Presented below is selected information from the Greenville Company's current period accounting records (in $000s):
Sales $10,000
Raw Materials Used 2,500
Direct Labor Costs 1,000
Period Costs (Selling and Administrative) 2,500
Beginning Raw Material Inventory 300
Ending Raw Material Inventory 1,000
Net Income 200
Beginning Work-in-Process Inventory 0
Ending Work-in-Process Inventory 300
Beginning Finished Goods Inventory 700
Ending Finished Goods Inventory 400
* NOTE: All raw materials used were direct materials.
Question:
Determine the following (in dollars):
a. Raw Material Purchases
b. Gross Profit
c. Cost of Goods Manufactured
d. Manufacturing Overhead
Click here for the solution: Presented below is selected information from the Greenville Company's current period accounting records (in $000s)
Showing posts with label period. Show all posts
Showing posts with label period. Show all posts
Friday, April 15, 2016
Wednesday, April 13, 2016
(Cost of trade credit) Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms
A14. (Cost of trade credit) Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms. Calculate the APR and the APY.
a. 5/10, net 50
b. 3/15, net 30
c. 2/10, net 20
Click here for the solution: Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms
a. 5/10, net 50
b. 3/15, net 30
c. 2/10, net 20
Click here for the solution: Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms
Thursday, January 14, 2016
If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods
AUDITING MULTIPLE CHOICE
1. (TCO 2) If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods, it is appropriate to issue a(n): (Points: 2)
2. (TCO 2) When a client has not applied GAAP consistently from the prior year to the current year, the auditor does not concur with the appropriateness of the change, and the change in GAAP has a material effect on the financial statements, the auditor should issue a(n): (Points: 2)
3. (TCO 2) Which of the following is not an essential condition for issuing the standard unqualified audit opinion? (Points: 2)
4. (TCO 2) An adverse opinion is issued when the auditor believes: (Points: 2)
5. (TCO 11) A principal purpose of a letter of representation from management is to (Points: 2)
6. (TCO 11) A client representation letter is: (Points: 2)
7. (TCO 11) Inquiries of management regarding the possibility of unrecorded contingencies will not be useful in uncovering: (Points: 2)
8. (TCO 11) The audit step most likely to reveal the existence of contingent liabilities is (Points: 2)
9. (TCO 2) The standards which govern the CPA’s association with unaudited financial statements are: (Points: 2)
10. (TCO 2) A CPA firm can issue a compilation report: (Points: 2)
Click here for the solution: If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods
1. (TCO 2) If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods, it is appropriate to issue a(n): (Points: 2)
2. (TCO 2) When a client has not applied GAAP consistently from the prior year to the current year, the auditor does not concur with the appropriateness of the change, and the change in GAAP has a material effect on the financial statements, the auditor should issue a(n): (Points: 2)
3. (TCO 2) Which of the following is not an essential condition for issuing the standard unqualified audit opinion? (Points: 2)
4. (TCO 2) An adverse opinion is issued when the auditor believes: (Points: 2)
5. (TCO 11) A principal purpose of a letter of representation from management is to (Points: 2)
6. (TCO 11) A client representation letter is: (Points: 2)
7. (TCO 11) Inquiries of management regarding the possibility of unrecorded contingencies will not be useful in uncovering: (Points: 2)
8. (TCO 11) The audit step most likely to reveal the existence of contingent liabilities is (Points: 2)
9. (TCO 2) The standards which govern the CPA’s association with unaudited financial statements are: (Points: 2)
10. (TCO 2) A CPA firm can issue a compilation report: (Points: 2)
Click here for the solution: If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods
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
Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013
P 18-5 Shareholders' equity transactions; statement of shareholders' equity
Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013. At December 31, 2010, the corporation's accounts included:
($ in 000s)
Common stock, 105 million shares at $1 par $105,000
Paid-in capital-excess of par 630,000
Retained earnings 970,000
a. November 1, 2011, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
b. On March 1, 2012, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for $1.3 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5.
c. On July 12, 2012, the corporation declared and distributed a 5% common stock dividend (when the market value of the common stock was $21 per share). Cash was paid in lieu of fractional shares representing 250,000 equivalent whole shares.
d. On November 1, 2012, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
e. On January 15, 2013, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $22 per share.
f. On November 1, 2013, the board of directors declared a cash dividend of $.65 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
Required:
1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.
2. Prepare comparative statements of shareholders' equity for Branch-Rickie for the three-year period ($ in 000s). Net income was $330 million, $395 million, and $455 million for 2011, 2012, and 2013, respectively.
Click here for the solution: Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013
Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013. At December 31, 2010, the corporation's accounts included:
($ in 000s)
Common stock, 105 million shares at $1 par $105,000
Paid-in capital-excess of par 630,000
Retained earnings 970,000
a. November 1, 2011, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
b. On March 1, 2012, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for $1.3 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5.
c. On July 12, 2012, the corporation declared and distributed a 5% common stock dividend (when the market value of the common stock was $21 per share). Cash was paid in lieu of fractional shares representing 250,000 equivalent whole shares.
d. On November 1, 2012, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
e. On January 15, 2013, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $22 per share.
f. On November 1, 2013, the board of directors declared a cash dividend of $.65 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
Required:
1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.
2. Prepare comparative statements of shareholders' equity for Branch-Rickie for the three-year period ($ in 000s). Net income was $330 million, $395 million, and $455 million for 2011, 2012, and 2013, respectively.
Click here for the solution: Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013
Thursday, September 24, 2015
In a period when prices are rising and inventory quantities are stable, the inventory method that would result
MULTIPLE CHOICE
1. In a period when prices are rising and inventory quantities are stable, the inventory method that would result in the highest ending inventory is:
2. The use of LIFO during a long inflationary period can result in:
3. 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:
4. The primary reason for the popularity of LIFO is that it gives:
5. When using the gross profit method to estimate ending inventory, it is not necessary to know:
6. Using the dollar-value LIFO retail method for inventory,:
7. Under the gross method, purchase discounts taken are:
8. In a periodic inventory system, the cost of inventories sold is:
9. An argument against the use of LCM is its lack of:
10. A retrospective treatment of prior years' financial statements is required when there is a change from:
Click here for the solution: In a period when prices are rising and inventory quantities are stable, the inventory method that would result
1. In a period when prices are rising and inventory quantities are stable, the inventory method that would result in the highest ending inventory is:
2. The use of LIFO during a long inflationary period can result in:
3. 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:
4. The primary reason for the popularity of LIFO is that it gives:
5. When using the gross profit method to estimate ending inventory, it is not necessary to know:
6. Using the dollar-value LIFO retail method for inventory,:
7. Under the gross method, purchase discounts taken are:
8. In a periodic inventory system, the cost of inventories sold is:
9. An argument against the use of LCM is its lack of:
10. A retrospective treatment of prior years' financial statements is required when there is a change from:
Click here for the solution: In a period when prices are rising and inventory quantities are stable, the inventory method that would result
Sunday, September 13, 2015
“I always go for the investment with the shortest payback period.” Is this a sound strategy?
19. “I always go for the investment with the shortest payback period.” Is this a sound strategy? Why or why not?
Click here for the solution: “I always go for the investment with the shortest payback period.” Is this a sound strategy?
Click here for the solution: “I always go for the investment with the shortest payback period.” Is this a sound strategy?
Tuesday, September 8, 2015
ACC 225 P07-05A You have just taken over the accounting for Choi Enterprises, whose annual accounting period ends December 31
ACC 225 P07-05A
You have just taken over the accounting for Choi Enterprises, whose annual accounting period ends December 31. The company’s previous accountant journalized its transactions through December 15 and posted all items that required posting as individual amounts (see the journals and ledgers in the Working Papers). The company’s transactions beginning on December 16 follow (terms for all its credit sales are 2/10, n/30):
Dec. 16 Sold merchandise on credit to Hanna Seppa, Invoice No. 916, for $7,700 (cost is $4,600).
17 Received a $1,040 credit memorandum from Funk Company for the return of merchandise received on December 15.
AND SO ON
31 Issued Check No. 626 to Jamie Inman, the company’s only sales employee, in payment of her $2,020 salary for the last half of December.
31 Issued Check No. 627 to Access Electric Company in payment of its $710 December electric bill.
31 Cash sales for the last half of the month are $29,600 (cost is $11,200). (Cash sales are recorded daily but are recorded only twice in this problem to reduce repetitive entries.)
Required
1. Record these transactions in the journals provided in the working papers.
2. Verify that amounts that should be posted as individual amounts to the general ledger accounts have been posted, including posting to the customer and creditor accounts. (Such items are immediately posted.) Foot and crossfoot the journals and make the month-end postings.
3. Prepare a December 31 trial balance and prove the accuracy of the subsidiary ledgers by preparing schedules of both accounts receivable and accounts payable.
Click here for the solution: ACC 225 P07-05A You have just taken over the accounting for Choi Enterprises, whose annual accounting period ends December 31
You have just taken over the accounting for Choi Enterprises, whose annual accounting period ends December 31. The company’s previous accountant journalized its transactions through December 15 and posted all items that required posting as individual amounts (see the journals and ledgers in the Working Papers). The company’s transactions beginning on December 16 follow (terms for all its credit sales are 2/10, n/30):
Dec. 16 Sold merchandise on credit to Hanna Seppa, Invoice No. 916, for $7,700 (cost is $4,600).
17 Received a $1,040 credit memorandum from Funk Company for the return of merchandise received on December 15.
AND SO ON
31 Issued Check No. 626 to Jamie Inman, the company’s only sales employee, in payment of her $2,020 salary for the last half of December.
31 Issued Check No. 627 to Access Electric Company in payment of its $710 December electric bill.
31 Cash sales for the last half of the month are $29,600 (cost is $11,200). (Cash sales are recorded daily but are recorded only twice in this problem to reduce repetitive entries.)
Required
1. Record these transactions in the journals provided in the working papers.
2. Verify that amounts that should be posted as individual amounts to the general ledger accounts have been posted, including posting to the customer and creditor accounts. (Such items are immediately posted.) Foot and crossfoot the journals and make the month-end postings.
3. Prepare a December 31 trial balance and prove the accuracy of the subsidiary ledgers by preparing schedules of both accounts receivable and accounts payable.
Click here for the solution: ACC 225 P07-05A You have just taken over the accounting for Choi Enterprises, whose annual accounting period ends December 31
Tucson, a U.S. corporation organized in Year 1, reports the following items for a three-year period
C:16-41 Foreign Tax Credit Limitation. Tucson, a U.S. corporation
organized in Year 1, reports the following items for a three-year
period.
Foreign tax accrual $ 100,000 $ 120,000 $ 180,000
Foreign source taxable income 400,000 300,000 500,000
Worldwide taxable income 1,000,000 1,000,000 1,000,000
The foreign source and worldwide taxable income items are determined under U.S. law.
a. What is Tucson’s foreign tax credit limitation for each of the three years (assume a 34% U.S. corporate tax rate and that income from all foreign activities fall into a single basket)?
b. How are Tucson’s excess foreign tax credits (if any) treated? Do any carryovers remain after Year 3?
c. How would your answers to Parts a and b change if the IRS determines that $100,000 of expenses allocable to U.S.-source income should have been allocable to foreign source income?
d. What measures should Tucson consider if it expects its current excess foreign tax credit position to persist in the long-run?
Click here for the solution: Tucson, a U.S. corporation organized in Year 1, reports the following items for a three-year period
Foreign tax accrual $ 100,000 $ 120,000 $ 180,000
Foreign source taxable income 400,000 300,000 500,000
Worldwide taxable income 1,000,000 1,000,000 1,000,000
The foreign source and worldwide taxable income items are determined under U.S. law.
a. What is Tucson’s foreign tax credit limitation for each of the three years (assume a 34% U.S. corporate tax rate and that income from all foreign activities fall into a single basket)?
b. How are Tucson’s excess foreign tax credits (if any) treated? Do any carryovers remain after Year 3?
c. How would your answers to Parts a and b change if the IRS determines that $100,000 of expenses allocable to U.S.-source income should have been allocable to foreign source income?
d. What measures should Tucson consider if it expects its current excess foreign tax credit position to persist in the long-run?
Click here for the solution: Tucson, a U.S. corporation organized in Year 1, reports the following items for a three-year period
Sunday, August 23, 2015
Staley Watch Company reported the following income statement data for a 2-year period
E6-12 Staley Watch Company reported the following income statement data for a 2-year period.
2008 2009
Sales $210,000 $250,000
Cost of goods sold
Beginning inventory 32,000 44,000
Cost of goods purchased 173,000 202,000
Cost of goods available for sale 205,000 246,000
Ending inventory 44,000 52,000
Cost of goods sold 161,000 194,000
Gross profit $ 49,000 $ 56,000
Staley uses a periodic inventory system. The inventories at January 1, 2008, and December 31, 2009, are correct. However, the ending inventory at December 31, 2008, was overstated $5,000.
Instructions
(a) Prepare correct income statement data for the 2 years.
(b) What is the cumulative effect of the inventory error on total gross profit for the 2 years?
(c) Explain in a letter to the president of Staley Company what has happened—i.e., the nature of the error and its effect on the financial statements.
Click here for the solution: Staley Watch Company reported the following income statement data for a 2-year period
2008 2009
Sales $210,000 $250,000
Cost of goods sold
Beginning inventory 32,000 44,000
Cost of goods purchased 173,000 202,000
Cost of goods available for sale 205,000 246,000
Ending inventory 44,000 52,000
Cost of goods sold 161,000 194,000
Gross profit $ 49,000 $ 56,000
Staley uses a periodic inventory system. The inventories at January 1, 2008, and December 31, 2009, are correct. However, the ending inventory at December 31, 2008, was overstated $5,000.
Instructions
(a) Prepare correct income statement data for the 2 years.
(b) What is the cumulative effect of the inventory error on total gross profit for the 2 years?
(c) Explain in a letter to the president of Staley Company what has happened—i.e., the nature of the error and its effect on the financial statements.
Click here for the solution: Staley Watch Company reported the following income statement data for a 2-year period
Friday, August 21, 2015
Garza Co. had the following transactions during the current period
E12-2 Garza Co. had the following transactions during the current period.
Mar. 2 Issued 5,000 shares of $1 par value common stock to attorneys in payment of a bill for $30,000 for services provided in helping the company to incorporate.
June 12 Issued 60,000 shares of $1 par value common stock for cash of $375,000.
July 11 Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.
Nov. 28 Purchased 2,000 shares of treasury stock for $80,000.
Instructions
Journalize the transactions.
Click here for the solution: Garza Co. had the following transactions during the current period
Mar. 2 Issued 5,000 shares of $1 par value common stock to attorneys in payment of a bill for $30,000 for services provided in helping the company to incorporate.
June 12 Issued 60,000 shares of $1 par value common stock for cash of $375,000.
July 11 Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.
Nov. 28 Purchased 2,000 shares of treasury stock for $80,000.
Instructions
Journalize the transactions.
Click here for the solution: Garza Co. had the following transactions during the current period
Thursday, August 13, 2015
Elysian Fields, Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusive projects
Elysian Fields, Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusive projects. Project Hydrogen requires an initial outlay of $25,000; project Helium requires an initial outlay of $35,000. Using the expected cash inflows given for each project in the following table, calculate each project's payback period. Which project meets Elysian's standards?
Expected cash inflows
Year Hydrogen Helium
1 $6000 $7000
2 6,000 7,000
3 8,000 8,000
4 4,000 5,000
5 3,500 5,000
6 2,000 4,000
Click here for the solution: Elysian Fields, Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusive projects
Expected cash inflows
Year Hydrogen Helium
1 $6000 $7000
2 6,000 7,000
3 8,000 8,000
4 4,000 5,000
5 3,500 5,000
6 2,000 4,000
Click here for the solution: Elysian Fields, Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusive projects
Sunday, July 26, 2015
R&J Associates leased certain commercial real estate from T&C Associates, Inc., for a one-year period beginning May 1
R&J Associates leased certain commercial real estate from T&C
Associates, Inc., for a one-year period beginning May 1. The lease
required that T&C give R&J 10 days’ notice before canceling the
lease. R&J operated the leased premises as a bar that featured
seminude dancers but discontinued the business during the following
March when it lost a necessary dance permit. In late March and early
April, T&C noticed that the bar was not open and learned that
R&J had lost its permit. R&J was behind on its rent at this
time. Utility companies were seeking to shut off service to the premises
because R&J was also behind on its utility bills. When T&C
informed R&J that its monthly rent would be higher if it renewed the
lease, R&J said it had no interest in renewing. For the above
reasons, T&C took possession of the premises in April. T&C,
however, did not give R&J the 10 days’ notice referred to in the
lease. T&C leased the premises to a new tenant later that month. At
approximately the same time, R&J demanded the return of certain
personal property items it had left on the premises. T&C told
R&J to contact the new tenant, adding that there should be no
problem with the return of the items of personal property. R&J
contacted the new tenant, who told R&J to submit a list of its
personal property because other parties were also claiming rights to
what had been left on the premises. R&J did not submit this list and
did not contact T&C again about the personal property items. Later,
R&J sued T&C for conversion of the personal property. Did
R&J have a valid conversion claim?
Click here for the solution: R&J Associates leased certain commercial real estate from T&C Associates, Inc., for a one-year period beginning May 1
Click here for the solution: R&J Associates leased certain commercial real estate from T&C Associates, Inc., for a one-year period beginning May 1
Sunday, July 19, 2015
Forrester Fashions has annual credit sales of 250,000 units with an average collection period of 70 days
E15–4 Forrester Fashions has annual credit sales of 250,000 units with an average collection period of 70 days. The company has a per-unit variable cost of $20 and a perunit sale price of $30. Bad debts currently are 5% of sales. The firm estimates that a proposed relaxation of credit standards would not affect its 70-day average collection period but would increase bad debts to 7.5% of sales, which would increase to 300,000 units per year. Forrester requires a 12% return on investments. Show all necessary calculations required to evaluate Forrester’s proposed relaxation of credit standards.
Click here for the solution: Forrester Fashions has annual credit sales of 250,000 units with an average collection period of 70 days
Click here for the solution: Forrester Fashions has annual credit sales of 250,000 units with an average collection period of 70 days
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