The standard cost of Product B manufactured by Mateo Company includes three units of direct materials at $5.00 per unit

ACC 560 Week 7 Assignment

E11-5 The standard cost of Product B manufactured by Mateo Company includes three units of direct materials at $5.00 per unit. During June, 28,000 units of direct materials are purchased at a cost of $4.70 per unit, and 28,000 units of direct materials are used to produce 9,000 units of Product B.

Instructions:
a) Compute the total materials variance and the price and quantity variances.

b) Repeat the question above, assuming the purchase price is $5.20 and the quantity purchased and used is 26,200 units.

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Grider Company's chart of accounts includes the following selected accounts

Grider Company's chart of accounts includes the following selected accounts.

101 Cash 401 Sales
112 Accounts Receivable 414 Sales Discounts
120 Merchandise Inventory 505 Cost of Goods Sold
301 O. Grider, Capital

On April 1 the accounts receivable ledger of Grider Company showed the following balances: Ogden $1,550, Chelsea $1,200, Eggleston Co. $2,900, and Baez $1,800.The April transactions involving the receipt of cash were as follows.

Apr. 1 The owner, O. Grider, invested additional cash in the business $7,200.
4 Received check for payment of account from Baez less 2% cash discount.
5 Received check for $920 in payment of invoice no. 307 from Eggleston Co.
8 Made cash sales of merchandise totaling $7,245. The cost of the merchandise sold was $4,347.
10 Received check for $600 in payment of invoice no. 309 from Ogden.
11 Received cash refund from a supplier for damaged merchandise $740.
23 Received check for $1,500 in payment of invoice no. 310 from Eggleston Co.
29 Received check for payment of account from Chelsea.

Instructions
(a) Journalize the transactions above in a six-column cash receipts journal with columns for Cash Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Cr., Other Accounts Cr., and Cost of Goods Sold Dr./Merchandise Inventory Cr. Foot and crossfoot the journal.
(b) Insert the beginning balances in the Accounts Receivable control and subsidiary accounts, and post the June transactions to these accounts.
(c) Prove the agreement of the control account and subsidiary account balances.


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The shareholders' equity of WBL Industries includes the items shown below

E 18-10 Effect of cumulative, nonparticipating preferred stock on dividends—3 years

The shareholders' equity of WBL Industries includes the items shown below. The board of directors of WBL declared cash dividends of $8 million, $20 million, and $150 million in its first three years of operation—2011, 2012, and 2013, respectively.

Common stock 100
Paid in capital excess of par, common 980
Preferred stock, 8% 200
Paid in capital excess of par, preferred 555

Required:
Determine the amount of dividends to be paid to preferred and common shareholders in each of the three years, assuming that the preferred stock is cumulative and nonparticipating.


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The entry to record the cost of inventory sold includes a credit to cost of goods sold

1. The entry to record the cost of inventory sold includes a credit to cost of goods sold.

2. The faster the sale of inventory and the collection of cash, the higher the profits will be for a business.

3. In the closing entry process, the sales returns and allowances account is credited.

4. Operating expenses are divided into administrative expenses and selling expenses on the income statement.

5. A merchandiser purchases inventory on account under a perpetual inventory system with terms of 2/10 n/30. The merchandiser would:

Question 6
Ending inventory equals the number of units on hand multiplied by the unit cost.

Question 7
Sales revenue minus sales returns and allowances and sales discounts equals

Question 8
Under a perpetual inventory system, the adjusting entry to account for inventory shrinkage would include a:

Question 9
In period of increasing prices, FIFO produces lower cost of goods sold and higher gross profit than LIFO.

Question 10
An error in ending inventory carries over into the next period.

Question 11
Which of the following inventory costing methods is the LEAST likely to mimic the actual physical flow of inventory?

Question 12
Which of the following principles require the application of the lower-of-cost-or-market rule?

Question 13
A company makes two errors in the physical count of inventory. Beginning inventory was understated by $28,000 and ending inventory is understated by $43,000. Which of the following will be the net effect of the two errors?

Question 14
A deposit in transit has been recorded by the company but not by the bank.

Question 15
To maintain effective internal control, all incoming mail should be opened by a mailroom employee who has access to the accounting records.

Question 16
The initial entry to establish a petty cash fund involves a debit to cash and a credit to petty cash.

Question 17
Internal control does not:

Question 18
A check drawn by the depositor for $205 in payment of a liability was recorded in the journal as $502. This item would be included in the bank reconciliation as a(n):

Question 19
The entry to reimburse the petty cash fund includes a:

Question 20
Under the allowance method, the entry to write off an account that has been deemed uncollectible has no effect on the total asset's of the firm.

Question 21
The allowance method and the direct write-off method are both methods of aging accounts

Question 22
A written promise to pay a specified amount of money at a particular future date is referred to as a promissory note.

Question 23
One method of establishing control over collections of accounts receivable is to:

Question 24
Using the balance sheet approach to estimate uncollectibles, accounts, which are 90 days old,are:

Question 25
Under the direct write-off method, the entry to record an uncollectible account has the following effect on the financial statements:


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Moon Company includes 1 coupon in each box of soap powder that it packs, 20 coupons being redeemable for a premium consisting of a kitchen utensil

Moon Company includes 1 coupon in each box of soap powder that it packs, 20 coupons being redeemable for a premium consisting of a kitchen utensil. In 2010, Moon Company purchased 12,000 premiums at $1.00 each and sold 360,000 boxes of soap powder @ $4.00 per box. Based on past experience, it is estimated that 60% of the coupons will be redeemed. During 2010, 96,000 coupons were presented for redemption.

During 2011, 19,000 premiums were purchased at $1.10. The company sold 800,000 boxes of soap at $4.00 and 330,000 coupons were presented for redemption.

Instructions
Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in both 2010 and 2011. Assume a FIFO inventory flow.


Click here for the solution: Moon Company includes 1 coupon in each box of soap powder that it packs, 20 coupons being redeemable for a premium consisting of a kitchen utensil

The ledger of Chopin Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared

E3-5 (Adjusting Entries) The ledger of Chopin Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.

Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated Depreciation—Equipment $ 8,400
Notes Payable 20,000
Unearned Rent Revenue 6,300
Rent Revenue 60,000
Interest Expense –0–
Wage Expense 14,000

An analysis of the accounts shows the following.
1. The equipment depreciates $250 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $650.
5. Insurance expires at the rate of $300 per month.

Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense; Insurance Expense; Interest Payable; and Supplies Expense. (Omit explanations.)

Click here for the solution: The ledger of Chopin Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared

(Bank reconciliation and internal control) The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31

CP 8-5 Bank reconciliation and internal control (25th edition)

The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31. The cash balance on the bank statement as of July 31 is $10,575. This balance includes a note of $2,250 plus $150 interest collected by the bank but not recorded in the journal. Checks outstanding on July 31 were as follows: No. 2670, $1,050; No. 3679, $675; No. 3690, $1,650; No. 5148, $225; No. 5149, $750; and No. 5151, $800. On July 25, the cashier resigned, effective at the end of the month. Before leaving on July 31, the cashier prepared the following bank reconciliation:


Cash balance per books, July 31 .................................... $10,400

Add outstanding checks:
No. 5148 ........................................................ $225


5149 ........................................................ 750

5151 ........................................................ 800 1,675

$12,075


Less undeposited receipts ......................................... 1,500

Cash balance per bank, July 31 ..................................... $10,575

Deduct unrecorded note with interest .............................. 2,400

True cash, July 31.................................................. $ 8,175


Calculator Tape of Outstanding Checks:

0*

225

750

800

1,675*


Subsequently, the owner of Parker Company discovered that the cashier had stolen an unknown amount of undeposited receipts, leaving only $1,500 to be deposited on July 31. The owner, a close family friend, has asked your help in determining the amount that the former cashier has stolen.


1. Determine the amount the cashier stole from Parker Company. Show your computations in good form.

2. How did the cashier attempt to conceal the theft?

3. a. Identify two major weaknesses in internal controls, which allowed the cashier to steal the undeposited cash receipts.

b. Recommend improvements in internal controls, so that similar types of thefts of undeposited cash receipts can be prevented.

Click here for the solution: (Bank reconciliation and internal control) The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31

The ledger of Duggan Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared

Exercise 3-5 (E3-5) (Adjusting Entries) The ledger of Duggan Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.

Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated Depreciation—Equipment $ 8,400
Notes Payable 20,000
Unearned Rent Revenue 9,300
Rent Revenue 60,000
Interest Expense –0–
Wage Expense 14,000
An analysis of the accounts shows the following.
1. The equipment depreciates $250 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $850.
5. Insurance expires at the rate of $300 per month.

Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense; Insurance Expense; Interest Payable; and Supplies Expense. (Omit explanations.)

Click here for the solution: The ledger of Duggan Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared