Metro Video Inc. is developing its annual financial statements at December 31, 2011

Metro Video Inc. is developing its annual financial statements at December 31, 2011. The statements are complete except for the statement of cash flows. The completed comparative sheets and income statement are summarized:
2011 2010
Balance sheet at December 31
Cash $68,250 $65,500
Accounts receivable 15,250 22,250
Merchandise inventory 22,250 18,000
Property and equipment 209,250 150,000
Less: Accumulated depreciation (59,000) (45,750)
Accounts payable $9,000 $19,000
Wages payable 4,000 1,200
Note payable, long-term 59,500 71,000
Contributed capital 98,500 65,900
Retained earnings 85,000 52,900
$256,000 $210,000

Income statement for 2011
Sales $195,00
Cost of goods sold 92,000
Depreciation expense 13,250
Other expenses 43,000
Net income $46,750
Additional Data:
a. Bought equipment for cash, $59,250
b. Paid $11,500 on the long-term note payable.
c. Issued new shares of stock for $32,600 cash.
d. Dividends of $14,650 were declared and paid.
e. Other expenses all relate to wages. f. Accounts payable includes only inventory purchases made on credit.
Required:
1. Prepare the statement of cash flows using the indirect method for the year ended December 31, 2011.
2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by Metro Video during 2011. 

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Problem 3-1A (P3-1A) Kasten Company manufactures bowling balls through two processes: Molding and Packaging

Problem 3-1A (P3-1A) Kasten Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2008 are presented below.

Production Data June
Beginning work in process units –0–
Units started into production 20,000
Ending work in process units 2,000
Percent complete—ending inventory 60%
Cost Data
Materials $198,000
Labor 50,400
Overhead 112,800
Total $361,200

Hint:
Complete four steps necessary to prepare a production cost report.

Instructions
(a) Prepare a schedule showing physical units of production.
(b) Determine the equivalent units of production for materials and conversion costs.
(c) Compute the unit costs of production.
(d) Determine the costs to be assigned to the units transferred and in process for June.
(e) Prepare a production cost report for the Molding Department for the month of June.

Check:
(c) Materials $9.90; CC $8.50
(d) Transferred out $331,200; WIP $30,000
 

Click here for the solution: Problem 3-1A (P3-1A) Kasten Company manufactures bowling balls through two processes: Molding and Packaging

Problem 3-3A (P3-3A) Fiedel Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging

Problem 3-3A (P3-3A) Fiedel Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging. All materials are entered at the beginning of each process. On October 1, 2008, inventories consisted of Raw Materials $26,000, Work in Process—Mixing $0, Work in Process—Packaging $250,000, and Finished Goods $289,000. The beginning inventory for Packaging consisted of 10,000 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 50,000 units were started into production in the Mixing Department and the following transactions were completed.

1. Purchased $300,000 of raw materials on account.
2. Issued raw materials for production: Mixing $210,000 and Packaging $45,000.
3. Incurred labor costs of $248,900.
4. Used factory labor: Mixing $182,500 and Packaging $66,400.
5. Incurred $790,000 of manufacturing overhead on account.
6. Applied manufacturing overhead on the basis of $22 per machine hour. Machine hours were 28,000 in Mixing and 6,000 in Packaging.
7. Transferred 45,000 units from Mixing to Packaging at a cost of $979,000.
8. Transferred 53,000 units from Packaging to Finished Goods at a cost of $1,315,000.
9. Sold goods costing $1,604,000 for $2,500,000 on account.

Hint:
Journalize transactions.

Instructions
Journalize the October transactions.

Click here for the solution: Problem 3-3A (P3-3A) Fiedel Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging

CA1-12 (Accounting Pronouncements) Standard setting bodies have issued a number of authoritative pronouncements

ACC 421 CA1-12 (Accounting Pronouncements) Standard setting bodies have issued a number of authoritative pronouncements. A list is provided on the left, below, with a description of these pronouncements on the right.
Instructions
Match the description to the pronouncements.

1. _____ Staff Positions
2. _____ Interpretations (of the Financial Accounting Standards Board)
3. _____ Statement of Financial Accounting Standards
4. _____ EITF Statements
5. _____ Opinions
6. _____ Statement of Financial Accounting Concepts

(a) Official pronouncements of the APB.
(b) Sets forth fundamental objectives and concepts that will be used in developing future standards.
(c) Primary document of the FASB that establishes GAAP.
(d) Provides additional guidance on implementing or applying FASB Standards or Interpretations.
(e) Provides guidance on how to account for new and unusual financial transactions that have the potential for creating diversity in financial reporting practices.
(f) Represent extensions or modifications of existing standards

Click here for the solution: CA1-12 (Accounting Pronouncements) Standard setting bodies have issued a number of authoritative pronouncements

(Preparation of a Corrected Balance Sheet) Uhura Company has decided to expand its operations

ACC 421  Week Four (Week 4)

Exercise 5-5 (E5-5) (Preparation of a Corrected Balance Sheet) Uhura Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.

AND SO ON

Instructions
Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $160,000 and for the office equipment, $105,000. The allowance for doubtful accounts has a balance of $17,000. The pension obligation is considered a long-term liability.

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Jarmon Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail, Inc

 Problem 12-16 Cost Allocation in a Service Industry

Jarmon Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail, Inc. Never-Fail is a multimillion dollar company started by Peter Never immediately after he failed to finish his first accounting course. The company's motto is "We Never-Fail to Deliver Your Package on Time" When Never-Fail has more freight than it can deliver, it pays Jarmon to carry the excess. Jarmon contracts with independent pilots to fly its planes on a per-trip basis. Jarmon recently purchased an airplane that cost the company $24,000,000. The plane has an estimated useful life of 100,000,000 miles and a zero salvage value. During the first week in January, Jarmon flew two trips. The first trip was a round trip flight from Chicago to San Francisco, for which Jarmon paid $500 for the pilot and $350 for the fuel. The second flight was a round trip from Chicago to New York. For this trip, it paid $300 for the pilot and $150 for fuel. The round trip between Chicago and San Francisco is approximately 4,400 miles and the round trip between Chicago and New York is 1,600 miles.

Required.
a. Identify the direct and indirect costs that Jarmon incurs for each trip.
b. Determine the total cost of each trip.
c. In addition to depreciation, identify three other indirect costs that may need to be allocated to determine the cost of each trip.

Check:
b. To NY: $834

Click here for the solution: Jarmon Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail, Inc

ADK Delivery is a small company that transports business packages between San Francisco and Los Angeles

Problem 16-16 Using Present Value Techniques to Evaluate Alternative Investment Opportunities

ADK Delivery is a small company that transports business packages between San Francisco and Los Angeles. It operates a fleet of small vans that move packages to and from a central depot within each city and uses a common carrier to deliver the packages between the depots in the two cities. ADK delivery recently acquired approximately $3 million of cash capital from its owners, and its president, Frank Hobb, is trying to identify the most profitable way to invest these funds.

AND SO ON

Check:
a. NPV of the vans investment: $75,608.57
b. NPV index of the trucks investment: 1.126

Click here for the solution: ADK Delivery is a small company that transports business packages between San Francisco and Los Angeles