Question: Ragg Shop Inc. (RSI) recognized $3,800

> Eagle Airlines is a small airline that occasionally carries overload shipments for the overnight delivery company Never-Fail Inc. Never-Fail is a multimillion-dollar company started by Wes Never immediately after he failed to finish his first accounting

> Bellco, a division of Becker International Corporation, is operated under the direction of Antoin Sedatt. Bellco is an independent investment center with approximately $72,000,000 of assets that generate approximately $8,640,000 in annual net income. Bec

> The Huffman School of Vocational Technology has organized the school training programs into three departments. Each department provides training in a different area as follows: nursing assistant, dental hygiene, and office technology. The schoolâ&#

> Yalland Manufacturing Company makes two different products, M and N. The company’s two departments are named after the products; for example, Product M is made in Department M. Yalland’s accountant has identified the f

> Kidd Company produces two products. Budgeted annual income statements for the two products are provided as follows. Table Summary: A table has 4 columns. Column 1 has entries. Column 2 has power. Column 3 has lite. Column 4 has total. Power is divided in

> Vaughn Corporation sells hammocks; variable costs are $75 each, and the hammocks are sold for $125 each. Vaughn incurs $240,000 of fixed operating expenses annually. Required 1. Determine the sales volume in units and dollars required to attain a $60,000

> Trevino Company makes and sells products with variable costs of $24 each. Trevino incurs annual fixed costs of $315,000. The current sales price is $87. Required The following requirements are interdependent. For example, the $252,000 desired profit intr

> Cahill Company is considering adding a new product. The cost accountant has provided the following data. Expected variable cost of manufacturing $57 per unit Expected annual fixed manufacturing costs $216,000 The administrative vice president has provide

> Hampton Company is considering the addition of a new product to its cosmetics line. The company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. Relevant information and budgeted annual income statements for each

> Reid Company is considering the production of a new product. The expected variable cost is $27 per unit. Annual fixed costs are expected to be $810,000. The anticipated sales price is $72 each. Required Determine the break-even point in units and dollars

> Bauer Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $100. Variable costs Manufacturing $30 per unit Selling 12 per unit Fixed costs Manufacturing $360,000 per year Selling and administ

> Massey Company reported the following data regarding the product it sells. Sales price $25 Contribution margin ratio 40% Fixed costs $810,000 Required Use the contribution margin ratio approach and consider each requirement separately. 1. What is the

> The following excerpt is from Coca-Cola Company’s 2019 annual report filed with the SEC. Management evaluates the performance of our operating segments separately to individually monitor the different factors affecting financial perform

> Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $60 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are $480,000, and fixed selling a

> Dean and Powell Tax Services Company has 31 branch offices in the nation. Each office has about three to six professional accountants and one to two secretaries. In a busy season, the office manager, who is also a professional accountant, can hire tempor

> Myrick Woodcraft Company (MWC) manufactures “antique” wooden cabinets to house modern televisions. MWC began operations in January of last year. Sidney Myrick, the owner, asks for your assistance. He believes that he n

> Thornton Computer Services, Inc., has been in business for six months. The following are basic operating data for that period. Table Summary: A table shows 2 columns. Column 1 has entries. Column 2 has months. The months are divided into July, August, Se

> Nepal Corporation offers mountain-climbing expeditions for its customers, providing food, equipment, and guides. Climbs normally require one week to complete. The company’s accountant is reviewing historical cost data to establish a pri

> Lakeshore Cinemas is considering a contract to rent a movie for $1,980 per day. The contract requires a minimum one-week rental period. Estimated attendance is as follows. /Required 1. Determine the average cost per person of the movie rental contract se

> Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $800,000 in a startup firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the p

> Kenton and Denton Universities offer executive training courses to corporate clients. Kenton pays its instructors $5,000 per course taught. Denton pays its instructors $250 per student enrolled in the class. Both universities charge executives a $450 tui

> Franklin Training Services (FTS) provides instruction on the use of computer software for the employees of its corporate clients. It offers courses in the clients’ offices on the clients’ equipment. The only major expense FTS incurs is instructor salarie

> Rita Jekyll operates a sales booth in computer software trade shows, selling an accounting software package, Abacus. She purchases the package from a software company for $210 each. Booth space at the convention hall costs $8,400 per show. Required 1. Sa

> Wilkin Fruit Drink Company planned to make 400,000 containers of apple juice. It expected to use two cups of frozen apple concentrate to make each container of juice, thus using 800,000 cups (400,000 containers × 2 cups) of frozen concentrate. The standa

> Seattle Bank’s startup division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is $96,000 per year. The three tellers combined can process up to 90,000 customer transactions per year. If a branch does not

> Vernon Company invented a new process for manufacturing ice cream. The ingredients are mixed in high-tech machinery that forms the product into small round beads. Like a bag of balls, the ice cream beads are surrounded by air pockets in packages. This de

> Ted Cowan is a model employee. He has not missed a day of work in the last five years. He even forfeits his vacation time to make sure that things run smoothly. Ted literally does the work of two people. He started out working as the purchasing agent in

> Campbell Manufacturing Company (CMC) was started when it acquired $80,000 by issuing common stock. During the first year of operations, the company incurred specifically identifiable product costs (materials, labor, and overhead) amounting to $75,000. CM

> CIA Review, Inc., provides review courses twice each year for students studying to take the CIA exam. The cost of textbooks is included in the registration fee. Text material requires constant updating and is useful for only one course. To minimize print

> Kenta Manufacturing Company obtains its raw materials from a variety of suppliers. Kenta’s strategy is to obtain the best price by letting the suppliers know that it buys from the lowest bidder. Approximately four years ago, unexpected increases in deman

> Wang Company began operations on January 1, Year 1, by issuing common stock for $70,000 cash. During Year 1, Wang received $88,000 cash from revenue and incurred costs that required $65,000 of cash payments. Required Prepare a GAAP-based income statement

> Power-To-Spare, Inc., makes a smartphone case that includes a battery that extends the operating life of an iPhone. The manufacturing costs per unit include $15 direct materials, $17 direct labor and $8 manufacturing overhead. These costs are based on a

> The following transactions pertain to Year 1, the first-year operations of Gibson Company. All inventory was started and completed during Year 1. Assume that all transactions are cash transactions. 1. Acquired $12,000 cash by issuing common stock. 2. Pai

> Sinclair Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement d

> Irvine Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price $48.00 Materials cost 12.00 Labor cost 6.00 Overhead cost 8.40 Selling, general,

> Stuart Manufacturing Company was started on January 1, Year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furnitur

> Use the following table to indicate whether the information is more representative of managerial versus financial accounting. The first item is shown as an example. Information Item: Estimates of future revenue GAAP-based product cost Salary of the man

> Janice Huffman has decided to start Janice Cleaning, a residential housecleaning service company. She is able to rent cleaning equipment at a cost of $600 per month. Labor costs are expected to be $50 per house cleaned and supplies are expected to cost $

> Identify the following costs as fixed or variable. Costs related to plane trips between Boston, Massachusetts, and San Diego, California, follow. Pilots are paid on a per-trip basis. 1. Pilots’ salaries relative to the number of trips flown. 2. Depreciat

> This problem is an extension of Problem 5-15A, which must be completed first. Bombay’s accounting staff has disaggregated the $216,000 of overhead costs into the following items. (1) Inspection costs $ 19,200 (2) Setup costs 12,960 (3) Engineering cos

> Gilchrist Corporation recognized the annual expiration of insurance on December 31, Year 2. Using the following horizontal financial statements model, indicate how this event affected the company’s GAAP-based financial statements under

> Ocean Plastics Company accrued a tax liability for $7,000. Use the following horizontal financial statements model to show the effect of this accrual under the following two assumptions: (1) the tax is on administrative buildings, or (2) the tax is on pr

> Use the following table to classify each cost as a product cost or as an SG&A cost. Also indicate whether the cost would be recorded as an asset or an expense. Assume that product costs are defined in accordance with GAAP. The first cost item is shown as

> Indicate whether each of the following costs should be classified as a product cost or as an SG&A cost in accordance with GAAP. 1. Wages paid to workers in a manufacturing plant. 2. The salary of the receptionist working in the sales department. 3. Suppl

> 1. Indicate whether each of the following items is representative of financial or managerial accounting. 2. Financial results used by stockbrokers to evaluate a company’s profitability. 3. Quarterly budgets used by management to determine future borrowin

> Melody Lovelady is the most highly rewarded sales representative at Swift Corporation. Her secret to success is always to understate her abilities. Ms. Lovelady is assigned to a territory in which her customer base is increasing at approximately 25 perce

> On January 1, Year 1, Sanita Company had a balance of $76,300 in its Office Equipment account. During Year 1, Sanita purchased office equipment that cost $30,300. The balance in the Office Equipment account on December 31, Year 1, was $75,400. The Year 1

> On January 1, Year 1, Poole Company had a balance of $178,000 in its Land account. During Year 1, Poole sold land that had cost $71,000 for $95,000 cash. The balance in the Land account on December 31, Year 1, was $210,000. Required 1. Determine the cash

> The following accounts and corresponding balances were drawn from Geneses Company’s Year 2 and Year 1 year-end balance sheets. The Year 2 income statement is shown as follows. Required 1. Prepare the operating activities section of the

> The following accounts and corresponding balances were drawn from Pixi Company’s Year 2 and Year 1 year-end balance sheets. The Year 2 income statement is shown as follows. Required 1. Use the direct method to compute the amount of cash

> The following accounts and corresponding balances were drawn from Osprey Company’s Year 2 and Year 1 year-end balance sheets. During the year, $84,000 of unearned revenue was recognized as having been earned. Rent expense for Year 2 was

> Pella Company presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Pella’s Year 2 and Year 1 year-end balance sheets. The income statement reported a $700 loss

> Napoleon Incorporated presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from the company’s Year 2 and Year 1 year-end balance sheets. The Year 2 income statement

> The following accounts and corresponding balances were drawn from Cushing Company’s Year 2 and Year 1 year-end balance sheets. Other information drawn from the accounting records: 1. Dividends paid during the period amounted to $50,000.

> On January 1, Year 1, Milam Company had a balance of $300,000 in its Common Stock account. During Year 1, Milam paid $18,000 to purchase treasury stock. Treasury stock is accounted for using the cost method. The balance in the Common Stock account on Dec

> Kemp Corporation makes a protein supplement called Power Punch™. Its principal competitor for Power Punch is the protein supplement Superior Strength™, made by Jim Adams Company (JAC). Mr. Adams, a world-renowned weight-lifting champion, founded JAC. The

> On January 1, Year 1, Van Company had a balance of $800,000 in its Bonds Payable account. During Year 1, Van issued bonds with a $300,000 face value. There was no premium or discount associated with the bond issue. The balance in the Bonds Payable accoun

> The following accounts and corresponding balances were drawn from Teva Company’s Year 2 and Year 1 year-end balance sheets. Other information drawn from the accounting records: 1. Teva incurred a $3,000 loss on the sale of investment se

> An accountant for Farve Enterprise Companies (FEC) computed the following information by making comparisons between FEC’s Year 2 and Year 1 balance sheets. Further information was determined by examining the company’s Year 2 income statement. 1. The amou

> December 31, Year 4, balance sheet data for Hestand Company follow. All accounts are represented. Amounts indicated by question marks (?) can be calculated using the following additional information. Required Determine the following: 1. The balance in ac

> Balance sheet data for the Beech Corporation follows. Required Compute the following and round computations to one decimal point: 1. Working capital. 2. Current ratio. 3. Debt-to-assets ratio. 4. Debt-to-equity ratio.

> On October 31, Year 4, Corona Company’s total current assets were $160,000 and its total current liabilities were $40,000. On November 1, Year 4, Corona bought manufacturing equipment for $20,000 cash. Required 1. Compute Corona’s working capital before

> On October 31, Year 4, Corona Company’s total current assets were $160,000 and its total current liabilities were $40,000. On November 1, Year 4, Corona purchased marketable securities for $20,000 cash. Required 1. Compute Corona’s working capital before

> Bruno Corporation purchased $480 of merchandise on account. Required Explain the effect of the purchase on Bruno’s current ratio.

> Selected financial information for Purdy Company for Year 4 follows. Sales $3,200,000 Cost of goods sold 2,100,000 Merchandise inventory Beginning of year 350,000 End of year 490,000 Required Assuming that the merchandise inventory buildup was relativel

> Alpena Company reported the following operating results for Year 4 and Year 3. Required Round percentages to one decimal point. 1. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 4 and Year 3.

> Obtain the income statements for Microsoft Corporation for its fiscal years ending on June 30, 2017, 2018, 2019, and 2020. The 2018–2020 statements are included in Microsoft’s 2020 annual report and Form 10-K, and the

> Sperry Company reported the following operating results for two consecutive years. Required Express each income statement component for each of the two years as a percentage of sales. Round percentages to one decimal point.

> The following is a list of transactions. 1. Paid cash for short-term marketable securities. 2. Purchased a computer, issuing a short-term note for the purchase price. 3. Purchased factory equipment, issuing a long-term note for the purchase price. 4. Sol

> Match each of the following ratios with its formula. 1. Price-earnings ratio 2. Dividend yield 3. Book value per share 4. Plant assets to long-term liabilities 5. Times interest earned 6. Earnings per share 7. Net margin 8. Debt-to-equity ratio 9. Curren

> Compute the specified ratios using the following December 31, Year 3, statement of financial position for Palmer Company. The average number of common shares outstanding during Year 3 was 1,500. Net income for the year was $60,000. Required Compute each

> During Year 4, Roper Corporation reported net income after taxes of $1,200,000. During the year, the number of shares of stock outstanding remained constant at 20,000 shares of $100 par, 8 percent preferred stock and 200,000 shares of common stock. The c

> Selected data from Goode Company follow. Table Summary: A table shows the Balance Sheet data as of December 31. Column 1 has entries. Column 2 has year 4. Column 2 has year 3. The Income Statements for the years ended December 31 shows 3 columns. Column

> The following data come from the financial records of Welch Corporation for Year 3. Sales $320,000 Interest expense 9,000 Income tax 36,000 Net income 99,000 Required How many times was interest earned in Year 3?

> Haskell Corporation reported the following operating results for two consecutive years. Required 1. Compute the percentage changes in Haskell Corporation’s income statement components for the two years. Round percentages to one decimal

> Hebron Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions. Issued common stock for $100,000. Paid $39,600 cash to purchase raw materials used to make products. Transferred $36,0

> The following information pertains to Job 712 that Nantou Manufacturing Company completed during the month of January. Materials and labor costs for the job were $24,500 and $19,000, respectively. Applied overhead costs were $16,000. Nantou completed and

> Kemp Tables Inc. (KTI) makes picnic tables of 2 × 4 planks of treated pine. It sells the tables to large retail discount stores such as Walmart. After reviewing the following data generated by KTI’s chief accountant, the co

> Tripoli Consulting provides financial and estate planning services on a retainer basis for the executive officers of its corporate clients. It incurred the following labor costs on services for three corporate clients during March Year 2. Direct Labor Co

> Newton Advertisements Corporation designs and produces television commercials for clients. On March 1, Year 1, the company issued common stock for $100,000 cash. During March, Newton worked on three jobs. Pertinent data follow. Actual production overhead

> Tang Drapery Inc. specializes in making custom draperies for both commercial and residential customers. It began business on August 1, Year 1, by acquiring $60,000 cash through issuing common stock. In August Year 1, Tang accepted drapery orders, Jobs 80

> Glenvar Automotive Specialties Inc. has a successful market niche. It customizes automobile interiors to fit the various needs of disabled customers. Some customers need special equipment to accommodate drivers with disabilities. Others need modified ent

> Julie Snyder, an artist, plans to make her living drawing customer portraits at a stand in Underground Atlanta. She will carry her drawing equipment and supplies to work each day in bags. By displaying two of her best hand-drawn portraits on either side

> Tully Corporation’s Kearney Plant in Jacksonville, Florida, produces the company’s weed-control chemical solution, Weed Terminator. Production begins with pure water from a controlled stream to which the plant adds different chemicals in the production p

> Wautoma Corporation, which makes suitcases, completed 42,000 suitcases in August Year 2. At the end of August, work in process inventory consisted of 5,000 suitcases estimated to be 40 percent complete. Total product costs for August amounted to $880,000

> Osprey Corporation, a manufacturer of diabetic testing kits, started November production with $150,000 in beginning inventory. During the month, the company incurred $740,000 of materials cost and $480,000 of labor cost. It applied $330,000 of overhead c

> Galilee Publications Inc. produces Bibles in volume. It printed and sold 60,000 Bibles last year. Demand is sufficient to support producing a particular edition continuously throughout the year. For this operation, Galilee uses two departments: printing

> Indicate which costing system (job-order, process, or hybrid) would be most appropriate for the type of product listed in the left-hand column. The first item is shown as an example. Type of Product a. House b. Oil c. Luxury yacht d. Special-order pers

> Jasmin Sylvera is the manufacturing production supervisor for Feynman Motor Works (FMW), a company that manufactures electrical motors for industrial applications. Trying to explain why she did not get the year-end bonus that she had expected, she told a

> Emma Emerson is a proud woman with a problem. Her daughter has been accepted into a prestigious law school. While Ms. Emerson beams with pride, she is worried sick about how to pay for the school; she is a single parent who has worked hard to support her

> The following incomplete T-accounts were drawn from the records of Richland Manufacturing Company. Required Determine the dollar amounts for (a), (b), (c), (d), and (e). Assume that underapplied and overapplied overhead is closed to Cost of Goods Sold.

> Lincoln Manufacturing Company incurred the following actual manufacturing overhead costs: (1) cash paid for plant supervisor’s salary, $43,000; (2) depreciation on manufacturing equipment, $15,000; and (3) manufacturing supplies used, $1,150 (Lincoln use

> Creek Company and Fort Company base their predetermined overhead rates on machine hours. The following information pertains to the companies’ most recent accounting periods. Required 1. Compute the predetermined overhead rate for each c

> Pleasant Hill Manufacturing Company incurred actual overhead costs of $312,000 during Year 2. It uses direct labor dollars as the allocation base for overhead costs. In Year 2, actual direct labor costs were $400,000, and overhead costs were underapplied

> On January 1, Year 2, Tinicum Company estimated that its total overhead costs for the coming year would be $646,000 and that it would make 34,000 units of product. Tinicum actually produced 34,600 units of product and incurred actual overhead costs of $6

> Creswell Enterprises’ budget included the following estimated costs for the Year 3 accounting period. Depreciation on manufacturing equipment $ 30,400 Cost of manufacturing supplies 6,000 Direct labor cost 172,800 Rent on manufacturing facility 15,200 Di

> Use a horizontal statements model to show how each of the following independent accounting events affects the elements of the balance sheet and the income statement. Indicate whether the event increases (I), decreases (D), or does not affect (NA) each el

> Fremont Company started Year 1 with $248,000 in its cash and common stock accounts. During Year 1, Fremont paid $160,000 cash for employee compensation and $68,000 cash for materials. Required 1. Determine the total amount of assets and the amount of exp

> The following information was drawn from the records of Shelby Company. During the most recent month, Shelby produced 4,000 units of product and sold 3,800 units of product at a sales price of $54 per unit. Required 1. Prepare an income statement for the

> Susank Manufacturing Company was started on January 1, Year 1, when it acquired $1,250 cash by issuing common stock. During its first year of operation, it purchased $250 of direct raw materials with cash and used $180 of the materials to make products.