While examining cash receipts information, the accounting department determined the following information

ACC 290 Week 5 Assignment

BE7-5 While examining cash receipts information, the accounting department determined the following information: opening cash balance $150, cash on hand $1,125.74, and cash sales per register tape $988.62. Prepare the required journal entry based upon the cash count sheet.

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(ACC 560 Week 10 Assignment) Nordstrom, Inc. operates department stores in numerous states

ACC 560 Week 10 Assignment

E14-5 Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 29, 2005, are as follows.

NORDSTROM, INC.
Balance Sheet (partial)
(in millions) End-of-Year Beginning-of-Year

Cash and cash equivalents $ 361 $ 340
Receivables (less allowance of 19 and 20) 646 667
Merchandise inventory 917 902
Prepaid expenses 53 46
Other current assets 595 570
Total current assets $2,572 $2,525
Total current liabilities $1,341 $1,123

For the year, net sales were $7,131, and cost of goods sold was $4,559 (in millions).

Instructions
(a) Compute the four liquidity ratios at the end of the year.
(b) Using the data in the chapter, compare Nordstrom’s liquidity with (1) that of J.C. Penney Company, and (2) the industry averages for department stores.


Click here for the solution: (ACC 560 Week 10 Assignment) Nordstrom, Inc. operates department stores in numerous states

Nordstrom, Inc. operates department stores in numerous states

E15-5 Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 29, 2005, are as follows.

NORDSTROM, INC.
Balance Sheet (partial)
(in millions) End-of-Year Beginning-of-Year
Cash and cash equivalents $ 361 $ 340
Receivables (less allowance of 19 and 20) 646 667
Merchandise inventory 917 902
Prepaid expenses 53 46
Other current assets 595 570
Total current assets $2,572 $2,525
Total current liabilities $1,341 $1,123

For the year, net sales were $7,131, and cost of goods sold was $4,559 (in millions).

Instructions
(a) Compute the four liquidity ratios at the end of the year.
(b) Using the data in the chapter, compare Nordstrom’s liquidity with (1) that of J.C. Penney Company, and (2) the industry averages for department stores.


Click here for the solution: Nordstrom, Inc. operates department stores in numerous states

Wilmington Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department

PR 20-3A Wilmington Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling Departments, emerging as finished chemicals. The balance in the account Work in Process - Filling was as follows on December 1, 2010:

AND SO ON

INSTRUCTIONS:
1. Prepare a cost of production report for the Filling department for December.
2. Journalize the entries for costs transferred from Reaction to Filling and the cost transferred from filling to finished goods.
3. Determine the increase or decrease in the cost per equivalent unit from November to December for direct materials and conversion costs.
4. Discuss the uses of the cost of production report and the results of part (3).


Click here for the solution: Wilmington Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department

Grande Stores is a large discount catalog department store chain

Auditing P 7-41 Grande Stores is a large discount catalog department store chain. The company has recently expanded from 6 to 43 stores by borrowing from several large financial institutions and from a public offering of common stock. A recent investigation has disclosed that Grande materially overstated net income. This was accomplished by understating accounts payable and recording fictitious supplier credits that further reduced accounts payable. An SEC investigation was critical of the evidence gathered by Grandes audit firm, Montgomery & Ross, in testing accounts payable and the supplier credits.

The following is a description of some of the fictitious supplier credits and unrecorded amounts in accounts payable, as well as the audit procedures.

AND SO ON

Required:
Identify deficiencies in the sufficiency and appropriateness of the evidence gathered in the audit of accounts payable of Grande Stores.


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Ideal Manufacturing Company of Sycamore, Illinois has supported a research and development (R&D) department

Ideal Manufacturing Company of Sycamore, Illinois has supported a research and development (R&D) department that has for many years been the sole contributor to the company’s new farm machinery products. The R&D activity is an overhead cost center that provides services only to in-house manufacturing departments (four different product lines), all of which produce agricultural/farm/ranch related machinery products. The department has never sold its services outside, but because of its long history of success, larger manufacturers of agricultural products have approached Ideal to hire its R&D department for special projects. Because the costs of operating the R&D department have been spiraling uncontrollably, Ideal’s management is considering entertaining these outside approaches to absorb the increasing costs. But, (1) management doesn’t have any cost basis for charging R&D services to outsiders, and (2) it needs to gain control of its R&D costs. Management decides to implement an activity-based costing system in order to determine the charges for both outsiders and the in-house users of the department’s services. R&D activities fall into four pools with the following annual costs.
Market analysis $1,050,000
Product design 2,280,000
Product development 3,600,000
Prototype testing 1,400,000
Activity analysis determines that the appropriate cost drivers and their usage for the four activities are:
Total
Activities Cost Drivers Estimated Drivers
Market analysis Hours of analysis 15,000 hours
Product design Number of designs 2,500 designs
Product development Number of products 90 products
Prototype testing Number of tests 700 tests

(a) Compute the activity-based overhead rate for each activity cost pool.
(b) How much cost would be charged to an in-house manufacturing department that consumed 1,800 hours of market analysis time, was provided 280 designs relating to 10 products, and requested 92 engineering tests?
(c) How much cost would serve as the basis for pricing an R&D bid with an outside company on a contract that would consume 800 hours of analysis time, require 178 designs relating to 3 products, and result in 70 engineering tests?
(d) What is the benefit to Ideal Manufacturing of applying activity-based costing to its R&D activity for both in-house and outside charging purposes?


Click here for the solution: Ideal Manufacturing Company of Sycamore, Illinois has supported a research and development (R&D) department

The management of Tritt Company has asked its accounting department

P8-7 (Financial Statement Effects of FIFO and LIFO) The management of Tritt Company has asked its accounting department to describe the effect upon the company's financial position and its income statements of accounting for inventories on the LIFO rather than the FIFO basis during 2010 and 2011. The accounting department is to assume that the change to LIFO would have been effective on January 1, 2010, and that the initial LIFO base would have been the inventory value on December 31, 2009. Presented below are the company's financial statements and other data for the years 2010 and 2011 when the FIFO method was employed.

Other data:
1. Inventory on hand at December 31, 2009, consisted of 40,000 units valued at $3.00 each.
2. Sales (all units sold at the same price in a given year):
2010—150,000 units @ $6.00 each
2011—180,000 units @ $7.50 each
3. Purchases (all units purchased at the same price in given year):
2010—150,000 units @ $3.50 each
2011—180,000 units @ $4.40 each
4. Income taxes at the effective rate of 40% are paid on December 31 each year.

Instructions
Name the account(s) presented in the financial statements that would have different amounts for 2011 if LIFO rather than FIFO had been used, and state the new amount for each account that is named.

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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

ACC 561 EXCEL Application Exercise 12-59, Allocating Costs Using Direct and Step-Down Methods

ACC 561 EXCEL Application Exercise 12-59, Allocating Costs Using Direct and Step-Down Methods, on p. 584

Goal: Create an Excel spreadsheet to allocate costs using the direct method and the stepdown
method. Use the results to answer questions about your findings.
Scenario: Antonio Cleaning has asked you to help them determine the best method for
allocating costs from their service departments to their producing departments. Additional
background information for your spreadsheet appears in Fundamental Assignment Material
12-B2. Exhibit 12-4 on page 532 illustrates the types of calculations that are used for
allocating costs using the direct method and the step-down method.

When you have completed your spreadsheet, answer the following questions:
1. What are the total costs for the Residential department using the direct method?
What are the total costs for the Commercial department using the direct method?
2. What are the total costs for the Residential department using the step-down method?
3. What are the total costs for the Commercial department using the step-down method?
4. Which method would you recommend that Antonio Cleaning use to allocate their
service departments’ costs to their producing departments? Why?

Step-by-Step:
1. Open a new Excel spreadsheet.
2. In column A, create a bold-faced heading that contains the following:
Row 1: Chapter 12 Decision Guideline
Row 2: Dallas Cleaning
Row 3: Cost Allocations from Service Departments to Producing Departments
Row 4: Today’s Date
3. Merge and center the four heading rows across columns A through H.
4. In row 7, create the following bold-faced, center-justified column headings:
Column B: Personnel
Column C: Administrative
Column D: Residential
Column E: Commercial
Column F: Total Res/Comm
Column G: Total Admin/Res/Comm
Column H: Grand Total
5. Change the format of the column headings in row 7 to permit the titles to be displayed
on multiple lines within a single cell.
Alignment tab: Wrap Text: Checked
Note: Adjust column widths so that headings use only two lines.
Adjust row height to ensure that row is same height as adjusted headings.
6. In column A, create the following row headings:
Row 8: Direct Department Costs
Row 9: Number of Employees
Skip 2 rows
Note: Adjust the width of column A to 27.14.
7. In column A, create the following bold-faced, underlined row heading:
Row 12: Direct Method:
8. In column A, create the following row headings:
Row 13: Direct Department Costs
Row 14: Personnel Allocation
Row 15: Administrative Allocation
Row 16: Total Costs
Skip 2 rows
9. In column A, create the following bold-faced, underlined row heading:
Row 19: Step-down Method:
10. In column A, create the following row headings:
Row 20: Direct Department Costs
Row 21: Step 1—Personnel Allocation
Row 22: Step 2—Administrative Allocation
Row 23: Total Costs
11. Use data from Fundamental Assignment 12-B2 to enter the amounts in columns B
through E for rows 8, 9, 13, and 20.
12. Use the appropriate calculations to do the totals in row 8 for columns F and H.
Use the appropriate calculations to do the totals in row 9 for columns F and G.
13. Use the appropriate formulas to allocate the costs from the service departments to the
producing departments using each of the methods.
14. Use the appropriate calculations to do the totals in columns B through E and in column H,
rows 16 and 23.
15. Format amounts in columns B through H, rows 8, 13, 16, 20, and 23 as
Number tab: Category: Accounting
Decimal: 0
Symbol: $
16. Format the amount in columns B through E, rows 14, 15, 21, and 22 as
Number tab: Category: Accounting
Decimal: 0
Symbol: None
17. Change the format of the total costs amounts in columns B through E, rows 16 and 23,
to display a top border, using the default line style.
Border tab: Icon: Top Border
18. Change the format of the amounts in row 9, columns B through G to center justified

Click here for the solution: ACC 561 EXCEL Application Exercise 12-59, Allocating Costs Using Direct and Step-Down Methods