Accounting Questions and Answers October 04, 2018

Iggy's Ice Pops produces two flavors of ice pops. Information regarding the products is summarized for the month of April below: Number of units Sales revenue Variable costs Fixed costs Profit

Biblio Files Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings. Type of Bookshelf 0 The company is

Basic Deluxe Sales Price per Unit 500 900 Variable Cost per Unit 175 810Percent of Sales Mix BreakEven Sales in Units BreakEven Sales in Dollars Basic Deluxe

A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would:

Harrell and Smith, Inc., 204 Ambulance Street, Anywhere, CA 92345, is a corporation (EIN 57-1234567) formed on January 1, 2010. Information concerning the corporation and its two shareholders follows. It uses tax/cash basis accounting, did not pay

A computer that originally cost $3,000 was purchased with a loan for 12 months at 15% annual simple interest. What was the total cost of the computer? $3,300.00 $3,350.00 $3,450.00 $3,500.00

Frizell Company has the following comparative balance sheet data. FRIZELL COMPANY Balance Sheets December 31 2017 2016 Cash $15,000 $30,000 Accounts receivable (net) 70,000 60,000 Inventory 60,000 50,000 Plant assets (net) 200,000 180,000 $345,000

Blake Company purchased two identical inventory items. The item purchased first cost $33.00, and the item purchased second cost $34.00. Blake sold one of the items for $62.00. Which of the following statements is true? a. Gross margin will be higher

Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco's fiscal year-end. The pertinent exchange rates were as follows: May 8 Spot

Describe the difference between exchange and nonexchange transactions and discuss the rules for recognition of revenues and expenses/expenditures for each type of transaction.

Hershey Office Supply, Inc. produces office supplies that are sold primarily to corporate users. Elizabeth Rigby, vice president of logistics, would like to move ahead on a project that was started about a year ago. At that time, a group of

Harvey rents his second home. During 2012, Harvey reported a net loss of $35,000 from the rental. If Harvey is an active participant in the rental and his AGI is $80,000, how much of the loss can he deduct against ordinary income in 2012? a. $35,000

Soundscape Enterprises manufactures Sonoblast, a device that produces a high-pitched reminder to telemarketers that they have once again disturbed you just when you were sitting 12 down to dinner. The production function for Sonoblasts is given by

Henry Highbrow promises to donate $50,000 to his church toward the purchase of a new pipe organ if the church is able to raise matching funds of $50,000 from other contributors. At what point should the church record revenue? A) When Henry makes his

G. Venda, owner of Venda Services, withdrew 25,000 from the business during the current year. the entry to close the withdrawals account at the end of the year is: a. G. Venda Withdrawals ....25,000 G. VEnda Capital ......................25,000 b.

Tillman Fabrications has five operating segments, as summarized below: Required: Determine which of the operating segments of Tillman Fabrications are re-portable segments for the period shown doing all four tests (1) Revenue Test, (2) Asset Test,

Sales to outside entities Intersegment sales Operating Profit Assets Wood 5200000 Plastic 1200000 Metal 450000 7800000 390000 4700000 0 520000 590000 1700000 690000 880000 Paper 1600000 0 190000 280000 Fabric 6300000 750000 960000 760000

Of the following, the most difficult account for management to intentionally misstate is: a. Income Taxes Payable. b. Cash. c. Securities. d. Prepaid Expenses.

Melanie Ltd requires a Statement of Cash Flows to be prepared for the year ended 31 March 2017; the following information taigagavatgl for this purpose. As at 31 March: 2017 2016 Cash $55 000 $33 000 Accounts receivable 20 000 30 000 Inventory 15

York City estimated 2 percent of its water utility's monthly billings would be uncollectible. During the year, the County water utility wrote off several accounts receivable. Assuming the 2 percent estimated is still deemed to be appropriate at

Grantham Manufacturing Company makes oak rocking chairs. Budgeted sales are 20,000 for July, 25,000 for August, 28,000 for September and 30,000 for October. Grantham maintains an ending inventory equal to 10% of the current months sales. Ending

Passage of the Sarbanes-Oxley Act led to the establishment of the: A. Auditing Standards Board. B. Accounting Enforcement Releases Board. C. Public Company Accounting Oversight Board. D. Securities and Exchange Commission.

Patties Event Planning Service collects her fees from her customers in advance. At January 1, 2010, the balance of her Unearned revenue account was a credit of $4,000. During January and February, she collected $2,000 and $1,000 respectively. During

Refer to the following list of liability balances at December 31, 2015. Accounts Payable $13,000 Employee Health Insurance Payable $450 Employee Income Tax Payable $400 Estimated Warranty Payable $600 Long-Term Notes Payable (Due 2019) $33,000

Relevant costs are often referred to as: A. Unavoidable costs B. Differential costs C. Sunk costs D. All of these

A firm's assets have a beta of 1.0. Assuming that the debt beta equals 0.0 and that there are no taxes, calculate the firm's equity beta under the following assumptions: a. The firm's capital structure is 100% equity. b. The capital structure is 20%

The EOQ model has a number of assumptions. List them and explain whether they are readily attainable. For example, will the adjustment for quantity discounts easily work?

Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a Credit to Merchandise Inventory Debit to Cost of Merchandise Sold Credit to Accounts Payable Credit to Sales

During 2014, Goodfellow has the following transactions involving its common and preferred stock. a. Issued 15,000 shares of $5 par common stock for $15 a share. This brings total shares outstanding to 50,000 shares. b. Issued 5,000 shares of $1000

Forto Chemical Corp. is a company that produces many products for janitors/ equipment and supplies. The company sells products to storekeepers as well as to customers. Extra Strength Toilet Bowl Cleaner is one of the products of Forto. It is a thick

Direct Materials 25 pounds 18 per pound Direct labor 08 hours 14 per hour Variable manufacturing overhead 09 hours 800 2700 1120 720 4540

During the current year, Mann, an unmarried U.S. citizen, made a $5,000 cash gift to an only child and also paid $25,000 in tuition expenses directly to a grandchild's university on the grandchild's behalf. Mann made no other lifetime transfers.

During the last two days, Chad purchased a lattc from two different stores. The table below shows Chad?s willingness to pay on each day and his consumer surplus from each purchase. Refer to Table. The price that Chad paid for a lattc on the first

First Day Second Day Chads Willingness to Pay 500 400 Chads Consumer Surplus 125 075

Write a paper about "independence" in the accounting profession.

Pocus, Inc., reports warranty expense when related products are sold. For tax purposes, the warranty costs are deductible as incurred. At the end of the current year, Pocus has a warranty liability of $200,000 and taxable income of $20,000,000. At

a. During the year 2019, Sampson Company had net credit sales of $1,950,000. Past experience shows that 1.5 percent of the firm's net credit sales result in uncollectible accounts. b. Equipment purchased by Park Consultancy for $38,220 on January 2,

For more than 40 years. the HarnsweU Sewing Machine Company has manufactured industrial sewing machines. The company specializes in automated machines called pattern tackers that sew repetitive patterns on such massproduced products as shoes,

How are Mortensen's estimates of Midland's cost of capital used? How, if at all, should these anticipated uses affect the calculations?

Polluter Corp. (the Company), an SEC registrant, operates three manufacturing facilities in the United States. The Company manufactures various household cleaning products at each facility, which are sold to retail customers. The U.S. government

Electrodo Co. purchased land for $55,000 with $20,000 paid in cash and $35,000 in notes payable. What effect does this transaction have on the accounts under the accrual basis of accounting? a. Net increase in assets and liabilities of $55,000 b.

Respond that the following statement is True or False: The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years, is $18,000 by the

Pool Industries paid $540,000 to purchase 75% of the outstanding stock of Swimmin Corporation, on December 31, 2014. Any excess fair value over the identified assets and liabilities is attributed to goodwill. The following year-end information was

Port Accounting performs two types of services, Audit and Tax. Port's overhead costs consist of computer support, $240,000; and legal support, $120,000. Information on the two services is: Audit Tax Direct labor cost $50,000 $100,000 CPU minutes

Employees earned $4,300 in salaries that will be paid next month. The Salaries Expense unadjusted balance as of December 31 is $7,900. Journalize the adjusting entry needed at December 31 for each situation. Use the Chart of Accounts to review

Adjustment Type Salaries Expense Salaries PayableDate Dec 31 Accounts and Explanation Debit CreditDate Dec 31 Accounts and Explanation Debit Credit

Prince Marinades uses process costing. Its Mixing Department had a beginning inventory of 650 units that had accumulated conversion costs of $16,486. During the period, the Mixing Department incurred conversion costs of $43,400 and started 21,900

Pro Tool Company expects to produce 24,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below: Production of 1,000 units of an auto towing tool required 800 labor hours, 12

ACTIVITIES Cost Cost Driver BATCH PRODUCT PRODUCT UNIT LEVEL LEVEL 50000 20000 4000 labor hrs 100 set ups LEVEL 10000 of use FACILITY LEVEL 120000 24000 units

Pueblo Production Company manufactures 50,000 high-definition televisions each year. Pueblo is considering purchasing the glass screens from an outside source rather than producing them internally. The following data relate to the glass screens:

Cost per screen from outside supplier Internal costs per screen Direct materials Direct labor Variable overhead Total fixed overhead Avoidable fixed overhead 3250 1750 825 260 67000 50400

Explain the purpose of the account "undistributed change in fair value of investments" used in a cash and investment pool and describe how it should be reported in the government's financial statements.

Fairweather Corporation purchases merchandise on terms of 2/15, net 40, and its gross purchases (i.e., purchases before taking off the discount) are $800,000 per year. What is the maximum dollar amount of costly trade credit the firm could get,

Record the following transactions for Sparkys Pet Shop using the general journal form provided below. Assume Sparkys uses a perpetual inventory system. Omit transaction descriptions from entries: Date Transaction July 3 Sold merchandise on account

Abigail's hobby is sculpting. During the current year, Abigail sold three of her sculptures for a total of $3,200. Her related expenses include $1,500 in utilities, $1,200 in supplies and $900 in depreciation. Of the total expenses incurred, Abigail

Referring to Table 2 assume that the Production Output units is now 4000 not 6000 The multifactor productivity is Table 2 shows last years production output and costs at Guemmer Temperature Control Switch Corp Table 2 Production Output units Input

Andre, Beau, and Caroline share profits and losses of their partnership in a 4:2:7 ratio respectively. If the net income is $1,200,000, calculate Caroline's share of the profits. A. $646,154 B. $161,538 C. $92,308 D. $ 369,231

A negative fixed overhead volume variance can be caused due to the following EXCEPT a. Sales orders at a low level. b. Machine breakdowns. c. Employee inexperience. d. Increase in utility costs.

Respond that the following statement is True or False: Business risk refers to the relative dispersion? (Variability) of a? Companys net income

The market for sweet potatoes consist of 1,000 identical firms. Each firm has a shot-run total cost curve of STC = 100 + 100q + 100q 2 , and a short-run marginal cost curve of SMC = 100 + 200q where q is output. Suppose that sunk costs are 75 and

Logan, Inc., had 9,000 units of work in process in Department M on March 1 that were 50 percent complete as to conversion costs. Materials are introduced at the beginning of the process. During March, 18,000 units were started, 20,000 units were

On the basis of the data shown below: Determine the value of the inventory at the lower-of-cost-or-market. (Note: Apply lower-of-cost-or-market to each inventory item, as shown in exhibit 10.) Exhibit 10: Determining Inventory at Lower of Cost or

Item Inventory Quantity Unit Cost Unit Market Price JFW1 11 SAW9 34 6330 1140 10 36Unit Unit Inventory Cost Market Item Quantity Price Price Cost Echo 400 1025 950 410 Faxtrot 120 225 241 2700 Sierra 600 800 775 4800 Tango 280 14 1475 3920 15520

I5) A3+ has prepared its 3rd quarter budget and provided the following date: The cash balance on June 30 is projected to be $4,001 The company has to maintain a minimum cash balance of 55,003 and is authorized to borrow at the end of each month to

Cash collections Cash payments Purchases of inventory Operating expenses Capital expenditures July 50000 31000 12000 13000 Aug 40000 22000 9000 25000 Sep 48000 18000 11600 0

Based on the following cost data, items labeled (a) and (b) in the table below are which of the following amounts, respectively? 1. (a) = $5.00; (b) = $2.00 2. (a) = $3.00; (b) = $3.00 3. (a) = $2.50; (b) = $2.00 4. (a) = $5.00; (b) = $4.00

Number of units Total cost Variable Fixed Cost per unit Variable Fixed 1500 7500 6000 5 4 3000 15000 6000 a b

Because Gene Co. uses different methods to depreciate buildings for financial statement and income tax purposes, Gene has temporary differences that will reverse during the next year and reduce taxable income. Deferred income taxes that are based on

Manley operates a law practice on the accrual method and calendar year. At the beginning of the year, Manleys firm had an allowance for doubtful accounts with a balance of $15,000. At the end of the year, Manley recorded bad debt expense of $23,000

Chang Inc. has developed the following unit costs for the production of one of its products, based on a normal activity of 11,000 units per month: What is the total amount of overhead included in the overhead budget for a month in which production

Direct material Direct labor Variable overhead Fixed overhead 300 pounds 13 3900 250 hours 16 4000 130 of direct labor cost 140 of direct labor cost

A public health researcher is interested in examining the economic effects of smoking. Specifically, she has data on two variables measured at the state level: the percentage of residents who smoke (PSMOKE) and annual average wages per capita

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 03736 01396 01217 58249199 50Regression Residual Total Intercept PSMOKE df SS MS 1 2642335864 26423358641 48 1628625194 3392969154 49 1892858780 Coefficients

Amys, Inc. Uses a Standard Cost system with the Following Labor Standards For One Units of Product: Standard hours 0,20 and Standard wage rate $9. During january Amys incurred 3700 hours of direct labor and paid 32760 in wages in production of 18000

On January 1, the Newman Company estimated its property tax to be $5,100 for the year. (a) How much should the company accrue each month for property taxes? (b) Calculate the balance in the Property Tax Payable account as of August 31. (c) Prepare

In preparing a company's statement of cash flows for the most recent year on the indirect method, the following information is available: 52,000-Net income for the year 18,000-AP decreased 25,000-AR decreased 5,000-Inventories increased 14,000-Cash

A company reported that its bonds with a par value of $50,000 and a carrying value of $60,500 are retired for $64,200 cash, resulting in a loss of $3,700. The amount to be reported under cash flows from financing activities is: a) Zero. This is an

Electrodo Co. purchased land for $55,000 with $20,000 paid in cash and $35,000 in notes payable. What effect does this transaction have on the accounts under the accrual basis of accounting? a. Net increase in assets and liabilities of $55,000 b.

If firms in a certain industry are expected to have a weighted average cost of capital of 20%, calculate the cost of equity based on the cost of debt (ignoring taxes) provided for the firms below. Assume that each firm is worth $10 million. Firm A:

A firm's assets have a beta of 1.0. Assuming that the debt beta equals 0.0 and that there are no taxes, calculate the firm's equity beta under the following assumptions: a. The firm's capital structure is 100% equity. b. The capital structure is 20%

Plano had 50,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 30%. Required: Prepare a multiple-step income statement with earnings per share disclosure.

Plano Co 12312018 Partial Trial Balance Data Sales revenue Interest revenue Gain on sale of investments Cost of goods sold Selling expenses Interest expense General and administrative expenses Debits 445000 132000 22000 84000 Credits 602000 78000

Match each of the following term (a-h) with the correct definition below. a. Credit terms b. FOB destination c. FOB shipping point d. Periodic inventory system e. Perpetual inventory system f. Inventory shrinkage g. Single-step income statement h.

Identify each of the following expenditures as chargeable. a) Land b) Land Improvements, c) Buildings, d) Machinery and Equipment, e) Other account. Cost of paving parking area for employees and customers. Insurance during construction of building

Delicious Food Products is famous for their specialty fruit cake. The main ingredient of the cake is dried fruit, which Delicious purchases by the pound. In addition, the production requires a certain amount of direct labor. Delicious uses a

Abigail's hobby is sculpting. During the current year, Abigail sold three of her sculptures for a total of $3,200. Her related expenses include $1,500 for utilities, $1,200 for supplies and $900 of depreciation on her pottery wheel. What is the

1. On December 31, 2012, Nolte Co. Is in financial difficulty and cannot pay a note due that day. It is a $1,800,000 note with $180,000 accrued interest payable to Piper, Inc. Piper agrees to accept from Nolte equipment that has a fair value of

A wholesale distributes washing machines made in factories in Akron and Wheeling. Some of these washing machines receive an in-home warranted repair, with the exact breakdown being: Warranted No warranted Akron 20 160 Wheeling 50 150 If one of the

The manager of a computer retails store is concerned that his suppliers have been giving him laptop computers with lower than average quality. His research shows that replacement times for the model laptop of concern are normally distributed with a

Phyllis maintained an IRA account at the brokerage firm ABC. On February 11 of the current year, she requested a check for the balance of her account.

Your team has been hired as the accountants for the Village of AIU. Your team is being asked to do the following: Your team is provided with the adopted budget, as well as the precluding trial balance, of the revenues and expenditures subsidiary

A company usually processes 20,000 orders at a total cost of $300,000. During the year, only 16,000 order were processed. What is the cost of unused activity? $300,000 $240,000 $30,000 $60,000

Write a short paper about the Intermediate Accounting: Volume 1 By (author) Nicola M. Young , By (author) Donald E. Kieso , By (author) Irene M. Wiecek , By (author) Terry D. Warfield , By (author) Jerry J. Weygandt , By (author) Bruce J. McConomy

During 2012, the accounts receivable turnover ratio for Upward Company increased from 10 to 15 times per year. Which one of the following statements is the most likely explanation for the change? The company's credit department has followed up with

Rahalli Co. has the following normal account balances: cash. 52.000: accounts receivable. 55.000: accounts payable. 51000: withdrawals, 51.000: and capital. $15.000. What Is the total debit amount that would appear on the trial balance? Ignore the

The cost incurred that provide long-term activity capacity, usually as the result of strategic planning are called Discretionary fixed expenses Committed fixed expenses Mixed costs Step variable costs

Select income statement data for Bukasy Company for two recent years ended December 31 are as follows: Prepar e horizontal and venKal analyses of Bukasys income statement. (Round percentages to one decimal place.)

Sales Cost of goods sold Gross profit Selling general and administrative expenses Income from operations 20Y2 20Y1 2200000 2000000 1337500 1250000 750000 862500 400000 350000 440000 422500

What is the depreciation expense?

What is 'Future Value - FV?'

In accounting for a contingent liability, if the likelihood of the obligation is probable but the amount cannot be estimated, a company must a) Recognize the liability and report it on the balance sheet. b) Do nothing. c) Not recognize or disclose

1. On April 1, Smart, Inc. paid $7,200 for an insurance premium on a three-year insurance policy. How does this transaction affect Smart's accounts? a. Increase prepaid insurance and decrease cash by $7,200 each b. Increase prepaid insurance and

Forto Chemical Corp. is a company that produces many products for janitors/ equipment and supplies. The company sells products to storekeepers as well as to customers. Extra Strength Toilet Bowl Cleaner is one of the products of Forto. It is a thick

Genesis Company buys equipment for $900 machine on credit. This transaction will immediately affect the: a) Income statement only. b) Balance Sheet only. c) Income statement and retained earnings statement only. d) Income statement, retained

Sandusky Company borrowed $12,000 from the Lakeside Bank by issuing a 10% three-year installment note. Sandusky agreed to repay the principal and interest by making annual payments in the amount of $4,825.38. Based on this information, the amount of

Norris Enterprises, an all-equity firm, has a beta of 2.0. The chief financial officer is evaluating a project with an expected return of 14%, before any risk adjustment. The risk-free rate is 5%, and the market risk premium is 4%. The project being

Your friend remarked, A company will never drop a product from its product line that has a positive contribution margin. It will want to garner every bit of profit that it can. Is this true in all cases? What are the risks and benefits of evaluating

Using the following information, prepare the payroll register for the Months of October, November, and December. All employees worked October 1 through December 31 and are subject to the following FICA taxes: OASDI: 6.2% on first $118,500 earned;

A sales invoice included the following information: merchandise price, $12,000; terms 1/10, n/eom, FOB shipping point with prepaid freight of $900 added to the invoice. Assuming that a credit for merchandise returned of $500 is granted prior to

Journalize the following merchandise transactions. Refer to the chart of Accounts for exact wording of account titles. Mar 1. Sold merchandise on account, $72,500 wth terms 2/10, n/30. The cost of the merchandise was $43,500. 9. Received payment

Germ Free produces hand sanitizer. It uses units of production as the cost driver for overhead and employs a standard costing system. The following information was provided by the company's controller for the month of May. Complete the template

Units Produced Materials Purchased total kilograms Materials kilograms per unit Material Cost per kilogram Materials used total kilograms Total labor hours used Laborhours per unit Labor wage per hour Fixed Overhead Total Variable Overhead Total

The Klamath Corp. produces two products, saws and drills. Three activities are used in their manufacture. These activities and their associated costs and bases are as follows: Required: a. Determine the activity rate for each activity. Stamping $ 20

Activity Stamping Assembly Setup Activity Base Machine hours Labor hours Number of setups Budgeted Costs 200000 400000 30000 Saws 4000 7000 3 Activity Base Machine hours Labor hours Number of setups Drills 6000 13000 12 Total 10000 20000 15

The following Information has been extracted from the financial statements of a company. Net income in 2316 = $3,000 Annual depredation in 2016 = $1,000 Interests in 2016= $500 Working capital in 2015 = $3200 Working capital in 2C16 = $4,000 Net

Maywood Company sells hand- knit scarves. Each scarf sells for $45. The company pays $40 to rent a vending space for one day. The variable costs are $13 per scarf. What total revenue amount does the company need to earn to break even? a. $45 b. $18