Accounting 5th Edition Charles T. Horngren, Walter T. Harrison, Linda S. Bamber, Betsy Willis, Becky Jones - Solutions

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Identify and briefly describe the two ways to estimate bad-debt expense and uncollectible accounts, using the allowance method.
Show three ways to report Accounts Receivable of $100,000 and Allowance for Uncollectible Accounts of $2,800 on the balance sheet or in the related notes.
Why is the acid-test ratio a more stringent measure of the ability to pay current liabilities than the current ratio?
DE8-1 Examine the Accounts Receivable T-accounts on page 312, and answer these questions: 1.Which account (and which amount) will appear on the company's balance sheet? Suppose the company has cash of $2,000. Show how the balance sheet will report cash and the other item on page 312.2. Who are
DE8-3 What duty must be withheld from a company's credit department in order to safeguard its cash? If this duty is granted to the credit department, what can a dishonest credit department employee do to hurt the company?
Which feature of effective internal control is the most fundamental? Why?
Identify seven features of an effective system of internal control.
Describe how a budget helps a company manage its cash.
Why should accountants adhere to a higher standard of ethical conduct than many other members of society?
Give three examples of companies that would use job costing rather than process costing, and explain why.
Is Manufacturing Overhead a temporary or permanent account? Explain how the account operates.
What is the primary difference between a merchandiser's and a manufacturer's income statement?
Summarize the computation of cost of goods manufac- tured Use any dollar amounts. 3
List and briefly explain four recent changes in the busi- ness environment.
Explain two ways globalization affects management accounting.
Describe two ways managers respond to time-based com- petition.
Once a company decides to adopt a just-in-time philoso- phy, what kinds of costs and benefits should it expect?
The Institute of Management Accountants Standards of Ethical Conduct for Management Accountants lists four broad requirements. In your own words. list and briefly explain three.
DE 19-1 Your roommate, who plans to specialize in international business, is considering whether to enroll in the second principles of accounting course. She says, "I don't want to be an accountant, so why do I need a second accounting course? I just spent a whole term on financial accounting. Most
DE 19-2 List the six business functions in the value chain (Exhibit 19-4, page 760). Give an example of costs that Honda might incur in each function for a new gas-electric hybrid car.DE 19-3 Give an example of costs that E*TRADE (an online brokerage firm) might incur in each of the six business
DE19-4 Classify each of Hewlett-Packard's costs as one of the six business functions in the value chain.a. Depreciation on Roseville, California, plant.b. Costs of a customer support center Web site.c. Transportation costs to deliver laser printers to retailers, like Best Buy.d. Depreciation on
DE19-5 Consider Marvin Windows' manufacturing plant. Give two examples ofa. Direct materialsb. Direct laborc. Indirect materialsd. Indirect labore. Other manufacturing overhead
DE 19-6 Classify each of Georgia-Pacific's costs as either inventoriable or period costs:a. Depreciation on the gypsum board plant.b. Purchase of lumber to be cut into boards.c. Life insurance on CEO.d. Salaries of scientists studying ways to speed forest growth.e. Cost of a new software package to
DE19-7 Listed on the following page are several terms relating to various cost definitions. Complete the following statements with one of these terms. You may use a term more than once, and some terms may not be used at all. Cost object Direct cost Direct materialsa. Direct labor Full product cost
DE19-8 Consider Toyota, United Parcel Service, and Home Depot. For each company. answer the following questions. 1. Is this a service company, a merchandiser, or a manufacturer? 2. What is the primary output the company sells to customers? 3. What inventory accounts would this company have on its
DE19-9 Link Back to Chapter 5. Refer to Exhibit 19-9 on page 765. What would be Apex's beginning inventory if revenues, purchases and freight-in, and ending inventory are all the same as in Exhibit 19-9, but gross profit is $45,000 rather than $43,500?
DE 19-10 Link Back to Chapter 5. Given the following information for Gemz, a fashion jewelry e-tailer, compute the cost of goods sold. Web site maintenance..... Freight-in $1,000 2,500 Delivery expenses. $ 500 Purchases. 30,000 Ending inventory. 5,500 Revenues. 60,000 Marketing expenses 6,000
DE19-11 Look at Exhibit 19-11 (page 766). What would be Top-Flight's cost of goods sold and operating income if the cost of goods manufactured were $35.000 rather than $42,000? (Other costs and revenues remain the same as in Exhibit 19-11.)
DE 19-12 Turn to Exhibit 19-12 (page 767). If direct material purchases were $35,000 rather than $27,000, what would be the cost of direct materials used and the cost of goods manufactured? (Other costs remain the same as in Exhibit 19-12.)
DE 19-13 Jell's manufactures women's plastic sandals. Suppose the company's March records C include the following items. What is Jell's total manufacturing overhead cost in March? Ink for printing shoe boxes.... $ 100 Company president's salary.... $15,000 Plant foreman's salary. Plant janitor's
DE 19-14 You are a new accounting intern at Mountain Gear, Inc. Your boss gives you the following information and asks you to compute direct materials used. Purchases of direct materials Freight-in....... Freight-out Ending inventory of direct materials. Beginning inventory of direct materials.
DE19-15 Use Exhibit 19-12 (page 767) to explain the differences between manufacturing costs and the cost of goods manufactured. How much are the manufacturing costs? How much is the cost of goods manufactured? Explain the difference between these two amounts.
DE19-16 The current asset sections of the balance sheets of three companies follow. Which company is a service company? Which is a merchandiser? Which is a manufacturer? How can you tell? X-Treme Y-Not? Zesto Cash. $ 2.500 Cash $3,000 Cash... $ 2,000 Accounts receivable. 5.500 Accounts receivable
DE19-17 You work for X-Rays, a company that produces and markets upscale sunglasses. One of your competitors. SunStop, has just hired eNow! Consultants to establish an on-line sales system that will enable customers to place orders via the Internet. How could this affect X-Rays, which still takes
DE 19-18 Is JIT more appropriate for Amazon.com, a book, music, and electronics e-tailer. or Mouton-Rothschild, a French winemaker specializing in fine red wines? Explain.
DE19-19 Consider the cost-benefit analysis for the GE quality program discussed on page 774. Suppose GE's managers now estimate a 90% chance that the projects will yield an extra $20 million in benefits, and a 10% chance that the projects will yield an extra $80 million. What is the expected value
DE 19-20 Explain why each of the four broad ethical standards in the Institute of Management Accountants' Standards of Ethical Conduct for Management Accountants (Exhibit 19- 15, page 776) is necessary.
DE 19-21 The Institute of Management Accountants' Standards of Ethical Conduct for Management Accountants (Exhibit 19-15, page 776) require management accountants to meet standards regarding Competence Confidentiality . Integrity . Objectivity Consider the following situations. Which guidelines are
E19-1 Listed below are several terms relating to the functions of managers and the differences between financial and management accounting. Complete the following statements with one of these terms. You may use a term more than once, and some terms may not be used at all. Budget Controlling
E19-2 Suppose the computer manufacturer Gateway. Inc., provides the following information for its costs last month (in hundreds of thousands): Depreciation on manufacturing Exterior case for computer Salaries of telephone salespeople... $4 plant and equipment.... Hard drives Rearrange production
E19-3 Suppose Target incurred the following costs at its Charleston, South Carolina. store. Research to determine whether store should add Payment to consultant for advice on location of new a travel agency service....... $ 400 store $2,500 Purchases of merchandise.. Rearranging store layout......
E19-4 Listed below are several terms relating to service, merchandising, and manufacturing firms and their inventories. Complete the following statements with one of these terms. You may use a term more than once, and some terms may not be used at all. Finished goods inventory Manufacturing
E19-5 Consider the following selected amounts and account balances of Boyds: Fabric and Cost of goods sold. $96,000 Prepaid expenses..... $ 6.000 Direct labor. 47.000 Marketing expense.. 39.000 Direct materials 25,000 Work in process inventory. 42.000 Accounts receivable. 75.000 Manufacturing
E19-6 Compute the 20X5 cost of goods manufactured and cost of goods sold for Strike Marine Company using the following amounts: Materials inventory Work in process inventory...... Finished goods inventory. Purchases of raw materials. Direct labor. Indirect labor. Beginning of Year $22,000 42.000
E19-7 Prepare the 20X5 income statement for the Strike Marine Company in Exercise 19-6. Assume that it sold 28.000 units of its product at a price of $14 during 20x5.
E19-8 Supply the missing amounts from the following computation of gross profit for Alon Plastics. Sales revenue Cost of goods sold: Beginning finished goods inventory... Cost of goods manufactured: Beginning work in process inventory Direct materials used. Direct labor....... Manufacturing
E19-9 Listed below are several terms relating to the modern business environment. Complete the following statements with one of these terms. You may use a term more than once, and some terms may not be used at all. E-commerce Expected value JIT Future Future value North American Free Trade
E19-10 Cool Cuts manufactures casual menswear. Eric Haynes, the CEO, is trying to decide whether to adopt just-in-time (JIT). He expects that in present-value terms, adopting JIT would save $113,000 in warehousing expenses and $67,800 in spoilage costs. Adopting JIT will require several one-time
E19-11 Mary Gonzales is the controller at Automax, a car dealership. Cory Loftus has recently been hired as bookkeeper. Cory wanted to attend a class on Excel spreadsheets, so Mary tem- porarily took over Cory's duties, including overseeing a fund for topping up a car's gas before a test drive.
E19-12 CoverUp manufactures and sells a new line of sun-protection clothing. Unfortunately. CoverUp suffered serious hurricane damage at its home office in Miami, Florida, As a result, the accounting records for October were partially destroyed-and completely jumbled. CoverUp has hired you to help
P19-1A Suppose Dell Computer reported the following costs last month. (All costs are in millions.) Payment to UPS for delivering PCs to customers.. Cost of hard drives used..... $ 250 3,300 Cost of Internet banner ads.. 400 Plant janitors' wages. 10 Wages of workers who assemble the PCs. 1,000 Cost
P19-2A Part One: On January 1. 2000, Matt Berrigan opened Boards of Paradise, a small retail store dedicated to selling snowboards, wakeboards, and skateboards. On December 31, 2000, his accounting records show the following: Store rent $ 6,500 Sales revenue. $87.000 Sales salaries. Freight-in
P19-3A Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and income statement of Southern Manufacturing Company. Fill in the missing items. work in process inventory. Direct materials used: materials, of materials materials. Manufacturing
P19-4A Quantx. Inc.. manufactures computer disk drives. It sells these disk drives to other manufacturers, which use them in assembling computers. Quantx is having trouble with its new DVD drive. If the parts are not engineered to exact specifications, the drive does not function. About half the
P19-5A Problem 19-4A provided both quantitative and qualitative information about Quantx's quality project, and asked you to perform a quantitative analysis to help Quantx's managers decide whether to embark on the project. Now consider some qualitative factors in Quantx's quality improvement
P19-6A West Bank is a regional bank in California that also processes checks for smaller banks and insurance companies. This results in mounds of paperwork, because West Bank tracks which checks have been deposited and which accounts have been debited or credited. When a customer complains that a
P19-7A Consider the West Bank project described in Problem 19-6A. West Bank has revised its estimates of additional profits the bank is likely to earn. There is a 50% chance that the bank will earn $39,600 in extra profits, but also a 50% chance the bank will earn $75,000. Required 1. Compute the
P19-8A Jan Hobbs is the new controller for Kromeware, a designer and manufacturer of outdoor wear. Shortly before the December 31 fiscal year end, Lashea Hare (the company president) asks Jan how things look for the year-end numbers. Lashea is not happy to learn that earnings growth may be below
P19-1B Healthy Foods produces canned chicken la king-chicken, mushrooms, and bell peppers in a cream sauce. The production process starts with raw chicken that workers debone. Cream sauce is prepared, the chicken is cooked, and the two are combined with the vegetables. Because chickens naturally
P19-2B Part One: In 20X3, Kelly Williams opened Kelly's Boutique, a small retail boutique selling makeup. On December 31, 20X4, her accounting records show the following: Required Inventory on December 31, 20X4 $ 9,850 Inventory on January 1, 20X4. Sales revenue... Utilities for boutique. 10,700
P19-3B Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and the income statement of Henriquez Manufacturing Company shown on the facing page. Fill in the missing items. Beginning Direct Beginning materials inventory Purchases of materials..
P19-4B Pameon manufactures fine watches. The company is having trouble with one of its watches. If the parts are not machined to exact specifications, the watch will not operate. Even a speck of dust under the crystal causes the watch to stop. About half the time. Pameon employees find the defect
P19-5B Problem 19-4B provided both quantitative and qualitative information about Pameon's quality project, and asked you to perform a quantitative analysis to help Pameon's managers decide whether to embark on the quality project. Now consider some qualitative factors in Pameon's quality
P19-6B Discount Gas Corporation wants to move its sales-order system to the Web. Under the proposed system, gas stations and other merchants will use a Web browser and, after typing in a password for the Discount Gas Web page, will be able to check the availability and current price of various
P19-7B Consider the Discount Gas proposed entry into e-commerce in Problem 19-6B. Steve Pronai revises his estimates of the benefits from the new system's lower labor costs. He now thinks there is a 40% chance of receiving the $1,400,000 in benefits and a 60% chance the benefits will only be
P19-8B Renee Abby is the new controller for Gate Software, Inc., which develops and sells educational software. Shortly before the December 31 fiscal year end. Matt Berrigan, the company president, asks Abby how things look for the year-end numbers. He is not happy to learn that earnings growth may
Case 1. Digiteck, Inc., designs and manufactures switches used in telecommunications. Digiteck's main facility is in California's Silicon Valley. Its second facility in North Carolina's Research Triangle Park services the Park's concentration of telecommunications firms. The serious flooding caused
Case 2. To help management accountants meet obligations to their profession, employer, the public, and themselves, the IMA has issued Standards of Ethical Conduct for Management Accountants. In defining ethical behavior, these standards can be applied to more than just management accounting. They
Link Back to Chapter 7. ComDigital, Inc., designs and manufactures chips used in digital cell phones. ComDigital is currently developing the next generation of computer chips that will allow users to receive e-mail and surf the Net using voice commands over a cell phone. Because of competition to
To help determine whether current profits will continue and grow in the future, investors need information on management's plans. Investors are especially interested in how management plans to compete in the modern business environment. Let's use Target Corporation's annual report to consider the
Search the Internet for a nearby company that also has a Web page. Arrange an interview with a management accountant, a controller, or other accounting/finance officer of the company. Before you conduct the interview, answer the following questions: 1. Is this a service. merchandising, or
1. Go to http://www.forbes.com. Under "Quotes & Research" type TOY, the stock symbol for Toys "" Us, Inc., and click on Go. In the left-hand column click on Company Info and scan the information provided.a. Is this primarily a service. merchandising, or manufacturing company? What is the company's
What percentage distinguishes a small stock dividend from a large stock dividend?
To an investor, a stock split and a stock dividend have essentially the same effect. Explain the similarity and difference to the corporation between a 100% stock dividend and a 2-for-1 stock split.
What is the normal balance of the Treasury Stock account?
What is the most widely used of all accounting statistics?
What account is affected by all prior-period adjustments? On what financial statement are prior-period adjustments reported?
What is the main difference in accounting for small and large stock dividends?
The following questions are unrelated except that they all apply to fixed assets and intangible assets:a. The manager of Clarkson Corporation regularly debits the cost of repairs and mainte- nance of plant assets to Plant and Equipment. Why would she do that, since she knows she is violating
Required Visit a local business. 1. List all its plant assets. 2. If possible, interview the manager. Gain as much information as you can about the busi- ness's plant assets. For example, try to determine the assets' costs, the depreciation method the company is using, and the estimated useful life
What distinguishes a current liability from a long-term liability?
A company purchases a machine by signing a $21.000, one-year. 10% note payable on July 31. Interest is to be paid at maturity. What two current liabilities related to this purchase does the company report on its December 31 balance sheet? What is the amount of each current liability?
Explain why sales tax that is paid by consumers is a liability of the store that sold the merchandise.
Patton Company warrants its products against defects for three years from date of sale. During the current year, the company made sales of $300.000. Store management estimated that warranty costs on those sales would total 6% of sales over the three-year warranty period. Ultimately, the company
Two persons are studying Allen Company's manufacturing process. One person is Allen's factory supervisor, and the other is an outside consultant who is an expert in the industry. Which person's salary is the payroll expense of Allen Company? Identify the expense account that Allen would debit to
DE11-17 Link Back to Chapter 7 (Internal Controls) 1. What are some of the important elements of good internal control to safeguard payroll disbursements? 2. Explain how the use of two payroll bank accounts (one account the first month, the other account the next month) makes accounting for the
Wal-Mart Stores, Inc., is the largest retailer in the United States. Recently, Wal-Mart reported these figures (in billions of dollars): 1999 1998 Net sales. Receivables at end of year $165 1 $138 1 The Wal-Mart financial statements include no uncollectible-account expense or allowance. Required 1.
Newcastle Sporting Goods distributes merchandise to sporting goods stores. All sales are on credit, so virtually all cash receipts arrive in the mail. William Borrows, the company president, has just returned from a meeting with new ideas for the business. Among other things, Borrows plans to
Windows Company received the following notes during 20X3. Note Date Principal Amount Interest Rate Term (1) Oct. 31 $11.000 12% 3 months (2) Nov. 19 15,000 10% 60 days (3) Dec. 1 12.000 9% 1 year Required Identify each note by number, compute interest using a 360-day year for those notes with terms
Link Back to Chapter 4 (Closing Entries). Record the following selected transactions in the general journal of Recognition Systems. Explanations are not required. 20x2 Dec. 21 31 31 20X3 Jan. 20 Sept. 14 30 Nov. 29 Dec. 14 Received a $2.800. 30-day, 10% note on account from Lindsey Fitzhugh. Made
Assume that Sherwin Williams, the paint manufacturer, completed the following selected transactions:20X1 Dec. 1 20X2 31 31 Mar. 1 July 21 Sep. 19 Nov. 11 Dec. 2 Required Sold goods to Kelly Paint Supply, receiving a $13.500, three-month. 10% note. Ignore cost of goods sold. Made an adjusting entry
Molson Appliance Co., prepares crowns, dentures, and other dental appliances. All work is performed on account, with regular monthly billing to participating dentists. Eve Nations, accountant for Molson, opens the mail. Company procedure requires her to separate customer checks from the remittance
On May 31, Nortell Networks, had a $210,000 debit balance in Accounts Receivable. During June. Nortell made sales of $640,000, all on credit. Other data for June include Collections on account, $567,400. Required Write-offs of uncollectible receivables. $8.900. 1. Record sales and collections on
The June 30, 20X1, balance sheet of Clarus Consultants. Inc.. reports the following: Accounts Receivable... Allowance for Uncollectible Accounts (credit balance). $143,000 3.200 At the end of each quarter, Clarus estimates uncollectible-account expense to be 1 1/2% of credit sales. At the end of
Link Back to Chapter 4 (Closing Entries). Interbiz Interactive completed the following transactions during 20X1 and 20X2: 20X1 Dec. 31 Estimated that uncollectible-account expense for the year was 3/4 of 1% on credit sales of $290,000, and recorded that amount as expense. 31 Made the closing entry
What is the relevant range, and why must it be considered in preparing a flexible budget?
What do the sales volume variance and the flexible bud- get variance for operating income measure?
Describe the benefits of a standard cost system.
Taylor Tennis. Inc.. completed the following selected transactions during 20X6: Feb. 6 Feb. 20 Mar. 21 Apr. 18 June 18 Dec. 22 Required Declared a cash dividend on the 10.000 shares of $2.25, no-par preferred stock. Declared a $0.20 per share dividend on the 10.000 shares of common stock
The balance sheet of Jade. Inc., at December 31. 20X1. reported 500,000 shares of $1 par common stock authorized with 100,000 shares issued. Paid-in Capital in Excess of Par-Common had a balance of $300,000. Retained Earnings had a balance of $57,000. During 20X2, the company completed the

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Accounting 5th Edition Charles T. Horngren, Walter T. Harrison, Linda S. Bamber, Betsy Willis, Becky Jones - Solutions

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