ACC 557 Week 1 Assignment
E1-8 An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below. Each increase and decrease in stockholders’ equity is explained.
Cash Accounts Office Accounts Stockholders’ _ Receivable _ Supplies _ Equipment _ Payable _ Equity
1. _$15,000 _$15,000 Investment
2. _2,000 _$5,000 _$3,000
3. _750 _$750
4. _4,600 _$3,700 _8,300 Service Revenue
5. _1,500 _1,500
6. _2,000 _2,000 Dividends
7. _650 −650 Rent Expense
8. _450 _450
9. _4,900 _4,900 Salaries Expense
10. _500 −500 Utilities Expense
Instructions
(a) Describe each transaction that occurred for the month.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the amount of net income for the month.
Click here for the solution: An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below
Showing posts with label made. Show all posts
Showing posts with label made. Show all posts
Monday, October 26, 2015
Wednesday, October 14, 2015
Stellar Stairs Co. of Poway designs and builds factory-made premium wooden stairs for homes
ACC 560 Week 3 Assignment
P4-3A Stellar Stairs Co. of Poway designs and builds factory-made premium wooden stairs for homes. The manufactured stair components (spindles, risers, hangers, hand rails) permit installation of stairs of varying lengths and widths. All are of white oak wood. Its budgeted manufacturing overhead costs for the year 2009 are as follows.
Overhead Cost Pools Amount
Purchasing $ 57,000
Handling materials 82,000
Production (cutting, milling, finishing) 210,000
Setting up machines 85,000
Inspecting 90,000
Inventory control (raw materials and finished goods) 126,000
Utilities 180,000
Total budget overhead costs $830,000
For the last 4 years, Stellar Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2009, 100,000 machine hours are budgeted.
Heather Fujar, owner-manager of Stellar Stairs Co., recently directed her accountant, Lindsay Baker, to implement the activity-based costing system that she has repeatedly proposed. At Heather Fujar's request, Lindsay and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools.
Activity Cost Pools Cost Drivers Expected
Use of Cost Drivers
Purchasing Number of orders 600
Handling materials Number of moves 8,000
Production (cutting, milling, finishing) Direct labor hours 100,000
Setting up machines Number of setups 1,250
Inspecting Number of inspections 6,000
Inventory control (raw materials and finished goods) Number of components 168,000
Utilities Square feet occupied 90,000
Jason Dion, sales manager, has received an order for 280 stairs from Community Builders, Inc., a large housing development contractor. At Jason's request, Lindsay prepares cost estimates for producing components for 280 stairs so Jason can submit a contract price per stair to Community Builders. She accumulates the following data for the production of 280 stairways.
Direct materials $103,600
Direct labor $112,000
Machine hours 14,500
Direct labor hours 5,000
Number of purchase orders 60
Number of material moves 800
Number of machine setups 100
Number of inspections 450
Number of components 16,000
Number of square feet occupied 8,000
Instructions
a) Compute the predetermined overhead rate using traditional costing with machine hours as the basis.
b) What is the manufacturing cost per stairway under traditional costing?
c) What is the manufacturing cost per stairway under the proposed activity-based costing? (Prepare all of the necessary schedules.)
d) Which of the two costing systems is preferable in pricing decisions and why?
Click here for the solution: Stellar Stairs Co. of Poway designs and builds factory-made premium wooden stairs for homes
P4-3A Stellar Stairs Co. of Poway designs and builds factory-made premium wooden stairs for homes. The manufactured stair components (spindles, risers, hangers, hand rails) permit installation of stairs of varying lengths and widths. All are of white oak wood. Its budgeted manufacturing overhead costs for the year 2009 are as follows.
Overhead Cost Pools Amount
Purchasing $ 57,000
Handling materials 82,000
Production (cutting, milling, finishing) 210,000
Setting up machines 85,000
Inspecting 90,000
Inventory control (raw materials and finished goods) 126,000
Utilities 180,000
Total budget overhead costs $830,000
For the last 4 years, Stellar Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2009, 100,000 machine hours are budgeted.
Heather Fujar, owner-manager of Stellar Stairs Co., recently directed her accountant, Lindsay Baker, to implement the activity-based costing system that she has repeatedly proposed. At Heather Fujar's request, Lindsay and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools.
Activity Cost Pools Cost Drivers Expected
Use of Cost Drivers
Purchasing Number of orders 600
Handling materials Number of moves 8,000
Production (cutting, milling, finishing) Direct labor hours 100,000
Setting up machines Number of setups 1,250
Inspecting Number of inspections 6,000
Inventory control (raw materials and finished goods) Number of components 168,000
Utilities Square feet occupied 90,000
Jason Dion, sales manager, has received an order for 280 stairs from Community Builders, Inc., a large housing development contractor. At Jason's request, Lindsay prepares cost estimates for producing components for 280 stairs so Jason can submit a contract price per stair to Community Builders. She accumulates the following data for the production of 280 stairways.
Direct materials $103,600
Direct labor $112,000
Machine hours 14,500
Direct labor hours 5,000
Number of purchase orders 60
Number of material moves 800
Number of machine setups 100
Number of inspections 450
Number of components 16,000
Number of square feet occupied 8,000
Instructions
a) Compute the predetermined overhead rate using traditional costing with machine hours as the basis.
b) What is the manufacturing cost per stairway under traditional costing?
c) What is the manufacturing cost per stairway under the proposed activity-based costing? (Prepare all of the necessary schedules.)
d) Which of the two costing systems is preferable in pricing decisions and why?
Click here for the solution: Stellar Stairs Co. of Poway designs and builds factory-made premium wooden stairs for homes
A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below
E3-4 A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below. Each increase and decrease in stockholders’ equity is explained.
Instructions
(a) Describe each transaction.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the net income for the month.
Click here for the solution: A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below
Instructions
(a) Describe each transaction.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the net income for the month.
Click here for the solution: A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below
Friday, October 9, 2015
Max Weinberg Company discovered the following errors made in January 2008
E4-12 Max Weinberg Company discovered the following errors made in January 2008.
1. A payment of Salaries Expense of $600 was debited to Equipment and credited to Cash, both for $600.
2. A collection of $1,000 from a client on account was debited to Cash $100 and credited to Service Revenue $100.
3. The purchase of equipment on account for $980 was debited to Equipment $890 and credited to Accounts Payable $890.
Instructions
(a) Correct errors by reversing the incorrect entry and preparing the correct entry.
(b) Correct the errors without reversing the incorrect entry.
Click here for the solution: Max Weinberg Company discovered the following errors made in January 2008
1. A payment of Salaries Expense of $600 was debited to Equipment and credited to Cash, both for $600.
2. A collection of $1,000 from a client on account was debited to Cash $100 and credited to Service Revenue $100.
3. The purchase of equipment on account for $980 was debited to Equipment $890 and credited to Accounts Payable $890.
Instructions
(a) Correct errors by reversing the incorrect entry and preparing the correct entry.
(b) Correct the errors without reversing the incorrect entry.
Click here for the solution: Max Weinberg Company discovered the following errors made in January 2008
Sunday, September 20, 2015
The number of transistors (in millions) made at a plant in Japan during the past 5 years follows
Problem 4.33 The number of transistors (in millions) made at a plant in Japan during the past 5 years follows:
Year Transistors
1 140
2 160
3 190
4 200
5 210
a) Forecast the number of transistors to be made next year, using linear regression.
b) Compute the mean squared error (MSE) when using linear regression.
c) Compute the mean absolute percent error (MAPE).
Click here for the solution: The number of transistors (in millions) made at a plant in Japan during the past 5 years follows
Year Transistors
1 140
2 160
3 190
4 200
5 210
a) Forecast the number of transistors to be made next year, using linear regression.
b) Compute the mean squared error (MSE) when using linear regression.
c) Compute the mean absolute percent error (MAPE).
Click here for the solution: The number of transistors (in millions) made at a plant in Japan during the past 5 years follows
The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011
ACC 291 Week 2 Assignment
E9‑1 The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011.
1. Paid $5,000 of accrued taxes at time plant site was acquired.
2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit.
3. Paid $850 sales taxes on new delivery truck.
4. Paid $17,500 for parking lots and driveways on new plant site.
5. Paid $250 to have company name and advertising slogan painted on new delivery truck.
6. Paid $8,000 for installation of new factory machinery.
7. Paid $900 for one-year accident insurance policy on new delivery truck.
8. Paid $75 motor vehicle license fee on the new truck.
Instructions
(a) Explain the application of the cost principle in determining the acquisition cost of plant assets.
(b) List the numbers of the foregoing transactions, and opposite each indicate the account title to which each expenditure should be debited.
Click here for the solution: The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011
E9‑1 The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011.
1. Paid $5,000 of accrued taxes at time plant site was acquired.
2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit.
3. Paid $850 sales taxes on new delivery truck.
4. Paid $17,500 for parking lots and driveways on new plant site.
5. Paid $250 to have company name and advertising slogan painted on new delivery truck.
6. Paid $8,000 for installation of new factory machinery.
7. Paid $900 for one-year accident insurance policy on new delivery truck.
8. Paid $75 motor vehicle license fee on the new truck.
Instructions
(a) Explain the application of the cost principle in determining the acquisition cost of plant assets.
(b) List the numbers of the foregoing transactions, and opposite each indicate the account title to which each expenditure should be debited.
Click here for the solution: The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011
Friday, September 18, 2015
The following information was made available from the income statement and balance sheet of Lauren Company
1. The following information was made available from the income statement and balance sheet of Lauren Company.
Item 12/31/10 12/31/09
Accounts Receivable $53,400 58,600
Accounts Payable 35,600 32,700
Merchandise Inventory 85,000 79,000
Sales (2010) 243,000
Interest Revenue (2010) 5,600
Dividend Revenue (2010) 1,200
Tax Expense (2010) 12,300
Salaries Expense (2010) 28,000
COGS (2010) 65,000
Interest Expense (2010) 3,600
Operating Expenses 28,500
Complete the cash flow from operating activities section for Lauren Company using the direct method for the year ended December 31, 2010.
Click here for the solution: The following information was made available from the income statement and balance sheet of Lauren Company
Item 12/31/10 12/31/09
Accounts Receivable $53,400 58,600
Accounts Payable 35,600 32,700
Merchandise Inventory 85,000 79,000
Sales (2010) 243,000
Interest Revenue (2010) 5,600
Dividend Revenue (2010) 1,200
Tax Expense (2010) 12,300
Salaries Expense (2010) 28,000
COGS (2010) 65,000
Interest Expense (2010) 3,600
Operating Expenses 28,500
Complete the cash flow from operating activities section for Lauren Company using the direct method for the year ended December 31, 2010.
Click here for the solution: The following information was made available from the income statement and balance sheet of Lauren Company
Sunday, September 13, 2015
As the auditor for XYZ Company, you discover that a material sale ($500,000 sale, cost of goods of $300,000) was made to a customer this year
3-44. (Application of Ethical Framework, LO 4) As the auditor for XYZ Company, you discover that a material sale ($500,000 sale, cost of goods of $300,000) was made to a customer this year. Due to poor internal accounting controls, the sale was never recorded. Your client makes a management decision not to bill the customer because such a long time has passed since the shipment was made. You determine, to the best of your ability, that the sale was not fraudulent.
Required
a. Does GAAP require disclosure of this situation? Cite specific applicable standards.
b. Regardless of your answer to part (a), utilize the ethical framework developed in the chapter to determine whether the auditor should require either a recording or disclosure of the transaction. If you conclude that the transaction should be disclosed or recorded, indicate the nature of disclosure and our rationale for it.
Click here for the solution: As the auditor for XYZ Company, you discover that a material sale ($500,000 sale, cost of goods of $300,000) was made to a customer this year
Required
a. Does GAAP require disclosure of this situation? Cite specific applicable standards.
b. Regardless of your answer to part (a), utilize the ethical framework developed in the chapter to determine whether the auditor should require either a recording or disclosure of the transaction. If you conclude that the transaction should be disclosed or recorded, indicate the nature of disclosure and our rationale for it.
Click here for the solution: As the auditor for XYZ Company, you discover that a material sale ($500,000 sale, cost of goods of $300,000) was made to a customer this year
Friday, September 11, 2015
Nottaway Flooring produces custom-made floor tiles
Nottaway Flooring produces custom-made floor tiles. The company's Raw Material Inventory account contains both direct and indirect materials. Until the end of April 2010, the company worked solely on a large job (#4263) for a major client. Near the end of the month, Nottaway began Job #4264. The following information was obtained relating to April production operations.
Raw material purchased on account, $204,000.
Direct material issued to Job #4263 cost $163,800; indirect material issued for that job cost $12,460. Direct material costing $1,870 was issued to start production of Job #4264.
Direct labor hours worked on Job #4263 were 3,600. Direct labor hours for Job #4264 were 120. All direct factory employees were paid $15 per hour.
Actual factory overhead costs incurred for the month totaled $68,700. This overhead consisted of $18,000 of supervisory salaries, $21,500 of depreciation charges, $7,200 of insurance, $12,500 of indirect labor, and $9,500 of utilities. Salaries, insurance, and utilities were paid in cash, and indirect labor charges were accrued.
Overhead is applied to production at the rate of $18 per direct labor hour.
Beginning balances of Raw Material Inventory and Work in Process Inventory were, respectively, $4,300 and $11,400. Of the beginning WIP balance, $800 was related to Job #4263. Job #4263 was completed during April.
a. Prepare journal entries for each transaction.
1. Raw material purchased on account, $204,000.
2. Direct material issued to Job #4263 cost $163,800; indirect material issued for that job cost $12,460. Direct material costing $1,870 was issued to start production of Job #4264.
3. Direct labor hours worked on Job #4263 were 3,600. Direct labor hours for Job #4264 were 120. All direct factory employees were paid $15 per hour.
4. Actual factory overhead costs incurred for the month totaled $68,700. This overhead consisted of $18,000 of supervisory salaries, $21,500 of depreciation charges, $7,200 of insurance, $12,500 of indirect labor, and $9,500 of utilities. Salaries, insurance, and utilities were paid in cash, and indirect labor charges were accrued.
5. Overhead is applied to production at the rate of $18 per direct labor hour.
b. Determine the balance in Raw Material Inventory at the end of the month.
c. Determine the balance in Work in Process Inventory at the end of the month.
d. Determine the cost of the goods manufactured during April. If completed goods consist of 10,000 similar units, what was the cost per unit?
e. What is the amount of underapplied or overapplied overhead at the end of April?
Click here for the solution: Nottaway Flooring produces custom-made floor tiles
Raw material purchased on account, $204,000.
Direct material issued to Job #4263 cost $163,800; indirect material issued for that job cost $12,460. Direct material costing $1,870 was issued to start production of Job #4264.
Direct labor hours worked on Job #4263 were 3,600. Direct labor hours for Job #4264 were 120. All direct factory employees were paid $15 per hour.
Actual factory overhead costs incurred for the month totaled $68,700. This overhead consisted of $18,000 of supervisory salaries, $21,500 of depreciation charges, $7,200 of insurance, $12,500 of indirect labor, and $9,500 of utilities. Salaries, insurance, and utilities were paid in cash, and indirect labor charges were accrued.
Overhead is applied to production at the rate of $18 per direct labor hour.
Beginning balances of Raw Material Inventory and Work in Process Inventory were, respectively, $4,300 and $11,400. Of the beginning WIP balance, $800 was related to Job #4263. Job #4263 was completed during April.
a. Prepare journal entries for each transaction.
1. Raw material purchased on account, $204,000.
2. Direct material issued to Job #4263 cost $163,800; indirect material issued for that job cost $12,460. Direct material costing $1,870 was issued to start production of Job #4264.
3. Direct labor hours worked on Job #4263 were 3,600. Direct labor hours for Job #4264 were 120. All direct factory employees were paid $15 per hour.
4. Actual factory overhead costs incurred for the month totaled $68,700. This overhead consisted of $18,000 of supervisory salaries, $21,500 of depreciation charges, $7,200 of insurance, $12,500 of indirect labor, and $9,500 of utilities. Salaries, insurance, and utilities were paid in cash, and indirect labor charges were accrued.
5. Overhead is applied to production at the rate of $18 per direct labor hour.
b. Determine the balance in Raw Material Inventory at the end of the month.
c. Determine the balance in Work in Process Inventory at the end of the month.
d. Determine the cost of the goods manufactured during April. If completed goods consist of 10,000 similar units, what was the cost per unit?
e. What is the amount of underapplied or overapplied overhead at the end of April?
Click here for the solution: Nottaway Flooring produces custom-made floor tiles
Sunday, September 6, 2015
Analytical procedures consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data
Auditing P 7-37
Analytical procedures consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data. They range from simple comparisons to the use of complex models involving many relationships and elements of data. They involve comparisons of recorded amounts, or ratios developed from recorded amounts, to expectations developed by the auditors.
a. Describe the broad purposes of analytical procedures.
b. When are analytical procedures required during an audit Explain why auditors use analytical procedures extensively in all parts of the audit.
c. Describe the factors that influence the extent to which an auditor will use the results of analytical procedures to reduce detailed tests in meeting audit objectives.
Click here for the solution: Analytical procedures consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data
Analytical procedures consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data. They range from simple comparisons to the use of complex models involving many relationships and elements of data. They involve comparisons of recorded amounts, or ratios developed from recorded amounts, to expectations developed by the auditors.
a. Describe the broad purposes of analytical procedures.
b. When are analytical procedures required during an audit Explain why auditors use analytical procedures extensively in all parts of the audit.
c. Describe the factors that influence the extent to which an auditor will use the results of analytical procedures to reduce detailed tests in meeting audit objectives.
Click here for the solution: Analytical procedures consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data
Wednesday, September 2, 2015
Jerry made the following contributions during 2010
Jerry made the following contributions during 2010:
His synagogue (by check) $680
The Republican Party (by check) 180
The American Red Cross (by check) 150
His lodge for a holiday party 100
In addition, Jerry donated used furniture to the Salvation Army costing $2,000 with a fair market value of $400. Assuming Jerry has adjusted gross income of $45,000, has the necessary written acknowledgments, and itemizes deductions. Complete the Gifts to Charity section of Schedule A, what is Jerry’s deduction for 2010.
Click here for the solution: Jerry made the following contributions during 2010
His synagogue (by check) $680
The Republican Party (by check) 180
The American Red Cross (by check) 150
His lodge for a holiday party 100
In addition, Jerry donated used furniture to the Salvation Army costing $2,000 with a fair market value of $400. Assuming Jerry has adjusted gross income of $45,000, has the necessary written acknowledgments, and itemizes deductions. Complete the Gifts to Charity section of Schedule A, what is Jerry’s deduction for 2010.
Click here for the solution: Jerry made the following contributions during 2010
Monday, July 6, 2015
A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation
E3-4 A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation.
Assets = Liabilities + Stockholders' Equity
Office Accounts Common Retained Earnings
Cash + A/R + Supp. + Equip. = Payable + Stock + Rev. - Exp. - Div.
1. +$20,000 +$20,000 Com. Stock
2. -1,000 +$5,000 +$4,000
3. -750 +$750
4. +4,400 +$5,400 +$9,800 Serv. Rev.
5. -1,500 -1,500
6. -2,000 -$2,000 Div.
7. -800 -$ 800 Rent Exp.
8. +450 -450
9. -3,000 -3,000 Sal. Exp.
10. +500 -500 Util. Exp.
Hint: Analyze transaction and compare net income (SO 1)
Instructions
(a) describe each transaction
(b) Determine how much stockholder's equity increased for the month
(c) Compute the net income for the month
Click here for the solution: A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation
Assets = Liabilities + Stockholders' Equity
Office Accounts Common Retained Earnings
Cash + A/R + Supp. + Equip. = Payable + Stock + Rev. - Exp. - Div.
1. +$20,000 +$20,000 Com. Stock
2. -1,000 +$5,000 +$4,000
3. -750 +$750
4. +4,400 +$5,400 +$9,800 Serv. Rev.
5. -1,500 -1,500
6. -2,000 -$2,000 Div.
7. -800 -$ 800 Rent Exp.
8. +450 -450
9. -3,000 -3,000 Sal. Exp.
10. +500 -500 Util. Exp.
Hint: Analyze transaction and compare net income (SO 1)
Instructions
(a) describe each transaction
(b) Determine how much stockholder's equity increased for the month
(c) Compute the net income for the month
Click here for the solution: A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation
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