Briefly discuss the differences between (A) adoption of IFRS by the U.S. Securities and Exchange Commission and (B) convergence of U.S. GAAP with IFRS.
> Amazon .com, Inc. is one of the largest Internet retailers in the world. Netflix , Inc. provides digital streaming and DVD rentals in the United States. Amazon and Netflix compete in streaming and digital services; however, Amazon also sells many other p
> Google, Inc. and Microsoft Corporation design and distribute consumer and enterprise software, including overlaps in search, business productivity, and mobile operating systems. Google’s primary source of revenue is from advertising, wh
> The Kroger Company, a national supermarket chain, reported the following data (in millions) in its financial statements for a recent year: Total sales…………………………………$108,465 Total assets: Beginning of year……………………………29,281 End of year…………………………………….
> The Home Depot reported the following data (in millions) in its recent financial statements: A. Determine the asset turnover ratio for Home Depot for Year 2 and Year 1. (Round to two decimal places). B. What conclusions can be drawn from these ratios c
> Amazon. com, Inc. is one of the largest Internet retailers in the world. Netflix, Inc. provides digital streaming and DVD rentals in the United States. Amazon and Netflix compete in streaming and digital services; however, Amazon also sells many other pr
> Sears Holdings C or p or at ion is one of the largest mall-based retailers in the United States. The following year-end data were taken from a recent Sears balance sheet (in millions): A. Compute the working capital and the current ratio as of December
> The following year-end data were taken from recent balance sheets of U nde r A r mou r , I nc. (in millions): A. Compute the working capital and the current ratio as of December 31, Year 2 and Year 1. (Round to one decimal place.) B. What conclusions c
> Amazon .com, Inc. is the largest Internet retailer in the United States. Best Buy , Inc. is a leading retailer of technology and media products in the United States. Amazon and Best Buy compete in similar markets; however, Best Buy sells through both tra
> The following total liabilities and stockholders’ equity information (in millions) is provided for Papa John’ s International, Inc. and Y u m! Brands, Inc. at the end of a recent year: Yum! Brands is a much larger co
> Technology Accessories Inc. is a designer, manufacturer, and distributor of accessories for consumer electronic products. Early in 20Y3, the company began production of a leather cover for tablet computers, called the iLeather. The cover is made of stitc
> The following data are taken from recent financial statement of Nike, Inc. (in millions): A. Determine the amount of change (in millions) and percent of change in net income from Year 1 to Year 2. B. Determine the percentage relationship
> Chipotle Mexican Grill, Inc. is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotle’s balance sheets for the end of two recent years are as follows (in thousands): A. Prepare a vertical analys
> Amazon .com, Inc. is one of the largest Internet retailers in the world. We will use Amazon as a continuing company exercise to reinforce the various tools and techniques for analyzing financial statements. We will begin with the ratio of liabilities to
> Low e’ s Companies, Inc. , a major competitor to T h e Ho me Depot in the home improvement retail business, operates over 1,800 stores. Lowe’s recently reported the following end of-year balance sheet data (in millions
> The Home Depot , Inc. , is the world’s largest home improvement retailer and one of the largest retailers in the United States based on sales volume. Home Depot operates over 2,200 stores that sell a wide assortment of building, home im
> Hewlett Packard Company (HP ) and Apple Inc. are both developers and marketers of computer equipment and peripherals. However, the two companies follow different manufacturing strategies. HP maintains a significant portion of its own manufacturing capabi
> Monster Beverage C or p or at ion develops, markets, and sells energy and other alternative beverage brands. Brown-F or man C or p or at ion manufactures and sells a wide variety of spirit and wine beverages, such as Jack Daniel’sÂ
> Chipotle Mexican Grill, Inc. is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotle’s balance sheets for the end of two recent years are as follows: A. Prepare a horizontal analysis of the two
> Amazon .com, Inc. is one of the largest Internet retailers in the world. Target Corporation is one of the largest value-priced general merchandisers operating in the United States. Target sells through nearly 1,800 brick-and-mortar stores and through the
> The following data (in millions) are taken from the financial statements of Walmart Stores, Inc. : A. For Walmart, determine the amount of change in millions and the percent of change (rounded to one decimal place) from Year 1 to Year 2
> Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May: In addition, the following information is available: A. Materials and direct labor were
> Suzi Nomro operates Watercraft Supply Company, an online boat parts distributorship that is in its third year of operation. The following income statement was prepared for the year ended October 31, 2018. Suzi is considering a proposal to increase net
> The following data (in millions) are taken from the financial statements of T ar g e t C or p or at i on, the owner of Target stores: A. For Target, determine the amount of change in millions and the percent of change (rounded to one dec
> Amazon .com, Inc. is the largest Internet retailer in the United States. Amazon’s income statements through income from operations for two recent years follow: A. Prepare a horizontal analysis of the operating income statements. (Roun
> Project 1 requires an original investment of $125,000. The project will yield cash flows of $50,000 per year for 10 years. Project 2 has a calculated net present value of $135,000 over an eight-year life. Project 1 could be sold at the end of eight years
> A project is estimated to cost $463,565 and provide annual net cash flows of $115,000 for nine years. Determine the internal rate of return for this project, using Exhibit 5. Exhibit 5: Present Value of an Annuity of $1 at Compound Interest Year 6%
> A project has estimated annual net cash flows of $70,000 for four years and is estimated to cost $190,000. Assume a minimum acceptable rate of return of 10%. Using Exhibit 5, determine (A) the net present value of the project and (B) the present value in
> A project has estimated annual net cash flows of $36,500. It is estimated to cost $222,650. Determine the cash payback period.
> McFadden Company owns equipment with a cost of $475,000 and accumulated depreciation of $280,000 that can be sold for $175,000, less a 7% sales commission. Alternatively, McFadden Company can lease the equipment for four years for a total of $180,000, at
> Product J19 is produced for $11 per gallon. Product J19 can be sold without additional processing for $18 per gallon, or processed further into Product R33 at an additional cost of $7 per gallon. Product R33 can be sold for $24 per gallon. Prepare a diff
> Pasadena Candle Inc. budgeted production of 785,000 candles for the year. Each candle requires molding. Assume that six minutes are required to mold each candle. If molding labor costs $18 per hour, determine the direct labor cost budget for the year.
> A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $75 per unit (100 bottles), including fixed costs of $28 per unit. A proposal is offered to purchase small bottles from an outside
> Stretch and Trim Carpet Company sells and installs commercial carpeting for office buildings. Stretch and Trim Carpet Company uses a job order cost system. When a prospective customer asks for a price quote on a job, the estimated cost data are inserted
> Product AG52 has revenue of $748,000, variable cost of goods sold of $640,000, variable selling expenses of $90,000, and fixed costs of $50,000, creating a loss from operations of $32,000. Prepare a differential analysis as of October 7 to determine if P
> The Commercial Division of Galena Company has income from operations of $12,680,000 and assets of $74,500,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?
> Pasadena Candle Inc. budgeted production of 785,000 candles for the year. Wax is required to produce a candle. Assume 10 ounces of wax is required for each candle. The estimated January 1 wax inventory is 16,000 pounds. The desired December 31 wax invent
> Pasadena Candle Inc. projected sales of 800,000 candles for the year. The estimated January 1 inventory is 35,000 units, and the desired December 31 inventory is 20,000 units. What is the budgeted production (in units) for the year?
> Vinton Company’s costs were under budget by $36,000. The company is divided into North and South regions. The North Region’s costs were over budget by $45,000. Determine the amount that the South Region’s costs were over or under budget.
> Prepare a cost of goods sold budget for Pasadena Candle Inc. using the information in Basic Exercises 3 and 4. Assume the estimated inventories on January 1 for finished goods and work in process were $200,000 and $41,250, respectively. Also assume the d
> At the beginning of the period, the Fabricating Department budgeted direct labor of $33,600 and equipment depreciation of $5,000 for 1,200 hours of production. The department actually completed 1,300 hours of production. Determine the budget for the depa
> How does the target cost method differ from cost-plus approaches?
> Explain why rewarding sales personnel on the basis of total sales might not be in the best interests of a business whose goal is to maximize profits.
> Why might management analyze product profitability?
> Hildreth Company uses a job order cost system. The following data summarize the operations related to production for April, the first month of operations: A. Materials purchased on account, $147,000. B. Materials requisitioned and factory labor used: C
> A new assistant controller recently was heard to remark: “All the assembly workers in this plant are covered by union contracts, so there should be no labor variances.” Was the controller’s remark correct? Discuss.
> Since all costs of operating a business are controllable, what is the significance of the term non controllable cost?
> In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
> Which of the following costs would be included in the cost of a manufactured product according to the variable costing concept: (A) rent on factory building, (B) direct materials, (C) property taxes on factory building, (D) electricity purchased to opera
> Which type of manufacturing cost (direct materials, direct labor, variable factory overhead, fixed factory overhead) is included in the cost of goods manufactured under the absorption costing concept but is excluded from the cost of goods manufactured un
> Do the terms debit and debit and debit credit signify increase or credit signify increase or credit decrease or can they signify either? Explain.
> Explain why service companies use different activity bases than manufacturing companies to classify costs as fixed or variable.
> When using the negotiated price approach to transfer pricing, within what range should the transfer price be established?
> Explain the meaning of (A) differential revenue, (B) differential cost, and (C) differential income.
> Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: A. Materials purchased on account, $770,000. B. Materials requisitioned, $680,000, of which $75,800 was for general factor
> Discuss the two factors affecting both sales and variable costs to which a change in contribution margin can be attributed.
> Differentiate between centralized and decentralized operations.
> How is the quantity factor for an increase or a decrease in the amount of sales computed in using contribution margin analysis?
> What types of costs are customarily included in the cost of manufactured products under (A) the absorption costing concept and (B) the variable costing concept?
> Discuss how financial data prepared on the basis of variable costing can assist management in the development of short-run pricing policies.
> When might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products?
> Under what circumstances might the activity-based costing method provide more accurate product costs than the multiple production department factory overhead rate method?
> What would happen to net income if the activities noted in Discussion Question 6 were allocated to products for financial statement reporting and the inventory increased? Data from Discussion Question 6: Shipping, selling, marketing, sales order proces
> Shipping, selling, marketing, sales order processing, return processing, and advertising activities can be related to products by using activity-based costing. Would allocating these activities to products for financial statement reporting be acceptable
> If fixed costs increase, what would be the impact on the (A) contribution margin? (B) income from operations?
> Rodgers Corporation produces and sells football equipment. On July 1, Year 1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. Interest on the bonds is payable semiannually on D
> Under what two conditions would the multiple production department factory overhead rate method provide more accurate product costs than the single plant wide factory overhead rate method?
> How do the multiple production department and the single plant wide factory overhead rate methods differ?
> Which of the following costs would be classified as variable and which would be classified as fixed, if units produced is the activity base? A. Direct materials costs B. Electricity costs of $0.35 per kilowatt-hour
> What are International Financial Reporting Standards? Who uses these accounting standards?
> Indicate how prior period adjustments would be reported on the financial statements presented only for the current period.
> Why would management be concerned about the accuracy of product costs?
> How does activity-based costing differ from the multiple production department factory overhead rate method?
> Why would a manufacturing company with multiple production departments still prefer to use a single plant wide overhead rate?
> How does lean manufacturing differ from the conventional manufacturing process?
> How are cost of production reports used for controlling and improving operations?
> Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December: Instructions: 1. For both companies, determine the amounts of the missing items (A) through (F), id
> What is the most important purpose of the cost of production report?
> Rameriz Company is a process manufacturer with two production departments, Blending and Filling. All direct materials are introduced in Blending from the materials store area. What is included in the cost transferred to Filling?
> What is the purpose for determining the cost per equivalent unit?
> Why is the cost per equivalent unit often determined separately for direct materials and conversion costs?
> In a job order cost system, direct labor and factory overhead applied are debited to individual jobs. How are these items treated in a process cost system and why?
> In job order cost accounting, the three elements of manufacturing cost are charged directly to job orders. Why is it not necessary to charge manufacturing costs in process cost accounting to job orders?
> Which type of cost system, process or job order, would be best suited for each of the following: (A) TV assembler, (B) building contractor, (C) automobile repair shop, (D) paper manufacturer, (E) custom jewelry manufacturer? Give reasons for your answers
> A. What is (1) over applied factory overhead and (2) under applied factory overhead? B. If the factory overhead account has a debit balance, was factory overhead under applied or over applied? C. If the factory overhead account has a credit balance at th
> What are the three categories of manufacturing costs included in the cost of finished goods and the cost of work in process?
> A. How does the rate earned on total assets differ from the rate earned on stockholders’ equity? B. Which ratio is normally higher? Why?
> Data pertaining to the current position of Lucroy Industries Inc. follows: Cash……………………â
> How is property, plant, and equipment measured on the balance sheet under IFRS? How does this differ from the way property, plant, and equipment is measured on the balance sheet under U.S. GAAP?
> Briefly discuss the difference between (A) a “rules-based” approach to accounting standard setting and (B) a “principles-based” approach to accounting standard setting.
> What document is the source for (A) debiting the accounts in the materials ledger and (B) crediting the accounts in the materials ledger?
> What manufacturing cost term is used to describe the cost of materials that are an integral part of the manufactured end product?
> A stockbroker advises a client to buy preferred stock, saying “With that type of stock, you will never have to worry about losing the dividends.” Is the broker right?
> What are the major differences between managerial accounting and financial accounting?
> The dividend yield of Suburban Propane was 7.7% in a recent year, and the dividend yield of Google was 0% in the same year. What might explain the difference between these ratios?
> Distinguish between prime costs and conversion costs.
> Kroger , a grocery store, 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 difference?
> What is the difference between adjusting entries and adjusting entries and adjusting entries correcting entries?
> Rodgers Corporation produces and sells football equipment. On July 1, Year 1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. Interest on the bonds is payable semiannually on D
> What body is responsible for setting International Financial Reporting Standards?
> Briefly discuss why global accounting standards are needed in today’s business environment.
