
Instructions
(a) Journalize the January transactions.
(b) Journalize the adjusting entries at January 31 for the outstanding notes payable. (Hint: Use one-third of a month for the UCLA Bank note.)
(c) Prepare the current liabilities section of the balance sheet at January 31, 2008. Assume no
change in accounts payable.
Click here for the solution: On January 1, 2008, the ledger of Mane Company contains the following liability accounts
Saturday, August 22, 2015
On January 1, 2006, the ledger of Shumway Software Company contains the following liability accounts
P11-1A On January 1, 2006, the ledger of Shumway Software Company contains the following liability accounts.
Accounts payable $42,500
Sales Taxes payable 5,800
Unearned service revenue 15,000
During January the following selected transactions occurred.
Jan. 1: Borrowed $15,000 in cash from Amsterdam bank on a 4 month 8%, $15,000 note.
Jan. 5: Sold merchandise for cash totaling $10,400 which includes 4% sales taxes.
Jan. 12: Provided services for customers who had made advance payments of $9,000. (Credit service revenue)
Jan. 14: Paid state treasurer's dept. for sales tax collected in Dec. 2005, $5,800.
Jan 20: Sold 700 units of a new product on credit at $52 per unit, plus 4% sales tax.
Jan 25: Sold merchandise for cash totaling $12,480, which includes 4% sales tax.
Instructions:
a. Journalize the January transactions.
b. Journalize the adjusting entry at January 31 for the outstanding notes payable.
c. Prepare the current liabilities section of the balance sheet at Jan 31, 2006. Assume no change in accounts payable. (current liability total $65,936)
Click here for the solution: On January 1, 2006, the ledger of Shumway Software Company contains the following liability accounts
Accounts payable $42,500
Sales Taxes payable 5,800
Unearned service revenue 15,000
During January the following selected transactions occurred.
Jan. 1: Borrowed $15,000 in cash from Amsterdam bank on a 4 month 8%, $15,000 note.
Jan. 5: Sold merchandise for cash totaling $10,400 which includes 4% sales taxes.
Jan. 12: Provided services for customers who had made advance payments of $9,000. (Credit service revenue)
Jan. 14: Paid state treasurer's dept. for sales tax collected in Dec. 2005, $5,800.
Jan 20: Sold 700 units of a new product on credit at $52 per unit, plus 4% sales tax.
Jan 25: Sold merchandise for cash totaling $12,480, which includes 4% sales tax.
Instructions:
a. Journalize the January transactions.
b. Journalize the adjusting entry at January 31 for the outstanding notes payable.
c. Prepare the current liabilities section of the balance sheet at Jan 31, 2006. Assume no change in accounts payable. (current liability total $65,936)
Click here for the solution: On January 1, 2006, the ledger of Shumway Software Company contains the following liability accounts
Tuesday, July 7, 2015
Tim's portfolio contains two stocks, Lightco and Shineco
P12-18 Tim's portfolio contains two stocks, Lightco and Shineco. Last year his portfolio returned 14 percent. Lightco's return was 5 percent and Shineco returned 20 percent. What are the weights of each in Tim's portfolio?
The following year Tim adds a third stock, Brightco, and reallocates his funds among the three stocks. Lightco and Shineco have the same weight in the portfolio, and Brightco's weight is one-half of Lightco. During the year Lightco returns 10 percent, Shineco returns 12 percent, and Brightco loses 5 percent. What was the return on his portfolio?
Click here for the solution: Tim's portfolio contains two stocks, Lightco and Shineco
The following year Tim adds a third stock, Brightco, and reallocates his funds among the three stocks. Lightco and Shineco have the same weight in the portfolio, and Brightco's weight is one-half of Lightco. During the year Lightco returns 10 percent, Shineco returns 12 percent, and Brightco loses 5 percent. What was the return on his portfolio?
Click here for the solution: Tim's portfolio contains two stocks, Lightco and Shineco
Wednesday, June 24, 2015
ACCT 202 Week 1 The ledger of Mathis Corporation contains the following accounts
Exercise 13-15 (E13-15) The ledger of Mathis Corporation contains the
following accounts: Common Stock, Preferred Stock, Treasury
Stock-Common, Paid-in Capital in Excess of Par Value-Preferred Stock,
Paid-in Capital in Excess of Stated Value-Common Stock, Paid-in Capital
from Treasury Stock, and Retained Earnings.
Instructions
Classify each account using the following table headings. Enter a "x" (lower case) in the column that classifies the account and a "o" (lower case) in the ones that are not affected.
Click here for the solution: ACCT 202 Week 1 The ledger of Mathis Corporation contains the following accounts
Instructions
Classify each account using the following table headings. Enter a "x" (lower case) in the column that classifies the account and a "o" (lower case) in the ones that are not affected.
Click here for the solution: ACCT 202 Week 1 The ledger of Mathis Corporation contains the following accounts
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