P6-5A You are provided with the following information for Pavey Inc. for the month ended October 31, 2008. Pavey uses a periodic method for inventory.
Date Description Units Unit Cost or Selling Price
October 1 Beginning inventory 60 $25
October 9 Purchase 120 26
October 11 Sale 100 35
October 17 Purchase 70 27
October 22 Sale 60 40
October 25 Purchase 80 28
October 29 Sale 110 40
Instructions
(a) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, and (iv) gross profit rate under each of the following methods.
(b) Compare results for the three cost flow assumptions. What cost flow results in the lowest inventory value. What cost flow results in the lowest cost of goods sold. What cost flow results in the lowest gross profit. What cost flow results in the lowest gross profit rate.
Click here for the solution: You are provided with the following information for Pavey Inc. for the month ended October 31, 2008
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Showing posts with label provided. Show all posts
Sunday, September 27, 2015
Friday, September 18, 2015
Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services
Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services.
Cash………………………………….$21,500
Accounts Receivable………. 17,500
Office Supplies……………… … 500
Equipment…………………… …….15,000
Accounts Payable…………… . 9,750
Rya Page, Capital……………....28,200
Rya Page, Drawing……………… 5,000
Planning Fees Income……… …26,250
Office Supplies Expense……….. 200
Rent Expense……………………… … 800
Salaries Expense……………… …. 3,000
Utilities Expense……………… ….. 700
Click here for the solution: Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services
Cash………………………………….$21,500
Accounts Receivable………. 17,500
Office Supplies……………… … 500
Equipment…………………… …….15,000
Accounts Payable…………… . 9,750
Rya Page, Capital……………....28,200
Rya Page, Drawing……………… 5,000
Planning Fees Income……… …26,250
Office Supplies Expense……….. 200
Rent Expense……………………… … 800
Salaries Expense……………… …. 3,000
Utilities Expense……………… ….. 700
Click here for the solution: Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services
Friday, September 11, 2015
Explain why each of the following phrases or clauses is used rather than the alternative provided
Auditing P 3-26 A careful reading of an unqualified report indicates several important phrases.
Explain why each of the following phrases or clauses is used rather than the alternative provided:
a. "The financial statements referred to above present fairly in all material respects the financial position" rather than "The financial statements mentioned above are correctly stated."
b. "In conformity with accounting principles generally accepted in the United States of America" rather than "are properly stated to represent the true economic conditions."
c. "In our opinion, the financial statements present fairly" rather than "The financial statements present fairly."
d. "Brown & Phillips, CPAs (firm name)," rather than "James E. Brown, CPA (individual partner's name)."
e. "We conducted our audit in accordance with auditing standards generally accepted in the United States of America" rather than "Our audit was performed to detect material misstatements in the financial statements."
Click here for the solution: Explain why each of the following phrases or clauses is used rather than the alternative provided
Explain why each of the following phrases or clauses is used rather than the alternative provided:
a. "The financial statements referred to above present fairly in all material respects the financial position" rather than "The financial statements mentioned above are correctly stated."
b. "In conformity with accounting principles generally accepted in the United States of America" rather than "are properly stated to represent the true economic conditions."
c. "In our opinion, the financial statements present fairly" rather than "The financial statements present fairly."
d. "Brown & Phillips, CPAs (firm name)," rather than "James E. Brown, CPA (individual partner's name)."
e. "We conducted our audit in accordance with auditing standards generally accepted in the United States of America" rather than "Our audit was performed to detect material misstatements in the financial statements."
Click here for the solution: Explain why each of the following phrases or clauses is used rather than the alternative provided
Thursday, September 10, 2015
Jimmy Carter Company has provided information on intangible assets as follows
Jimmy Carter Company has provided information on intangible assets as follows
A patent was purchased from Gerald Ford Company for $2,000,000 on January 1, 2006. Carter estimated the remaining useful life of the patent to be 10 years. The patent was carried in Ford's accounting records at a net book value of $2,000,000 when Ford sold it to Carter.
During 2007, a franchise was purchased from Ronald Reagan Company for $480,000. In addition, 5% of revenue from the franchise must be paid to Reagan. Revenue from the franchise for 2007 was $2,500,000.
Carter estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase.
Carter incurred research and development costs in 2007 as follows:
Materials and Equipment 142,000
Personnel 189,000
Indirect Costs 102,000
Carter estimates that these new costs will be recouped by December 31, 2010. The materials and equipment purchased have no alternative uses.
On January 1, 2007, because of recent events in the field, Carter estimates that the remaining life of the patent purchased on January 1, 2006, is only 5 years from January 1, 2007.
Instructions:
(a) Prepare a schedule showing the intangibles section of Carter's balance sheet at December 31, 2007. Show supporting computations in good form.
(b) Prepare a schedule showing the income statement effect for the year ended December 31, 2007, as a result of the facts above. Show supporting computations in good form.
Click here for the solution: Jimmy Carter Company has provided information on intangible assets as follows
A patent was purchased from Gerald Ford Company for $2,000,000 on January 1, 2006. Carter estimated the remaining useful life of the patent to be 10 years. The patent was carried in Ford's accounting records at a net book value of $2,000,000 when Ford sold it to Carter.
During 2007, a franchise was purchased from Ronald Reagan Company for $480,000. In addition, 5% of revenue from the franchise must be paid to Reagan. Revenue from the franchise for 2007 was $2,500,000.
Carter estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase.
Carter incurred research and development costs in 2007 as follows:
Materials and Equipment 142,000
Personnel 189,000
Indirect Costs 102,000
Carter estimates that these new costs will be recouped by December 31, 2010. The materials and equipment purchased have no alternative uses.
On January 1, 2007, because of recent events in the field, Carter estimates that the remaining life of the patent purchased on January 1, 2006, is only 5 years from January 1, 2007.
Instructions:
(a) Prepare a schedule showing the intangibles section of Carter's balance sheet at December 31, 2007. Show supporting computations in good form.
(b) Prepare a schedule showing the income statement effect for the year ended December 31, 2007, as a result of the facts above. Show supporting computations in good form.
Click here for the solution: Jimmy Carter Company has provided information on intangible assets as follows
Wednesday, September 9, 2015
You are provided with the following information for Kiley Enterprises, effective as of its April 30, 2010, year-end
P2-3A You are provided with the following information for Kiley Enterprises, effective as of its April 30, 2010, year-end.
Accounts payable $834
Accounts receivable 810
Building, net of accumulated depreciation 1,537
Cash 1,270
Common stock 900
Cost of goods sold 990
Current portion of long-term debt 450
Depreciation expense 335
Dividends paid during the year 325
Equipment, net of accumulated depreciation 1,220
Income tax expense 165
Income taxes payable 135
Interest expense 400
Inventories 967
Land 2,100
Long-term debt 3,500
Prepaid expenses 12
Retained earnings, beginning 1,600
Revenues 4,600
Selling expenses 210
Short-term investments 1,200
Wages expense 700
Wages payable 222
(a) Complete income statement and a retained earnings statement for Kiley Enterprises for the year ended April 30, 2010.
(b) Complete the classified balance sheet for Kiley Enterprises as of April 30, 2010.
Click here for the solution: You are provided with the following information for Kiley Enterprises, effective as of its April 30, 2010, year-end
Accounts payable $834
Accounts receivable 810
Building, net of accumulated depreciation 1,537
Cash 1,270
Common stock 900
Cost of goods sold 990
Current portion of long-term debt 450
Depreciation expense 335
Dividends paid during the year 325
Equipment, net of accumulated depreciation 1,220
Income tax expense 165
Income taxes payable 135
Interest expense 400
Inventories 967
Land 2,100
Long-term debt 3,500
Prepaid expenses 12
Retained earnings, beginning 1,600
Revenues 4,600
Selling expenses 210
Short-term investments 1,200
Wages expense 700
Wages payable 222
(a) Complete income statement and a retained earnings statement for Kiley Enterprises for the year ended April 30, 2010.
(b) Complete the classified balance sheet for Kiley Enterprises as of April 30, 2010.
Click here for the solution: You are provided with the following information for Kiley Enterprises, effective as of its April 30, 2010, year-end
Thursday, August 13, 2015
You are provided with the following transactions that took place during a recent fiscal year
P12-1A You are provided with the following transactions that took place during a recent fiscal year.
Transaction Where Reported on Statement Cash Inflow, Outflow, or No Effect?
a. Recorded depreciation expense on the plant assets.
b. Recorded and paid interest expense.
c. Recorded cash proceeds from a sale of plant assets.
d. Acquired land by issuing common stock.
e. Paid a cash dividend to preferred stockholders.
f. Distributed a stock dividend to common stockholders.
g. Recorded cash sales.
h. Recorded sales on account.
i. Purchased inventory for cash.
j. Purchased inventory on account.
Distinguish among operating, investing, and financing activities.
Instructions
Complete the table, indicating whether each item (1) should be reported as an operating (O) activity, investing (I) activity, financing (F) activity, or as a noncash (NC) transaction reported in a separate schedule, and (2) represents a cash inflow or cash outflow or has no cash flow effect. Assume use of the indirect approach.
Click here for the solution: You are provided with the following transactions that took place during a recent fiscal year
Transaction Where Reported on Statement Cash Inflow, Outflow, or No Effect?
a. Recorded depreciation expense on the plant assets.
b. Recorded and paid interest expense.
c. Recorded cash proceeds from a sale of plant assets.
d. Acquired land by issuing common stock.
e. Paid a cash dividend to preferred stockholders.
f. Distributed a stock dividend to common stockholders.
g. Recorded cash sales.
h. Recorded sales on account.
i. Purchased inventory for cash.
j. Purchased inventory on account.
Distinguish among operating, investing, and financing activities.
Instructions
Complete the table, indicating whether each item (1) should be reported as an operating (O) activity, investing (I) activity, financing (F) activity, or as a noncash (NC) transaction reported in a separate schedule, and (2) represents a cash inflow or cash outflow or has no cash flow effect. Assume use of the indirect approach.
Click here for the solution: You are provided with the following transactions that took place during a recent fiscal year
Tuesday, August 4, 2015
You are provided with the following transactions that took place during the year
P12-12A You are provided with the following transactions that took place during the year.
Transactions Free Cash Flow ($125,000) Current Cash Debt Coverage Ratio (0.5 times) Cash Debt Coverage Ratio (0.3 times)
a. Recorded credit sales $2,500.
b. Collected $1,900 owed by customers.
c. Paid amount owed to suppliers $2,750.
d. Recorded sales returns of $500 and credited the customer’s account.
e. Purchased new equipment $5,000; signed a long-term note payable for the cost of the equipment.
f. Purchased a patent and paid $65,000 cash for the asset.
Instructions
For each transaction listed above, indicate whether it will increase (I), decrease (D), or have no effect (NE) on the ratios.
Click here for the solution: You are provided with the following transactions that took place during the year
Transactions Free Cash Flow ($125,000) Current Cash Debt Coverage Ratio (0.5 times) Cash Debt Coverage Ratio (0.3 times)
a. Recorded credit sales $2,500.
b. Collected $1,900 owed by customers.
c. Paid amount owed to suppliers $2,750.
d. Recorded sales returns of $500 and credited the customer’s account.
e. Purchased new equipment $5,000; signed a long-term note payable for the cost of the equipment.
f. Purchased a patent and paid $65,000 cash for the asset.
Instructions
For each transaction listed above, indicate whether it will increase (I), decrease (D), or have no effect (NE) on the ratios.
Click here for the solution: You are provided with the following transactions that took place during the year
Friday, July 3, 2015
Hunsicker Corporation has provided the following data for the month of January
Hunsicker Corporation has provided the following data for the month of January:
Inventories Beginning Ending
Raw materials $30,000 $33,000
Work In process $20,000 $18,000
Finished goods $52,000 $60,000
Additional Information
Raw material purchases $63,000
Direct labor costs $92,000
Manufacturing overhead cost incurred $75,000
Indirect materials included in manufacturing overhead costs incurred $6,000
Manufacturing overhead cost applied to work in process $69,000
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.
Click here for the solution: Hunsicker Corporation has provided the following data for the month of January
Inventories Beginning Ending
Raw materials $30,000 $33,000
Work In process $20,000 $18,000
Finished goods $52,000 $60,000
Additional Information
Raw material purchases $63,000
Direct labor costs $92,000
Manufacturing overhead cost incurred $75,000
Indirect materials included in manufacturing overhead costs incurred $6,000
Manufacturing overhead cost applied to work in process $69,000
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.
Click here for the solution: Hunsicker Corporation has provided the following data for the month of January
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