A review of the notes payable files discovers that three years ago the company reported the entire $1,000 cash payment (consisting of $800 principal and $200 interest) toward an installment note payable as interest expense. This mistake had a material effect on the amount of income in that year. How should the correction be reported in the current-year financial statements?
> Use Samsung’s financial statements in Appendix A to compute its return on total assets for fiscal year ended December 31, 2013. Samsung’s Financial Statements from Appendix A: Samsung Electronics Co., Ltd. an
> Refer to Samsung’s financial statements in Appendix A. Compute its debt ratio as of December 31, 2013, and December 31, 2012. Samsung’s Financial Statements from Appendix A: Samsung Electronics Co., Ltd. and
> Refer to Google’s financial statements in Appendix A to compute its equity ratio as of December 31, 2013, and December 31, 2012. Google’s Financial Statements from Appendix A: Google Inc. CONSOLIDATED BAL
> Refer to Apple’s financial statements in Appendix A. Compute its profit margin for the years ended September 28, 2013, and September 29, 2012. Apple’s Financial Statements from Appendix A: Apple Inc. CONSOLID
> Why does managerial accounting often involve working with numerous predictions and estimates?
> Would a manager of an Apple retail store participate more in budgeting than a manager at the corporate offices? Explain.
> At the end of a period, what balance should remain in the Factory Overhead account?
> Samsung uses a “time ticket” for some employees. How are time tickets used in job order costing?
> How do an income statement and a balance sheet for a manufacturing company and a merchandising company differ?
> Should we evaluate a production manager’s performance on the basis of operating expenses? Why?
> What events cause debits to be recorded in the Factory Overhead account? What events cause credits to be recorded in the Factory Overhead account?
> What product cost is listed as both a prime cost and a conversion cost?
> What are two main goals in managerial accounting for reporting on and analyzing departments?
> What is capital budgeting?
> When output volume increases, do fixed costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.
> Which items are usually assigned a 100% value on (a) a common-size balance sheet and (b) a common-size income statement?
> The focus in a job order costing system is the job or batch. Identify the main focus in process costing.
> Capital budgeting decisions require careful analysis because they are generally the and decisions that management faces.
> Champ, Inc., predicts the following sales in units for the coming three months: Each month’s ending inventory of finished units should be 60% of the next month’s sales. The April 30 finished goods inventory is 108 un
> Harley-Davidson manufactures 30 custom-made, luxury-model motorcycles. Does it account for these motorcycles as 30 individual jobs or as a job lot? Explain.
> X-Tel budgets sales of $60,000 for April, $100,000 for May, and $80,000 for June. In addition, sales commissions are 10% of sales dollars and the company pays a sales manager a salary of $6,000 per month. Sales commissions and salaries are paid in the mo
> X-Tel budgets sales of $60,000 for April, $100,000 for May, and $80,000 for June. In addition, sales are 40% cash and 60% on credit. All credit sales are collected in the month following the sale. The April 1 balance in accounts receivable is $15,000. Pr
> Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the company’s degree of operating leverage. (2) If sales increase by 15%, what amount of income will Singh Co. report?
> US-Mobile manufactures and sells two products, tablet computers and smartphones, in the ratio of 5:3. Fixed costs are $105,000, and the contribution margin per composite unit is $125. What number of each type of product is sold at the break-even point?
> Zhao Co. has fixed costs of $354,000. Its single product sells for $175 per unit, and variable costs are $116 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2015.
> Refer to QS 20-8 and compute the total equivalent units of production with respect to conversion for July using the FIFO inventory method. Data from QS 20-8: The following refers to units processed by an ice cream maker in July. Gallons of Perce
> The following refers to units processed by an ice cream maker in July. Compute the total equivalent units of production with respect to conversion for July using the weighted-average inventory method. Gallons of Percent of Product Conversion Added B
> Refer to QS 20-4. Compute the total equivalent units of production with respect to conversion for March using the FIFO inventory method. Data from QS 20-4: The following refers to units processed in Sunflower Printing’s binding depart
> Anheuser-Busch InBev is attempting to reduce its water usage. How could a company manager use a process cost summary to determine if the program to reduce water usage is successful?
> The following refers to units processed in Sunflower Printing’s binding department in March. Prepare a physical flow reconciliation. Units of Percent of Product Conversion Added Beginning work in process........ Goods started.....
> Assume that Apple produces a batch of 1,000 iPhones. Does it account for this as 1,000 individual jobs or as a job lot? Explain (consider costs and benefits).
> Prepare journal entries to record the following production activities for Hotwax. 1. Requisitioned $9,000 of indirect materials for use in production of surfboard wax. 2. Incurred $156,000 overhead costs (credit “Other accounts”). 3. Applied overhead at
> Refer to the information in QS 20-10. Calculate the assembly department’s equivalent units of production for materials and for conversion for November. Use the FIFO method. Information from QS 20-10: The Carlberg Company has two manuf
> Refer to the information in QS 20-10. Assign costs to the assembly department’s output—specifically, the units transferred out to the painting department and the units that remain in process in the assembly department
> Refer to QS 20-21. Using the FIFO method, assign direct materials costs to the roasting department’s output—specifically, the units transferred out to the mixing department and the units that remain in process in the r
> BOGO Inc. has two sequential processing departments, roasting and mixing. At the beginning of the month, the roasting department has 2,000 units in inventory, 70% complete as to materials. During the month, the roasting department started 18,000 units. A
> Azule Co. manufactures in two sequential processes, cutting and binding. The two departments report the information below for a recent month. Determine the ending balances in the Work in Process Inventory accounts of each department. Cutting Binding
> Refer to information in QS 20-18. Using the weighted-average method, assign direct materials costs to the molding department’s output—specifically, the units transferred out to the packaging department and the units th
> The Plastic Flowerpots Company has two manufacturing departments, molding and packaging. At the beginning of the month, the molding department has 2,000 units in inventory, 70% complete as to materials. During the month, the molding department started 18
> Refer to the information in QS 20-10. Calculate the assembly department’s cost per equivalent unit of production for materials and for conversion for November. Use the weighted-average method. Information from QS 20-10: The Carlberg C
> Refer to the information in QS 20-10. Assign costs to the assembly department’s output—specifically, the units transferred out to the painting department and the units that remain in process in the assembly department
> Why must a company use predetermined overhead rates when using job order costing?
> Refer to the information in QS 20-10. Calculate the assembly department’s cost per equivalent unit of production for materials and for conversion for November. Use the FIFO method. Information from QS 20-10: The Carlberg Company has t
> Nestlé reports beginning raw materials inventory of 3,815 and ending raw materials inventory of 3,499 (both numbers in millions of Swiss francs). Assume Nestlé purchased 13,860 and used 14,176 (both amounts in millions of Swiss francs) in raw materials d
> The Carlberg Company has two manufacturing departments, assembly and painting. The assembly department started 10,000 units during November. The following production activity unit and cost information refers to the assembly department’s
> Refer to the information in QS 19-11. During the month, the jobs used direct labor as shown below. Jobs 1 and 3 are not finished by the end of March, and Job 2 is finished but not sold by the end of March. (1) Determine the amounts of direct materials, d
> Compute cost of goods sold for 2015 using the following information. Finished goods inventory, Dec. 31, 2014 ... Work in process inventory, Dec. 31, 2014 ... Work in process inventory, Dec. 31, 2015 ... Cost of goods manufactured, 2015 Finished good
> Prepare the 2015 schedule of cost of goods manufactured for Barton Company using the following information. Direct materials..... Direct labor ... $190,500 ... 63,150 Factory overhead costs... 24,000 Work in process, Dec. 31, 2014. 157,600 Work in p
> Compute ending work in process inventory for a manufacturer with the following information. Raw materials purchased.... Raw materials used in production. $124,800 .... 74,300 Direct labor used..... Total factory overhead Work in process inventory, b
> The following information is available for Morgan Company and Parker Company, similar firms operating in the same industry. Write a half-page report comparing Morgan and Parker using the available information. Your discussion should include their ability
> For each ratio listed, identify whether the change in ratio value from 2014 to 2015 is usually regarded as favorable or unfavorable. Ratio 2015 2014 Ratio 2015 2014 I. Profit margin.... 2. Debt ratio.... 3. Gross margin.... 9% 8% 5. Accounts receiva
> How does inventory turnover provide information about a company’s short-term liquidity?
> Describe the managerial accountant’s role in business planning, control, and decision making.
> Suppose Canwest Global Communications Corp. reported net cash used by operating activities of $104,539,000 and sales revenue of $2,867,459,000 during 2014. Cash spent on plant asset additions during the year was $79,330,000. Calculate free cash flow.
> Flowers Corporation reported net cash provided by operating activities of $412,000, net cash used by investing activities of $250,000, and net cash provided by financing activities of $70,000. In addition, cash spent for capital assets during the period
> Loveland Corporation issued $400,000 of 10-year bonds at a discount. Prior to maturity, when the carrying value of the bonds was $388,000, the company redeemed the bonds at 99. Prepare the entry to record the redemption of the bonds.
> Dilley Corporation issues $300,000 of bonds for $315,000. (a) Prepare the journal entry to record the issuance of the bonds, and (b) show how the bonds would be reported on the balance sheet at the date of issuance.
> Loveland Corporation issued $400,000 of 10-year bonds at a discount. Prior to maturity, when the carrying value of the bonds was $388,000, the company redeemed the bonds at 99. Prepare the entry to record the redemption of the bonds.
> Dilley Corporation issues $300,000 of bonds for $315,000. (a) Prepare the journal entry to record the issuance of the bonds, and (b) show how the bonds would be reported on the balance sheet at the date of issuance.
> Suppose during 2014, Cypress Semiconductor Corporation reported net cash provided by operating activities of $89,303,000, cash used in investing of $43,126,000, and cash used in financing of $7,368,000. In addition, cash spent for fixed assets during the
> SUPERVALU, one of the largest grocery retailers in the United States, is headquartered in Minneapolis. Suppose the following financial information (in millions) was taken from the company’s 2014 annual report: net sales $44,597, net income $393, beginnin
> Troutman Corporation has 7,000 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record
> Pringle Inc. issues 8,000 shares of $100 par value preferred stock for cash at $106 per share. Journalize the issuance of the preferred stock.
> On May 10, Paige Corporation issues 2,500 shares of $5 par value common stock for cash at $13 per share. Journalize the issuance of the stock.
> Gast Corporation has 200,000 shares of $10 par value common stock outstanding. It declares a 12% stock dividend on December 1 when the market price per share is $17. The dividend shares are issued on December 31. Prepare the entries for the declaration a
> Range Company issues $400,000, 20-year, 7% bonds at 101. Prepare the journal entry to record the sale of these bonds on June 1, 2014.
> Saddle Inc. issues $300,000, 10-year, 8% bonds at 98. Prepare the journal entry to record the sale of these bonds on March 1, 2014.
> Data for Susan Braun are presented in BE10-5. Prepare the employer’s journal entry to record payroll taxes for the period. Ignore unemployment taxes. Data for Susan Braun: Susan Braun’s regular hourly wage rate is $16, and she receives an hourly rate of
> Susan Braun’s regular hourly wage rate is $16, and she receives an hourly rate of $24 for work in excess of 40 hours. During a January pay period, Susan works 47 hours. Susan’s federal income tax withholding is $95, and she has no voluntary deductions. C
> Washburn University sells 3,500 season basketball tickets at $80 each for its 10-game home schedule. Give the entry to record (a) the sale of the season tickets and (b) the revenue recognized after playing the first home game.
> The T-accounts for Equipment and the related Accumulated Depreciation— Equip. for Coldsmith Company at the end of 2014 are shown here. In addition, Coldsmith Company’s income statement reported a loss on the disposal
> Bluestem Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $10,388. All sales are subject to a 6% sales tax. Compute sales taxes payable and make the entry to record sales taxes payable and sales.
> Oxford Inc. issues $4 million, 5-year, 8% bonds at 102, with interest payable on January 1. The straight-line method is used to amortize bond premium. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Prepare the jou
> Verlin Company issues $2 million, 10-year, 7% bonds at 99, with interest payable on December 31. The straight-line method is used to amortize bond discount. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Prepare t
> Presented here are long-term liability items for Evenson Inc. at December 31, 2014. Prepare the long-term liabilities section of the balance sheet for Evenson Inc. Bonds payable (due 2018) ……………………………………………. $700,000 Notes payable (due 2016) ……………………………
> Oxford Inc. issues $4 million, 5-year, 8% bonds at 102, with interest payable on January 1. The straight-line method is used to amortize bond premium. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Prepare the jou
> Verlin Company issues $2 million, 10-year, 7% bonds at 99, with interest payable on December 31. The straight-line method is used to amortize bond discount. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Prepare t
> The balance sheet for Fogelberg Company reports the following information on July 1, 2014. Fogelberg decides to redeem these bonds at 102 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2014. FOGELBERG CO
> Rooney Corporation issued 3,000 7%, 5-year, $1,000 bonds dated January 1, 2014, at face value. Interest is paid each January 1. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Prepare the adjusting journal entry on
> Presented here are long-term liability items for Evenson Inc. at December 31, 2014. Prepare the long-term liabilities section of the balance sheet for Evenson Inc. Bonds payable (due 2018) ……………………………………………. $700,000 Notes payable (due 2016) ……………………………
> The balance sheet for Fogelberg Company reports the following information on July 1, 2014. Fogelberg decides to redeem these bonds at 102 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2014. FOGELBERG CO
> The comparative balance sheets for Lowery Company show these changes in noncash current asset accounts: accounts receivable decrease $80,000, prepaid expenses increase $28,000, and inventories increase $40,000. Compute net cash provided by operating acti
> Rooney Corporation issued 3,000 7%, 5-year, $1,000 bonds dated January 1, 2014, at face value. Interest is paid each January 1. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Prepare the adjusting journal entry on
> Range Company issues $400,000, 20-year, 7% bonds at 101. Prepare the journal entry to record the sale of these bonds on June 1, 2014.
> Saddle Inc. issues $300,000, 10-year, 8% bonds at 98. Prepare the journal entry to record the sale of these bonds on March 1, 2014.
> Data for Susan Braun are presented in BE10-5. Prepare the employer’s journal entry to record payroll taxes for the period. Ignore unemployment taxes. Data for Susan Braun: Susan Braun’s regular hourly wage rate is $16, and she receives an hourly rate of
> Graves Company borrows $90,000 on July 1 from the bank by signing a $90,000, 7%, 1-year note payable. Prepare the journal entries to record (a) the proceeds of the note and (b) accrued interest at December 31, assuming adjusting entries are made only a
> Susan Braun’s regular hourly wage rate is $16, and she receives an hourly rate of $24 for work in excess of 40 hours. During a January pay period, Susan works 47 hours. Susan’s federal income tax withholding is $95, and she has no voluntary deductions. C
> Washburn University sells 3,500 season basketball tickets at $80 each for its 10-game home schedule. Give the entry to record (a) the sale of the season tickets and (b) the revenue recognized after playing the first home game.
> Bluestem Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $10,388. All sales are subject to a 6% sales tax. Compute sales taxes payable and make the entry to record sales taxes payable and sales.
> Graves Company borrows $90,000 on July 1 from the bank by signing a $90,000, 7%, 1-year note payable. Prepare the journal entries to record (a) the proceeds of the note and (b) accrued interest at December 31, assuming adjusting entries are made only a
> Detwiler Inc. reported sales of $2 million for 2014. Accounts receivable decreased $150,000 and accounts payable increased $300,000. Compute cash receipts from customers, assuming that the receivable and payable transactions are related to operations.
> The net income for Freeman Co. for 2014 was $280,000. For 2014, depreciation on plant assets was $70,000, and the company incurred a loss on disposal of plant assets of $28,000. Compute net cash provided by operating activities under the indirect method,
> Using the data in Question 17, what are (a) the total cost of work in process and (b) the cost of goods manufactured?
> Tate Inc. has beginning work in process $26,000, direct materials used $240,000, direct labor $220,000, total manufacturing overhead $180,000, and ending work in process $32,000. What are the total manufacturing costs?
> Sealy Company has beginning raw materials inventory $12,000, ending raw materials inventory $15,000, and raw materials purchases $170,000. What is the cost of direct materials used?
> Ratzlaff Company issues €2 million, 10-year, 8% bonds at 97, with interest payable on July 1 and January 1. Instructions: (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Assuming instead that the above bonds sold
> Ratzlaff Company issues €2 million, 10-year, 8% bonds at 97, with interest payable on July 1 and January 1. Instructions: (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Assuming instead that the above bonds sold
> (a) If Neer Company had net income of $300,000 in 2013 and it experienced a 24.5% increase in net income for 2014, what is its net income for 2014? (b) If 6 cents of every dollar of Neer’s revenue is net income in 2013, what is the dollar amount of 2013
> Kono Inc. has net income of $200,000, average shares of common stock outstanding of 40,000, and preferred dividends for the period of $20,000. What is Kono’s earnings per share of common stock? Tim Frye, the president of Kono, believes that the computed
