Questions and Answers of Accounting What The Numbers Mean

Maryville Inc. incurred the following costs during June:Required:During the month, 53,000 units of product were manufactured and 48,000 units of product were sold. On June 1, Maryville carried no
The information presented here represents selected data from the December 31, 2022, balance sheets and income statements for the year then ended for three firms:Required:Calculate the missing amounts
This exercise provides practice in understanding the operation of T-accounts and transaction analysis. For each situation, you must solve for a missing amount. Use a T-account for the balance sheet
Stockholders’ equity totaled $246,000 at the beginning of the year. During the year, net income was $36,000, dividends of $9,000 were declared and paid, and $30,000 of common stock was issued at
Prepare a bank reconciliation as of June 30 from the following information:a. The June 30 cash balance in the general ledger is $1,940.b. The June 30 balance shown on the bank statement is $1,168.c.
The following information is available from Gray Co.’s accounting records for the year ended December 31, 2022 (amounts in millions):Required:a. The net cash provided by operating activities for
Presented here are summarized data from the balance sheets and income statements of Wiper Inc.:Required:a. Calculate return on investment, based on net income and average total assets, for 2023 and
A department of Delta Co. incurred the following costs for the month of June. Variable costs, and the variable portion of mixed costs, are a function of the number of units of activity:During July,
Acme Inc. incurs the following costs during July:Required:Calculate Acme’s total manufacturing costs for July. Sales expense.. Direct labor..... Factory supplies.. Advertising.. Raw material
Presented here is the income statement for Big Sky Inc. for the month of February:Based on an analysis of cost behavior patterns, it has been determined that the company’s contribution margin ratio
Harris Company experiences the following cost behavior patterns each week:Fixed costs: supervisor’s salary $1,600; factory rent $4,000Mixed costs: utilities $2,400 + $8.40 per unitVariable costs
Bentley estimates manufacturing overhead of $1,200,000 for 2022 and will apply overhead to units produced based on 400,000 machine hours. During 2022, Bentley used $1,280,000 of raw materials, paid
Coronado Company applies manufacturing overhead to production at the rate of $8 per direct labor hour and ended March with $24,000 underapplied overhead. Actual manufacturing overhead incurred for
The following information is from ABC Company’s general ledger for the month of September: Beginning and ending finished goods inventory, respectively, were 168,000 and 156,000. Cost of goods sold
The following cost behavior pattern describes anticipated manufacturing overhead costs for 2022: $240,000 + $8/unit. During the year, 30,000 units were produced and 28,000 units were
The following cost behavior patterns describe anticipated manufacturing costs for 2022: raw material, $7/unit; direct labor, $10/unit; and manufacturing overhead, $240,000 + $8/unit.Required:If
Ironstone Inc. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours.Required:a. For 2022, the
HealthTech Inc. manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials and direct
Nautical Footwear Inc. manufactures women’s boating shoes. Manufacturing overhead is assigned to production on a machine-hour basis. For 2022, it was estimated that manufacturing overhead would
Janson Inc. produces pickup truck bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $25.40 per machine hour
TopBass Inc. manufactures fishing equipment. During 2022, total costs associated with manufacturing 30,000 fly-cast fishing rods (a new product introduced this year) were as follows:Required:a.
Trendy Creations Tie Co. manufactures neckties and scarves. Two overhead application bases are used; some overhead is applied on the basis of raw material cost at a rate of 150% of material cost, and
Angora Creations Co. manufactures wool sweaters. Costs incurred in making 45,000 sweaters in September included $180,000 of fixed manufacturing overhead. The total absorption cost per sweater was
Williamson Inc. manufactures digital voice recorders. During 2022, total costs associated with manufacturing 52,000 of the new EZ 9900 model (introduced this year) were as follows:Required:a.
The following table summarizes the beginning and ending inventories of Springfield Manufacturing Inc. for the month of September:Raw materials purchased during the month of September totaled
Morrison & Company incurred the following costs during August:Manufacturing overhead is applied on the basis of $25 per direct labor hour. Assume that overapplied or underapplied overhead is
Gillman Co. is forecasting sales of 80,600 units of product for August. To make one unit of finished product, five pounds of raw materials are required. Actual beginning and desired ending
Each gallon of Old Brut, a popular aftershave lotion, requires three ounces of ocean scent. Budgeted production of Old Brut for the first three quarters of 2022 is as follows:Management’s policy is
Olympia Productions Inc. makes award medallions that are attached to ribbons. Each medallion requires 18 inches of ribbon. The sales forecast for March is 4,000 medallions. Estimated beginning
SAS is a world leader in business analytics software, delivering breakthrough technology to transform the way organizations do business. Activity based costing (ABC) is a proven methodology that
ABC Company’s actual unit sales in the current year for January, February, and March were 20,000, 17,000, and 23,000 units, respectively. Current year selling price is $20. An analysis of general
Brooklyn Studio’s sales are all made on account. The firm’s collection experience has been that 25% of a month’s sales are collected in the month the sale is made, 60% are collected in the
ABC Company has a cash balance of $22,000 on August 1 and requires a minimum ending cash balance of $20,000. Cash receipts from sales budgeted for August are $306,180. Cash disbursements budgeted for
Scottsdale Co. has actual sales for July and August and forecast sales for September, October, November, and December as follows:Based on past experience, it is estimated that 40% of a month’s
Osage Inc. has actual sales for May and June and forecast sales for July, August, September, and October as follows:Required:a. The firm’s policy is to have finished goods inventory on hand at the
Oakwood Creations Co. makes decorative candle pedestals. An industrial engineer consultant developed ideal time standards for one unit of the Berkley model pedestal. The standards follow, along with
Lakeway Manufacturing Co. manufactures and sells household cleaning products. The company’s research department has developed a new cleaner for which a standard cost must be determined. The new
D&J Furniture, a retail store, has an average gross profit ratio of 48%. The sales forecast for the next four months follows:Management’s inventory policy is to have ending inventory equal to
Precious Stones Ltd. is a retail jeweler. Most of the firm’s business is in jewelry and watches. The firm’s average gross profit ratio for jewelry and watches is 70% and 40%, respectively. The
Refer to the PrimeTime Sportswear data presented in Problem 14.21.Data From in Problem 14.21PrimeTime Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded
Form a group of three or four students to research, evaluate, and report on software solutions available to support the budgeting needs of an organization. Choose three planning/budgeting products
The monthly cash budgets for the second quarter of 2022 follow ($000 omitted) for Tuscano Mfg. Co. A minimum cash balance of $15,000 is required to start each month, and a $50,000 line of credit has
MDA Inc. processes corn into corn starch and corn syrup. The company’s productivity and cost standards follow: From every bushel of corn processed, ten pounds of starch and five pounds of syrup
In addition to the information for Acme Company in Mini-Exercises 15.1 and 15.2, the standard fixed overhead application rate per unit consists of $2 per machine hour and each unit is allowed a
Following is a partially completed performance report for a recent week for direct labor in the binding department of a book publisher:The original budget is based on the expectation that 4,000 books
ABC Company operates two divisions with the following sales and expense information for the month of May:Division 1: sales, $240,000; contribution margin ratio, 50%; direct fixed expenses,
ABC Company operates two divisions with the following operating information for the month of May:Division 1: sales, $240,000; operating income, $72,000; operating assets, $600,000.Division 2: sales,
The cost formula for the maintenance department of Rambo Ltd. is $9,700 per month plus $3.85 per machine hour used by the production department.Required:a. Calculate the maintenance cost that would
Oakton Inc. manufactures end tables, armchairs, and other wood furniture products from high-quality materials. The company uses a standard costing system and isolates variances as soon as possible.
Smallman’s Garage uses standards to plan and control labor time and expense. The standard time for an engine tune-up is 4 hours, and the standard labor rate is $20 per hour. Last week, 36 tune-ups
The president of Eaglesway Inc. attended a seminar about the contribution margin model and returned to her company full of enthusiasm about it. She requested that last year’s traditional model
Vogel Co. produces three models of heating and air conditioning thermostat components. The following table summarizes data about each model:Required:a. Criticize the preceding presentation. On what
The standards for one case of Springfever Tonic are as follows:During the week ended March 13, the following activity took place:14,800 lb of raw materials were purchased for inventory at a cost of
Romano Corporation has three operating divisions and requires a 12% return on all investments. Selected information is presented here:Required:a. Calculate the missing amounts for each division.b.
The standards for one case of liquid weed killer are as follows:During the week ended May 6, the following activity took place: 4,360 machine hours were worked. 22,800 lb of raw material were
The Flynn Insurance Company developed standard times for processing claims. When a claim was received at the processing center, it was first reviewed and classified as simple or complex. The standard
The Northern Division of Allied Inc. has operating income of $32,000 on sales revenue of $320,000. Divisional operating assets are $160,000, and management of Allied has determined that a minimum
Graystone’s production budget for September called for making 60,000 units of a single product. The firm’s production standards allow one-half of a machine hour per unit produced. The fixed
Presented here are the original overhead budget and the actual costs incurred during April for Piccolo Inc. Piccolo’s managers relate overhead to direct labor hours for planning, control, and
The chair of the Science Department of State University has a budget for laboratory supplies. Supplies have a variable cost behavior pattern that is a function of the number of students enrolled in
One of the significant costs for a nonpublic college or university is student aid in the form of gifts and grants awarded to students because of academic potential or performance, and/or financial
During the year ended May 31, 2021, Teller Register Co. reported favorable raw material usage and direct labor and variable overhead efficiency variances that totaled $285,800. Price and rate
The Consortium for Advanced Manufacturing—International (CAM-I) is an international consortium of companies, consultancies, and academics that have elected to work cooperatively in a precompetitive
Lakeside Inc. produces a product that currently sells for $72 per unit. Current production costs per unit include direct materials, $20; direct labor, $24; variable overhead, $10; and fixed overhead,
In addition to the product cost information for Lakeside Inc. in Mini-Exercise 16.1, Lakeside has received an offer from a nonprofit organization to buy 6,000 units at $56 per unit. Lakeside
Lakeside Inc. produces Product A and Product B that require special machining time. Machine time capacity is 10,000 machine hours per month. Lakeside estimates April demand for each product and
In addition to the product cost information for Lakeside Inc. in Mini-Exercise 16.1, product engineering has determined that a certain part of the product conversion process could be outsourced. Raw
Lakeside Inc. is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $7,500 per month. The new equipment will have a five-year
Use the information presented for Lakeside Inc. in Mini-Exercise 16.6 and your calculation of the net present value of the new production equipment.Data from in Mini-Exercise 16.6Lakeside Inc. is
ABC Company produces product X, product Y, and product Z. All three products require processing on specialized finishing machines. The capacity of these machines is 1,800 hours per month. ABC Company
Use the information presented for Lakeside Inc. in Mini-Exercise 16.6.Data from in Mini-Exercise 16.6Lakeside Inc. is considering replacing old production equipment with state-of-the-art technology
Waterway Engine Inc. produces engines for the watercraft industry. An outside manufacturer has offered to supply several component parts used in the engine assemblies, which are currently being
TopCap Co. is evaluating the purchase of another sewing machine that will be used to manufacture sport caps. The invoice price of the machine is $98,000. In addition, delivery and installation costs
The following capital expenditure projects have been proposed for management’s consideration at Scott Inc. for the upcoming budget year:Required:a. Calculate the net present value of projects B, C,
Southern Manufacturing Ltd. is considering the investment of $230,000 in a new machine. The machine will generate cash flow of $40,000 per year for each year of its eight-year life and will have a
Throughout this course, you will be asked to relate the material being studied to actual financial statements. After you complete this course, you will be able to use an organization’s financial
The accounting profession is frequently in the news, not always in the most positive light. The purpose of this assignment is to increase your awareness of an issue facing the
Chris and Tiasha Hirst have owned and operated a retail furniture store for more than 30 years. They have employed an independent CPA during this time to prepare various sales tax, payroll tax, and
Using the search engine you are most comfortable with, identify at least five sources concerning the general topic of auditor independence. Write a brief memo to provide an update on the current
From the set of financial statements acquired for E1.1, determine the following:a. Who is the chief financial officer?b. What are the names of the directors?c. Which firm conducted the audit? Have
The information presented here represents selected data from the December 31, 2022, balance sheets and income statements for the year then ended for three firms:Required:Calculate the missing amounts
Total assets were $58,000 and total liabilities were $35,000 at the beginning of the year. Net income for the year was $11,000, and dividends of $3,000 were declared and paid during the
During the year, net sales were $400,000; gross profit was $160,000; net income was $60,000; income tax expense was $15,000; and selling, general, and administrative expenses were
From the following data, calculate the retained earnings balance as of December 31, 2022: Retained earnings, December 31, 2021. ... Cost of buildings purchased during 2022. . . . Net loss for the
During the year, cost of goods sold was $120,000; income from operations was $114,000; income tax expense was $24,000; interest expense was $18,000; and selling, general, and administrative expenses
From the following data, calculate the retained earnings balance as of December 31, 2021: Retained earnings, December 31, 2022. Decrease in total liabilities during 2022. Gain on the sale of
Net income for the year was $72,000. During the year, net cash provided by operating activities was $201,000; net cash used for investing activities was $168,000; net cash provided by financing
At the beginning of its current fiscal year, Willie Corp.’s balance sheet showed assets of $67,600 and liabilities of $33,000. During the year, liabilities decreased by $5,000. Net income for the
Net income for the year was $62,000. During the year, net cash provided by operating activities was $145,000; net cash used for investing activities was $96,000; net increase in cash for the year was
Pope’s Garage had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet items reflect account balances at December 31, 2022, and that
At the beginning of the current fiscal year, the balance sheet for Davis Co. showed liabilities of $160,000. During the year, liabilities decreased by $9,000, assets increased by $33,000, and paid-in
The information on the following page was obtained from the records of Breanna Inc.:Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2022,
Circle-Square Ltd. is in the process of liquidating and going out of business. The firm’s balance sheet shows $50,000 in cash, accounts receivable of $240,000, inventory totaling $110,000, plant
Gary’s TV had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet items reflect account balances at December 31, 2022, and that all
A partially completed balance sheet for Blue Co. Inc. as of October 31, 2022, is presented. Where amounts are shown for various items, the amounts are correct.Required:Using the following data,
Following is a partially completed balance sheet for Epsico Inc. at December 31, 2022, together with comparative data for the year ended December 31, 2021. From the statement of cash flows for the
The following selected data are adapted from the February 2, 2020, and February 3, 2019, consolidated balance sheets and income statements for the years then ended for The Home Depot, Inc. All
Selected data from the September 26, 2020, and September 28, 2019, consolidated balance sheets and income statements (statements of operations) for the years then ended for Apple Inc. follow. All
Firm J has net income of $124,800, sales of $960,000, and average total assets of $640,000.Required:Calculate Firm J’s margin, turnover, and return on investment (ROI).
Firm L had net assets at the end of the year of $660,000. The only items affecting stockholders’ equity during the year were net income of $162,000 and dividends of $42,000.Required:Calculate Firm

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