For each of the following statements regarding dividends, indicate whether it is true or false. 1. Cash and stock dividends reduce retained earnings. 2. Dividends payable is recorded at the time a cash dividend is declared. 3. The date of record is the date a cash dividend is paid to stockholders. 4. Stock dividends help keep the market price of stock affordable.
> What important assumption underlies multiproduct CVP analysis?
> A custom manufacturer completed Jobs 103 and 104. Job 103 cost $12,000 and was sold (on credit) for $20,000. Job 104 cost $15,000. Prepare journal entries to record (a) the completion of both jobs, (b) the sale of Job 103, and (c) cost of goods sold for
> A manufacturer incurred the following actual factory overhead costs: indirect materials, $6,200; indirect labor (factory wages payable), $9,000; depreciation on factory equipment, $12,000; factory utilities (utilities payable), $800; and factory insuranc
> Ace Patios applies overhead using direct labor hours as its activity base. At the beginning of the year, the company estimates total direct labor hours of 20,000 and total overhead costs of $600,000 for the year. 1. Determine the company’s predetermined
> Indicate which of the following are most likely to be considered as a job and which as a job lot.
> Garcia Company reports beginning raw materials inventory of $855 and ending raw materials inventory of $717. If the company purchased $3,646 of raw materials during the month, what is the amount of materials used during the month? Note: Assume all raw ma
> Prepare the current assets section of the balance sheet at December 31 for Bin Manufacturing using the following information. Hint: Not all information given is needed for the solution.
> Prepare an income statement for Rex Manufacturing for the year ended December 31 using the following information. Hint: Not all information given is needed for the solution.
> Determine the missing amount for each separate situation involving inventory cost flows.
> Compute cost of goods sold using the following information.
> Compute ending work in process inventory for a manufacturer using the following information.
> Why are fixed costs shown as a horizontal line on a CVP chart?
> A company manufactures guitars. Identify each of the following costs as either a prime cost, a conversion cost, or both. 1. Wood used to build the guitar body. 2. Glue used to bind the guitar wood. 3. Wages paid to assembly workers. 4. Depreciation on fa
> Classify each of the following costs as either a product cost or a period cost for a manufacturer. 1. Factory insurance. 2. Sales commissions. 3. Depreciation on factory equipment. 4. Depreciation on office equipment. 5. Rent on factory building. 6. Tax
> Sims Company reports beginning raw materials inventory of $900 and ending raw materials inventory of $1,100. Assume the company purchased $5,200 of raw materials and used $5,000 of raw materials during the year. Compute raw materials inventory turnover (
> A company reports cost of goods manufactured of $918,700 and cost of goods sold of $955,448. Compute the average manufacturing cost per unit assuming 18,374 units were produced.
> Determine the missing amount for each separate situation involving work in process cost flows.
> Refer to the data in Quick Study 18-16. Factory overhead of $39,000 consists of Indirect labor of $20,000, Depreciation expense—Factory of $15,000, and Factory utilities of $4,000. a. Compute total manufacturing costs. b. Prepare a schedule of cost of g
> Prepare the schedule of cost of goods manufactured for Barton Company using the following information for the year ended December 31.
> Determine the missing amount for each separate situation involving manufacturing costs.
> A company manufactures tennis balls. Classify each of the following costs as either direct materials, direct labor, or factory overhead. 1. Rubber used to form the cores. 2. Factory maintenance. 3. Wages paid to assembly workers. 4. Glue used in binding
> We are evaluating whether or not to invest in a company. Indicate whether each of the following separate trends would make us more or less likely to invest. a. Return on equity is increasing, from 19% to 24%. b. Days’ sales in inventory is increasing, fr
> CVP analysis relies on what four assumptions?
> We are evaluating whether or not to make a loan to a company. Indicate whether each of the following separate trends would make us more or less likely to make the loan. a. Current ratio is increasing, from 0.8 to 1.3. b. Acid-test ratio is increasing, fr
> Refer to the information in QS 17-7. Determine the prior year and current year common-size percent’s for cost of goods sold using net sales as the base.
> Use the following information to determine the prior year and current year trend percent’s for net sales using the prior year as the base year.
> Express the items from QS 17-5 in common-size percent’s.
> Financial data from three competitors in the same industry follow. 1. Rank the three companies from high to low on cash from operating activities. 2. Which company has the largest cash outflow for investing activities? 3. Which company has the largest ca
> Use the following information for VPI Co. to prepare a statement of cash flows for the year ended December 31 using the indirect method.
> Refer to the data in QS 16-7. 1. Assume that all common stock is issued for cash. What amount of cash dividends is paid during 2021? 2. Assume that no additional notes payable are issued in 2021. What cash amount is paid to reduce the notes payable balan
> Refer to the data in QS 16-7. Furniture costing $55,000 is sold at its book value in 2021. Acquisitions of furniture total $45,000 cash, on which no depreciation is necessary because it is acquired at year-end. What is the cash inflow from the sale of fu
> Refer to the balance sheet data in QS 16-10 from Anders Company. During 2021, a building with a book value of $70,000 and an original cost of $300,000 was sold at a gain of $60,000. 1. How much cash did Anders receive from the sale of the building? 2. Ho
> The plant assets section of the comparative balance sheets of Anders Company is reported below. Refer to the balance sheet data above from Anders Company. During 2021, equipment with a book value of $40,000 and an original cost of $210,000 was sold at a
> What is the relevant range of operations? How is it important in CVP analysis?
> Data below are from recent annual reports for Apple and Google. Required 1. Compute revenue per employee for both Apple and Google for the current year .Round answers to the nearest dollar. 2. Using revenue per employee from part 1, which companyâ
> The following information is from Ellerbe Company’s comparative balance sheets. The current-year income statement reports depreciation expense on furniture of $18,000. During the year, furniture costing $52,500 was sold for its book val
> Use the indirect method to prepare the operating activities section of Cruz’s statement of cash flows.
> Refer to the data in QS 16-7. Use the direct method to prepare the operating activities section of Cruz’s statement of cash flows.
> Refer to the data in QS 16-7. 1. How much cash is paid to acquire inventory during year 2021? 2. How much cash is paid for operating expenses (excluding depreciation) during year 2021? Hint: Examine prepaid expenses and wages payable.
> Refer to the data in QS 16-7. 1. How much cash is received from sales to customers for year 2021? 2. What is the net increase or decrease in the Cash account for year 2021?
> Use the following information to determine cash flows from operating activities using the indirect method.
> On January 1, $50,000 cash is borrowed from a bank in return for a 6% installment note with 24 monthly payments of $2,216 each. Prepare the journal entry to record (1) the issuance of the note and (2) the first monthly interest payment.
> Madrid Company plans to issue 8% bonds with a par value of $4,000,000. The company sells $3,600,000 of the bonds at par on January 1. The remaining $400,000 sells at par on July 1. The bonds pay interest semiannually on June 30 and December 31. 1. Record
> Identify whether stockholders’ equity would increase, decrease, or have no effect as a result of each separate transaction listed below. 1. A stock dividend equal to 30% of the previously outstanding shares is declared. 2. New shares of common stock are
> Anthem Co. has 100,000 shares authorized, 90,000 shares issued, and 20,000 shares of treasury stock. Determine the number of shares outstanding.
> Identify two ways in which a contribution margin income statement differs in format from a traditional income statement.
> For each transaction, determine the impact—increase, decrease, or no effect—on total assets, total liabilities, and total equity.
> Use the information in QS 13-13 to compute the dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative.
> Green Planet Corp. has 5,000 shares of noncumulative 10% preferred stock with a $2 par value and 17,000 shares of common stock with a $0.01 par value. During its first two years of operation, Green Planet declared and paid the following total cash divide
> Belkin Inc. has 100,000 shares of $3 par value common stock outstanding. Belkin declares a 40% stock dividend on March 2 when the stock’s market value is $72 per share. Prepare the journal entry for declaration of the stock dividend.
> Epic Inc. has 10,000 shares of $2 par value common stock outstanding. Epic declares a 5% stock dividend on July 1 when the stock’s market value is $8 per share. The stock dividend is distributed on July 20. Prepare journal entries for (a) declaration and
> On January 1, Payson Inc. had a retained earnings balance of $20,000. During the year, Payson reported net income of $30,000 and paid cash dividends of $17,000. Calculate the retained earnings balance at its December 31 year-end.
> On December 31, West world Inc. has the following equity accounts and balances. Prepare the stockholders’ equity section of West world’s balance sheet.
> Identify which of the following statements are true for the corporate form of organization. 1. Ownership rights cannot be easily transferred. 2. Owners have unlimited liability for corporate debts. 3. Capital is more easily accumulated than with most oth
> Field, Brown & Snow are partners and share income and losses equally. The partners decide to liquidate the partnership when their capital balances are as follows: Field, $131,250; Brown, $165,000; and Snow, $153,750. On May 31, the liquidation resulted i
> What four inputs are needed in cost-volume-profit analysis?
> Camila, Danni, and Olivia are members of an LLC and share net income and loss equally. Olivia withdraws from the business when equity for each member is Camila, $18,000; Danni, $5,000; and Olivia, $7,000. Olivia is paid $10,000 for her equity in the LLC.
> Lopez, Cruz, and Perez are partners and share net income and loss in a 6:4:1 ratio (in ratio form: Lopez, 6⁄11; Cruz, 4⁄11; and Perez, 1⁄11). On December 31, Perez withdraws from the partnership when the equities of the partners are Lopez, $3,000; Cruz,
> Pena LLC has two members, Sophia and Maria, who share net income and loss equally. Total equity of the business is $100,000, which is made up of Sophia, Member Equity, of $60,000, and Maria, Member Equity, of $40,000. During the year, Juan invests $30,00
> Lopez and Gomez are members in an LLC that reports net income of $130,000. An agreement states that Lopez receives a $20,000 salary allowance and Gomez receives a $50,000 salary allowance. Any remaining income or loss is to be shared by Lopez and Gomez i
> Andy and Jin form an LLC. Jin invests $3,000 cash, equipment with a market value of $6,000, and land with a market value of $40,000. Prepare the LLC’s journal entry to record Jin’s investment. Hint: The LLC records Jin’s investment using the “Jin, Member
> Dave Krug contributed $1,000 cash along with inventory and land to a new partnership. The inventory had a market value of $2,000. The land had a market value of $5,000. The partnership also accepted a $3,000 note payable owed by Krug to a creditor. Prepa
> Fee and Karley had a tech business. After two unprofitable years, the business closed. At that point, the liabilities of the business were $100,000 larger than its assets. Under each separate situation, how much money (if any) can creditors take from Cha
> Amy and Lester are partners in operating a store. Without consulting Amy, Lester enters into a contract to purchase $10,000 of merchandise for the store. Amy says she did not authorize the order and that she could have purchased the same merchandise for
> On December 1, Home Store sells a mower (that costs $200) for $500 cash with a one-year warranty that covers parts. Warranty expense is estimated at 8% of sales. On January 24 of the following year, the mower is brought in for repairs covered under the w
> During the month of January, an employer incurred the following payroll taxes: FICA Social Security taxes of $372, FICA Medicare taxes of $87, FUTA taxes of $36, and SUTA taxes of $324. Prepare the journal entry to record the employer’s payroll tax expen
> How could a production cost report be used to determine if a program to reduce water usage is successful?
> During the month of January, an employee earned $4,000 of salary. Withholdings from the employee’s salary consist of FICA Social Security taxes of $248, FICA Medicare taxes of $58, federal income taxes of $426, and medical insurance deductions of $170. P
> Anoka Company reports the following: net sales of $14,800 for Year 2 and $13,990 for Year 1; end-of-year total assets of $19,100 for Year 2 and $17,900 for Year 1. 1. Compute total asset turnover for Year 2. 2. Anika’s competitor has a turnover of 2.0.
> On January 1 of this year, Diaz Boutique pays $105,000 to modernize its store. Improvements include new floors, ceilings, wiring, and wall coverings. These improvements are estimated to yield benefits for 10 years. Diaz leases (does not own) its store an
> On January 1, the Matthews Band pays $65,800 for sound equipment. The band estimates it will use this equipment for four years and after four years it can sell the equipment for $2,000. Matthews Band uses straight-line depreciation but realizes at the st
> Refer to QS 10-7 and record the journal entries for equipment depreciation for the first year under straight line, units-of-production, and double-declining-balance.
> Equipment costing $13,000 with a 10-year useful life and an estimated $3,000 salvage value is acquired and started operating on January 1. The equipment is estimated to produce 2,000 units of product during its life. It produced 160 units in the first ye
> On January 1, the Matthews Band pays $65,800 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $2,000. During the first year, the b
> On January 1, the Matthews Band pays $65,800 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $2,000. During the first year, the b
> Diego Co. paid $180,000 cash to acquire a group of items consisting of land appraised at $50,000 and a building appraised at $150,000. Allocate total cost to these two assets and prepare an entry to record the purchase.
> Flynn Co. determines that it cannot collect $7,000 of its accounts receivable from its customer, MDC. Record the journal entry required of Flynn under (a) the direct write-off method and (b) the allowance method.
> General Mills needs a steady supply of ingredients for processing. What are some risks the company faces regarding its ingredients?
> Use the following information to prepare the current assets section of Lima Company’s classified balance sheet as of December 31.
> Using the information in QS 8-12, prepare any necessary journal entries that Organic Food Co. must record as a result of preparing the bank reconciliation.
> Nolan Company’s Cash account shows a $22,352 debit balance and its bank statement shows $21,332 on deposit at the close of business on June 30. Prepare a bank reconciliation using the following information. a. Outstanding checks as of June 30 total $3,71
> Choose from the following list of terms and phrases to best complete the following statements. a. Cash b. Cash equivalents c. outstanding check d. Liquidity e. Cash over and short f. Voucher system 1. Th
> The following T-accounts show postings of selected transactions. Indicate the journal used in recording each of these postings a through e.
> Following are (1) two transactions involving a customer as reported in the accounts receivable subsidiary ledger and (2) two transactions involving a supplier as reported in the accounts payable subsidiary ledger. Identify the journal in which each of th
> Greenleaf Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Prepare a cash payments journal like the one in Exhibit 7.11. Journalize the following transactions that should be recorded in t
> Refer to QS 7-8 and for each of the transactions identify the journal in which it would be recorded. Assume the company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal.
> Li Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Prepare a cash receipts journal like the one in Exhibit 7.7. Journalize the following transactions that should be recorded in the cash
> Caesar Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Prepare a sales journal like the one in Exhibit 7.5. Journalize the following transactions that should be recorded in the sales jou
> How does a process manufacturer compute the cost of a completed unit?
> Wilcox Electronics uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Identify the journal in which each transaction should be recorded. a. Sold merchandise on credit. e. Sold merchandise for cash.
> For each account, indicate whether it appears in the general ledger or the subsidiary ledger.
> Wentz Co. made it a priority to negotiate better credit terms with its suppliers so it could defer payments longer. (a) Use the following information for Wentz Co. to compute days’ payable outstanding for Year 1 and Year 2. (b) Does Wen
> Wharton Company posts individual sales to the accounts receivable subsidiary ledger immediately. At the end of each month, Wharton posts the end-of-month totals to the general ledger 1. Open an accounts receivable subsidiary ledger with a T-account for e
> Identify each item 1 through 10 with the system component A through E that it is best associated with. A. Source documents D. Information storage B. Input devices E. Output devices C. Information processors 1. Computer keyboard 2. Printer 3. Monitor 4. B
> Refer to the information in QS 6-11 and assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on specific identification. Of the units sold, eight are from the December 7 purchase and
> Refer to QS 5-10 and prepare journal entries to record each of the merchandising transactions assuming that the company records purchases using the gross method and a periodic inventory system.
> Refer to QS 5-5 and prepare journal entries to record each of the merchandising transactions assuming that the company records purchases using the gross method and a periodic inventory system.
> Chosen Company’s inventory balance at the beginning of the year was $6,000. During the year, the company had Purchases of $30,000 and Purchases Returns and Allowances of $2,000. The company’s inventory balance at the end of the year is $4,000. Compute co
> Clear Water Co. reports the following balance sheet accounts as of December 31. Prepare a classified balance sheet.
> List the four steps in accounting for production activity in a reporting period (for process operations).
