Questions and Answers of Accounting Principles IFRS

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $900,000. The only variable costs budgeted for the division were
The Mixing Department manager of Malone Company is able to control all overhead costs except rent, property taxes, and salaries. Budgeted monthly overhead costs for the Mixing Department, in
The service division of Raney Industries reported the following results for 2017.Sales.....................................................................$500,000Variable
In the Assembly Department of Hannon Company, budgeted and actual manufacturing overhead costs for the month of April 2017 were as follows.All costs are controllable by the department manager.
Data for Gundy Company are given in BE24-4. In March 2017, the company incurs the following costs in producing 100,000 units: direct materials $520,000, direct labor $596,000, and variable overhead
Gundy Company expects to produce 1,200,000 units of Product XX in 2017. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are direct
(a) What costs are included in a performance report for a cost center?(b) In the report, are variable and fixed costs identified?
Waterways Corporation is preparing its budget for the coming year, 2017. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in
Deleon Inc. is preparing its annual budgets for the year ending December 31, 2017. Accounting assistants furnish the data shown below.An accounting assistant has prepared the detailed manufacturing
Green Landscaping Inc. is preparing its budget for the first quarter of 2017. The next step in the budgeting process is to prepare a cash receipts schedule and a cash payments schedule. To that end
The controller of Trenshaw Company wants to improve the company’s control system by preparing a month-by-month cash budget. The following information is for the month ending July 31, 2017.June 30,
Danner Company expects to have a cash balance of $45,000 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows.Collections from customers: January $85,000,
Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following.Units to be produced (by quarters): 10,000, 12,000, 14,000, 16,000.Direct labor: time
Fuqua Company’s sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 4 pounds of materials,
DeWitt Industries has adopted the following production budget for the first 4 months of 2017.Each unit requires 2 pounds of raw materials costing $3 per pound. On December 31, 2016, the ending raw
Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follows.Quarter
Edington Electronics Inc. produces and sells two models of pocket calculators, XQ-103 and XQ-104. The calculators sell for $15 and $25, respectively. Because of the intense competition Edington
Batista Company management wants to maintain a minimum monthly cash balance of $25,000. At the beginning of April, the cash balance is $25,000, expected cash receipts for April are $245,000, and cash
North Company has completed all of its operating budgets. The sales budget for the year shows 50,000 units and total sales of $2,250,000. The total unit cost of making one unit of sales is $25.
For Roche Inc., variable manufacturing overhead costs are expected to be $20,000 in the first quarter of 2017, with $5,000 increments in each of the remaining three quarters. Fixed overhead costs are
Perine Company has 2,000 pounds of raw materials in its December 31, 2016, ending inventory. Required production for January and February of 2017 are 4,000 and 5,000 units, respectively. Two pounds
The production budget of Justus Company calls for 80,000 units to be produced. If it takes 45 minutes to make one unit and the direct labor rate is $16 per hour, what is the total budgeted direct
Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2017,
Montier Corporation produces one product. Its cost includes direct materials ($10 per unit), direct labor ($8 per unit), variable overhead ($5 per unit), fixed manufacturing ($225,000), and fixed
Hamby Inc. has sales of $2,000,000 for the first quarter of 2017. In making the sales, the company incurred the following costs and expenses.Prepare a CVP income statement for the quarter ended March
Florida Beach Company manufactures sunscreen, called NoTan, in 11-ounce plastic bottles. NoTan is sold in a competitive market. As a result, management is very cost-conscious. NoTan is manufactured
At the beginning of April, Current Designs had 30 kayaks in process in the Fabrication Department. Rick Thrune, the production manager, estimated that about 80% of the materials costs had been added
Schultz Electronics manufactures two large-screen television models: the Royale which sells for $1,600, and a new model, the Majestic, which sells for $1,300. The production cost computed per unit
Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2017 totaled $2,280,000 as follows.Production records show that 35,000 units were in beginning
Rosenthal Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling
The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2017, the first month of operation.Production: 7,000 units finished and transferred
Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $4,200, Work in Process—Cutting $2,900, Work in Process—Assembly $10,600, and Finished
Harrelson Company manufactures pizza sauce through two production departments: Cooking and Canning. In each process, materials and conversion costs are incurred evenly throughout the process. For the
(a) What steps are involved in developing an activity-based costing system?(b) What are the benefits of ABC?
Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor
Manufacturing cost data for Orlando Company, which uses a job order cost system, are presented below.InstructionsIndicate the missing amount for each letter. Assume that in all cases manufacturing
The primary purpose of managerial accounting is to provide information useful for management decisions. Many of the managerial accounting techniques that you learn in this course will be useful for
The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2017.Instructions(a) Prepare a cost of goods manufactured schedule. (Assume all raw materials
Bell Company, a manufacturer of audio systems, started its production in October 2017. For the preceding 3 years, Bell had been a retailer of audio systems. After a thorough survey of audio system
The following information is available for Aikman Company.Instructions(a) Compute cost of goods manufactured.(b) Prepare an income statement through gross profit.(c) Show the presentation of the
An incomplete cost of goods manufactured schedule is presented below.InstructionsComplete the cost of goods manufactured schedule for Hobbit Company. НОВBIT COMPANY Cost of Goods Manufactured
Match the descriptions that follow with the corresponding terms. Descriptions:1. ______ Inventory system in which goods are manufactured or purchased just as they are needed for sale.2. ______ A
Indicate whether the following statements are true or false.1. Managerial accounting reports focus on manufacturing and nonmanufacturing costs, but are also used in the budget process.2. Financial
Using the data in Question 15, what are(a) The total cost of work in process(b) The cost of goods manufactured?
If your school has a subscription to the FASB Codification, go to http://aaahq.org/ascLogin.cfm to log in and prepare responses to the following. Use the Master Glossary for determining the proper
In this chapter, you learned how to use many tools for performing a financial analysis of a company. When making personal investments, however, it is most likely that you won’t be buying stocks and
As the CPA for Gandara Manufacturing Inc., you have been asked to develop some key ratios from the comparative financial statements. This information is to be used to convince creditors that the
Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. Instructions for accessing and using the complete
PepsiCo’s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. Instructions for accessing and using the complete annual
Your parents are considering investing in Apple Inc. common stock. They ask you, as an accounting expert, to make an analysis of the company for them. Apple’s financial statements are presented in
Terwilliger Corporation owns a number of cruise ships and a chain of hotels. The hotels, which have not been profitable, were discontinued on September 1, 2017. The 2017 operating results for the
An incomplete income statement and an incomplete comparative balance sheet of Deines Corporation are presented below.Additional information:1. The accounts receivable turnover for 2017 is 10
The comparative statements of Corbin Company are presented below.Additional data:The common stock recently sold at $19.50 per share.InstructionsCompute the following ratios for 2017.(a) Current
Financial information for Messersmith Company is presented below.Additional information:1. Inventory at the beginning of 2016 was $118,000.2. Total assets at the beginning of 2016 were $630,000.3. No
Condensed balance sheet and income statement data for Landwehr Corporation appear below.Additional information:1. The market price of Landwehr’s common stock was $4.00, $5.00, and $8.00 for 2016,
The comparative statements of Painter Tool Company are presented below.All sales were on account.InstructionsCompute the following ratios for 2017. (Weighted-average common shares in 2017 were
Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appear below. All balance sheet data are as of December 31, 2017, and December 31, 2016.Instructions(a) Prepare a
Trayer Corporation has income from continuing operations of $290,000 for the year ended December 31, 2017. It also has the following items (before considering income taxes).1. An unrealized loss of
Wiemers Corporation’s comparative balance sheets are presented below:Wiemers’s 2017 income statement included net sales of $100,000, cost of goods sold of $60,000, and net income of
The income statement for Sutherland, Inc., appears below.Additional information:1. The weighted-average common shares outstanding in 2017 were 30,000 shares.2. The market price of Sutherland, Inc.
Selected comparative statement data for Queen Products Company are presented below. All balance sheet data are as of December 31.InstructionsCompute the following ratios for 2017.(a) Profit
Frizell Company has the following comparative balance sheet data.Additional information for 2017:1. Net income was $25,000.2. Sales on account were $410,000. Sales returns and allowances were
Keener Incorporated had the following transactions occur involving current assets and current liabilities during February 2017.Feb. 3 Accounts receivable of $15,000 are collected.7 Equipment is
Suppose Nordstrom, Inc., which operates department stores in numerous states, has the following selected financial statement data for a recent year.For the year, net sales were $8,258 and cost of
The comparative condensed income statements of Emley Corporation are shown below.Instructions(a) Prepare a horizontal analysis of the income statement data for Emley Corporation using 2016 as a base.
The comparative condensed balance sheets of Gurley Corporation are presented on page 819.Instructions(a) Prepare a horizontal analysis of the balance sheet data for Gurley Corporation using 2016 as
Operating data for Navarro Corporation are presented below.InstructionsPrepare a schedule showing a vertical analysis for 2017 and 2016. 2017 2016 Net sales $750,000 $600,000 Cost of goods sold
Financial information for Kurzen Inc. is presented below.InstructionsPrepare a schedule showing a horizontal analysis for 2017 using 2016 as the base year. December 31, 2017 December 31, 2016
The condensed financial statements of Murawski Company for the years 2016 and 2017 are presented below. (Amounts in thousands.)Compute the following ratios for 2017 and 2016.(a) Current ratio.(b)
Summary financial information for Wolford Company is as follows.Compute the amount and percentage changes in 2017 using horizontal analysis, assuming 2016 is the base year. December 31, 2017 December
On June 30, Holloway Corporation discontinued its operations in Europe. During the year, the operating loss was $300,000 before taxes. On September 1, Holloway disposed of its European facilities at
An inexperienced accountant for Silva Corporation showed the following in the income statement: income before income taxes $450,000 and unrealized gain on available-for-sale securities (before taxes)
The following data are from the income statements of Haskin Company.(a) Compute for each year (1) the inventory turnover and (2) the days in inventory.(b) What conclusions concerning the management
Linebarger Corporation has net income of $11.44 million and net revenue of $95 million in 2017. Its assets are $14 million at the beginning of the year and $18 million at the end of the year. What
Vertical analysis (common size) percentages for Kochheim Company’s sales revenue, cost of goods sold, and expenses are shown below.Did Kochheim’s net income as a percentage of sales increase,
Horizontal analysis (trend analysis) percentages for Dody Company’s sales revenue, cost of goods sold, and expenses are shown below.Did Dody’s net income increase, decrease, or remain unchanged
Using the same data presented above in BE18-3 for Goody Company, illustrate vertical analysis. December 31, 2017 December 31, 2016 Accounts receivable $ 520,000 $ 400,000 Inventory Total assets
Using the following data from the comparative balance sheet of Goody Company, illustrate horizontal analysis. December 31, 2017 December 31, 2016 Accounts receivable $ 520,000 $ 400,000 Inventory
You are considering investing in Wingert Transportation. The company reports 2017 earnings per share of $6.50 on income from continuing operations and $4.75 on net income. Which EPS figure would you
Roberto Perez is puzzled. His company had a profit margin of 10% in 2017. He feels that this is an indication that the company is doing well. Julie Beck, his accountant, says that more information is
(a) If Peoples Company had net income of $390,000 in 2017 and it experienced a 24.5% increase in net income for 2018, what is its net income for 2018?(b) If six cents of every dollar of Peoples’
Tom Epps and Mary Jones are examining the following statement of cash flows for Guthrie Company for the year ended January 31, 2017.Tom claims that Guthrie’s statement of cash flows is an excellent
The financial statements of Apple Inc. are presented in Appendix A. Instructions for accessing and using the company’s complete annual report, including the notes to the financial statements, are
Condensed financial data of Oakley Company appear below.Additional information:1. Equipment costing $97,000 was purchased for cash during the year.2. Investments were sold at cost.3. Equipment
The comparative balance sheets for Rothlisberger Company as of December 31 are presented below.Additional information:1. Operating expenses include depreciation expense of $42,000 and charges from
Data for Cheng Inc. are presented in P17-9A. Further analysis reveals that accounts payable pertain to merchandise creditors.InstructionsPrepare a statement of cash flows for Cheng Inc. using the
Condensed financial data of Cheng Inc. follow.Additional information:1. New equipment costing $85,000 was purchased for cash during the year.2. Old equipment having an original cost of $57,500 was
Data for Nosker Company are presented in P17-7A. Further analysis reveals the following.1. Accounts payable pertain to merchandise suppliers.2. All operating expenses except for depreciation were
Data for Zumbrunn Company are presented in P17-5A.Zumbrunn’s balance sheet contained the comparative data at December 31, shown below.InstructionsPrepare the operating activities section of the
Zumbrunn Company’s income statement contained the condensed information below.Zumbrunn’s balance sheet contained the comparative data at December 31, shown below.Accounts payable pertain to
Data for Whitlock Company are presented in P17-3A.InstructionsPrepare the operating activities section of the statement of cash flows using the direct method. WHITLOCK COMPANY Income Statement For
The income statement of Whitlock Company is presented here.Additional information:1. Accounts receivable increased $200,000 during the year, and inventory decreased $500,000.2. Prepaid expenses
The following account balances relate to the stockholders’ equity accounts of Kerbs Corp. at year-end.A small stock dividend was declared and issued in 2017. The market value of the shares was
Comparative balance sheets for International Company are presented below.Additional information:1. Net income for 2017 was $135,000.2. Cash dividends of $70,000 were declared and paid.3. Bonds
Rodriquez Corporation’s comparative balance sheets are presented below.Additional information:1. Net income was $18,300. Dividends declared and paid were $16,400.2. Equipment which cost $10,000 and
Here are comparative balance sheets for Velo Company.Additional information:1. Net income for 2017 was $93,000.2. Cash dividends of $35,000 were declared and paid.3. Bonds payable amounting to
Rojas Corporation’s comparative balance sheets are presented below.Additional information:1. Net income was $22,630. Dividends declared and paid were $19,500.2. No noncash investing and financing
The current sections of Scoggin Inc.’s balance sheets at December 31, 2016 and 2017, are presented here. Scoggin’s net income for 2017 was $153,000. Depreciation expense was
Obermeyer Corporation issued the following statement of cash flows for 2017.(a) Compute free cash fl ow for Obermeyer Corporation.(b) Explain why free cash flow often provides better information
Sisson Corporation reports operating expenses of $80,000 excluding depreciation expense of $15,000 for 2017. During the year, prepaid expenses decreased $6,600 and accrued expenses payable increased

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