MULTIPLE CHOICE
1. Nu Company reported the following pretax data for its first year of operations.
Net sales 2,800 Cost of goods available for sale 2,500 Operating expenses 880 Effective tax rate 40% Ending inventories: If LIFO is elected 820 If FIFO is elected 1,060
What is Nu's gross profit percentage if it elects LIFO? (Points : 1)
2. The use of LIFO during a long inflationary period can result in: (Points : 1)
3. The primary reason for the popularity of LIFO is that it gives: (Points : 1)
4. In determining the cost-to-retail percentage for the current year,: (Points : 1)
5. Inventory does not include: (Points : 1)
6. So. California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2006. In preparing their insurance claim on the inventory loss, they developed the following data: Inventory January 1, 2006, $300,000; sales and purchases from January 1, 2006, to May 1, 2006, $1,300,000 and $875,000, respectively. So. California consistently reports a 40% gross profit. The estimated inventory on May 1, 2006, is: (Points : 1)
7. In a period when prices are falling and inventory quantities are stable, the lowest taxable income would be reported by using the inventory method of: (Points : 1)
8. To determine the value of a LIFO layer, using dollar-value LIFO retail: (Points : 1)
9. When using the gross profit method to estimate ending inventory, it is not necessary to know: (Points : 1)
10. The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be: (Points : 1)
Click here for the solution: 1. Nu Company reported the following pretax data for its first year of operations
Showing posts with label data. Show all posts
Showing posts with label data. Show all posts
Wednesday, April 13, 2016
The following data are taken from the statement of affairs of the Monroe Company
Chapter 10 Exercise 6 The following data are taken from the statement of affairs of the Monroe Company. (Assume that the realizable values of assets are accurate.)
Assets pledged with fully secured creditors (realizable value, $190,000) $240,000
Assets pledged with partially secured creditors (realizable value, $90,000) $110,000
Free assets (realizable value, $102,000) $160,000
Fully secured creditor claims $91,000
Partially secured creditor claims $120,000
Unsecured creditor claims with priority $30,000
General unsecured creditor claims $350,000
Compute the amount that will be paid to each class of creditor.
Click here for the solution: The following data are taken from the statement of affairs of the Monroe Company
Assets pledged with fully secured creditors (realizable value, $190,000) $240,000
Assets pledged with partially secured creditors (realizable value, $90,000) $110,000
Free assets (realizable value, $102,000) $160,000
Fully secured creditor claims $91,000
Partially secured creditor claims $120,000
Unsecured creditor claims with priority $30,000
General unsecured creditor claims $350,000
Compute the amount that will be paid to each class of creditor.
Click here for the solution: The following data are taken from the statement of affairs of the Monroe Company
Thursday, January 14, 2016
Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
Condensed balance sheet and income statement data for Kersenbrock Corporation appear below.
KERSENBROCK CORPORATION
Balance Sheets
December 31
2009 2008 2007
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 95,000 64,000
Investments 75,000 70,000 45,000
Plant and equipment (net) 400,000 370,000 358,000
$640,000 $600,000 $533,000
Current liabilities $ 75,000 $ 80,000 $ 70,000
Long-term debt 80,000 85,000 50,000
Common stock, $10 par 340,000 310,000 300,000
Retained earnings 145,000 125,000 113,000
$640,000 $600,000 $533,000
KERSENBROCK CORPORATION
Income Statement
For the Year Ended December 31
2009 2008
Sales $740,000 $700,000
Less: Sales returns and allowances 40,000 50,000
Net sales 700,000 650,000
Cost of goods sold 420,000 400,000
Gross profit 280,000 250,000
Operating expenses (including income taxes) 235,000 220,000
Net income $ 45,000 $ 30,000
Additional information:
a) The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2007, 2008, and 2009, respectively.
b) All dividends were paid in cash.
Instructions:
Compute the following ratios for 2008 and 2009. (Weighted-average-common shares in 2009 were 32,000 and in 2008 were 31,000.)
(1) Profit margin
(2) Asset turnover
(3) Earnings per share
(4) Price-earnings
(5) Payout
(6) Debt to total assets
Click here for the solution: Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
KERSENBROCK CORPORATION
Balance Sheets
December 31
2009 2008 2007
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 95,000 64,000
Investments 75,000 70,000 45,000
Plant and equipment (net) 400,000 370,000 358,000
$640,000 $600,000 $533,000
Current liabilities $ 75,000 $ 80,000 $ 70,000
Long-term debt 80,000 85,000 50,000
Common stock, $10 par 340,000 310,000 300,000
Retained earnings 145,000 125,000 113,000
$640,000 $600,000 $533,000
KERSENBROCK CORPORATION
Income Statement
For the Year Ended December 31
2009 2008
Sales $740,000 $700,000
Less: Sales returns and allowances 40,000 50,000
Net sales 700,000 650,000
Cost of goods sold 420,000 400,000
Gross profit 280,000 250,000
Operating expenses (including income taxes) 235,000 220,000
Net income $ 45,000 $ 30,000
Additional information:
a) The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2007, 2008, and 2009, respectively.
b) All dividends were paid in cash.
Instructions:
Compute the following ratios for 2008 and 2009. (Weighted-average-common shares in 2009 were 32,000 and in 2008 were 31,000.)
(1) Profit margin
(2) Asset turnover
(3) Earnings per share
(4) Price-earnings
(5) Payout
(6) Debt to total assets
Click here for the solution: Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
Wednesday, November 25, 2015
The budget director of Regal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month
The budget director of Regal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for August 2010 is summarized as follows:
a. Estimated sales of King and Prince chairs for August by sales territory:
Northern Domestic:
King.........................5,500 units at $750 per unit
Prince......................6,900 units at $520 per unit
Southern Domestic:
King.........................3,200 units at $690 per unit
Prince......................4,000 units at $580 per unit
International:
King........................1,450 units at $780 per unit
Prince......................900 units at $600 per unit
b. Estimated inventories at August 1:
Direct materials:
Finished Products
Fabric................4,500 sq. yds
King.....................950units
Wood.................6,000 lineal ft.
Prince..................280units
Filler...................2,800 cu, ft
Springs..............6,700 units
c. Desired inventories at August 31:
Direct Materials:
Finished Products:
Fabric..................4300 sq yds
King.............800units
Wood..................6,200 lineal ft.
Prince...........400units
Filler....................3,100 cu. ft
Springs................7,500 units
d. Direct materials used in production:
In manufacture of King:
Fabric..................5.0 sq. yds per unit of product
Wood ..................35 lineal ft. per unit of product
Filler.................... 3.8 cu ft. per units of product
Springs.................14 units per units of product
In manufacture of Prince:
Fabric...............$12.00 per sq. yd.
Filler..............$3.50 per cu. ft.
Wood................ 8.00 per lineal ft.
Springs........... 4.50 per unit
f. Direct labor requirements:
King:
Framing Department............ 2.5hrs. at $12 per hr.
Cutting Department.............. 1.5 hrs. at $11 per hr.
Upholstery Department.......... 2.4hrs. at $14 per hr.
Prince: Framing Department............ 1.8 hrs. at $12 per hr.
Cutting Department............. 0.5 hrs. at $11 per hr.
Upholstery Department......... 2.0hrs. at $14 per hr.
3.) Prepare a direct materials purchases budget for August.
Click here for the solution: The budget director of Regal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month
a. Estimated sales of King and Prince chairs for August by sales territory:
Northern Domestic:
King.........................5,500 units at $750 per unit
Prince......................6,900 units at $520 per unit
Southern Domestic:
King.........................3,200 units at $690 per unit
Prince......................4,000 units at $580 per unit
International:
King........................1,450 units at $780 per unit
Prince......................900 units at $600 per unit
b. Estimated inventories at August 1:
Direct materials:
Finished Products
Fabric................4,500 sq. yds
King.....................950units
Wood.................6,000 lineal ft.
Prince..................280units
Filler...................2,800 cu, ft
Springs..............6,700 units
c. Desired inventories at August 31:
Direct Materials:
Finished Products:
Fabric..................4300 sq yds
King.............800units
Wood..................6,200 lineal ft.
Prince...........400units
Filler....................3,100 cu. ft
Springs................7,500 units
d. Direct materials used in production:
In manufacture of King:
Fabric..................5.0 sq. yds per unit of product
Wood ..................35 lineal ft. per unit of product
Filler.................... 3.8 cu ft. per units of product
Springs.................14 units per units of product
In manufacture of Prince:
Fabric...............$12.00 per sq. yd.
Filler..............$3.50 per cu. ft.
Wood................ 8.00 per lineal ft.
Springs........... 4.50 per unit
f. Direct labor requirements:
King:
Framing Department............ 2.5hrs. at $12 per hr.
Cutting Department.............. 1.5 hrs. at $11 per hr.
Upholstery Department.......... 2.4hrs. at $14 per hr.
Prince: Framing Department............ 1.8 hrs. at $12 per hr.
Cutting Department............. 0.5 hrs. at $11 per hr.
Upholstery Department......... 2.0hrs. at $14 per hr.
3.) Prepare a direct materials purchases budget for August.
4.)Prepare a direct labor cost budget for August
Click here for the solution: The budget director of Regal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month
Wednesday, November 11, 2015
The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007
E15-15 (Dividend Entries) The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007.
Current Assets $540,000
Investments $624,000
Common Stock (par value $10) $500,000
Paid in Capital in excess of par $150,000
Retained Earnings $840,000
Instructions
Prepare the required journal entries for the following unrelated items.
a.) A 5% stock dividend is declared and distributed at a time when the market value of the shares is $39 per share.
b.) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split.
c.) A dividend is declared January 5, 2008, and paid January 25, 2008 in bonds held as an investment. The bonds have a book value of $100,000 and a fair market value of $135,000.
Click here for the solution: The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007
Current Assets $540,000
Investments $624,000
Common Stock (par value $10) $500,000
Paid in Capital in excess of par $150,000
Retained Earnings $840,000
Instructions
Prepare the required journal entries for the following unrelated items.
a.) A 5% stock dividend is declared and distributed at a time when the market value of the shares is $39 per share.
b.) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split.
c.) A dividend is declared January 5, 2008, and paid January 25, 2008 in bonds held as an investment. The bonds have a book value of $100,000 and a fair market value of $135,000.
Click here for the solution: The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007
Tuesday, November 10, 2015
The beginning inventory for Waldo Co and data on purchases and sales for a three-month period are shown in Problem 7-1A
PR 7-2A LIFO Perpetual Inventory
The beginning inventory for Waldo Co and data on purchases and sales for a three-month period are shown in Problem 7-1A.
Instructions
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method.
2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.
3. Determine the ending inventory cost.
Click here for the solution: The beginning inventory for Waldo Co and data on purchases and sales for a three-month period are shown in Problem 7-1A
The beginning inventory for Waldo Co and data on purchases and sales for a three-month period are shown in Problem 7-1A.
Instructions
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method.
2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.
3. Determine the ending inventory cost.
Click here for the solution: The beginning inventory for Waldo Co and data on purchases and sales for a three-month period are shown in Problem 7-1A
(ACC 423 Week 5) The following defined pension data of Doreen Corp. apply to the year 2008
ACC 423 Week Five (Week 5)
Exercise 20-7 (E20-7) (Basic Pension Worksheet) The following defined pension data of Doreen Corp. apply to the year 2008.
Projected benefit obligation, 1/1/08 (before amendment) $560,000
Plan assets, 1/1/08 546,200
Prepaid/accrued pension cost (credit) 13,800
On January 1, 2008, Doreen Corp., through plan amendment, grants prior service benefits having a present value of 100,000
Settlement rate 9%
Service cost 58,000
Contributions (funding) 55,000
Actual (expected) return on plan assets 52,280
Benefits paid to retirees 40,000
Prior service cost amortization for 2008 17,000
Instructions
For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.
Click here for the solution: (ACC 423 Week 5) The following defined pension data of Doreen Corp. apply to the year 2008
Exercise 20-7 (E20-7) (Basic Pension Worksheet) The following defined pension data of Doreen Corp. apply to the year 2008.
Projected benefit obligation, 1/1/08 (before amendment) $560,000
Plan assets, 1/1/08 546,200
Prepaid/accrued pension cost (credit) 13,800
On January 1, 2008, Doreen Corp., through plan amendment, grants prior service benefits having a present value of 100,000
Settlement rate 9%
Service cost 58,000
Contributions (funding) 55,000
Actual (expected) return on plan assets 52,280
Benefits paid to retirees 40,000
Prior service cost amortization for 2008 17,000
Instructions
For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.
Click here for the solution: (ACC 423 Week 5) The following defined pension data of Doreen Corp. apply to the year 2008
Monday, October 26, 2015
The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation
ACC 560 Week 2 Assignment
E3-7 The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation.
Production: 12,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.
Manufacturing costs: Materials $33,000; labor $27,000; overhead $36,000.
Prepare a production cost report.
Click here for the solution: The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation
E3-7 The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation.
Production: 12,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.
Manufacturing costs: Materials $33,000; labor $27,000; overhead $36,000.
Prepare a production cost report.
Click here for the solution: The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation
Use the financial data shown below to calculate the following ratios for the current year
Use the financial data shown below to calculate the following ratios for the current year:
(a) Current ratio.
(b) Acid-test ratio.
(c) Accounts receivable turnover.
(d) Days' sales uncollected.
(e) Inventory turnover.
(f) Days' sales in inventory.
Income statement data
Sales (all on credit)……………………………………………….. $650,000
Cost of goods sold…………………………………………………. 425,000
Income before taxes……………………………………………. 78,000
Net Income…………………………………………………………… 54,000
Ending Beginning
Balances Balances
Cash…………………………………………………………….. $ 19,500 $ 15,000
Accounts receivable (net)………………………….. 65,000 60,000
Inventory…………………………………………………… 71,500 64,500
Plant and equipment (net) ………………………… 195,000 183,900
Total assets………………………………………………… $351,000 $323,400
Current liabilities…………………………………………. $ 62,400 $ 52,700
Long-term notes payable ……………………………. 97,500 100,000
Click here for the solution: Use the financial data shown below to calculate the following ratios for the current year
(a) Current ratio.
(b) Acid-test ratio.
(c) Accounts receivable turnover.
(d) Days' sales uncollected.
(e) Inventory turnover.
(f) Days' sales in inventory.
Income statement data
Sales (all on credit)……………………………………………….. $650,000
Cost of goods sold…………………………………………………. 425,000
Income before taxes……………………………………………. 78,000
Net Income…………………………………………………………… 54,000
Ending Beginning
Balances Balances
Cash…………………………………………………………….. $ 19,500 $ 15,000
Accounts receivable (net)………………………….. 65,000 60,000
Inventory…………………………………………………… 71,500 64,500
Plant and equipment (net) ………………………… 195,000 183,900
Total assets………………………………………………… $351,000 $323,400
Current liabilities…………………………………………. $ 62,400 $ 52,700
Long-term notes payable ……………………………. 97,500 100,000
Click here for the solution: Use the financial data shown below to calculate the following ratios for the current year
Friday, October 9, 2015
Olsson Video Center accumulates the following cost and market data at December 31
ACC 290 Week 5 Assignment
BE6-7 Olsson Video Center accumulates the following cost and market data at December 31.
Inventory Cost Market
Categories Data Data
Cameras $12,500 $13,400
Camcorders 9,000 9,500
DVDs 13,000 12,200
Compute the lower-of-cost-or-market valuation for Olsson inventory.
Click here for the solution: Olsson Video Center accumulates the following cost and market data at December 31
BE6-7 Olsson Video Center accumulates the following cost and market data at December 31.
Inventory Cost Market
Categories Data Data
Cameras $12,500 $13,400
Camcorders 9,000 9,500
DVDs 13,000 12,200
Compute the lower-of-cost-or-market valuation for Olsson inventory.
Click here for the solution: Olsson Video Center accumulates the following cost and market data at December 31
The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data
The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July 2010 is summarized as follows:
a. Estimated sales for July by sales territory:
Maine:
Backyard Chef...........................5000 units at $750 per unit
Master Chef..............................1800 units at $1,500 per unit
Vermont:
Backyard Chef..........................4200 units at $800 per unit
Master Chef.............................1600 units at $1,600 per unit
New Hampshire:
Backyard Chef..........................4600 units at $850 per unit
Master Chef.............................1900 units at $1,700 per unit
b. Estimated inventories at July 1:
Direct materials: Finished products:
Grates.....................1000 units Backyard chef........1400 units
Stainless steel...........1800 lbs Master Chef........... 600 units
Burner subassemblies....500 units
Shelves.................... 300 units
c. Desired inventories at July 31:
Direct materials: Finished products:
Grates..................... 800 units Backyard chef........1600 units
Stainless steel........... 2100 lbs Master Chef........... 500 units
Burner subassemblies....550 units
Shelves.................... 350 units
d. Direct materials used in production:
In manufacture of Backyard Chef:
Grates.......................... 3 units per unit of product
Stainless steel................ 20 lbs per unit of product
Burner subassemblies....... 2 units per unit of product
Shelves......................... 5 units per unit of product
In manufacture of Master Chef:
Grates.......................... 6 units per unit of product
Stainless steel................ 45 lbs per unit of product
Burner subassemblies....... 4 units per unit of product
Shelves......................... 6 units per unit of product
e. Anticipated purchase price for direct materials:
Grates.............. $20 per unit Burner subassemblies...... $105 per unit
Stainless steel...... $6 per lb Shelves.........................$7 per unit
f. Direct labor requirements:
Backyard Chef:
Stamping Dept. 0.60 hr at $18 per hr
Forming Dept. 0.80 hr at $14 per hr
Assembly Dept. 1.50 hr at $12 per hr
Master Chef:
Stamping Dept. 0.80 hr at $18 per hr
Forming Dept. 1.50 hr at $14 per hr
Assembly Dept. 2.50 hr at $12 per hr
1. Prepare a sales budget for July.
2. Prepare a production budget for July.
3. Prepare a direct materials purchases budget for July.
4. Prepare a direct labor cost budget for July.
Click here for the solution: The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data
a. Estimated sales for July by sales territory:
Maine:
Backyard Chef...........................5000 units at $750 per unit
Master Chef..............................1800 units at $1,500 per unit
Vermont:
Backyard Chef..........................4200 units at $800 per unit
Master Chef.............................1600 units at $1,600 per unit
New Hampshire:
Backyard Chef..........................4600 units at $850 per unit
Master Chef.............................1900 units at $1,700 per unit
b. Estimated inventories at July 1:
Direct materials: Finished products:
Grates.....................1000 units Backyard chef........1400 units
Stainless steel...........1800 lbs Master Chef........... 600 units
Burner subassemblies....500 units
Shelves.................... 300 units
c. Desired inventories at July 31:
Direct materials: Finished products:
Grates..................... 800 units Backyard chef........1600 units
Stainless steel........... 2100 lbs Master Chef........... 500 units
Burner subassemblies....550 units
Shelves.................... 350 units
d. Direct materials used in production:
In manufacture of Backyard Chef:
Grates.......................... 3 units per unit of product
Stainless steel................ 20 lbs per unit of product
Burner subassemblies....... 2 units per unit of product
Shelves......................... 5 units per unit of product
In manufacture of Master Chef:
Grates.......................... 6 units per unit of product
Stainless steel................ 45 lbs per unit of product
Burner subassemblies....... 4 units per unit of product
Shelves......................... 6 units per unit of product
e. Anticipated purchase price for direct materials:
Grates.............. $20 per unit Burner subassemblies...... $105 per unit
Stainless steel...... $6 per lb Shelves.........................$7 per unit
f. Direct labor requirements:
Backyard Chef:
Stamping Dept. 0.60 hr at $18 per hr
Forming Dept. 0.80 hr at $14 per hr
Assembly Dept. 1.50 hr at $12 per hr
Master Chef:
Stamping Dept. 0.80 hr at $18 per hr
Forming Dept. 1.50 hr at $14 per hr
Assembly Dept. 2.50 hr at $12 per hr
1. Prepare a sales budget for July.
2. Prepare a production budget for July.
3. Prepare a direct materials purchases budget for July.
4. Prepare a direct labor cost budget for July.
Click here for the solution: The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data
Selected sales and operating data for three divisions of three different companies are given below
Selected sales and operating data for three divisions of three different companies are given below:
Division X Division Y Division Z
Sales $900,000 $750,000 $600,000
Average operating assets $600,000 $150,000 $200,000
Net operating income $54,000 $30,000 $10,000
Minimum required rate of return 10% 16% 8%
a. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. Show computations
b. Compute the residual income for each division. Show computations
c. Under which of these methods would they accept an opportunity with a 15% return. Show computations and details
Click here for the solution: Selected sales and operating data for three divisions of three different companies are given below
Division X Division Y Division Z
Sales $900,000 $750,000 $600,000
Average operating assets $600,000 $150,000 $200,000
Net operating income $54,000 $30,000 $10,000
Minimum required rate of return 10% 16% 8%
a. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. Show computations
b. Compute the residual income for each division. Show computations
c. Under which of these methods would they accept an opportunity with a 15% return. Show computations and details
Click here for the solution: Selected sales and operating data for three divisions of three different companies are given below
Monday, October 5, 2015
Armada Company has these comparative balance sheet data
Armada Company has these comparative balance sheet data:
ARMADA COMPANY
Balance Sheets
December 31
2010 2009
Cash $25,000 $ 30,000
Receivables (net) 65,000 60,000
Inventories 60,000 50,000
Plant assets (net) 200,000 180,000
$350,000 $320,000
Accounts payable $50,000 $60,000
Mortgage payable (15%) 100,000 100,000
Common stock, $10 par 140,000 120,000
Retained earnings 60,000 40,000
$350,000 $320,000
Additional information for 2010:
1. Net income was $25,000.
2. Sales on account were $375,000. Sales returns and allowances amounted to $25,000.
3. Cost of goods sold was $198,000.
4. Net cash provided by operating activities was $48,000.
5. Capital expenditures were $25,000, and cash dividends were $18,000.
Compute the following ratios at December 31, 2010.
Current Ratio
Receivables turnover times
Average collection period days
Inventory turnover times
Days in inventory days
Cash debt coverage times
Current cash debt coverage times
Free cash flow
Click here for the solution: Armada Company has these comparative balance sheet data
ARMADA COMPANY
Balance Sheets
December 31
2010 2009
Cash $25,000 $ 30,000
Receivables (net) 65,000 60,000
Inventories 60,000 50,000
Plant assets (net) 200,000 180,000
$350,000 $320,000
Accounts payable $50,000 $60,000
Mortgage payable (15%) 100,000 100,000
Common stock, $10 par 140,000 120,000
Retained earnings 60,000 40,000
$350,000 $320,000
Additional information for 2010:
1. Net income was $25,000.
2. Sales on account were $375,000. Sales returns and allowances amounted to $25,000.
3. Cost of goods sold was $198,000.
4. Net cash provided by operating activities was $48,000.
5. Capital expenditures were $25,000, and cash dividends were $18,000.
Compute the following ratios at December 31, 2010.
Current Ratio
Receivables turnover times
Average collection period days
Inventory turnover times
Days in inventory days
Cash debt coverage times
Current cash debt coverage times
Free cash flow
Click here for the solution: Armada Company has these comparative balance sheet data
Sunday, October 4, 2015
The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster
ACC 560 Week 5 Assignment
E8-12 The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster.
Selling price $2,200
Variable cost of goods sold
Body frame $300
Other variable costs 900 1,200
Contribution margin $1,000
Presently, the Cycle Division buys its body frames from an outside supplier. However TravelVelocity has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $350 per frame.The variable cost for FrameBody is $250. The Cycle Division is willing to pay $275 to purchase the frames from FrameBody.
Instructions:
a) Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (1) effect on the income of the Cycle Division; (2) effect on the income of FrameBody; and (3) effect on the income of TravelVelocity.
b)Assume that FrameBody does not have excess capacity and therefore would lose sales if the frames were sold to the Cycle Division. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (1) effect on the income of the Cycle Division; (2) effect on the income of FrameBody; and (3) effect on the income of TravelVelocity.
Click here for the solution: The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster
E8-12 The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster.
Selling price $2,200
Variable cost of goods sold
Body frame $300
Other variable costs 900 1,200
Contribution margin $1,000
Presently, the Cycle Division buys its body frames from an outside supplier. However TravelVelocity has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $350 per frame.The variable cost for FrameBody is $250. The Cycle Division is willing to pay $275 to purchase the frames from FrameBody.
Instructions:
a) Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (1) effect on the income of the Cycle Division; (2) effect on the income of FrameBody; and (3) effect on the income of TravelVelocity.
b)Assume that FrameBody does not have excess capacity and therefore would lose sales if the frames were sold to the Cycle Division. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (1) effect on the income of the Cycle Division; (2) effect on the income of FrameBody; and (3) effect on the income of TravelVelocity.
Click here for the solution: The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster
The following data are accumulated by Eco-Labs, Inc. in evaluating two competing capital investment proposals
EX 10-1 The following data are accumulated by Eco-Labs, Inc. in evaluating two competing capital investment proposals:
Testing Equipment Vehicle
Amount of investment $80,000 $28,000
Useful life 6 years 8 years
Estimated residual value 0 0
Estimated total income over the useful life $13,200 $14,000
Determine the expected average rate of return for each proposal. Round to one decimal place.
Click here for the solution: The following data are accumulated by Eco-Labs, Inc. in evaluating two competing capital investment proposals
Testing Equipment Vehicle
Amount of investment $80,000 $28,000
Useful life 6 years 8 years
Estimated residual value 0 0
Estimated total income over the useful life $13,200 $14,000
Determine the expected average rate of return for each proposal. Round to one decimal place.
Click here for the solution: The following data are accumulated by Eco-Labs, Inc. in evaluating two competing capital investment proposals
Sunday, September 27, 2015
Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows
PR 10-6A Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows:
a. On December 31, the company determined that $20,000,000 of goodwill was impaired.
b. Governmental and legal costs of $675,000 were incurred on June 30 in obtaining a patent with an estimated economic life of 10 years. Amortization is to be for one-half year.
c. Timber rights on a tract of land were purchased for $1,665,000 on February 16. The stand of timber is estimated at 9,000,000 board feet. During the current year, 2,400,000 board feet of timber were cut and sold.
Instructions
1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items.
2. Journalize the adjusting entries to record the amortization, depletion, or impairment for each item.
Click here for the solution: Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows
a. On December 31, the company determined that $20,000,000 of goodwill was impaired.
b. Governmental and legal costs of $675,000 were incurred on June 30 in obtaining a patent with an estimated economic life of 10 years. Amortization is to be for one-half year.
c. Timber rights on a tract of land were purchased for $1,665,000 on February 16. The stand of timber is estimated at 9,000,000 board feet. During the current year, 2,400,000 board feet of timber were cut and sold.
Instructions
1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items.
2. Journalize the adjusting entries to record the amortization, depletion, or impairment for each item.
Click here for the solution: Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows
Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
BE 15-5 Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4. Prepare the job cost sheets for each of the three jobs. (Note: You may omit the column for manufacturing overhead).
Data given in BE15-3 and 15-4:
BE 15-3 In January, Reyes Tool & Die requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600.
BE 15-4 During January, time tickets show that the factory labor of $5,000 was used as follows: Job 1 $1,200, Job 2 $1,600 Job 3 $1,400, and general factory use $800.
Click here for the solution: Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
Data given in BE15-3 and 15-4:
BE 15-3 In January, Reyes Tool & Die requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600.
BE 15-4 During January, time tickets show that the factory labor of $5,000 was used as follows: Job 1 $1,200, Job 2 $1,600 Job 3 $1,400, and general factory use $800.
Click here for the solution: Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
The following data are accumulated by Reynolds Company in evaluating the purchase of $104,000 of equipment, having a four-year useful life
EX 10-7 The following data are accumulated by Reynolds Company in evaluating the purchase of $104,000 of equipment, having a four-year useful life:
Net income net cash flow
Year 1 $38,000 $64,000
Year2 $23,000 $49,000
Year 3 $11,000 $37,000
Year 4 (1,000) $25,000
a. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. Use the table of the present value of $1 appearing in Exhibit 1 of this chapter.
b. Would management be likely to look with favor on the proposal?
Click here for the solution: The following data are accumulated by Reynolds Company in evaluating the purchase of $104,000 of equipment, having a four-year useful life
Net income net cash flow
Year 1 $38,000 $64,000
Year2 $23,000 $49,000
Year 3 $11,000 $37,000
Year 4 (1,000) $25,000
a. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. Use the table of the present value of $1 appearing in Exhibit 1 of this chapter.
b. Would management be likely to look with favor on the proposal?
Click here for the solution: The following data are accumulated by Reynolds Company in evaluating the purchase of $104,000 of equipment, having a four-year useful life
Friday, September 25, 2015
The following data for Enrichment Industries, Inc. relate to the payroll for the week ended December 10, 2010
PR 11-5A The following data for Enrichment Industries, Inc. relate to the payroll for the week ended December 10, 2010:
Fed U.S. Accumulated
Employee Hours Worked Hourly Rate Weekly Salary Income Tax Savings Bonds Earnings Dec 3
Beilein 32 $16.00 $102.40 10 $24,576
Calhoun 32 32.00 369.60 10 84,480
Calipari 40 28.00 240.80 20 53,760
Knight 42 32.00 316.48 66,048
Odom $3,400 748.00 90 163,200
Olson 1,600 384.00 76,800
Pitino 34 18.00 91.80 29,376
Ryan 44 34.00 297.16 20 75,072
Thompson 40 26.00 218.40 35 49,920
Employees Olson and Odom are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1.5 times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0% on the first 100,000 of each employee's annual earnings, and Medicare tax is 1.5% of each employee's annual earnings. The next payroll check to used is No. 345.
1. Prepare a payroll register for Enrichment Industries, Inc for the week ended December 10, 2010. Use the following columns for the payroll register: Name, Total Hours, Reg Earnings, Overtime Earnings, Total Earnings, Social Security tax, Medicare Tax, Federal Income Tax, U.S. Savings Bonds, Total Deductions, Net Pay, Ck. No, Sales Salaries Expense, and Office Salaries Expense.
2. Journalize the entry to record the payroll sales for the week.
Click here for the solution: The following data for Enrichment Industries, Inc. relate to the payroll for the week ended December 10, 2010
Fed U.S. Accumulated
Employee Hours Worked Hourly Rate Weekly Salary Income Tax Savings Bonds Earnings Dec 3
Beilein 32 $16.00 $102.40 10 $24,576
Calhoun 32 32.00 369.60 10 84,480
Calipari 40 28.00 240.80 20 53,760
Knight 42 32.00 316.48 66,048
Odom $3,400 748.00 90 163,200
Olson 1,600 384.00 76,800
Pitino 34 18.00 91.80 29,376
Ryan 44 34.00 297.16 20 75,072
Thompson 40 26.00 218.40 35 49,920
Employees Olson and Odom are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1.5 times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0% on the first 100,000 of each employee's annual earnings, and Medicare tax is 1.5% of each employee's annual earnings. The next payroll check to used is No. 345.
1. Prepare a payroll register for Enrichment Industries, Inc for the week ended December 10, 2010. Use the following columns for the payroll register: Name, Total Hours, Reg Earnings, Overtime Earnings, Total Earnings, Social Security tax, Medicare Tax, Federal Income Tax, U.S. Savings Bonds, Total Deductions, Net Pay, Ck. No, Sales Salaries Expense, and Office Salaries Expense.
2. Journalize the entry to record the payroll sales for the week.
Click here for the solution: The following data for Enrichment Industries, Inc. relate to the payroll for the week ended December 10, 2010
Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data
ACC 560 Week 6 Assignment
E10-7 Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data.
Variable Costs Fixed Costs
Indirect materials $12,000 Supervisory salaries $36,000
Indirect labor 10,000 Depreciation 7,000
Utilities 8,000 Property taxes and insurance 8,000
Maintenance 6,000 Maintenance 5,000
Actual variable costs were: indirect materials $13,800, indirect labor $9,600, utilities $8,700, and maintenance $4,900. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,200. The actual activity level equaled the budgeted level.
All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.
Instructions
(a) Prepare a flexible manufacturing overhead budget report for the first quarter.
(b) Prepare a responsibility report for the first quarter.
Click here for the solution: Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data
E10-7 Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data.
Variable Costs Fixed Costs
Indirect materials $12,000 Supervisory salaries $36,000
Indirect labor 10,000 Depreciation 7,000
Utilities 8,000 Property taxes and insurance 8,000
Maintenance 6,000 Maintenance 5,000
Actual variable costs were: indirect materials $13,800, indirect labor $9,600, utilities $8,700, and maintenance $4,900. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,200. The actual activity level equaled the budgeted level.
All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.
Instructions
(a) Prepare a flexible manufacturing overhead budget report for the first quarter.
(b) Prepare a responsibility report for the first quarter.
Click here for the solution: Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data
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