Tropic Zone Corporation experienced the following variances: materials price $350 U, materials quantity $1,700 F, labor price $800 F, labor quantity $500 F, and total overhead $1,200 U. Sales revenue was $92,100, and cost of goods sold (at standard) was $51,600. Determine the actual gross profit.
> Ruiz Engineering Contractors incurred service salaries and wages of $36,000 ($28,000 direct and $8,000 indirect) on an engineering project. The company applies overhead at a rate of 25% of direct labor. Record the entries to assign service salaries and
> In alphabetical order below are current asset items for Roland Company’s balance sheet at December 31, 2020. Prepare the current assets section (including a complete heading). Accounts receivable ………………………………………………… $200,000 Cash ……………………………………………………………
> Coolplay Corp. is thinking about opening a soccer camp in southern California. To start the camp, Coolplay would need to purchase land and build four soccer fields and a sleeping and dining facility to house 150 soccer players. Each year, the camp would
> Presented below are Rook Company’s monthly manufacturing cost data related to its tablet computer product. a. Utilities for manufacturing equipment $116,000 b. Raw materials (CPU, chips, etc.) $ 85,000 c. Depreciation on manufacturing b
> Data pertaining to job cost sheets for Dieker Company are given in BE20.3 and BE20.4. Prepare the job cost sheets for each of the three jobs using the format shown in Illustration 20.8. Data from BE20.3: In January, Dieker Company requisitions raw mate
> In January, Dieker Company requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600. Prepare a summary journal entry to record raw materials used.
> During January, its first month of operations, Dieker Company accumulated the following manufacturing costs: raw materials purchased $4,000 on account, factory labor incurred $6,000 of which $5,200 relates to factory wages payable and $800 relates to pay
> The following data are taken from the financial statements of Colby Company. a. Compute for each year (1) the accounts receivable turnover and (2) the average collection period. At the end of 2018, accounts receivable was $520,000. b. What conclusions
> Use the same data from BE19.9 above and the data below. Determine the missing amounts. Data from BE19.9: Presented below are incomplete manufacturing cost data. Determine the missing amounts for three different situations. Total Work Work Cost of
> Dieker Company begins operations on January 1. Because all work is done to customer specifications, the company decides to use a job order cost system. Prepare a flowchart of a typical job order system with arrows showing the flow of costs. Identify the
> Horizontal analysis (trend analysis) percentages for Phoenix Company’s sales revenue, cost of goods sold, and expenses are listed here. Explain whether Phoenix’s net income increased, decreased, or remained unchanged
> Francum Company has the following data: direct labor $209,000, direct materials used $180,000, total manufacturing overhead $208,000, and beginning work in process $25,000. Compute (a) total manufacturing costs and (b) total cost of work in process.
> Identify whether each of the following costs should be classified as product costs or period costs. a. Manufacturing overhead. b. Selling expenses. c. Administrative expenses. d. Advertising expenses. e. Direct labor. f. Direct materials.
> Using these data from the comparative balance sheet of Rollaird Company, perform horizontal analysis. December 31, 2020 December 31, 2019 $ 400,000 Accounts receivable Inventory Total assets $ 460,000 780,000 650,000 3,164,000 2,800,000
> On January 1, 2020, Bryce Inc. changed from the LIFO method of inventory pricing to the FIFO method. Explain how this change in accounting principle should be treated in the company’s financial statements.
> On August 1, Shaw Company buys 1,000 shares of Estrada common stock for $37,000 cash. On December 1, Shaw sells the stock investments for $40,000 in cash. Journalize the purchase and sale of the common stock.
> Each of the items below must be considered in preparing a statement of cash flows for Baskerville Co. for the year ended December 31, 2020. For each item, state how it should be shown in the statement of cash flows for 2020 if the indirect method is used
> Vertical analysis (common-size) percentages for Palau Company’s sales revenue, cost of goods sold, and expenses are as follows. Did Palau’s net income as a percent of sales increase, decrease, or remain unchanged ove
> If Coho Company had net income of $382,800 in 2020 and it experienced a 16% increase in net income over 2019, what was its 2019 net income?
> Net income was $500,000 in 2018, $485,000 in 2019, and $518,400 in 2020. What is the percentage of change from (a) 2018 to 2019, and (b) from 2019 to 2020? Is the change an increase or a decrease?
> Using the data presented in BE18.4 for Rollaird Company, perform vertical analysis. Data from BE18.4: December 31, 2020 December 31, 2019 $ 400,000 Accounts receivable Inventory Total assets $ 460,000 780,000 650,000 3,164,000 2,800,000
> Suppose these selected condensed data are taken from recent balance sheets of Bob Evans Farms (in thousands). Compute the current ratio for each year and comment on your results. 2020 2019 Cash $ 13,606 $ 7,669 Accounts receivable 23,045 31,087 19,
> Hinck Corporation reported net cash provided by operating activities of $360,000, net cash used by investing activities of $250,000 (including cash spent for capital assets of $200,000), and net cash provided by financing activities of $70,000. Dividends
> Assume that during 2020, Cypress Semiconductor Corporation reported net cash provided by operating activities of $155,793,000, net cash used in investing activities of $207,826,000 (including cash spent for plant assets of $132,280,000), and net cash use
> The T-accounts for Equipment and the related Accumulated Depreciation—Equipment for Luo Company at the end of 2020 are shown here. In addition, Luo’s income statement reported a loss on the disposal of plant assets o
> The comparative balance sheets for Montalvo Company show these changes in noncash current asset accounts: accounts receivable decrease $80,000, prepaid expenses increase $28,000, and inventories increase $30,000. Compute net cash provided by operating ac
> The net income for Metz Co. for 2020 was $280,000. For 2020, depreciation on plant assets was $70,000, and the company incurred a loss on disposal of plant assets of $12,000. Compute net cash provided by operating activities under the indirect method, as
> Telfer, Inc. reported net income of $2.8 million in 2020. Depreciation for the year was $160,000, accounts receivable decreased $350,000, and accounts payable decreased $280,000. Compute net cash provided by operating activities using the indirect method
> The following T-account is a summary of the Cash account of Cuellar Company. What amount of net cash provided (used) by financing activities should be reported in the statement of cash flows? Cash (Summary Form) Balance, Jan. 1 8,000 Receipts from
> During the year, prepaid expenses decreased $5,600, and accrued expenses increased $2,400. Indicate how the changes in prepaid expenses and accrued expenses payable should be entered in the reconciling columns of a worksheet. Assume that beginning balanc
> Howell Corporation reported income tax expense of $340,000,000 on its 2020 income statement and income taxes payable of $297,000,000 at December 31, 2019, and $522,000,000 at December 31, 2020. What amount of cash payments were made for income taxes duri
> Suppose Columbia Sportswear Company had accounts receivable of $206,024,000 at the beginning of a recent year, and $267,653,000 at year-end. Sales revenue was $1,095,307,000 for the year. What is the amount of cash receipts from customers?
> The management of Morrow Inc. is trying to decide whether it can increase its dividend. During the current year, it reported net income of $875,000. It had net cash provided by operating activities of $734,000, paid cash dividends of $70,000, and had cap
> Suppose in a recent quarter, Alliance Atlantis Communications Inc. reported net cash provided by operating activities of $45,600,000 and revenues of $264,800,000. Cash spent on plant asset additions during the quarter was $1,600,000. No dividends were pa
> Christina Corporation purchased 400 shares of Nolan Inc. common stock for $13,200 (Christina does not have significant influence). During the year, Nolan paid a cash dividend of $3.25 per share. At year-end, Nolan stock was selling for $34.50 per share.
> Financial Statement Kruger Corporation has the following long-term investments. (1) Common stock of Eidman Co. (10% ownership), cost $108,000, fair value $115,000. (2) Common stock of Pickerill Inc. (30% ownership), cost $210,000, equity $260,000. (3) De
> Financial Statement For the data presented in BE16.6, show the financial statement presentation of the securities and related accounts. Assume the securities are noncurrent. Data from BE16.6: In its first year of operations, Godfrey Corporation purchase
> In its first year of operations, Godfrey Corporation purchased, as a long-term investment, available-for-sale debt securities costing $72,000. At December 31, 2020, the fair value of the securities is $68,000. Prepare the adjusting entry to record the se
> Financial Statement For the data presented in BE16.4, show the financial statement presentation of the trading securities and related accounts. Data from BE16.4: The cost of the trading debt securities of Munoz Company at December 31, 2020, is $64,000.
> The cost of the trading debt securities of Munoz Company at December 31, 2020, is $64,000. At December 31, 2020, the fair value of the securities is $59,000. Prepare the adjusting entry to record the securities at fair value.
> Noler Company owns 25% of Lauer Company. For the current year, Lauer reports net income of $180,000 and declares and pays a $50,000 cash dividend. Record Noler’s equity in Lauer’s net income and the receipt of dividends from Lauer.
> Randle Inc. issues $300,000, 10-year, 8% bonds at 98. Prepare the journal entry to record the sale of these bonds on March 1, 2020.
> Writing Presented below is the partial bond discount amortization schedule for Gomez Corp. Gomez uses the effective-interest method of amortization. a. Prepare the journal entry to record the payment of interest and the discount amortization at the end
> Golden Inc. issues $4 million, 5-year, 10% bonds at 102, with interest payable annually 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, 2020. b. Prepare
> Sweetwood Company issues $5 million, 10-year, 9% bonds at 96, with interest payable annually on January 1. 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, 2020. b. P
> Imhoff Company leases a new building from Noble Construction, Inc. The present value of the lease payments is $700,000. The lease is a finance lease. Prepare the journal entry that the lessee should make to record this transaction.
> Detroit Company has a stock portfolio valued at $6,000. Its cost was $4,000. If the Fair Value Adjustment account has a debit balance of $300, prepare the journal entry at year-end.
> Ownbey Corporation purchased debt investments for $52,000 on January 1, 2020. On July 1, 2020, Ownbey received cash interest of $2,340. Journalize the purchase and the receipt of interest. Assume that no interest has been accrued.
> State whether each of the following statements is true or false. If false, indicate how to correct the statement. _____ 1. Mortgage bonds and sinking fund bonds are both examples of debenture bonds. _____ 2. Convertible bonds are also known as callable b
> The Rockies Division operates as a profit center. It reports the following for the year ending December 31, 2020. Prepare a responsibility report for the Rockies Division at December 31, 2020. Budget Actual Sales $2,000,000 $1,890,000 760,000 550,0
> In Pargo Company’s flexible budget graph, the fixed cost line and the total budgeted cost line intersect the vertical axis at $90,000. The total budgeted cost line is $350,000 at an activity level of 50,000 direct labor hours. Compute total budgeted cost
> Larkin Company accumulated the following standard cost data concerning product I-Tal. Direct materials per unit: 2 pounds at $5 per pound Direct labor per unit: 0.2 hours at $16 per hour Manufacturing overhead: Allocated based on direct labor hours at a
> The service division of Raney Industries reported the following results for 2020. Sales ………………………………. $500,000 Variable costs …………………… 300,000 Controllable fixed costs ……… 75,000 Average operating assets …. 625,000 Management is considering the followi
> Wade Company estimates that it will produce 6,000 units of product IOA during the current month. Budgeted variable manufacturing costs per unit are direct materials $7, direct labor $13, and overhead $18. Monthly budgeted fixed manufacturing overhead cos
> Snow Cap Company has a unit selling price of $250, variable costs per unit of $170, and fixed costs of $160,000. Compute the break-even point in units using (a) the mathematical equation and (b) unit contribution margin.
> Cedar Grove Industries produces and sells a cell phone-operated home security control. Information regarding the costs and sales of security controls during May 2020 are provided below. Unit selling price of security control ………………………………………….. $45 Unit v
> Summary financial information for Gandaulf Company is as follows. Compute the amount and percentage changes in 2020 using horizontal analysis, assuming 2019 is the base year. Dec. 31, 2020 Dec. 31, 2019 Current assets $ 200,000 $ 220,000 Plant asse
> Amanda Company reports the following total costs at two levels of production. Classify each cost as variable, fixed, or mixed. 5,000 Units 10,000 Units Indirect labor $ 3,000 $ 6,000 Property taxes 7,000 7,000 56,000 Direct labor 28,000 Direct mate
> Huebner Corporation leases new equipment for 10 years on December 31, 2020. The present value of the lease payments is $192,000. After recording this lease, Huebner has assets of $1,800,000, liabilities of $1,100,000, and stockholders’ equity of $700,000
> The condensed financial statements of Murawski Company for the years 2019 and 2020 are presented as follows. (Amounts in thousands.) Compute the following ratios for 2020 and 2019. a. Current ratio. b. Inventory turnover. (Inventory on 12/31/18 was $3
> During the current month, Wacholz Company incurs the following manufacturing costs. a. Purchased raw materials of $18,000 on account. b. Incurred factory labor of $40,000. Of that amount, $31,000 relates to wages payable and $9,000 relates to payroll tax
> In its proposed 2020 income statement, Hrabik Corporation reports income before income taxes $500,000, income taxes $100,000 (not including unusual items), loss on operation of discontinued music division $60,000, gain on disposal of discontinued music d
> Detwiler Orchard issues a $700,000, 6%, 15-year mortgage note to obtain needed financing for a new lab. The terms call for annual payments of $72,074 each. Prepare the entries to record the mortgage loan and the first installment payment.
> Presented below are two independent situations: 1. Edelman Inc. acquired 10% of the 500,000 shares of common stock of Schuberger Corporation at a total cost of $11 per share on June 17, 2020. On September 3, Schuberger declared and paid a $160,000 divide
> Ragsdell Corporation had the following transactions. 1. Issued $200,000 of bonds payable. 2. Paid utilities expense. 3. Issued 500 shares of preferred stock for $45,000. 4. Sold land and a building for $250,000. 5. Lent $30,000 to Tegtmeier Corporation,
> Kurtyka Corporation had the following transactions relating to debt investments: Jan. 1, 2020 Purchased 50, $1,000, 10% Spiller Company bonds for $50,000. Interest is payable annually on January 1. Dec. 31, 2020 Accrued interest on Spiller Company bonds.
> Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $120,000. It will have a useful life of 4 years and no salvage value. Annual revenues would increase by $80,000, and annual expenses (excluding depr
> Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $120,000. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $80,000, and annual cash outflows would
> Ranger Corporation has decided to invest in renewable energy sources to meet part of its energy needs for production. It is considering solar power versus wind power. After considering cost savings as well as incremental revenues from selling excess elec
> Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $120,000. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $80,000, and annual cash outflows would
> Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $140,000. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $80,000, and annual cash outflows would
> Suppose the 2020 adidas financial statements contain the following selected data (in millions). Compute the following values and provide a brief interpretation of each. a. Debt to assets ratio. b. Times interest earned. Current assets $4,485 8,875
> Presented below are long-term liability items for Lind Company at December 31, 2020. Prepare the long-term liabilities section of the balance sheet for Lind Company. Bonds payable, due ………………………………………………….. 2022 $600,000 Lease liability …………………………………………
> Hanschu Inc. issues an $800,000, 10%, 10-year mortgage note on December 31, 2020, to obtain financing for a new building. The terms provide for annual installment payments of $130,196. Prepare the entry to record the mortgage loan on December 31, 2020, a
> The balance sheet for Miley Consulting reports the following information on July 1, 2020. Miley decides to redeem these bonds at 101 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2020. Long-term liabili
> Frankum Company has issued three different bonds during 2020. Interest is payable annually on each of these bonds. 1. On January 1, 2020, 1,000, 8%, 5-year, $1,000 bonds dated January 1, 2020, were issued at face value. 2. On July 1, $900,000, 9%, 5-year
> Nasreen Company issues $2 million, 10-year, 8% bonds at 97, with interest payable each January 1. a. Prepare the journal entry to record the sale of these bonds on January 1, 2020. b. Assuming instead that the above bonds sold for 104, prepare the journa
> Meera Corporation issued 4,000, 8%, 5-year, $1,000 bonds dated January 1, 2020, at 100. Interest is paid each January 1. a. Prepare the journal entry to record the sale of these bonds on January 1, 2020. b. Prepare the adjusting journal entry on December
> Price Company issues $400,000, 20-year, 7% bonds at 101. Prepare the journal entry to record the sale of these bonds on June 1, 2020.
> Moby Inc. is considering two alternatives to finance its construction of a new $2 million plant. a. Issuance of 200,000 shares of common stock at the market price of $10 per share. b. Issuance of $2 million, 8% bonds at face value. Complete the following
> Selected data taken from a recent year’s financial statements of trading card company Topps Company, Inc. are as follows (in millions). Net sales …………………………………………………………….. $326.7 Current liabilities, beginning of year ………………………….. 41.1 Current liabiliti
> Sisson Corporation reports operating expenses of $80,000 excluding depreciation expense of $15,000 for 2020. During the year, prepaid expenses decreased $6,600 and accrued expenses payable increased $4,400. Compute the cash payments for operating expense
> Data for Stiever Corporation’s maintenance costs is shown below. Compute the variable- and fixed-cost elements using regression analysis. Present your solution in the form of a cost equation. Units Produced Total Cost $32,000 July
> Deines Corporation has fixed costs of $480,000. It has a unit selling price of $6, unit variable costs of $4.40, and a target net income of $1,500,000. Compute the required sales in units to achieve its target net income.
> Using the data in BE26.6 and BE26.10, compute the overhead volume variance. Normal capacity was 25,000 direct labor hours. Data from BE26.6 & BE26.10: In October, Pine Company reports 21,000 actual direct labor hours, and it incurs $118,000 of manufactu
> Some overhead data for Pine Company are given in BE26.6. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $4 variable per direct labor hour and $50,000 fixed. Compute the overhead controllable variance. Data from BE2
> Swift Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by $130,000 and will increase annual expenses by $70,000 including depreciation. The oil well will cost $490,000 and will have a
> For the year ending December 31, 2020, Cobb Company accumulates the following data for the Plastics Division which it operates as an investment center: contribution margin—$700,000 budget, $710,000 actual; controllable fixed costs—$300,000 budget, $302,0
> Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $176,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash
> In October, Pine Company reports 21,000 actual direct labor hours, and it incurs $118,000 of manufacturing overhead costs. Standard hours allowed for the work done is 20,600 hours. The predetermined overhead rate is $6 per direct labor hour. Compute the
> McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $400,000, has an expected useful life of 10 years, a salvage value of zero, and is expected to increase net annual cash flows by $70,000.
> Gundy Company expects to produce 1,200,000 units of Product XX in 2020. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $6, and overhead $8. Budget
> Nathan T Corporation is comparing two different options. Nathan T currently uses Option 1, with revenues of $65,000 per year, maintenance expenses of $5,000 per year, and operating expenses of $26,000 per year. Option 2 provides revenues of $60,000 per y
> Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $136,000 and have an estimated useful life of 5 years. It can be sold for $60,000 at the end of that time. (Amusement parks need to rotat
> Data for Croix Company are given in BE25.1. In the second quarter, budgeted sales were $380,000, and actual sales were $384,000. Prepare a static budget report for the second quarter and for the year to date. Data from BE25.1: For the quarter ended Marc
> Rihanna Company is considering purchasing new equipment for $450,000. It is expected that the equipment will produce net annual cash flows of $60,000 over its 10-year useful life. Annual depreciation will be $45,000. Compute the cash payback period.
> Vern Thoms is puzzled. His company had a profit margin of 10% in 2020. He feels that this is an indication that the company is doing well. Tina Amos, his accountant, says that more information is needed to determine the company’s financial well-being. Wh
> When the total cash inflows exceed the total cash outflows in the statement of cash flows, how and where is this excess identified?
> (a) When should a long-term investment in common stock be accounted for by the equity method? (b) When is revenue recognized under this method?
> Distinguish among the three types of activities reported in the statement of cash flows.
