Questions and Answers of Financial Managerial Accounting

a. Based on the data in Exercise 17-11, determine the following:1. Cost of beginning work in process inventory completed this period2. Cost of units transferred to finished goods during the period3.
The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of
Kellogg Company (K) manufactures cold cereal products, such as Frosted Flakes. Assume that the inventory in process on March 1 for the Packing Department included 1,200 pounds of cereal in the
a. Based upon the data in Exercise 17-7, determine the following for December:1. Direct materials cost per equivalent unit2. Conversion cost per equivalent unit3. Cost of the beginning work in
The following information concerns production in the Baking Department for December. All direct materials are placed in process at the beginning of production.a. Determine the number of units in work
Data for the two departments of Kimble & Pierce Company for June of the current fiscal year are as follows:Production begins in the Drawing Department and finishes in the Winding Department. If
The Converting Department of Worley Company had 2,400 units in work in process at the beginning of the period, which were 35% complete. During the period, 10,800 units were completed and transferred
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be $3,150,000, and total
Radford Inc. manufactures a sugar product by a continuous process, involving three production departments—Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct
In October, the cost of materials transferred into the Rolling Department from the Casting Department of Kraus Steel Company is $3,000,000. The conversion cost for the period in the Rolling
The costs per equivalent unit of direct materials and conversion in the Rolling Department of Kraus Steel Company are $750 and $120, respectively. The equivalent units to be assigned costs are as
The Rolling Department of Kraus Steel Company had 200 tons in beginning work in process inventory (60% complete) on October 1. During October, 3,900 tons were completed. The ending work in process
Kraus Steel Company has two departments, Casting and Rolling. In the Rolling Department, ingots from the Casting Department are rolled into steel sheet. The Rolling Department received 4,000 tons
The cost of direct materials transferred into the Rolling Department of Kraus Company is $3,000,000. The conversion cost for the period in the Rolling Department is $462,600. The total equivalent
The Rolling Department of Kraus Steel Company had 200 tons in beginning work in process inventory (60% complete) on October 1. During October, 3,900 tons were completed. The ending work in process
Ginocera Inc. is a designer, manufacturer, and distributor of custom gourment kitchen knives. A new kitchen knife series called the Kitchen Ninja was released for production in early 20Y8. In
A summary of the time tickets is as follows:Journalize the entry to record the factory labor costs. Amount Job No. Job No. Amount Indirect $ 8,220 100 101 $ 4,800 5,875 18,250 15,500 111 9,430 12,675
Materials issued are as follows:Journalize the entry to record the issuance of materials. Requisition No. Material Job No. Amount 201 Aluminum $976,000 500 503 Plastic 202 412,300 187,700 150,000
The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:Preferred 2% Stock, $100 par (100,000 shares authorized, 80,000 shares issued) . .
The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records:a. Estimate the cost of the inventory destroyed.b. Briefly describe the situations in
The units of an item available for sale during the year were as follows:There are 208 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the
Financial information related to Ebony Interiors for February and March 20Y3 is as follows:a. Prepare balance sheets for Ebony Interiors as of February 28 and March 31, 20Y3.b. Determine the amount
The financial statements are interrelated. (a) What item of financial or operating data appears on both the income statement and the statement of stockholders’ equity? (b) What item
A business had revenues of $640,000 and operating expenses of $715,000. What was the amount of (a) Net loss or (b) Net income?
A business had revenues of $679,000 and operating expenses of $588,000. What was the amount of(a) Net loss or (b) Net income?
Patterson Corporation expects to incur $70,000 of factory overhead and $60,000 of general and administrative costs next year. Direct labor costs at $5 per hour are expected to total $50,000. If
Lucy Sportswear manufactures a specialty line of T-shirts using a job order cost system. During March, the following costs were incurred in completing Job ICU2: direct materials, $13,700; direct
John Sheng, a cost accountant at Starlet Company, is developing departmental factory overhead application rates for the company’s Tooling and Fabricating departments. The budgeted overhead for each
Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for
Antolini Enterprises produces men’s sports coats that are sold by popular department stores. Each retail order is treated as a job that accumulates materials, labor, and overhead costs for a batch
Barnes Company uses a job order cost system. The following data summarize the operations related to production for October:a. Materials purchased on account, $315,500.b. Materials requisitioned,
The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:• Purchased $480,000 of materials.• Used $434,500 of direct
Collegiate Publishing Inc. began printing operations on March 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303
The following account appears in the ledger prior to recognizing the jobs completed in January:
Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows:Engine
Eclipse Solar Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated
Schumacher Industries Inc. manufactures recreational vehicles. Schumacher Industries uses a job order cost system. The time tickets from June jobs are summarized as follows:Job
Kingsford Furnishings Company manufactures designer furniture. Kingsford Furnishings uses a job order cost system. Balances on April 1 from the materials ledger are as
The following information is available for the first year of operations of Creston Inc., a manufacturer of fabricating
In practice, items such as wood screws and glue used in the production of school desks and chairs would most likely be classified as:a. Period costs.b. Direct labor.c. Factory overhead.d. Direct
A firm has $100,000 in direct materials costs, $50,000 in direct labor costs, and $80,000 in overhead. Which of the following is true?a. Prime costs are $150,000; conversion costs are $180,000.b.
A review of Plunkett Corporation’s accounting records revealed the following selected information for the previous year:Direct materials used.............................$ 56,000Direct
Which of the following items would not be considered a manufacturing cost?a. Cream for an ice cream maker.b. Sales commissions for a car manufacturer.c. Plant property taxes for an ice cream maker.d.
a. How is a predetermined factory overhead rate computed?b. Name three common bases used in computing the rate?
Comfort Plus, Inc., has a hotel with 300 rooms in a metropolitan city. Its main competitor, Connors Hotel, has a hotel with 350 rooms in the same city. The following operating data are available for
A partial list of The Grand Hotel’s costs follows:a. Advertising in local newspaperb. Bedding (sheets, blankets, pillows)c. Bellhop wagesd. Champagne for special guest packagese. Coffee and tea for
The following is a list of costs incurred by several manufacturing companies:a. Bonus for vice president of marketingb. Costs of operating a research laboratoryc. Cost of unprocessed milk for a
A partial list of Foothills Medical Center’s costs follows:a. Advertising hospital services on televisionb. Blood testsc. Cost of drugs used for patientsd. Cost of maintaining the staff and
The following is a list of costs incurred by several manufacturing companies:a. Annual picnic for plant employees and their familiesb. Cost of fabric used by clothing manufacturerc. Cost of plastic
Cost data for Johnstone Manufacturing Company for the month ended March 31 are as follows:a. Prepare a cost of goods manufactured statement for March.b. Determine the cost of goods sold for March.
The following information is available for Fuller Manufacturing Company for the month ending October 31:Cost of direct materials used in
Walker Manufacturing Company reported the following materials data for the month ending June 30:Materials purchased.............................................$845,700Materials inventory, June
The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:a. Purchased $250,000 of materials.b. Used
Which of the following items are properly classified as part of factory overhead for Ford Motor Company (F), a maker of heavy automobiles and trucks?a. Air conditioner units for installation in
Indicate whether the following costs of Procter & Gamble (PG), a maker of consumer products, would be classified as direct materials cost, direct labor cost, or factory overhead cost:a.
Jake’s Cabins is a small motel chain with locations near the national parks of Utah, Wyoming, and Montana. The chain has a total of 500 guest rooms. The following operating data are available for
How does the “Cost of goods sold” section of the income statement differ between retail and manufacturing companies?
How do the manufacturing costs incurred during a period differ from the cost of goods manufactured for a period?
a. Differentiate between a vertical and horizontal unit within a company.b. Are the accounting and legal departments normally considered vertical or horizontal units within a company?c. Would a
The president of Freeman Industries Inc. made the following statement in the annual report to shareholders: “The founding family and majority shareholders of the company do not believe in using
The financial statements for Nike, Inc. (NKE), are presented in Appendix E at the end of the text. The following additional information is available (in thousands):Accounts receivable at May 31,
Marriott International, Inc. (MAR), and Hyatt Hotels Corporation (H) are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information
Crosby Company has provided the following comparative information:You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have
Addai Company has provided the following comparative information:You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have
The table that follows shows the stock price, earnings per share, and dividends per share for three companies for a recent year:a. Determine the price-earnings ratio and dividend yield for the three
Hasbro, Inc. (HAS), and Mattel, Inc. (MAT), are the two largest toy companies in North America. Condensed liabilities and stockholders’ equity from a recent balance sheet are shown for each
PepsiCo, Inc. (PEP), the parent company of Frito-Lay snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years:a. Determine the (1)
Income statement data for Winthrop Company for two recent years ended December 31 are as follows:a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)
The following comparative income statement (in thousands of dollars) for two recent fiscal years was adapted from the annual report of Speedway Motorsports, Inc. (TRK), owner and operator of several
The dividend yield of Suburban Propane Partners, L.P. (SPH) was 7.7% in a recent year, and the dividend yield of Alphabet Inc. (GOOG) was 0% in the same year. What might explain the difference
The Kroger Company (KR), a grocery store chain, recently had a price-earnings ratio of 13.7, while the average price-earnings ratio in the grocery store industry was 22.5. What might explain this
In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and
The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:Additional data obtained from the income statement and from an examination of the accounts
The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: Shasta Inc. Statement of Cash Flows For the Year Ended December 31, 20Y9 Cash flows from
On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows: ACCOUNT Land ACCOUNT NO. Balance Date Credit Debit Debit Credit
An analysis of the general ledger accounts indicates that delivery equipment, which cost $75,000 and on which accumulated depreciation totaled $58,000 on the date of sale, was sold for $20,200 during
The income statement disclosed the following items for the year:Depreciation expense...............................................$ 57,600Gain on disposal of
Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:a. Decrease in inventoryb. Increase
Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: 20Y1, $80,000; 20Y2, $90,000;
Sumter Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the year ended December 31, 20Y3:Retained earnings, January 1, 20Y3 . . . . . . . . . . . . . . . . . .
A corporation with both preferred stock and common stock outstanding has a substantial credit balance in its retained earnings account at the beginning of the current fiscal year. Although net
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:20Y1July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, 20Y1, at a market
Using the bond from Basic Exercise 11-4, journalize the first interest payment and the amortization of the related bond premium.Data from 11-4:On the first day of the fiscal year, a company issues a
On the first day of the fiscal year, a company issues a $5,000,000, 7%, five-year bond that pays semiannual interest of $175,000 ($5,000,000 × 7% × ½), receiving cash of $5,400,000. Journalize the
If you asked your broker to purchase for you a 11% bond when the market interest rate for such bonds was 12%, would you expect to pay more or less than the face amount for the bond? Explain.
What are the principal reasons for using a special payroll bank account?
The units of an item available for sale during the year were as follows:There are 1,500 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine
Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the last-in,
Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the first-in,
The following units of a particular item were available for sale during the calendar year:The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods
The following units of an item were available for sale during the year:Beginning inventory...................................................8,100 units at
Assume that the business in Exercise 6-3 maintains a perpetual inventory system, costing by the last-in, first-out method. Determine the cost of goods sold for each sale and the inventory balance
Beginning inventory, purchases, and sales data for DVD players are as follows:The business maintains a perpetual inventory system, costing by the first-in, first-out method.a. Determine the cost of
If inventory is being valued at cost and the price level is decreasing, which of the three methods of costing—FIFO, LIFO, or weighted average cost—will yield (a) The highest inventory
On December 31, 20Y5, the balances of the accounts appearing in the ledger of Wyman Company are as follows:Instructions1. Does Wyman Company use a periodic or perpetual inventory system? Explain.2.
Selected accounts and related amounts for Clairemont Co. for the fiscal year ended May 31, 20Y2, are presented in Problem 5-5A.Instructions1. Prepare a single-step income statement in the format
The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 20Y2:Instructions1. Prepare a multiple-step income statement.2.
Identify the errors in the following schedule of the cost of goods sold for the year ended May 31, 20Y5: Cost of goods sold: Inventory, May 31, 20Y5 .. Cost of merchandise purchased: Purchases ....
For (a) through (e), identify the items designated by X and Y.a. Purchases 2 (X + Y) = Net purchasesb. Net purchases + X = Cost of inventory purchasedc. Inventory (beginning) + Cost of inventory
The following income statement for Curbstone Company was prepared for the year ended August 31, 20Y5:a. Identify the errors in the income statement.b. Prepare a corrected income statement. Curbstone

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