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PLEASE use the SEARCH BOX provided below to locate your specific tutorial (s).</b>Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.comBlogger1303125tag:blogger.com,1999:blog-9129554029764779348.post-26013395798303226672013-09-11T10:23:00.002-07:002013-09-11T10:23:45.803-07:00Dousmann Company 840000<b>Price: $1.99 </b><br />
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<br />
For Dousmann Company actual sales are $1,200,000 and break-even sales<br />
are $840,000. Compute (a) the margin of safety in dollars and (b) the margin of safety<br />
ratio.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-4220509703027035372013-09-10T12:46:00.003-07:002013-09-10T12:49:26.392-07:00Mendocino Corporation 300000<b>Price: $2.50 </b><br />
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<br />
Mendocino Corporation produces two grades of wine from grapes that it buys<br />
from California growers. It produces and sells roughly 3,000,000 liters per year of a low cost,<br />
high-volume product called CoolDay. It sells this in 600,000 5-liter jugs. Mendocino<br />
also produces and sells roughly 300,000 liters per year of a low-volume, high-cost product<br />
called LiteMist. LiteMist is sold in 1-liter bottles. Based on recent data, the CoolDay<br />
product has not been as profitable as LiteMist. Management is considering dropping<br />
the inexpensive CoolDay line so it can focus more attention on the LiteMist product.<br />
The LiteMist product already demands considerably more attention than the CoolDay<br />
line.<br />
<br />
<a name='more'></a><table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 347px;">
<!--StartFragment-->
<colgroup><col span="2" style="width: 76pt;" width="76"></col>
<col style="mso-width-alt: 4205; mso-width-source: userset; width: 115pt;" width="115"></col>
<col style="mso-width-alt: 2925; mso-width-source: userset; width: 80pt;" width="80"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl69" height="15" style="height: 15.0pt; width: 76pt;" width="76"></td>
<td class="xl67" style="width: 76pt;" width="76"></td>
<td class="xl66" style="width: 115pt;" width="115">Coolday</td>
<td class="xl66" style="width: 80pt;" width="80">LiteMist</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl68" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Direct
materials per liter </td>
<td class="xl71"> 0.40 </td>
<td class="xl71"> 1.20 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl68" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Direct
labor cost per liter </td>
<td class="xl71"> 0.25 </td>
<td class="xl71"> 0.50 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl68" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Direct
labor hours per liter </td>
<td class="xl71"> 0.05 </td>
<td class="xl71"> 0.09 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl68" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Total
direct labor hours </td>
<td class="xl70"> 120,000 </td>
<td class="xl70"> 25,000 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />
Tyler Silva, president and founder of Mendocino, is skeptical about this idea. He<br />
points out that for many decades the company produced only the CoolDay line, and that<br />
it was always quite profitable. It wasn’t until the company started producing the more<br />
complicated LiteMist wine that the profitability of CoolDay declined. Prior to the introduction<br />
of LiteMist, the company had simple equipment, simple growing and production<br />
procedures, and virtually no need for quality control. Because LiteMist is bottled in<br />
1-liter bottles, it requires considerably more time and effort, both to bottle and to label<br />
and box than does CoolDay. The company must bottle and handle 5 times as many bottles<br />
of LiteMist to sell the same quantity as CoolDay. CoolDay requires 1 month of aging;<br />
LiteMist requires 1 year. CoolDay requires cleaning and inspection of equipment every<br />
10,000 liters; LiteMist requires such maintenance every 600 liters.<br />
Tyler has asked the accounting department to prepare an analysis of the cost per liter<br />
using the traditional costing approach and using activity-based costing. The following information<br />
was collected.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-drmcmpU6HSk/Ui924yuo1NI/AAAAAAAABDQ/YvPxD-a5o90/s1600/Screen+Shot+2013-09-10+at+3.47.54+PM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-drmcmpU6HSk/Ui924yuo1NI/AAAAAAAABDQ/YvPxD-a5o90/s1600/Screen+Shot+2013-09-10+at+3.47.54+PM.png" /></a></div>
<br />
Instructions<br />
Answer each of the following questions. (Round all calculations to three decimal places.)<br />
(a) Under traditional product costing using direct labor hours, compute the total manufacturing<br />
cost per liter of both products.<br />
(b) Under ABC, prepare a schedule showing the computation of the activity-based<br />
overhead rates (per cost driver).<br />
(c) Prepare a schedule assigning each activity’s overhead cost pool to each product, based<br />
on the use of cost drivers. Include a computation of overhead cost per liter.<br />
(d) Compute the total manufacturing cost per liter for both products under ABC.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com1tag:blogger.com,1999:blog-9129554029764779348.post-29883554026933660442013-04-01T08:57:00.000-07:002013-09-09T20:54:39.363-07:00Skaros Stairs Co. of Moore 89600<b>Price: $2.50 </b><br />
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<br />
Skaros Stairs Co. of Moore designs and builds factory-made premium wooden<br />
stairways for homes. The manufactured stairway components (spindles, risers, hangers,<br />
hand rails) permit installation of stairways of varying lengths and widths. All are of white<br />
oak wood. Budgeted manufacturing overhead costs for the year 2011 are as follows.<br />
<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 360px;">
<!--StartFragment-->
<colgroup><col style="mso-width-alt: 2633; mso-width-source: userset; width: 72pt;" width="72"></col>
<col span="2" style="width: 71pt;" width="71"></col>
<col style="mso-width-alt: 2742; mso-width-source: userset; width: 75pt;" width="75"></col>
<col style="width: 71pt;" width="71"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt; width: 72pt;" width="72">Purchasing </td>
<td class="xl65" style="width: 71pt;" width="71"></td>
<td class="xl65" style="width: 71pt;" width="71"></td>
<td class="xl65" style="width: 75pt;" width="75"></td>
<td align="right" class="xl69" style="width: 71pt;" width="71"> 57,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Handling
materials </td>
<td class="xl65"></td>
<td class="xl65"></td>
<td align="right" class="xl69"> 82,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" colspan="3" height="15" style="height: 15.0pt; mso-ignore: colspan;">Production
(cutting, milling, finishing) </td>
<td class="xl65"></td>
<td align="right" class="xl69"> 210,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Setting
up machines </td>
<td class="xl65"></td>
<td class="xl65"></td>
<td align="right" class="xl69"> 85,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Inspecting </td>
<td class="xl65"></td>
<td class="xl65"></td>
<td class="xl65"></td>
<td align="right" class="xl69"> 90,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" colspan="4" height="15" style="height: 15.0pt; mso-ignore: colspan;">Inventory
control (raw materials and finished goods) </td>
<td align="right" class="xl69"> 126,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Utilities </td>
<td class="xl65"></td>
<td class="xl65"></td>
<td class="xl65"></td>
<td align="right" class="xl66"> 180,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" colspan="3" height="15" style="height: 15.0pt; mso-ignore: colspan;">Total
budgeted overhead costs </td>
<td class="xl65"></td>
<td align="right" class="xl68"> $830,000 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />For the last 4 years, Skaros Stairs Co. has been charging overhead to products on<br />
the basis of machine hours. For the year 2011, 100,000 machine hours are budgeted.<br />
Anthony Morse, owner-manager of Skaros Stairs Co., recently directed his accountant,<br />
Neal Seagren, to implement the activity-based costing system that he has repeatedly<br />
proposed. At Anthony Morse’s request, Neal and the production foreman identify the following<br />
cost drivers and their usage for the previously budgeted overhead cost pools.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-NjuC8OSZIiw/Ui6X41QSVfI/AAAAAAAABCo/oEzwBJCxoWk/s1600/Screen+Shot+2013-09-09+at+11.56.47+PM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-NjuC8OSZIiw/Ui6X41QSVfI/AAAAAAAABCo/oEzwBJCxoWk/s1600/Screen+Shot+2013-09-09+at+11.56.47+PM.png" /></a></div>
<br />
David Hannon, sales manager, has received an order for 280 stairways from Community<br />
Builders, Inc., a large housing development contractor. At David’s request, Neal<br />
prepares cost estimates for producing components for 280 stairways so David can submit<br />
a contract price per stairway to Community Builders. He accumulates the following data<br />
for the production of 280 stairways.<br />
<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 289px;">
<!--StartFragment-->
<colgroup><col style="mso-width-alt: 2633; mso-width-source: userset; width: 72pt;" width="72"></col>
<col span="2" style="width: 71pt;" width="71"></col>
<col style="mso-width-alt: 2742; mso-width-source: userset; width: 75pt;" width="75"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan; width: 143pt;" width="143">Direct materials </td>
<td class="xl65" style="width: 71pt;" width="71"></td>
<td align="right" class="xl67" style="width: 75pt;" width="75"> 103,600 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" height="15" style="height: 15.0pt;">Direct labor </td>
<td class="xl65"></td>
<td class="xl65"></td>
<td align="right" class="xl67"> 112,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Machine
hours </td>
<td class="xl65"></td>
<td align="right" class="xl67"> 14,500 </td>
</tr>
<tr height="15" style="height: 15.0pt; page-break-before: always;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Direct
labor hours </td>
<td class="xl65"></td>
<td align="right" class="xl67"> 5,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Number
of purchase orders </td>
<td class="xl65"></td>
<td align="right" class="xl67"> 60 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Number
of material moves </td>
<td class="xl65"></td>
<td align="right" class="xl67"> 800 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Number
of machine setups </td>
<td class="xl65"></td>
<td align="right" class="xl67"> 100 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Number
of inspections </td>
<td class="xl65"></td>
<td align="right" class="xl67"> 450 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Number
of components </td>
<td class="xl65"></td>
<td align="right" class="xl67"> 16,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="3" height="15" style="height: 15.0pt; mso-ignore: colspan;">Number
of square feet occupied </td>
<td align="right" class="xl67"> 8,000 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />Instructions<br />
(a) Compute the predetermined overhead rate using traditional costing with machine<br />
hours as the basis.<br />
(b) What is the manufacturing cost per stairway under traditional costing? (Round to<br />
the nearest cent.)<br />
(c) What is the manufacturing cost per stairway under the proposed activity-based costing?<br />
(Round to the nearest cent. Prepare all of the necessary schedules.)<br />
(d) Which of the two costing systems is preferable in pricing decisions and why?Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-39569219703907671462013-04-01T07:15:00.005-07:002013-04-13T11:39:42.364-07:00ACC206 Week 3 Ch 4 and 5<b>Price: $18.99 </b><br />
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<br />
Chapter 4 and 5 Problems<br />
<br />
Please complete the following 7 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.<br />
<br />
<b>Chapter 4 Exercise 3</b><br />
3. Cost flows and overhead application <br />
Cleveland Metals uses a job cost system and applies factory overhead to production at a predetermined rate of 180% of direct labor cost. Data pertaining to recent operations follow. <br />
• Job no. 636 was the only job in process on January 1 of the current year. The Work in Process account contained a $24,600 balance on this date. <br />
• Jobs no. 637, 638, and 639 were started during January. <br />
• Total direct material requisitions and direct labor incurred during January amounted to $89,200 and $114,500, respectively.<br />
• The only job that remained in process on January 31 was job no. 638, with costs of $15,000 for direct materials and $20,000 for direct labor. <br />
<br />
<br />
<a name='more'></a>a. Compute the total cost of the work in process inventory on January 31. <br />
b. Compute the cost of jobs completed during January, and present the proper journal entry to reflect job completion. <br />
<br />
<b>Chapter 4 Exercise 7</b><br />
<br />
7. Overhead application: Working backward <br />
The Towson Manufacturing Corporation applies overhead on the basis of machine hours. The following divisional information is presented for your review:<br />
Division A Division B<br />
Actual machine hours 22,500 ? <br />
Estimated machine hours 20,000 ? <br />
Overhead application rate $4.50 $5.00 <br />
Actual overhead $110,000 ? <br />
Estimated overhead ? $90,000 <br />
Applied overhead ? $86,000 <br />
Over- (under-) applied overhead ? $6,500 <br />
FIND THE UNKNOWNS FOR EACH OF THE DIVISIONS.<br />
<br />
<b>Chapter 4 Problem 2</b><br />
<b><br />
</b> 2. Computations using a job order system <br />
General Corporation employs a job order cost system. On May 1 the following balances were extracted from the general ledger;<br />
<br />
Work in process $ 35,200 <br />
Finished goods 86,900 <br />
Cost of goods sold 128,700 <br />
<br />
Work in Process consisted of two jobs, no. 101 ($20,400) and no. 103 ($14,800). During May, direct materials requisitioned from the storeroom amounted to $96,500, and direct labor incurred totaled $114,500. These figures are subdivided as follows:<br />
<br />
Direct Materials Direct Labor<br />
Job No. Amount Job No. Amount<br />
101 $5,000 101 $7,800 <br />
115 19,500 103 20,800<br />
116 36,200 115 42,000<br />
Other 35,800 116 18,000<br />
$96,500 Other 25,900<br />
$114,500 <br />
<br />
Job no. 115 was the only job in process at the end of the month. Job no. 101 and three "other" jobs were sold during May at a profit of 20% of cost. The "other" jobs contained material and labor charges of $21,000 and $17,400, respectively. <br />
<br />
General applies overhead daily at the rate of 150% of direct labor cost as labor summaries are posted to job orders. The firm's fiscal year ends on May 31.<br />
<br />
Instructions:<br />
a. Compute the total overhead applied to production during May. <br />
b. Compute the cost of the ending work in process inventory. <br />
c. Compute the cost of jobs completed during May. <br />
d. Compute the cost of goods sold for the year ended May 31. <br />
<br />
<b>Chapter 5 Exercise 1</b><br />
1. High-low method<br />
The following cost data pertain to 20X6 operations of Heritage Products: <br />
Quarter 1 Quarter 2 Quarter 3 Quarter 4 <br />
Shipping costs $58,200 $58,620 $60,125 $59,400 <br />
Orders shipped 120 140 175 150<br />
<br />
The company uses the high-low method to analyze costs. <br />
a. Determine the variable cost per order shipped. <br />
b. Determine the fixed shipping costs per quarter. <br />
c. If present cost behavior patterns continue, determine total shipping costs for 20X7 if activity amounts to 570 orders. <br />
<br />
<b>Chapter 5 Exercise 2</b><br />
The treasurer anticipates the following costs for the event, which will be held at the Regency Hotel: <br />
Room rental $300 <br />
Dinner cost (per person) 25 <br />
Chartered buses 500 <br />
Favors and souvenirs (per person) 5 <br />
Band 900 <br />
<br />
Each person would pay $40 to attend; 200 attendees are expected.<br />
a. Will the event be profitable for the sorority? Show computations.<br />
b. How many people must attend for the sorority to break even?<br />
c. Suppose the sorority encouraged its members to drive to the hotel and did not charter the buses. Further, a planned menu change will reduce the cost per meal by $2. If each member will still be charged $40, compute the contribution margin per person.<br />
<br />
<b>Chapter 5 Exercise 3</b><br />
3. Break-even and other CVP relationships <br />
Cedars Hospital has average revenue of $180 per patient day. Variable costs are $45 per patient day; fixed costs total $4,320,000 per year. <br />
a. How many patient days does the hospital need to break even? <br />
b. What level of revenue is needed to earn a target income of $540,000? <br />
c. If variable costs drop to $36 per patient day, what increase in fixed costs can be tolerated without changing the break-even point as determined in part (a)? <br />
<br />
<b>Chapter 5 Problem 6</b><br />
6. Direct and absorption costing <br />
The information that follows pertains to Consumer Products for the year ended December 31, 20X6. <br />
Inventory, 1/1/X6 24,000 units <br />
Units manufactured 80,000<br />
Units sold 82,000<br />
Inventory, 12/31/X6 ? units <br />
Manufacturing costs: <br />
Direct materials $3 per unit <br />
Direct labor $5 per unit <br />
Variable factory overhead $9 per unit <br />
Fixed factory overhead $280,000 <br />
Selling & administrative expenses: <br />
Variable $2 per unit <br />
Fixed $136,000 <br />
<br />
The unit selling price is $26. Assume that costs have been stable in recent years.<br />
<br />
Instructions:<br />
a. Compute the number of units in the ending inventory.<br />
b. Calculate the cost of a unit assuming use of:<br />
1. Direct costing.<br />
2. Absorption costing.<br />
c. Prepare an income statement for the year ended December 31, 20X6, by using direct costing.<br />
d. Prepare an income statement for the year ended December 31, 20X6, by using absorption costing.<br />
<br />
<br />
<br />
<br />Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-19156387109502412172013-04-01T07:15:00.002-07:002013-04-13T11:39:49.771-07:00The next dividend payment by ECY<b>Price: $7.99 </b><br />
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<br />
Chapter 9<br />
<br />
QUESTIONS AND PROBLEMS<br />
<br />
2. Stock Values – The next dividend payment by ECY, Inc., will be $3.20 per shares. The dividends are anticipated to maintain a growth rate of 6 percent, forever. If ECY stock currently sells for $63.50 per share, what is the required return?<br />
<br />
<br />
<a name='more'></a>3. Stock Values – For the company in the previous problem, what is the dividend yield? What is the expected capital gains yield?<br />
<br />
5. Stock Valuation – Siblings, Inc., is expected to maintain a constant 6.4 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 4.3 percent, what is the required return on the company’s stock?<br />
<br />
9. Growth Rate – The newspaper reported last week that Bennington Enterprises earned $34 million this year. The report also stated that the firm’s return on equity is 16 percent. Bennington retains 80 percent of its earning. What is the firm’s earnings growth rate? What will next year’s earnings be? Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-72971017837717987382013-04-01T07:14:00.005-07:002013-04-01T07:14:44.061-07:00Rhiannon Corporation<b>Price: $7.99 </b><br />
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<br />
Chapter 8<br />
<br />
QUESTIONS and PROBLEMS<br />
<br />
2. Valuing Bonds – Microhard has issued a bond with the following characteristics: <br />
Par: $1,000<br />
Time to Maturity: 15 years<br />
Coupon Rate: 7 percent<br />
Semiannual payments <br />
Calculate the price of this bond if the YTM is:<br />
a. 7 percent<br />
b. 9 percent<br />
c. 5 percent<br />
<br />
3. Bond Yields - Walters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 6.4 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM?<br />
<br />
4. Coupon Rates – Rhiannon Corporation has bonds on the market with 11.5 years to maturity, a YTM of 7.6 percent, and a current price of $1,060. The bonds make semiannual payments. What must the coupon rate be on these bonds? <br />
<br />
8. Inflation and Nominal Returns – Suppose the real rate is 2.4 percent and the inflation rate is 3.1 percent. What rate would you expect to see on a treasury bill?Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-42504146451318253572013-04-01T07:14:00.002-07:002013-04-13T11:40:01.518-07:00Ang Electronics, Inc<b>Price: $4.99 </b><br />
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<br />
QUESTIONS and PROBLEMS<br />
<br />
6. Decision Trees - Ang Electronics, Inc., has developed a new DVDR. If the DVDR is successful, the present value of the payoff (which the product is brought to market) is $34million. If the DVDR fails, the present value of the payoff is $12 million. If the product goes directly to market, there is a 50 percent chance of success. Alternatively, Ang can delay the launch by one year and spend $1.3 million to test market the DVDR. Test marketing would allow the firm to improve the product and increase the probability of success to 80 percent. The appropriate discount rate is 11 percent. Should the firm conduct test marketing? <br />
<br />
7. Decision Trees – The manager for a growing firm is considering the launch of a new product. If the product goes directly to market, there is a 50 percent chance of success. For $175,000 the manager can conduct a focus group that will increase the product’s chance of success to 65 percent. Alternatively, the manager has the option to pay a consulting firm $390,000 to research the market and refine the product. The consulting firm successfully launches new products 80 percent of the time. If the firm successfully launches the product, the payoff will be $1.9 million. If the product is a failure, the NPV is Zero. Which action will result in the highest expected payoff to the firm?Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-48559661614277934002013-02-11T18:16:00.004-08:002013-09-19T09:20:46.217-07:00E13-9 Cassandra Corporation’s<b>Price: $1.99</b><br />
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<br />
E13-9 Cassandra Corporation’s comparative balance sheets are presented below<br />
<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 361px;">
<!--StartFragment-->
<colgroup><col style="mso-width-alt: 8832; mso-width-source: userset; width: 207pt;" width="207"></col>
<col style="mso-width-alt: 682; mso-width-source: userset; width: 16pt;" width="16"></col>
<col span="2" style="mso-width-alt: 2944; mso-width-source: userset; width: 69pt;" width="69"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" colspan="4" height="15" style="height: 15pt; text-align: center; width: 361pt;" width="361">Cassandra
Corporation</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" colspan="4" height="15" style="height: 15pt; text-align: center; width: 361pt;" width="361">Comparative
Balance Sheets</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="4" height="15" style="height: 15pt; text-align: center; width: 361pt;" width="361">31-Dec</td>
</tr>
<tr height="16" style="height: 16.0pt;">
<td class="xl63" height="16" style="height: 16.0pt;"> </td>
<td></td>
<td class="xl67"><u>2014</u></td>
<td class="xl67"><u>2013</u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Cash </td>
<td></td>
<td class="xl68"> 17,000 </td>
<td class="xl68"> 17,700 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Accounts receivable </td>
<td></td>
<td class="xl68"> 25,200 </td>
<td class="xl68"> 22,300 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Investments </td>
<td></td>
<td class="xl68"> 20,000 </td>
<td class="xl68"> 16,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Equipment </td>
<td></td>
<td class="xl68"> 60,000 </td>
<td class="xl68"> 70,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Accumulated
depreciation-equipment </td>
<td></td>
<td class="xl68"> <u>(14,000)</u></td>
<td class="xl68"><u> (10,000)</u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;"> Total </td>
<td></td>
<td class="xl68"> 108,200 </td>
<td class="xl68"> 116,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;"> </td>
<td></td>
<td class="xl68"></td>
<td class="xl68"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Accounts payable </td>
<td></td>
<td class="xl68"> 14,600 </td>
<td class="xl68"> 11,100 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Bonds payable </td>
<td></td>
<td class="xl68"> 10,000 </td>
<td class="xl68"> 30,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Common stock </td>
<td></td>
<td class="xl68"> 50,000 </td>
<td class="xl68"> 45,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Retained earnings </td>
<td></td>
<td class="xl68"> <u>33,600 </u></td>
<td class="xl68"><u> 29,900 </u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;"> Total </td>
<td></td>
<td class="xl68"> 108,200 </td>
<td class="xl68"> 116,000 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />
Additional information:<br />
1. Net income was $18,300. Dividends declared and paid were $14,600.<br />
2. Equipment which cost $10,000 and had accumulated depreciation of $1,800 was sold<br />
for $3,500.<br />
3. All other changes in noncurrent account balances had a direct effect on cash flows,<br />
except the change in accumulated depreciation.<br />
<br />
Instructions<br />
(a) Prepare a statement of cash flows for 2014 using the indirect method.<br />
(b) Compute free cash flow.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-50775548765292146582013-02-11T17:59:00.004-08:002013-09-18T16:15:37.442-07:00E13-8 Syal Companu<b>Price: $1.99</b><br />
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<br />
E13-8 Here are comparative balance sheets for Syal Company.<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 365px;">
<!--StartFragment-->
<colgroup><col style="mso-width-alt: 8960; mso-width-source: userset; width: 210pt;" width="210"></col>
<col style="mso-width-alt: 725; mso-width-source: userset; width: 17pt;" width="17"></col>
<col span="2" style="mso-width-alt: 2944; mso-width-source: userset; width: 69pt;" width="69"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" colspan="4" height="15" style="height: 15.0pt; width: 365pt;" width="365"><br /></td></tr>
<tr height="16" style="height: 16.0pt;">
<td class="xl63" height="16" style="height: 16.0pt;">Assets</td>
<td></td>
<td align="right" class="xl67"><u>2014</u></td>
<td align="right" class="xl67"><u>2013</u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Cash </td>
<td></td>
<td align="right" class="xl68"> 73,000 </td>
<td align="right" class="xl68"> 33,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Accounts receivable </td>
<td></td>
<td align="right" class="xl68"> 85,000 </td>
<td align="right" class="xl68"> 71,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Inventory </td>
<td></td>
<td align="right" class="xl68"> 170,000 </td>
<td align="right" class="xl68"> 187,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Land </td>
<td></td>
<td align="right" class="xl68"> 73,000 </td>
<td align="right" class="xl68"> 100,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Equipment </td>
<td></td>
<td align="right" class="xl68"> 260,000 </td>
<td align="right" class="xl68"> 200,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Accumulated
depreciation-equipment </td>
<td></td>
<td align="right" class="xl69"><u> (66,000)</u></td>
<td align="right" class="xl69"><u> (34,000)</u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;"> Total </td>
<td></td>
<td align="right" class="xl68"> 595,000 </td>
<td align="right" class="xl68"> 557,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;"> </td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Liabilities and astockholder's
equity</td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Accounts payable </td>
<td></td>
<td align="right" class="xl68"> 35,000 </td>
<td align="right" class="xl68"> 47,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Bonds payable </td>
<td></td>
<td align="right" class="xl68"> 150,000 </td>
<td align="right" class="xl68"> 200,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Common stock ($1 par) </td>
<td></td>
<td align="right" class="xl68"> 216,000 </td>
<td align="right" class="xl68"> 174,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;">Retained earnings </td>
<td></td>
<td align="right" class="xl69"><u> 194,000 </u></td>
<td align="right" class="xl69"><u> 136,000 </u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;"> Total </td>
<td></td>
<td align="right" class="xl68"> 595,000 </td>
<td align="right" class="xl68"> 557,000 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />
Additional information:<br />
1. Net income for 2014 was $103,000.<br />
2. Depreciation expense was $32,000.<br />
3. Cash dividends of $45,000 were declared and paid.<br />
4. Bonds payable amounting to $50,000 were redeemed for cash $50,000.<br />
5. Common stock was issued for $42,000 cash.<br />
6. No equipment was sold during 2014.<br />
7. Land was sold for its book value of $27,000.<br />
<br />
Instructions<br />
Prepare a statement of cash flows for 2014 using the indirect method.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-50561094363438291732013-02-11T17:40:00.000-08:002013-09-18T16:00:43.341-07:00E13-7 Meera Corporation’s<b>Price: $1.99</b><br />
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<br />
Meera Corporation’s comparative balance sheets are presented below.<br />
<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 360px;">
<!--StartFragment-->
<colgroup><col style="mso-width-alt: 1194; mso-width-source: userset; width: 28pt;" width="28"></col>
<col style="width: 65pt;" width="65"></col>
<col span="3" style="mso-width-alt: 2816; mso-width-source: userset; width: 66pt;" width="66"></col>
<col style="mso-width-alt: 2944; mso-width-source: userset; width: 69pt;" width="69"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" colspan="6" height="15" style="height: 15.0pt; width: 360pt;" width="360">Meera
Corporation</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" colspan="6" height="15" style="height: 15.0pt;">Comparative Balance
Sheets</td>
</tr>
<tr height="16" style="height: 16.0pt;">
<td class="xl66" height="16" style="height: 16.0pt;"> </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td class="xl63"></td>
<td align="right" class="xl65"> 2,014 </td>
<td align="right" class="xl65"> 2,013 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Cash </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td align="right" class="xl64"> 14,700 </td>
<td align="right" class="xl64"> 10,700 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="3" height="15" style="height: 15.0pt; mso-ignore: colspan;">Accounts
receivable </td>
<td class="xl63"></td>
<td align="right" class="xl64"> 20,800 </td>
<td align="right" class="xl64"> 23,400 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Land </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td align="right" class="xl64"> 20,000 </td>
<td align="right" class="xl64"> 26,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Buildings </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td align="right" class="xl64"> 70,000 </td>
<td align="right" class="xl64"> 70,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="4" height="15" style="height: 15.0pt; mso-ignore: colspan;">Accumulated
depreciation - buildings </td>
<td align="right" class="xl69"> <u>(15,000)</u></td>
<td align="right" class="xl69"><u> (10,000)</u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;"> Total </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td align="right" class="xl64"> 110,500 </td>
<td align="right" class="xl64"> 120,100 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" height="15" style="height: 15.0pt;"> </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td class="xl63"></td>
<td class="xl64"></td>
<td class="xl64"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Accounts
payable </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td align="right" class="xl64"> 12,370 </td>
<td align="right" class="xl64"> 28,100 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;">Common
stock </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td align="right" class="xl64"> 75,000 </td>
<td align="right" class="xl64"> 72,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="3" height="15" style="height: 15.0pt; mso-ignore: colspan;">Retained
earnings </td>
<td class="xl63"></td>
<td align="right" class="xl69"> <u>23,130 </u></td>
<td align="right" class="xl69"><u> 20,000 </u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="2" height="15" style="height: 15.0pt; mso-ignore: colspan;"> Total </td>
<td class="xl63"></td>
<td class="xl63"></td>
<td align="right" class="xl64"> 110,500 </td>
<td align="right" class="xl64"> 120,100 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />
Additional information:<br />
1. Net income was $22,630. Dividends declared and paid were $19,500.<br />
2. All other changes in noncurrent account balances had a direct effect on cash flows,<br />
except the change in accumulated depreciation. The land was sold for $5,000.<br />
<br />
Instructions<br />
(a) Prepare a statement of cash flows for 2014 using the indirect method.<br />
(b) Compute free cash flow.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-70702157850057594392013-02-11T17:23:00.001-08:002013-09-18T15:45:55.289-07:00E13-6 The three accounts shown below appear in the general ledger of Chaudry Corp<b>Price: $1.99 </b><br />
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<br />
The three accounts shown below appear in the general ledger of Chaudry Corp.<br />
during 2014.<br />
<br />
<a href="http://3.bp.blogspot.com/-iQqh4MXmKJk/URmZe554qVI/AAAAAAAAAfY/0S1_IYHticg/s1600/Screen%2BShot%2B2013-02-11%2Bat%2B8.23.32%2BPM.png" imageanchor="1"><img border="0" src="http://3.bp.blogspot.com/-iQqh4MXmKJk/URmZe554qVI/AAAAAAAAAfY/0S1_IYHticg/s1600/Screen%2BShot%2B2013-02-11%2Bat%2B8.23.32%2BPM.png" /></a><br />
<br />
Instructions<br />
From the postings in the accounts, indicate how the information is reported on a statement<br />
of cash flows using the indirect method. The loss on disposal of plant assets was<br />
$5,000. (Hint: Cost of equipment constructed is reported in the investing activities section<br />
as a decrease in cash of $53,000)Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-51194143678549608872013-02-11T17:13:00.003-08:002013-09-18T15:40:47.987-07:00E13-5 The current sections of Nasreen Inc.’s<b>Price: $1.99</b><br />
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<br />
E13-5 The current sections of Nasreen Inc.’s balance sheets at December 31, 2013 and 2014,<br />
are presented here. Nasreen’s net income for 2014 was $153,000. Depreciation expense was<br />
$24,000.<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 340px;">
<!--StartFragment-->
<colgroup><col style="mso-width-alt: 6272; mso-width-source: userset; width: 147pt;" width="147"></col>
<col style="mso-width-alt: 2346; mso-width-source: userset; width: 55pt;" width="55"></col>
<col span="2" style="width: 69pt;" width="69"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl65" height="15" style="height: 15.0pt; width: 147pt;" width="147"> </td>
<td style="width: 55pt;" width="55"></td>
<td align="right" style="width: 69pt;" width="69"><u>2014</u></td>
<td align="right" style="width: 69pt;" width="69"><u>2013</u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;">Current assets </td>
<td class="xl63"></td>
<td class="xl66"></td>
<td class="xl66"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;">Cash </td>
<td class="xl63"></td>
<td align="right" class="xl66"> 105,000 </td>
<td align="right" class="xl66"> 99,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;"> Accounts receivable </td>
<td class="xl63"></td>
<td align="right" class="xl66"> 110,000 </td>
<td align="right" class="xl66"> 79,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;"> Inventory </td>
<td class="xl63"></td>
<td align="right" class="xl66"> 158,000 </td>
<td align="right" class="xl66"> 172,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;"> Prepaid expenses </td>
<td class="xl63"></td>
<td align="right" class="xl66"> <u>27,000 </u></td>
<td align="right" class="xl66"><u> 25,000 </u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;"> Total current assets </td>
<td class="xl63"></td>
<td align="right" class="xl66"> 400,000 </td>
<td align="right" class="xl66"> 375,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;">Current liabilities </td>
<td class="xl63"></td>
<td class="xl66"></td>
<td class="xl66"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;">Accrued expenses payable </td>
<td class="xl63"></td>
<td align="right" class="xl66"> 15,000 </td>
<td align="right" class="xl66"> 9,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;"> Accounts payable </td>
<td class="xl63"></td>
<td align="right" class="xl66"> <u>85,000 </u></td>
<td align="right" class="xl66"><u> 95,000 </u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;"> Total current liabilities </td>
<td class="xl63"></td>
<td align="right" class="xl66"> 100,000 </td>
<td align="right" class="xl66"> 104,000 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />
Instructions<br />
Prepare the net cash provided by operating activities section of the company’s statement of<br />
cash flows for the year ended December 31, 2014, using the indirect method.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-61534160850843626402013-02-11T17:05:00.000-08:002013-02-11T17:05:01.574-08:00E13-3 Tim Latimer Corporation<b>Price: $2.99 </b><br />
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<br />
E13-3 Tim Latimer Corporation had the following transactions.<br />
1. Sold land (cost $12,000) for $10,000.<br />
2. Issued common stock for $22,000.<br />
3. Recorded depreciation on buildings for $14,000.<br />
4. Paid salaries of $7,000.<br />
5. Issued 1,000 shares of $1 par value common stock for equipment worth $9,000.<br />
6. Sold equipment (cost $10,000, accumulated depreciation $8,000) for $3,200.<br />
<br />
Instructions<br />
For each transaction above, (a) prepare the journal entry, and (b) indicate how it would<br />
affect the statement of cash fl ows under the indirect method.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-78746550911585973652013-02-11T17:04:00.004-08:002013-09-18T15:36:33.647-07:00E13-4 Bracewell Company<b>Price: $1.99</b><br />
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<br />
E13-4 Bracewell Company reported net income of $195,000 for 2014. Bracewell also<br />
reported depreciation expense of $40,000 and a gain of $5,000 on disposal of plant assets.<br />
The comparative balance sheet shows an increase in accounts receivable of $15,000<br />
for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid<br />
expenses.<br />
<br />
Instructions<br />
Prepare the operating activities section of the statement of cash flows for 2014. Use the<br />
indirect methodAccountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-61614680307457610582012-07-21T15:07:00.001-07:002012-07-21T15:07:11.321-07:00Exercise 3-5 situations a through d<b>Price: $2.99 </b><br />
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<br />
Determine the missing amounts in each of these four separate situations a through d.<br />
<br />
a b c d<br />
Supplies available — prior year-end . . . . . . . . . . . . . . . . $ 300 $1,600 $1,360 ?<br />
Supplies purchased during the current year . . . . . . . . . 2,100 5,400 ? $6,000<br />
Supplies available — current year-end . . . . . . . . . . . . . . 750 ? 1,840 800<br />
Supplies expense for the current year . . . . . . . . . . . . . ? 1,300 9,600 6,575Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-39663297278813582202012-07-21T14:09:00.001-07:002013-11-01T12:57:56.471-07:00Exercise EMIL SKODA COMPANY<b>Price: $1.99 </b><br />
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<br />
E4-7 Emil Skoda Company had the following adjusted trial balance.<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 300px;">
<!--StartFragment-->
<colgroup><col style="mso-width-alt: 7253; mso-width-source: userset; width: 170pt;" width="170"></col>
<col span="2" style="width: 65pt;" width="65"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl65" colspan="3" height="15" style="height: 15pt; text-align: center; width: 300pt;" width="300">Emil
Skoda Company</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl65" colspan="3" height="15" style="height: 15pt; text-align: center;">Adjusted Trial
Balance</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl65" colspan="3" height="15" style="height: 15pt; text-align: center;">For the Month Ended
June 30, 2008</td>
</tr>
<tr height="16" style="height: 16.0pt;">
<td class="xl66" height="16" style="height: 16pt; text-align: center; width: 170pt;" width="170"><br /></td><td class="xl68"><br /></td><td class="xl68"><br /></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Cash</td>
<td class="xl69"> 3,712 </td>
<td class="xl69"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Accounts Receivable</td>
<td class="xl69"> 3,904 </td>
<td class="xl69"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Supplies</td>
<td class="xl69"> 480 </td>
<td class="xl69"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Accounts Payable</td>
<td class="xl69"></td>
<td class="xl69"> 1,792 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Unearned revenue</td>
<td class="xl69"></td>
<td class="xl69"> 160 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Common stock</td>
<td class="xl69"></td>
<td class="xl69"> 5,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Retained earnings</td>
<td class="xl69"></td>
<td class="xl69"> 760 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Dividends</td>
<td class="xl69"> 300 </td>
<td class="xl69"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Service revenue</td>
<td class="xl69"></td>
<td class="xl69"> 4,064 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Salaries expense</td>
<td class="xl69"> 1,344 </td>
<td class="xl69"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Miscellaneous expense</td>
<td class="xl69"> 256 </td>
<td class="xl69"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Supplies Expense</td>
<td class="xl69"> 2,228 </td>
<td class="xl69"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl67" height="15" style="height: 15.0pt;">Salaries payable</td>
<td class="xl70"> </td>
<td class="xl70"><u> 448 </u></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" height="15" style="height: 15.0pt;"> </td>
<td class="xl71"> 12,224 </td>
<td class="xl71"> 12,224 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />
Instructions<br />
(a) Prepare closing entries at June 30, 2008.<br />
(b) Prepare a post-closing trial balance.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-66026573391597683372012-07-21T14:08:00.003-07:002013-10-31T11:13:43.947-07:00Exercise 4-8 Apachi July 31<b>Price: $1.99 </b><br />
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<br />
E4-8 Apachi Company ended its fiscal year on July 31, 2008. The company’s adjusted trial<br />
balance as of the end of its fiscal year is as shown below<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 370px;">
<!--StartFragment-->
<colgroup><col style="width: 62pt;" width="62"></col>
<col style="mso-width-alt: 7210; mso-width-source: userset; width: 169pt;" width="169"></col>
<col style="mso-width-alt: 2986; mso-width-source: userset; width: 70pt;" width="70"></col>
<col style="mso-width-alt: 2944; mso-width-source: userset; width: 69pt;" width="69"></col>
</colgroup><tbody>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" colspan="4" height="15" style="height: 15pt; text-align: center; width: 370pt;" width="370">Apachi
Company</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl64" colspan="4" height="15" style="height: 15pt; text-align: center;">Adjusted Trial
Balance</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl66" colspan="4" height="15" style="height: 15pt; text-align: center;">31-Jul-08</td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">No. </td>
<td>Account Titles </td>
<td class="xl67">Debits </td>
<td class="xl67">Credits </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">101</td>
<td>Cash </td>
<td class="xl68"> 14,840 </td>
<td class="xl68"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">112</td>
<td>Accounts Receivable </td>
<td class="xl68"> 8,780 </td>
<td class="xl68"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">157</td>
<td>Equipment </td>
<td class="xl68"> 15,900 </td>
<td class="xl68"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">167</td>
<td>Accumulated Depreciation</td>
<td class="xl68"></td>
<td class="xl68"> 7,400 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">201</td>
<td>Accounts Payable </td>
<td class="xl68"></td>
<td class="xl68"> 4,220 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">208</td>
<td>Unearned Rent Revenue </td>
<td class="xl68"></td>
<td class="xl68"> 1,800 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">311</td>
<td>Common stock</td>
<td class="xl68"></td>
<td class="xl68"> 20,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">320</td>
<td>Retained earnings</td>
<td class="xl68"></td>
<td class="xl68"> 25,200 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">332</td>
<td>Dividends</td>
<td class="xl68"> 16,000 </td>
<td class="xl68"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">404</td>
<td>Commission revenue</td>
<td class="xl68"></td>
<td class="xl68"> 65,000 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">429</td>
<td>Rent revenue</td>
<td class="xl68"></td>
<td class="xl68"> 6,500 </td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">711</td>
<td>Depreciation expense</td>
<td class="xl68"> 4,000 </td>
<td class="xl68"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">720</td>
<td>Salaries expense</td>
<td class="xl68"> 55,700 </td>
<td class="xl68"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl70" height="15" style="height: 15.0pt;">732</td>
<td>Utilities expense</td>
<td class="xl68"> <u>14,900 </u></td>
<td class="xl68"></td>
</tr>
<tr height="15" style="height: 15.0pt;">
<td class="xl63" height="15" style="height: 15.0pt;"> </td>
<td></td>
<td class="xl69"> 130,120 </td>
<td class="xl69"> 130,120 </td>
</tr>
<!--EndFragment-->
</tbody></table>
<br />
<b>Instructions<br />
</b>(a) Prepare the closing entries using page J15.<br />
(b) Post to Retained Earnings and No. 350 Income Summary accounts. (Use the three-column form.)<br />
(c) Prepare a post-closing trial balance at July 31.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-64273888972072466952012-07-21T14:07:00.001-07:002013-10-31T11:21:26.564-07:00Exercise 4-9 Apachi Company<b>Price: $1.99 </b><br />
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<br />
E4-9 The adjusted trial balance for Apachi Company is presented in E4-8.<br />
<br />
data from E4-8<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 370px;"><colgroup><col style="width: 62pt;" width="62"></col><col style="width: 169pt;" width="169"></col><col style="width: 70pt;" width="70"></col><col style="width: 69pt;" width="69"></col></colgroup><tbody>
<tr height="15" style="height: 15pt;"><td class="xl64" colspan="4" height="15" style="height: 15pt; text-align: center; width: 370pt;" width="370">Apachi Company</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl64" colspan="4" height="15" style="height: 15pt; text-align: center;">Adjusted Trial Balance</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl66" colspan="4" height="15" style="height: 15pt; text-align: center;">31-Jul-08</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">No. </td><td>Account Titles </td><td class="xl67">Debits </td><td class="xl67">Credits </td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">101</td><td>Cash </td><td class="xl68"> 14,840</td><td class="xl68"></td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">112</td><td>Accounts Receivable </td><td class="xl68"> 8,780</td><td class="xl68"></td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">157</td><td>Equipment </td><td class="xl68"> 15,900</td><td class="xl68"></td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">167</td><td>Accumulated Depreciation</td><td class="xl68"></td><td class="xl68"> 7,400</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">201</td><td>Accounts Payable </td><td class="xl68"></td><td class="xl68"> 4,220</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">208</td><td>Unearned Rent Revenue </td><td class="xl68"></td><td class="xl68"> 1,800</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">311</td><td>Common stock</td><td class="xl68"></td><td class="xl68"> 20,000</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">320</td><td>Retained earnings</td><td class="xl68"></td><td class="xl68"> 25,200</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">332</td><td>Dividends</td><td class="xl68"> 16,000</td><td class="xl68"></td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">404</td><td>Commission revenue</td><td class="xl68"></td><td class="xl68"> 65,000</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">429</td><td>Rent revenue</td><td class="xl68"></td><td class="xl68"> 6,500</td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">711</td><td>Depreciation expense</td><td class="xl68"> 4,000</td><td class="xl68"></td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">720</td><td>Salaries expense</td><td class="xl68"> 55,700</td><td class="xl68"></td></tr>
<tr height="15" style="height: 15pt;"><td class="xl70" height="15" style="height: 15pt;">732</td><td>Utilities expense</td><td class="xl68"> <u>14,900</u></td><td class="xl68"></td></tr>
<tr height="15" style="height: 15pt;"><td class="xl63" height="15" style="height: 15pt;"></td><td></td><td class="xl69"> 130,120</td><td class="xl69"> 130,120<br />
<div>
<br /></div>
</td></tr>
</tbody></table>
<b>Instructions</b>(a) Prepare an income statement and a retained earnings statement for the year. There were no<br />
issuances of common stock during the year.<br />
(b) Prepare a classified balance sheet at July 31.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-21765515299769763102012-05-26T18:52:00.000-07:002013-11-07T15:50:59.310-08:00Upstart Company provided the following information<b>Price: $16.99 </b><br /><a href="http://homeworksolution.fetchapp.com/sell/yyqueide?type=cart"><img alt="" src="http://www.paypal.com/en_US/i/btn/btn_cart_LG.gif" /></a><br /><br />1. Inventory accounts for a manufacturer include:<br />a. materials, work in process, and finished goods<br />b. merchandise, materials, and finished goods<br />c. work in process, direct labor, and finished goods<br />d. work in process, materials, and manufacturing overhead<br /><br />2. All of the following would probably be considered a direct material except:<br />a. steel<br />b. fabric<br />c. glue<br />d. lumber<br /><br />3. Inventoriable product costs:<br />a. are used for external reporting purposes<br />b. include marketing and distribution costs<br />c. are not shown on the income statement until the products are sold<br />d. both A and C are correct<br /><br />4. Work in process inventory on December 31, 20X6, is $42,000. Work in process inventory decreased 40% during 20X6. Total manufacturing costs incurred in 20X6 amount to $260,000. What is cost of goods manufactured?<br />a. $232,000<br />b. $302,000<br />c. $288,000<br />d. $190,000<br /><br />5. The following information is provided for the Heather Company for the current year:<br />Beginning work in process inventory $150,000<br />Ending work in process inventory $70,000<br />Beginning finished goods inventory $20,000<br />Ending finished goods inventory $30,000<br />Direct materials used $120,000<br />Direct labor $160,000<br />Manufacturing overhead $200,000<br />Selling and administrative expenses $100,000<br /><br />What is the costs of goods manufactured?<br /><br />a. $480,000<br />b. $540,000<br />c. $560,000<br />d. $660,000<br /><br />6. All of the following are examples of manufacturing overhead except:<br />a. indirect materials<br />b. utilities incurred in the factory<br />c. insurance expired on the factory equipment<br />d. wages of assembly line workers<br /><br />7. Which of the following industries is most likely not to use a job costing system?<br />a. paint<br />b. aircraft<br />c. custom furniture<br />d. unique furniture accessories<br /><br />8. Which of the following would be debited to record the requisition of direct materials?<br />a. finished goods inventory<br />b. materials inventory<br />c. work in process inventory<br />d. cost of goods manufactured<br /><br />9. Upstart Company provided the following information. Upstart uses machine hours as its overhead allocation base.<br />Estimated manufacturing overhead $1,000,000<br />Estimated machine hours 40,000<br />Actual machine hours worked 50,000<br />Actual manufacturing overhead incurred $1,200,000<br /><br />What is the predetermined overhead rate?<br />a. $20 per machine hour<br />b. $22.5 per machine hour <br />c. $25 per machine hour<br />d. $30 per machine hour<br /><br />10. Upstart Company provided the following information. Upstart uses machine hours as its overhead allocation base.<br />Estimated manufacturing overhead $1,000,000<br />Estimated machine hours 40,000<br />Actual machine hours worked 50,000<br />Actual manufacturing overhead incurred $1,200,000<br />What is the amount of over-applied or under-applied overhead?<br />a. $50,000 under-applied<br />b. $50,000 over-applied<br />c. $200,000 under-applied<br />d. $200,000 over-applied<br /><br />11. Which of the following would be debited to assign the cost of indirect labor?<br />a. manufacturing overhead<br />b. work in process inventory<br />c. finished <br />goods inventory<br />d. wages payable<br /><br />12. The Heminway Company uses a job costing system. In April, material requisitions of $44,000 were issued and materials purchases totaled $56,600. The ending balance in materials inventory was $18,400. The beginning balance was:<br />a. $5,800<br />b. $25,600<br />c. $31,000<br />d. None of the above<br /><br />13. Which of the following is a characteristic of a variable cost?<br />a. Variable costs vary in total with production and sales.<br />b. Variable costs are variable per unit, and fixed in total.<br />c. Variable costs do not change in total over the relevant range.<br />d. All of the above are charters of variable costs<br /><br />14. Fixed Company produces a single product selling for $30 per unit. Variable costs are $12 per unit and total fixed costs are $4,000. What is the contribution margin ratio?<br />a. 0.40<br />b. 2.50<br />c. 0.60<br />d. 1.67<br /><br />15. If the sale price per unit is $7, the unit contribution margin is $3, and total fixed expenses are $19,500, the breakeven sales in units is:<br />a. 5,850<br />b. 6,500<br />c. 2,786<br />d. 4,875<br /><br />16. If the sale price per units is $24.50, the variable expense per unit is $17, and total fixed expenses are $324,000, the breakeven sales in dollars is:<br />a. $43,200<br />b. $734,400<br />c. $1,058,400<br />d. $224,808<br /><br />17. If the sale price per unit decreases and variable costs remain the same, the contribution margin ratio will:<br />a. decrease<br />b. increase<br />c. remain the same<br />d. impossible to determine using the given data<br /><br />18. Lighfoot Company sells its product for $55 and has variable costs of $30 per unit. Total fixed costs are $25,000. Suppose variable costs increase by 10% due to an increase in the cost of direct materials. The breakeven point will<br /><br />a. increase from 1,000 units to 1,136 units <br />b. decrease form 1,000 units to 864 units<br />c. increase from 758 units to 1,000 units<br />d. decrease from 1,000 units to 758 unit<br /><br />19. Dakota Company provides the following information about its single product.<br /><br />Targeted operating income $40,000<br />Selling price per unit $3.50<br />Variable cost per unit $1.05<br />Total fixed costs $90,000<br />How many units must be sold to earn the targeted operating income?<br />a. 37,143<br />b. 53,061 <br />c. 123,810<br />d. 36,735<br /><br />20. Which of the following is an advantage of the budgeting process?<br />a. aids in performance evaluation<br />b. coordinates the activities of the organization<br />c. assures the company of achieving its objectives<br />d. both A and B<br /><br />21. Operating budgets include all of the following except:<br />a. budgeted income statement<br />b. sales budget<br />c. budgeted balance sheet<br />d. inventory budget<br /><br />22. When preparing the cash budget, all of the following should be considered except:<br />a. cash receipts from customers<br />b. payments for inventory<br />c. cash payments to suppliers<br />d. depreciation expense<br /><br />23. Lan Corporation had beginning inventory of 42,000 units and expects sales of 96,000 units during the year. Desired ending inventory is 31,000 units. Lan Corporation should produce:<br />a. 65,000 units<br />b. 73,000 units<br />c. 85,000 units<br />d. 103,000 units<br /><br />24. Lue Electronics budgeted sales of $400,000 for the month of November and costs of goods sold equal to 65% of sales. Beginning inventory was $80,000 and ending inventory is estimated at $72,000. The budgeted purchases for November are:<br />a. $252,000<br />b. $254,800<br />c. $264,800<br />d. $265,200<br /><br />25. A sporting goods store purchased $4,500 of ski boots in September. The store had $2,000 of ski boots on hand at the beginning of September, and expected to have $2,500 of ski boots at the end in order to cover part of anticipated October sales. What is the budgeted costs of goods sold for September?<br />a. $6,500<br />b. $6,000<br />c. $4,500<br />d. $4,000<br /><br />26. Farmington Enterprises has budgeted sales for the months of September and October at $300,000 and $280,000, respectively. Monthly sales are 80% credit and 20% cash. Of the credit sales, 50% are collected in the month of sale and 50% are collected in the following month. The October cash collections from customers are:<br />a. $168,000<br />b. $288,000<br />c. $232,000<br />d. $290,000<br /><br />27. All of the following statements regarding flexible budgets are true except:<br />a. they are designed to estimate revenues, costs, and profit<br />b. managers use them to help plan for uncertainties<br />c. they are prepared for a range of activity levels<br />d. all of the above are true<br /><br />28. An unfavorable direct labor price variance indicates that:<br />a. both actual quantity and actual cost of direct labor hours exceeded standard quantity and standard cost of hours for actual output<br />b. the actual quantity of direct labor hours worked exceeded the standard quantity of hours for actual output<br />c. the actual cost of direct labor per hour was less than the standard cost of direct labor per hour<br />d. the actual direct labor cots per hour exceeded the standard direct labor cots per hour for actual output<br /><br />Use the following data about Joy Corporation to answer Questions 31 to 34<br /><br />39. Joy Corporation manufactures a product with the following per unit standard costs:<br /><br />Direct Materials 10 square yards at $6 per yard<br />Direct Labor 12 hours at $10 per hour<br /><br />The following information relates to actual operations:<br />Direct materials purchased = 1000 square yards at $5 per yard<br />Direct materials used in production = 900 square yards<br />Direct labor cost = $10,000<br />Direct labor hours = 1,200<br />Actual output = 80 units<br /><br />The direct materials price variance is:<br />a. $600 favorable<br />b. $600 unfavorable<br />c. $1,000 favorable<br />d. $1,000 unfavorable<br /><br />30. The direct materials efficiency variance is:<br />a. $600 favorable<br />b. $600 unfavorable <br />c. $1,200 favorable<br />d. $1,200 unfavorable<br /><br />31. The direct labor price variance is:<br />a $1,000 favorable<br />b. $1,000 unfavorable<br />c. $2,000 favorable<br />d. $2,000 unfavorable<br /><br />32. The direct labor efficiency variance is:<br />a. $2,000 favorable<br />b. $2,000 unfavorable<br />c. $2,400 favorable<br />d. $2,400 unfavorable<br /><br />33. A budget based on a single predicted amount of sales or production is called:<br />a. static budget<br />b. fixed budget<br />c. flexible budget<br />d. standard budgetAccountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-84283075193620799112012-05-21T14:37:00.000-07:002013-11-07T15:50:59.322-08:00ACC561 Week 1 BE1-7 BE1-8 BE1-9<b>Price: $5.99</b><br /><a href="http://homeworksolution.fetchapp.com/sell/oojetool?type=cart"><img src="http://www.paypal.com/en_US/i/btn/btn_cart_LG.gif" alt="" /></a><br /><br />ACC561 Week 1 Wiley BE1-7 BE1-8 BE1-9<br /><br /><b>BE1-7 Indicate which statement you would examine to find each of the following items:</b><br />income statement (I), balance sheet (B), retained earnings statement (R), or statement of<br />cash flows (C).<br />(a) Revenue during the period.<br />(b) Supplies on hand at the end of the year.<br />(c) Cash received from issuing new bonds during the period.<br />(d) Total debts outstanding at the end of the period.<br /><br /><b>BE1-8 Use the basic accounting equation to answer these questions.</b><br />(a) The liabilities of Cummings Company are $90,000 and the stockholders’ equity is<br />$230,000. What is the amount of Cummings Company’s total assets?<br />(b) The total assets of Haldeman Company are $170,000 and its stockholders’ equity is<br />$90,000. What is the amount of its total liabilities?<br />(c) The total assets of Dain Co. are $800,000 and its liabilities are equal to one-fourth<br />of its total assets. What is the amount of Dain Co.’s stockholders’ equity?<br /><br /><b>BE1-9 At the beginning of the year, Fuqua Company had total assets of $800,000 and</b><br />total liabilities of $500,000.<br />(a) If total assets increased $150,000 during the year and total liabilities decreased<br />$80,000, what is the amount of stockholders’ equity at the end of the year?<br />(b) During the year, total liabilities increased $100,000 and stockholders’ equity decreased<br />$70,000. What is the amount of total assets at the end of the year?<br />(c) If total assets decreased $90,000 and stockholders’ equity increased $110,000 during<br />the year, what is the amount of total liabilities at the end of the year?Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-63808280476145254822012-05-19T18:31:00.000-07:002013-11-07T15:50:59.330-08:00The beta of a portfolio of stocks is always smaller than the betas of any<b>Price: $13.99</b><br /><a href="http://homeworksolution.fetchapp.com/sell/iehocohs?type=cart"><img src="http://www.paypal.com/en_US/i/btn/btn_cart_LG.gif" alt="" /></a><br /><br />1. Which of the following statements is CORRECT? (Points : 5) <br /><br />a. The beta of a portfolio of stocks is always smaller than the betas of any<br />of the individual stocks.<br /><br />b. If you found a stock with a zero historical beta and held it as the only<br />stock in your portfolio, you would by definition have a riskless<br />portfolio.<br /><br />c. The beta coefficient of a stock is normally found by regressing past<br />returns on a stock against past market returns. One could also construct<br />a scatter diagram of returns on the stock versus those on the market,<br />estimate the slope of the line of best fit, and use it as beta. However,<br />this historical beta may differ from the beta that exists in the future.<br /><br />d. The beta of a portfolio of stocks is always larger than the betas of any<br />of the individual stocks.<br /><br />e. It is theoretically possible for a stock to have a beta of 1.0. If a<br />stock did have a beta of 1.0, then, at least in theory, its required rate<br />of return would be equal to the risk-free (default-free) rate of return,<br />r<br /><br />2. Which of the following statements is NOT CORRECT? (Points : 5)<br />If a bond is selling at a discount to par, its current yield will be less than its yield to maturity.<br />All else equal, bonds with longer maturities have more interest rate (price) risk than bonds with shorter maturities.<br />If a bond is selling at its par value, its current yield equals its yield to maturity.<br />If a bond is selling at a premium, its current yield will be greater than its yield to maturity.<br />All else equal, bonds with larger coupons have greater interest rate (price) risk than bonds with smaller coupons.<br /><br />3. Which of the following statements is CORRECT? (Points : 5)<br />a. If a bond is selling at a discount, the yield to call is a better measure of return than the yield to maturity.<br />b. On an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss.<br />c. On an expected yield basis, the expected current yield will always be positive because an investor would not purchase a bond that is not expected to pay any cash coupon interest.<br />d. If a coupon bond is selling at par, its current yield equals its yield to maturity.<br />e. The current yield on Bond A exceeds the current yield on Bond B; therefore, Bond A must have a higher yield to maturity than Bond B.<br /><br />4. Which of the following statements is CORRECT? (Points : 5)<br /><br />Sinking fund provisions sometimes turn out to adversely affect bondholders, and this is most likely to occur if interest rates decline after the bond has been issued.<br />Most sinking funds require the issuer to provide funds to a trustee, who saves the money so that it will be available to pay off bondholders when the bonds mature.<br />A sinking fund provision makes a bond more risky to investors at the time of issuance.<br />Sinking fund provisions never require companies to retire their debt; they only establish "targets" for the company to reduce its debt over time.<br />If interest rates have increased since a company issued bonds with a sinking fund, the company is less likely to retire the bonds by buying them back in the open market, as opposed to calling them in at the sinking fund call price.<br /><br />5. Which of the following statements best describes what you should expect to happen if you randomly select stocks and add them to your portfolio? (Points : 5)<br /><br />a. Adding more such stocks will reduce the portfolio's unsystematic, or diversifiable, risk.<br />b. Adding more such stocks will increase the portfolio's expected rate of return.<br />c. Adding more such stocks will reduce the portfolio's beta coefficient and thus its systematic risk.<br />e. Adding more such stocks will have no effect on the portfolio's risk.<br />e. Adding more such stocks will reduce the portfolio's market risk but not its unsystematic risk.<br /><br />6. A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is NOT CORRECT? (Points : 5)<br />a. The bond's expected capital gains yield is positive.<br />b. The bond's yield to maturity is 9%.<br />c. The bond's current yield is 9%.<br />d. If the bond's yield to maturity remains constant, the bond will continue to sell at par.<br />e. The bond's current yield exceeds its capital gains yield.<br /><br />7. Stock A has a beta of 0.8, Stock B has a beta of 1.0, and Stock C has a beta of 1.2. a. Portfolio P has 1/3 of its value invested in each stock. Each stock has a standard deviation of 25%, and their returns are independent of one another, i.e., the correlation coefficients between each pair of stock is zero. Assuming the market is in equilibrium, which of the following statements is CORRECT? (Points : 5)<br /><br />a. Portfolio P's expected return is greater than the expected return on Stock B.<br />b. Portfolio P's expected return is equal to the expected return on Stock A.<br />c. Portfolio P's expected return is less than the expected return on Stock B.<br />d. Portfolio P's expected return is equal to the expected return on Stock B.<br />e. Portfolio P's expected return is greater than the expected return on Stock C.<br /><br />8. Which of the following statements is CORRECT? (Points : 5)<br />a. If the maturity risk premium were zero and interest rates were expected to decrease in the future, then the yield curve for U.S. Treasury securities would, other things held constant, have an upward slope.<br />b. Liquidity premiums are generally higher on Treasury than corporate bonds.<br />c. The maturity premiums embedded in the interest rates on U.S. Treasury securities are due primarily to the fact that the probability of default is higher on long-term bonds than on short-term bonds.<br />d. Default risk premiums are generally lower on corporate than on Treasury bonds.<br />e. Reinvestment rate risk is lower, other things held constant, on long-term than on short-term bonds.<br /><br />9. Stock X has a beta of 0.7 and Stock Y has a beta of 1.3. The standard deviation of each stock's returns is 20%. The stocks' returns are independent of each other, i.e., the correlation coefficient, r, between them is zero. Portfolio P consists of 50% X and 50% Y. Given this information, which of the following statements is CORRECT? (Points : 5)<br /><br />a. Portfolio P has a standard deviation of 20%.<br />b. The required return on Portfolio P is equal to the market risk premium (rM - rRF).<br />c. Portfolio P has a beta of 0.7.<br />d. Portfolio P has a beta of 1.0 and a required return that is equal to the riskless rate, rRF.<br />e. Portfolio P has the same required return as the market (rM).<br /><br />10. A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity. Which of the following statements is CORRECT? (Points : 5)<br />The bond sells at a price below par.<br />The bond has a current yield greater than 8%.<br />The bond sells at a discount.<br />The bond's required rate of return is less than 7.5%.<br />If the yield to maturity remains constant, the price of the bond will decline over time.<br /><br />11. Which of the following statements is CORRECT? (Points : 5)<br />a. A zero coupon bond's current yield is equal to its yield to maturity.<br />b. If a bond's yield to maturity exceeds its coupon rate, the bond will sell at par.<br />c. All else equal, if a bond's yield to maturity increases, its price will fall.<br />d. If a bond's yield to maturity exceeds its coupon rate, the bond will sell at a premium over par.<br />e. All else equal, if a bond's yield to maturity increases, its current yield will fall.<br /><br />12. Assume that all interest rates in the economy decline from 10% to 9%. Which of the following bonds would have the largest percentage increase in price? (Points : 5)<br />a. An 8-year bond with a 9% coupon.<br />b. A 1-year bond with a 15% coupon.<br />c. A 3-year bond with a 10% coupon.<br />d. A 10-year zero coupon bond.<br />e. A 10-year bond with a 10% coupon.<br /><br />13. Bob has a $50,000 stock portfolio with a beta of 1.2, an expected return of 10.8%, and a standard deviation of 25%. Becky also has a $50,000 portfolio, but it has a beta of 0.8, an expected return of 9.2%, and a standard deviation that is also 25%. The correlation coefficient, r, between Bob's and Becky's portfolios is zero. If Bob and Becky marry and combine their portfolios, which of the following best describes their combined $100,000 portfolio? (Points : 5)<br /><br />a. The combined portfolios expected return will be less than the simple weighted average of the expected returns of the two individual portfolios, 10.0%.<br />b. The combined portfolio's beta will be equal to a simple average of the betas of the two individual portfolios, 1.0; its expected return will be equal to a simple weighted average of the expected returns of the two individual portfolios, 10.0%; and its standard deviation will be less than the simple average of the two portfolios' standard deviations, 25%.<br />c. The combined portfolio's expected return will be greater than the simple weighted average of the expected returns of the two individual portfolios, 10.0%.<br />d. The combined portfolio's standard deviation will be greater than the simple average of the two portfolios' standard deviations, 25%.<br />e. The combined portfolio's standard deviation will be equal to a simple average of the two portfolios' standard deviations, 25%.<br /><br />14. Which of the following statements is CORRECT? (Points : 5)<br /><br />a. If a coupon bond is selling at par, its current yield equals its yield to maturity.<br />b. If a coupon bond is selling at a discount, its price will continue to decline until it reaches its par value at maturity.<br />c. If interest rates increase, the price of a 10-year coupon bond will decline by a greater percentage than the price of a 10-year zero coupon bond.<br />d. If a bond's yield to maturity exceeds its annual coupon, then the bond will trade at a premium.<br />e. If a coupon bond is selling at a premium, its current yield equals its yield to maturity.<br /><br />15. A 10-year Treasury bond has an 8% coupon, and an 8-year Treasury bond has a 10% coupon. Both bonds have the same yield to maturity. If the yield to maturity of both bonds increases by the same amount, which of the following statements would be CORRECT? (Points : 5)<br /><br />a. The prices of both bonds will decrease by the same amount.<br />b. Both bonds would decline in price, but the 10-year bond would have the greater percentage decline in price.<br />c. The prices of both bonds would increase by the same amount.<br />d. One bond's price would increase, while the other bond's price would decrease.<br />e. The prices of the two bonds would remain constant.<br /><br />16. Stocks A and B each have an expected return of 15%, a standard deviation of 20%, and a beta of 1.2. The returns on the two stocks have a correlation coefficient of +0.6. You have a portfolio that consists of 50% A and 50% B. Which of the following statements is CORRECT? (Points : 5)<br /><br />a. The portfolio's beta is less than 1.2.<br />b. The portfolio's expected return is 15%.<br />c. The portfolio's standard deviation is greater than 20%.<br />d. The portfolio's beta is greater than 1.2.<br />e. The portfolio's standard deviation is 20%.<br /><br />17. A highly risk-averse investor is considering adding one additional stock to a 3-stock portfolio, to form a 4-stock portfolio. The three stocks currently held all have b = 1.0 and a perfect positive correlation with the market. Potential new Stocks A and B both have expected returns of 15%, and both are equally correlated with the market, with r = 0.75. However, Stock A's standard deviation of returns is 12% versus 8% for Stock B. Which stock should this investor add to his or her portfolio, or does the choice matter? (Points : 5)<br /><br />a. Either A or B, i.e., the investor should be indifferent between the two.<br />b. Stock A.<br />c. Stock B.<br />d. Neither A nor B, as neither has a return sufficient to compensate for risk.<br />e. Add A, since its beta must be lower.<br /><br />18. A 12-year bond has an annual coupon rate of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? (Points : 5)<br /><br />a. If market interest rates decline, the price of the bond will also decline.<br />b. The bond is currently selling at a price below its par value.<br />c. If market interest rates remain unchanged, the bond's price one year from now will be lower than it is today.<br />d. The bond should currently be selling at its par value.<br />e. If market interest rates remain unchanged, the bond's price one year from now will be higher than it is today.<br /><br />19. Under normal conditions, which of the following would be most likely to increase the coupon rate required to enable a bond to be issued at par? (Points : 5)<br /><br />a. Adding additional restrictive covenants that limit management's actions.<br />b. Adding a call provision.<br />c. The rating agencies change the bond's rating from Baa to Aaa.<br />d. Making the bond a first mortgage bond rather than a debenture.<br />e. Adding a sinking fund.<br /><br />20. Which of the following statements is CORRECT? (Points : 5)<br /><br />a. All else equal, senior debt generally has a lower yield to maturity than subordinated <br />debt.<br />b. An indenture is a bond that is less risky than a mortgage bond.<br />c. The expected return on a corporate bond will generally exceed the bond's yield to maturity.<br />d. If a bond's coupon rate exceeds its yield to maturity, then its expected return to investors exceeds the yield to maturity.<br />e. Under our bankruptcy laws, any firm that is in financial distress will be forced to declare bankruptcy and then be liquidated.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-3961324837879780992012-05-19T13:17:00.000-07:002013-11-07T15:50:59.340-08:00E5-15 Sondergaard Corporation<b>Price: $2.99 </b><br /><a href="http://homeworksolution.fetchapp.com/sell/ykequado?type=cart"><img src="http://www.paypal.com/en_US/i/btn/btn_cart_LG.gif" alt="" /></a><br /><br />E5-15 (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative<br />balance sheets for Sondergaard Corporation for the last two years at December 31.<br />2010 2009<br />Cash $157,000 $ 78,000<br />Accounts receivable 180,000 185,000<br />Investments 52,000 74,000<br />Equipment 298,000 240,000<br />Less: Accumulated depreciation (106,000) (89,000)<br />Current liabilities 134,000 151,000<br />Capital stock 160,000 160,000<br />Retained earnings 287,000 177,000<br />Additional information:<br />Investments were sold at a loss (not extraordinary) of $7,000; no equipment was sold; cash dividends paid<br />were $50,000; and net income was $160,000.<br />Instructions<br />(a) Prepare a statement of cash flows for 2010 for Sondergaard Corporation.<br />(b) Determine Sondergaard Corporation’s free cash flow.<br /><br />Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-55141015156401025212012-05-19T09:19:00.000-07:002013-11-07T15:50:59.349-08:00A local real estate investor in Orlando is considering three<b>Price: $7.99 </b><br /><a href="http://homeworksolution.fetchapp.com/sell/heiwuphi?type=cart"><img src="http://www.paypal.com/en_US/i/btn/btn_cart_LG.gif" alt="" /></a><br /><br /><b>Problem 8</b><br />A local real estate investor in Orlando is considering three alternative investments: a motel, a restaurant, or a theater. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the theater will be relatively stable under any conditions. The following payoff table shown the profit or loss that could result from each investment.<br /><br />Gasoline Availability<br /><br />Investment Shortage Stable Supply Surplus<br /><br />Motel $-8,000 $15,000 $20,000<br />Restuarant 2,000 8,000 6,000<br />Theater 6,000 6,000 5,000<br /><br />Determine the best investment using the following decision criteria.<br />a. Maximax<br />b. Maximin<br />c. Minimax regret<br />d. Hurwicz ( α =.4)<br />e. Equal likelihood<br /><br /><b>Problem 26</b><br />The Steak and Chop Butcher Shop purchases steak from a local meatpacking house. The meat is purchased on Monday at $2.00 per pound, and the shop sells the steak for $3.00 per pound. Any steak left over at the end of the week is sold to a local zoo for $.50 per pound . The possible demands for steak and the probability of each are shown in the following table:<br />Demand (lb.) Probability<br />20 .10<br />21 .20<br />22 .30<br />23 .30<br />24 .10<br />1.00<br /><br />The shop must decide how much steak to order in a week. Construct a payoff table for this decision situation and determine the amount of steak that should be ordered, using expected value.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-55572898265464143672012-05-19T09:09:00.000-07:002013-11-07T15:50:59.359-08:00The Senate consists of 100 senators<b>Price: $18.99</b><br /><a href="http://homeworksolution.fetchapp.com/sell/aimapeya?type=cart"><img src="http://www.paypal.com/en_US/i/btn/btn_cart_LG.gif" alt="" /></a><br /><br /><b>Problem 2.</b><br />The retread tire company recaps tires. The fixed annual cost of the recapping operation is $60,000. The variable cost of recapping a tire is $ 9.00 . The company charges $ 25 to recap a tire.<br /><br />a. for an annual volume of 12,000 tire, determine the total cost , total revenue, and profit.<br /><br />b. determine annual break-even volume for the retread tire company operation<br /><br /><b>Problem 4</b><br />The Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound.Determine the monthly break-even volume for the company. graphically illustrate the break-even volume for the evergreen fertilizer company.<br /><br /><b>Problem 10</b><br />A large research hospital has accumulated statistical data on its patients for an extended period. Researchers have determined that patients who are smokers have an 18% chance of contracting a serious illness such as heart disease, cancer, of emphysema, whereas there is only a .06 probability that a nonsmoker will contract a serious illness. From hospital records, the researchers know that 23% of all hospital patients are smokers, while 77% are nonsmokers. For planning purposes, the hospital physician staff would like to know the probability that a gives patient is a smoker if the patient has a serious illness.<br /><br /><b>Problem 12</b><br />The Senate consists of 100 senators, of whom 34 are Republicans and 66 are Democrats. A bill to increase defense appropriations is before the Senate. Thirty-five percent of the Democrats and 70% of the Republicans favor the bill. The bill needs a simple majority to pass. Using a probability tree, determine the probability that the bill will pass.<br /><br /><b>Problem 14</b><br />A metropolitan school system consists of three districts -north, south, and central. The north district contains 25% of all students, the south district contains 40%, and the central district contains 35%. A minimum-competency test was given to all students; 10% of the north district students failed, 15% of the south district students failed, and 5% of the central district students failed.<br /><br />a. Develop a probability tree showing all marginal, conditional, and joint probabilities.<br />b. Develop a joint probability table.<br />c. What is the probability that a student selected at random failed the test?Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0tag:blogger.com,1999:blog-9129554029764779348.post-60522539455838398312012-05-18T18:15:00.000-07:002013-11-07T15:50:59.368-08:00S6-5 Perpetual inventory<b>Price: $1.99 </b><br /><a href="http://homeworksolution.fetchapp.com/sell/vcquiebo?type=cart"><img src="http://www.paypal.com/en_US/i/btn/btn_cart_LG.gif" alt="" /></a><br /><br />S6-5 Perpetual inventory record—average cost [10 min]<br />Review the facts on Mountain Cycles in Short Exercise 6-3.<br /><br />Requirement<br />1. Prepare a perpetual inventory record for the average-cost method.<br /><br />Data from E6-3<br />Mountain Cycles uses the FIFO inventory method. Mountain started August with 12<br />bicycles that cost $42 each. On August 16, Mountain bought 40 bicycles at $68 each.<br />On August 31, Mountain sold 36 bicycles.Accountingtutorialshttp://www.blogger.com/profile/09946131556910110553noreply@blogger.com0