The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just completed year

The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just completed year.

Sales 1,200
Raw materials inventory, beginning 25
Raw materials inventory, ending 50
Purchases of raw materials 180
Direct labor 230
Manufacturing overhead 250
Administrative expenses 400
Selling expenses 200
Work in process inventory, beginning 150
Work in process inventory, ending 120
Finished goods inventory, beginning 100
Finished goods inventory, ending 110

Use the above data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for the year. In addition, what is the impact on the financial statements if the ending finished goods inventory is overstated or understated?


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Following are selected financial data in thousands of dollars for the Hunter Corporation

Following are selected financial data in thousands of dollars for the Hunter Corporation.

2012 2011
Current assets $ 500 $400
Fixed assets, net 700 600
Total assets 1,200 1,000
Current liabilities 300 200
Long-term debt 200 200
Common equity 700 600
Total liabilities and equity $1,200 $1,000
Net sales $1,500 $1,200
Total expenses 1,390 1,100
Net income 110 100

a. Calculate Hunter’s rate of return on total assets in 2012 and in 2011. Did the ratio improve or worsen?
b. Diagram the expanded Du Pont system for Hunter for 2012. Insert the appropriate dollar amounts wherever possible.
c. Use the Du Port system to calculate the return on assets for the two years, and determine why they changed.

Click here for the solution: Following are selected financial data in thousands of dollars for the Hunter Corporation