harris furniture company manufactures living room furniture through two departments 538905

Aug 29, 2021 | Uncategorized

Harris Furniture Company manufactures living room furniture through two departments: Framing and Upholstering. Materials are entered at the beginning of each process. For May, the following cost data are obtained from the two work in process accounts.

Instructions

Answer the following questions.

(a) If 3,000 sofas were started into production on May 1 and 2,500 sofas were transferred to Upholstering, what was the unit cost of materials for May in the Framing Department?

(b) Using the data in (a) above, what was the per unit conversion cost of the sofas transferred to Upholstering?

(c) Continuing the assumptions in (a) above, what is the percentage of completion of the units in process at May 31 in the Framing Department?

enos printing corp uses a job order cost system the following data summarize the ope 538795

Aug 29, 2021 | Uncategorized

Enos Printing Corp. uses a job order cost system. The following data summarize the operations related to the first quarter’s production.

1. Materials purchased on account $192,000, and factory wages incurred $87,300.

2. Materials requisitioned and factory labor used by job:

3. Manufacturing overhead costs incurred on account $49,500.

4. Depreciation on equipment $14,550.

5. Manufacturing overhead rate is 90% of direct labor cost.

6. Jobs completed during the quarter: A20, A21, and A23.

Instructions

Prepare entries to record the operations summarized above. (Prepare a schedule showing the individual cost elements and total cost for each job in item 6.)

at may 31 2012 the accounts of mantle manufacturing company show the following 538796

Aug 29, 2021 | Uncategorized

At May 31, 2012, the accounts of Mantle Manufacturing Company show the following.

1. May 1 inventories—finished goods $12,600, work in process $14,700, and raw materials $8,200.

2. May 31 inventories—finished goods $9,500, work in process $17,900, and raw materials $7,100.

3. Debit postings to work in process were: direct materials $62,400, direct labor $50,000, and manufacturing overhead applied $40,000.

4. Sales totaled $210,000.

Instructions

(a) Prepare a condensed cost of goods manufactured schedule.

(b) Prepare an income statement for May through gross profit.

(c) Indicate the balance sheet presentation of the manufacturing inventories at May 31, 2012.

shown below are the job cost related accounts for the law firm of jack 538798

Aug 29, 2021 | Uncategorized

Shown below are the job cost related accounts for the law firm of Jack, Bob, and Will and their manufacturing equivalents:

Cost data for the month of March follow.

1. Purchased supplies on account $1,500.

2. Issued supplies $1,200 (60% direct and 40% indirect).

3. Time cards for the month indicated labor costs of $60,000 (80% direct and 20% indirect).

4. Operating overhead costs incurred for cash totaled $40,000.

5. Operating overhead is applied at a rate of 90% of direct attorney cost.

6. Work completed totaled $75,000.

Instructions

(a) Journalize the transactions for March. Omit explanations.

(b) Determine the balance of the Work in Process account. Use a T account.

pure decorating uses a job order costing system to collect the costs of its interior 538800

Aug 29, 2021 | Uncategorized

Pure Decorating uses a job order costing system to collect the costs of its interior decorating business. Each client’s consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year.

The company uses Operating Overhead in place of Manufacturing Overhead.

Instructions

(a) Compute the predetermined overhead rate.

(b) Prepare the entry to apply the overhead for the year.

(c) Determine whether the overhead was under- or overapplied and by how much.

deglman manufacturing uses a job order cost system and applies overhead to productio 538801

Aug 29, 2021 | Uncategorized

Deglman Manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2012, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account.

During the month of January, Deglman Manufacturing began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month.

1. Purchased additional raw materials of $90,000 on account.

2. Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes.

3. Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $20,000; depreciation expense on equipment $19,000; and various other manufacturing overhead costs on account $16,000.

4. Assigned direct materials and direct labor to jobs as follows.

Instructions

(a) Calculate the predetermined overhead rate for 2012, assuming Deglman Manufacturing estimates total manufacturing overhead costs of $980,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year.

(b) Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job No. 50.

(c) Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and them anufacturing overhead costs incurred during the month of January.

(d) Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.

(e) Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month.

(f) Prepare the journal entry (or entries) to record the sale of any job(s) during the month.

(g) What is the balance in the Finished Goods Inventory account at the end of the month? What does this balance consist of?

(h) What is the amount of over- or under applied overhead?

for the year ended december 31 2012 the job cost sheets of cinta company contained t 538802

Aug 29, 2021 | Uncategorized

For the year ended December 31, 2012, the job cost sheets of Cinta Company contained the following data.

Other data:

1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.

2. Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.

3. Job No. 7640 and Job No. 7641 were completed during the year.

4. Job Nos. 7638, 7639, and 7641 were sold on account for $530,000.

5. Manufacturing overhead incurred on account totaled $120,000.

6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $18,000, and depreciation on factory machinery $8,000.

Instructions

(a) Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint: Use a single T account for Work in Process Inventory.) Calculate each of the following, then post each to the T account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs. (b) Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.

(c) Determine the gross profit to be reported for 2012.

stellar inc is a construction company specializing in custom patios 538803

Aug 29, 2021 | Uncategorized

Stellar Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2012, the general ledger for Stellar Inc. contains the following data.

Subsidiary data for Work in Process Inventory on June 1 are as follows.

During June, raw materials purchased on account were $4,900, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $700 and miscellaneous costs of $400 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for customers Gannon, Rosenthal, and Linton were completed during June and sold for a total of $18,900. Each customer paid in full.

Instructions

(a) Journalize the June transactions: (i) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (ii) assignment of direct materials, labor, and overhead to production; and (iii) completion of jobs and sale of goods.

(b) Post the entries to Work in Process Inventory.

(c) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.

(d) Prepare a cost of goods manufactured schedule for June.

agassi manufacturing company uses a job order cost system in each of its three 538804

Aug 29, 2021 | Uncategorized

Agassi Manufacturing Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2012, the following estimates were made for the year.

During January, the job cost sheets showed the following costs and production data.

Instructions

(a) Compute the predetermined overhead rate for each department.

(b) Compute the total manufacturing costs assigned to jobs in January in each department.

(c) Compute the under- or overapplied overhead for each department at January 31.

for the year ended december 31 2012 the job cost sheets of dosey company contained t 538807

Aug 29, 2021 | Uncategorized

For the year ended December 31, 2012, the job cost sheets of Dosey Company contained the following data.

Other data:
1. Raw materials inventory totaled $20,000 on January 1. During the year, $100,000 of raw materials were purchased on account.
2. Finished goods on January 1 consisted of Job No. 7648 for $93,000 and Job No. 7649 for $62,000.
3. Job No. 7650 and Job No. 7651 were completed during the year.
4. Job Nos. 7648, 7649, and 7650 were sold on account for $490,000.
5. Manufacturing overhead incurred on account totaled $135,000.
6. Other manufacturing overhead consisted of indirect materials $12,000, indirect labor $16,000 and depreciation on factory machinery $19,500.

Instructions
(a) Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. Calculate each of the following, then post each to the T account: 
(1) Beginning balance, 
(2) Direct materials, 
(3) Direct labor, 
(4) Manufacturing overhead, and 
(5) Completed jobs.
(b) Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to cost of goods sold.
(c) Determine the gross profit to be reported for 2012. 

robert perez is a contractor specializing in custom built jacuzzis on may 1 2012 his 538808

Aug 29, 2021 | Uncategorized

Robert Perez is a contractor specializing in custom-built jacuzzis. On May 1, 2012, his ledger contains the following data.

The Manufacturing Overhead account has debit totals of $12,500 and credit totals of $10,000. Subsidiary data for Work in Process Inventory on May 1 include:

During May, the following costs were incurred: raw materials purchased on account $4,000, labor paid $7,000, and manufacturing overhead paid $1,400.

A summary of materials requisition slips and time tickets for the month of May reveals the following.

Overhead was charged to jobs on the basis of $0.70 per dollar of direct labor cost. The jacuzzis for customers Stiner, Alton, and Herman were completed during May. The three jacuzzis were sold for a total of $36,000.

Instructions

(a) Prepare journal entries for the May transactions: (i) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (ii) assignment of raw materials, labor, and overhead to production; and (iii) completion of jobs and sale of goods.

(b) Post the entries to Work in Process Inventory.

(c) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.

(d) Prepare a cost of goods manufactured schedule for May.

bell company s fiscal year ends on june 30 the following accounts 538810

Aug 29, 2021 | Uncategorized

Bell Company’s fiscal year ends on June 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year.

Other data:

1. On July 1, two jobs were in process: Job No. 4085 and Job No. 4086, with costs of $19,000 and $8,200, respectively.

2. During July, Job Nos. 4087, 4088, and 4089 were started. On July 31, only Job No. 4089 was unfinished. This job had charges for direct materials $2,000 and direct labor $1,500, plus manufacturing overhead. Manufacturing overhead was applied at the rate of 130% of direct labor cost.

3. On July 1, Job No. 4084, costing $145,000, was in the finished goods warehouse. On July 31, Job No. 4088, costing $138,000, was in finished goods.

4. Overhead was $3,000 under applied in July.

Instructions

List the letters (a) through (n) and indicate the amount pertaining to each letter. Show computations.

khan products company uses a job order cost system for a number of months there has 538811

Aug 29, 2021 | Uncategorized

Khan Products Company uses a job order cost system. For a number of months, there has been an ongoing rift between the sales department and the production department concerning a special-order product, TC-1. TC-1 is a seasonal product that is manufactured in batches of 1,000 units. TC-1 is sold at cost plus a markup of 40% of cost. The sales department is unhappy because fluctuating unit production costs significantly affect selling prices. Sales personnel complain that this has caused excessive customer complaints and the loss of considerable orders for TC-1. The production department maintains that each job order must be fully costed on the basis of the costs incurred during the period in which the goods are produced. Production personnel maintain that the only real solution to the problem is for the sales department to increase sales in the slack periods. Andrea Parley, president of the company, asks you as the company accountant to collect quarterly data for the past year on TC-1. From the cost accounting system, you accumulate the following production quantity and cost data.

Instructions

With the class divided into groups, answer the following questions.

(a) What manufacturing cost element is responsible for the fluctuating unit costs? Why?

(b) What is your recommended solution to the problem of fluctuating unit cost?

(c) Restate the quarterly data on the basis of your recommended solution.

in the course of routine checking of all journal entries prior to preparing year end 538812

Aug 29, 2021 | Uncategorized

In the course of routine checking of all journal entries prior to preparing year-end reports, Betty Eller discovered several strange entries. She recalled that the president’s son Joe had come in to help out during an especially busy time and that he had recorded some journal entries. She was relieved that there were only a few of his entries, and even more relieved that he had included

rather lengthy explanations. The entries Joe made were:

(This is for materials put into process. I don’t find the record that we paid for these, so I’m crediting Cash, because I know we’ll have to pay for them sooner or later.)

(This is for bonuses paid to salespeople. I know they’re part of overhead, and I can’t find an account called “Non-factory Overhead” or “Other Overhead” so I’m putting it in Manufacturing Overhead. I have the check stubs, so I know we paid these.)

(This is for the factory workers’ wages. I have a note that payroll taxes are $18,000. I still think that’s part of wages expense, and that we’ll have to pay it all in cash sooner or later, so I credited Cash for the wages and the taxes.)

(This is for the glue used in the factory. I know we used this to make the products, even though we didn’t use very much on any one of the products. I got it out of inventory, so I credited an inventory account.)

Instructions

(a) How should Joe have recorded each of the four events?

(b) If the entry was not corrected, which financial statements (income statement or balance sheet) would be affected? What balances would be overstated or understated?

you are the management accountant for williams manufacturing your company does custo 538814

Aug 29, 2021 | Uncategorized

You are the management accountant for Williams Manufacturing. Your company does custom carpentry work and uses a job order costing system. Williams sends detailed job cost sheets to its customers, along with an invoice. The job cost sheets show the date materials were used, the dollar cost of materials, and the hours and cost of labor. A predetermined overhead application rate is used, and the total overhead applied is also listed. Nancy Kopay is a customer who recently had custom cabinets installed. Along with her check in payment for the work done, she included a letter. She thanked the company for including the detailed cost information but questioned why overhead was estimated. She stated that she would be interested in knowing exactly what costs were included in overhead, and she thought that other customers would, too. Instructions Prepare a letter to Ms. Kopay (address: 123 Cedar Lane, Altoona, KS 66651) and tell her why you did not send her information on exact costs of overhead included in her job. Respond to her suggestion that you provide this information.

lrf printing provides printing services to many different corporate clients 538815

Aug 29, 2021 | Uncategorized

LRF Printing provides printing services to many different corporate clients. Although LRF bids most jobs, some jobs, particularly new ones, are negotiated on a “cost-plus” basis. Cost-plus means that the buyer is willing to pay the actual cost plus a return (profit) on these costs to LRF. Alice Reiley, controller for LRF, has recently returned from a meeting where LRF’s president stated that he wanted her to find a way to charge more costs to any project that was on a costplus basis. The president noted that the company needed more profits to meet its stated goals this period. By charging more costs to the cost-plus projects and therefore fewer costs to the jobs that were bid, the company should be able to increase its profit for the current year. Alice knew why the president wanted to take this action. Rumors were that he was looking for a new position and if the company reported strong profits, the president’s opportunities would be enhanced. Alice also recognized that she could probably increase the cost of certain jobs by changing the basis used to allocate manufacturing overhead.

Instructions

(a) Who are the stakeholders in this situation?

(b) What are the ethical issues in this situation?

(c) What would you do if you were Alice Reiley?

many of you will work for a small business some of you will even own your own busine 538816

Aug 29, 2021 | Uncategorized

Many of you will work for a small business. Some of you will even own your own business. In order to operate a small business, you will need a good understanding of managerial accounting, as well as many other skills. Much information is available to assist people who are interested in starting a new business. A great place to start is the website provided by the Small Business Administration, which is an agency of the federal government whose purpose is to support small business.

Instructions

Go to www.sba.govand in the Small Business Planner, Plan Your Business link, review the material under “Get Ready.” Answer the following questions.

(a) What are some of the characteristics required of a small business owner?

(b) What are the top 10 reasons given for business failure?

data for cascio company are given in be16 8 production records indicate 538863

Aug 29, 2021 | Uncategorized

Data for Cascio Company are given in BE16-8. Production records indicate that 18,000 units were transferred out, and 2,000 units in ending work in process were 50% complete as to conversion cost and 100% complete as to materials. Prepare a cost reconciliation schedule.

The Smelting Department of Mathews Manufacturing Company has the following production and cost data for November.

Production: Beginning work in process 2,000 units that are 100% complete as to materials and 20% complete as to conversion costs; units transferred out 8,000 units; and ending work in process 7,000 units that are 100% complete as to materials and 40% complete as to conversion costs.Compute the equivalent units of production for (a) materials and (b) conversion costs for the month of November.

kopa company manufactures ch 21 through two processes mixing and packaging in july t 538868

Aug 29, 2021 | Uncategorized

Kopa Company manufactures CH-21 through two processes: Mixing and Packaging. In July, the following costs were incurred.

Units completed at a cost of $21,000 in the Mixing Department are transferred to the Packaging Department. Units completed at a cost of $106,000 in the Packaging Department are transferred to Finished Goods. Journalize the assignment of these costs to the two processes and the transfer of units as appropriate.

the assembly department has the following production and cost data for the current m 538869

Aug 29, 2021 | Uncategorized

The assembly department has the following production and cost data for the current month.

Materials are entered at the beginning of the process. The ending work in process units are 70% complete as to conversion costs. Compute the equivalent units of production for (a) materials and (b) conversion costs.

robert mallory has prepared the following list of statements about process cost acco 538871

Aug 29, 2021 | Uncategorized

Robert Mallory has prepared the following list of statements about process cost accounting.

1. Process cost systems are used to apply costs to similar products that are mass-produced in a continuous fashion.

2. A process cost system is used when each finished unit is indistinguishable from another.

3. Companies that produce soft drinks, motion pictures, and computer chips would all use process cost accounting.

4. In a process cost system, costs are tracked by individual jobs.

5. Job order costing and process costing track different manufacturing cost elements.

6. Both job order costing and process costing account for direct materials, direct labor, and manufacturing overhead.

7. Costs flow through the accounts in the same basic way for both job order costing and process costing.

8. In a process cost system, only one work in process account is used.

9. In a process cost system, costs are summarized in a job cost sheet.

10. In a process cost system, the unit cost is total manufacturing costs for the period divided by the units produced during the period.

Instructions

Identify each statement as true or false. If false, indicate how to correct the statement.

calculate cost of goods sold and ending inventory analyze effects of each method on 538770

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory; analyze effects of each method on financial statements apply lower-of-cost-or-market rule; calculate inventory turnover ratio. (Lo 3, 4,5,6)

The following series of transactions occurred during 2007.

Required

a. Calculate the value of the ending inventory and cost of goods sold, assuming the company uses a periodic inventory system and the FIFO cost flow assumption.

b. Calculate the value of the ending inventory and cost of goods sold, assuming the company uses a periodic inventory system and the LIFO cost flow assumption.

c. Calculate the value of the ending inventory and cost of goods sold, assuming the company uses a periodic inventory system and the weighted average cost flow assumption.

d. Which of the three methods will result in the highest cost of goods sold for the year ended December 31, 2007?

e. Which of the three methods will provide the most current ending inventory value for the balance sheet at December 31, 2007?

f. How will the differences between the methods affect the income statement for the year and the balance sheet at year end?

g. At the end of the year, the current replacement cost of the inventory is $1,100.

Indicate at what amount the company’s inventory will be reported using the lower-of-cost-or-market rule for each method (FIFO, LIFO, and weighted average cost).

h. Calculate the company’s inventory turnover ratio and days in inventory for the year for each method in items a, b, and c.

the following merchandise inventory transactions occurred during the month of june f 538771

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold, ending inventory, and inventory turnover ratio. (LO 3, 6)

The following merchandise inventory transactions occurred during the month of June for the Furlong Corporation

Required

a. Assume Furlong uses a periodic inventory system and compute the cost of goods sold for the month ended June 30 and ending inventory at June 30 using each of the following cost flow methods:

1. FIFO

2. LIFO

3. Weighted average cost

b. Using the information for item a, calculate the inventory turnover ratio and days in inventory for the month of June for each method.

c. Assume Furlong uses the perpetual inventory system and compute the cost of goods sold for the month ended June 30 and ending inventory at June 30 using each of the following cost flow methods:

1. FIFO

2. LTFO

calculate cost of goods sold and ending inventory analyze effects of each method on 538773

Aug 29, 2021 | Uncategorized

P5-11A. Calculate cost of goods sold and ending inventory; analyze effects of each method on financial statements; apply lower-of-cost-or-market rule; calculate inventory turnover ratio. (LO 3,4,5,6)

The following information is for Manuel’s Pharmacy Supply Inc. for the year ending December 31, 2010.

At January 1, 2010:

. Cash amounted to $19.375.

. Beginning inventory was $16,000 (160 units at 9100 each).

. Contributed capital was $15,000.

. Retained earnings was $20,375

Transactions during 2010:

. purchased 150 units at 9110 each

. purchased 190 more units at $120 each

. Cash sales of 390 units at $200 each

. Paid $11,500 cash for operating expenses

. Paid cash for income tax at a rate of 30Vo of net income

Required

a. Compute the cost of goods sold for the year and ending inventory at December 31, 2010, using each of the following cost flow methods:

1. FIFO periodic

2. LIFO periodic

3. Weighted average cost periodic

b. For each method, prepare the balance sheet at December 31, 2010, a multistep income statements, statement cash flows, and statement of changes in shareholder’s equity for Manuel for the year ended December 31, 2010.

c. What is income before taxes and net income after taxes under each of the three inventory cost flow assumptions? What observation scan you make about net income from the analysis of the three methods?

d. At the end of the year, the current replacement cost of the inventory is $ 12,750.

Indicate at what amount the company’s inventory will be reported using the lower of-cost-or-market rule for each method (FIFO, LIFO, and weighted average cost).

e. For each method, calculate the inventory turnover ratio and average days in inventory for the year ended December 3I,2010.

the following information is from the financial statements of afua s international p 538774

Aug 29, 2021 | Uncategorized

Calculate the gross profit ratio and inventory turnover ratio. (LO 6)

The following information is from the financial statements of Afua’s International Pasta Corporation.

Required

a. Calculate the gross profit ratio for the last 2 years shown.

b. Calculate the inventory turnover ratio for the last 2 years shown.

c. What information do these comparisons provide?

hines fruit corp sells fresh fruit to tourists on interstate 75 in florida a tornado 538775

Aug 29, 2021 | Uncategorized

Estimate inventory.

Hines Fruit Corp. sells fresh fruit to tourists on Interstate 75 in Florida. A tornado destroyed the entire inventory in late June. In order to file an insurance claim, Hazel and Euglenia, the owners of the company, must estimate the value of the lost inventory. Records from January 1 though the date of the tornado in June indicated that Hines Fruit Corp. started the year with $4,000 worth of inventory on hand. Purchases for the year amounted to $9,000, and sales up to the date of the tornado were $16,000. Gross profit percentage has traditionally been 30%.

Required

a. How much should Hazel and Euglenia request from the insurance company?

b. Suppose that one case of fruit was spared by the tornado. The cost of that case was $700. How much was the inventory loss under these conditions?

deborah hartranft s professional costumers inc made the following purchases in novem 538776

Aug 29, 2021 | Uncategorized

P5-18. Analyze purchases of merchandise inventory. GO 1)

Deborah Hartranft’s Professional Costumers Inc. made the following purchases in November of the current year.

Required

a. For each of the listed purchases, how many days does the company have to take advantage of the purchase discount?

b. What is the amount of the cash discount allowed in each case?

c. Assume the freight charges are $115 on each purchase. What is the amount of freight that Professional Costumers must pay for each purchase?

d. What is the total cost of inventory for Professional Costumers for the month of November, assuming that all discounts were taken?

international sports merchandising inc made the following purchases in august of the 538777

Aug 29, 2021 | Uncategorized

Analyze purchases of merchandise inventory. (LO 1)

International Sports Merchandising Inc. made the following purchases in August of the current year.

Required

a. For each purchase by what date is the payment due, assuming the company takes

advantage of the discount?

b. For each purchase, when is the payment due if the company does not take advantage of the discount?

c. In each case, what is the amount of the cash discount allowed?

d. Assume the freight charges are $170 on each purchase For which purchases is International Sports Merchandising responsible for the freight charges?

e. What is the total amount of inventory costs for the month of August, assuming that all discounts were taken?

record merchandising transactions prepare financial statements and calculate gross p 538778

Aug 29, 2021 | Uncategorized

Record merchandising transactions, prepare financial statements, and calculate gross profit ratio: perpetual inventory system. (LO 1, 2,4,6)

At the beginning of April, Morgan Parts Company Inc. started with a contribution of $20,000 cash in exchange for common stock from its shareholders. The company engaged in the following transactions during the month of April.

Required

a. Enter each transaction into the accounting equation, assuming Morgan Parts

Company Inc. uses a perpetual inventory system. Start with the opening balances in cash and common stock described at the beginning of the problem.

b. Calculate the balance in the inventory account at the end of April.

c. Prepare the four financial statements (including multiple-step income statement) for the month of April. (Balance sheet at April 30.)

d. Calculate the gross profit ratio.

record merchandising transactions and prepare single step and multiple step income s 538779

Aug 29, 2021 | Uncategorized

Record merchandising transactions and prepare single-step and multiple-step income statement perpetual inventory system.(LO 1, 2, 4,6)

FOXX Supplier Inc. sells plant food to retail landscaping and gardening stores. At the beginning of May, FOXX Supplier had a $15,000 balance in cash and $15,000 in common stock. During the month of May, the following transactions took place

Required

a. Enter each transaction into the accounting equation, assuming FOXX Supplier Inc. uses a perpetual inventory system. Start with the opening balances in cash and common stock described at the beginning of the problem’

b. Calculate the cost of goods sold for May and the ending balance in inventory.

c. Prepare the multiple-step income statement and the statement of changes in shareholders’ equity for the month of May, and the balance sheet at May 3 1.

d. Calculate the gross profit ratio for FOXX Supplier. Explain what the ratio measures.

you are the accountant for celebration company and your assistant has prepared the f 538780

Aug 29, 2021 | Uncategorized

Analyze accounting methods and prepare corrected income statement (. LO 1,2, 4)

You are the accountant for Celebration Company, and your assistant has prepared the following income statement for the year ended December 31,2006.

You have uncovered the following facts:

1. Sales revenue includes $6,000 of items that have been back-ordered. (The items have not been delivered to the customers, although the customers have paid for the items.)

2. Selling expenses includes $4,000 of allowances that were given to customers who received damaged products.

3. Rent expense includes $400 worth of rent that applies to 2011.

4. Salary expenses include $10,000 loaned to one of the executives for a boat.

a. Prepare a corrected multistep income statement for the year. Celebration shows sales as the net amount only on its income statement.

b. Write a memo to your assistant explaining why each effort you found is incorrect and what the correct account instrument should be.

barney s flowerpot company uses a perpetual inventory system so the cost of goods so 538781

Aug 29, 2021 | Uncategorized

Analyze results of physical count of inventory and calculate cost of goods sold.

(LO 1,2,7,8)

Barney’s Flowerpot Company uses a perpetual inventory system, so the cost of goods sold is recorded and the inventory records are updated at the time of every sale. The company’s accounting records showed the following related to May 2008 transactions

On May 31, 2008, Barney conducted a physical count of its inventory and discovered there were actually 900 units of inventory on hand.

Required

a. Using the information from the physical count, correct Barney’s cost of goods sold for June.

b. How would this correction change the financial statements for the year?

c. What are some possible causes of the difference between the inventory amounts in Barney’s accounting records and the inventory amount from the physical count?

calculate cost of goods sold and ending inventory and analyze effect of each method 538782

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory and analyze effect of each method on the financial statements

Washington Company had the following sales and purchases during 2009, its first year of business

Required

a. Calculate the ending inventory, the cost of goods sold, and the gross profit for the

December 31, 2009, financial statements under each of the following assumptions:

1. FIFO periodic

2. LIFO periodic

3. Weighted average cost periodic

b. How will the differences between the methods affect the income statement and balance sheet for the year?

calculate cost of goods sold and ending inventory analyze effects of each method on 538783

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory; analyze effects of each method on financial statements apply lower-of-cost-or-market rule calculate inventory turnover ratio. (LO 3,4, 5,6)

Hillary’s Diamonique buys and then resells a single product. Here is some information concerning Hillary’s inventory activity during the month of August 2008.

Hillary’s uses a periodic inventory system.

Required

a. Calculate the value of the ending inventory and cost of goods sold, assuming the company uses a periodic inventory system and the FIFO cost flow assumption.

b. Calculate the value of the ending inventory and cost of goods sold, assuming the company uses a periodic inventory system and the LIFO cost flow assumption.

c. Calculate the value of the ending inventory and cost of goods sold, assuming the company uses a periodic inventory system and the weighted average cost flow assumption.

d. Which of the three methods will result in the highest cost of goods sold for August?

e. Which of the three methods will provide the most current ending inventory value for Hillary’s balance sheet at August 31,2008?

f. How would the differences between the methods affect Hillary’s income statement to August and balance sheet at August 31, 2008?

g. At the end of the year, the current replacement cost of the inventory is $6,730.

Indicate at what amount the company’s inventory will be reported using the lower of-cost-or-market rule for each method (FIFO, LIFO, and weighted average cost).

h. Calculate the company’s inventory turnover ratio and days in inventory for the month for each method in items a. b. and c.

the following merchandise inventory transactions occurred during the month of novemb 538784

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold, ending inventory, and inventory turnover ratio. (LO 3, 6)

The following merchandise inventory transactions occurred during the month of November for Party Heaven Inc.

Required

a. Assume Party Heaven uses a periodic inventory system and compute the cost of goods sold for the month ended November 30 and ending inventory at November 30 using each of the following cost flow methods:

1. FIFO

2, LIFO

3. Weighted average cost

b. Using the information for item a, calculate the inventory turnover ratio and days in inventory for the month of November for each method.

c. Assume Party Heaven uses the perpetual inventory system and compute the cost of goods sold for the month ended November 30 and ending inventory at November 30 using each of the following cost flow methods:

1. FIFO

2, LIFO

analyze effect of cost flow method on financial statements and inventory turnover ra 538785

Aug 29, 2021 | Uncategorized

Analyze effect of cost flow method on financial statements and inventory turnover ratio. (LO 2,4,6)

Castana Company is considering changing inventory cost flow methods. Castana’s primary objective is to minimize their tax liability. Currently, the firm uses weighted average cost.

Data for 2007 are provided.

Operating expenses were $12,000 and the company’s tax rate is 25%.

Required

a. Prepare the income statement for 2007 using each of the following methods:

1. FIFO

2. LIFO

b. Which method provides the more current balance sheet inventory balance at December 31,2007? Explain your answer.

c. Which method provides the more current cost of goods sold for the year ended December 37 , 2007 ? Explain your answer.

d. Which method provides the better inventory turnover ratio for the year? Explain your answer.

e. In order to meet Castana’s goal, what is your recommendation to Castana Company? Explain your answer

calculate the gross profit ratio and inventory turnover ratio lo 6 538788

Aug 29, 2021 | Uncategorized

Calculate the gross profit ratio and inventory turnover ratio. (LO 6)

The following information is from the financial statements of Toys for Toddlers Company

Required

a. Calculate the gross profit ratio for the last 2 years shown.

b. Calculate the inventory turnover ratio for the last 2 years shown.

c. What information do these comparisons provide?

cynthia s cotton candy company sells cotton candy to visitors at a traveling county 538789

Aug 29, 2021 | Uncategorized

P5-138. (Appendix B) Estimate inventory. GO 9)

Cynthia’s Cotton Candy Company sells cotton candy to visitors at a traveling county fair.

During a drought a fire destroyed the entire inventory in late July. In order to file an insurance claim, Cynthia, the owner of the company, must estimate the value of the lost inventory.

Records from January 1 through the date of the fire in July indicated that Cynthia’s Cotton Candy Company started the year with $4,250 worth of inventory on hand. Purchases for the year amounted to $8,000, and sales up to the date of the fire were $17,500. Gross profit percentage has traditionally been 35%.

Required

a. How much should Cynthia request from the insurance company?

b. Suppose that one bag of cotton candy mix was spared by the fire. The cost of that bag was $50. How much was the inventory loss under these conditions?

manufacturing cost data for orlando company which uses a job order cost system are p 538791

Aug 29, 2021 | Uncategorized

Manufacturing cost data for Orlando Company, which uses a job order cost system, are presented below.

Instructions

Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is the same.

a job cost sheet of sandoval company is given below 538793

Aug 29, 2021 | Uncategorized

A job cost sheet of Sandoval Company is given below.

Instructions

(a) Answer the following questions.

(1) What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?

(2) What is the predetermined manufacturing overhead rate?

(3) What are the total cost and the unit cost of the completed job? (Round unit cost to nearest cent.)

(b) Prepare the entry to record the completion of the job.

torre corporation incurred the following transactions 538794

Aug 29, 2021 | Uncategorized

Torre Corporation incurred the following transactions. 1. Purchased raw materials on account $46,300. 2. Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials. 3. Factory labor costs incurred were $55,900, of which $51,000 pertained to factory wages payable and $4,900 pertained to employer payroll taxes payable. 4. Time tickets indicated that $50,000 was direct labor and $5,900 was indirect labor. 5. Overhead costs incurred on account were $80,500. 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $88,000 were completed and transferred to finished goods. 8. Finished goods costing $75,000 to manufacture were sold on account for $103,000. Instructions Journalize the transactions. (Omit explanations.)

for each of the following independent situations calculate the amount that the purch 538722

Aug 29, 2021 | Uncategorized

Calculate cost of inventory. (LO1)

For each of the following independent situations, calculate the amount that the purchasing company would record as the cost of each inventory purchase.

a. Invoice price of goods is $5,000. Purchase terms are 2/70, n/30 and the invoice is paid in the week of receipt. The shipping terms are F.O.B. shipping point, and the shipping costs amount to $200.

b. Invoice price of goods is $3,000. Purchase terms are 4110n, l30 and the invoice is paid in the week of receipt. The shipping terms are F.O.B. destination, and the shipping costs amount to $250.

c. Invoice price of goods is $2,500. Purchase terms are 2/10, n/30 and the invoice is paid 15 days after receipt. The shipping terms are F.O.B. shipping point, and the shipping costs amount to $250.

using the following information calculate inventory turnover ratio the average days 538732

Aug 29, 2021 | Uncategorized

Calculate the gross profit ratio, inventory turnover ratio, and average days in inventory. GO 6)

Using the following information, calculate inventory turnover ratio, the average days in inventory, and the gross profit ratio for Barkley Company for the year ended December 31, 2012. (Round to two decimal places.)

calculate cost of goods sold and ending inventory periodic weighted average cost 538739

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory: periodic weighted average cost.

(LO 3,4)

The For Fish Company sells commercial fish tanks. The company began 2006 with 1,000 units of inventory on hand. These units cost $150 each. The following transactions related to the company’s merchandise inventory occurred during the first quarter of 2006.

All unit costs include the purchase price and freight charges paid by For Fish. During the quarter ending March 3I,2006, sales totaled 1,700 units, leaving 800 units in ending inventory.

Assume For Fish uses a periodic inventory system and the weighted average cost flow method.

a. Calculate the cost of goods sold that will appear on For Fish Company’s income statement for the qualifier ending March 31.

b. Determine the cost of inventory that will appear on For Fish Company’s balance sheet at the end of March.

calculate cost of goods sold and ending inventory perpetual weighted average cost lo 538740

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory: perpetual weighted average cost. (LO 3,4)

Advanced Music Technology Inc. sells MP3 players. The company began the third quarter of the year on July l, 2008, with 750 units of inventory on hand. These units cost $50 each.

The following transactions related to the company’s merchandise inventory occurred during the third quarter of 2008.

All unit costs include the purchase price and freight charges paid by Advanced Music Technology.

Assume Advanced Music Technology uses a perpetual inventory system and the weighted average cost flow method.

a. Calculate the cost of goods sold that will appear on Advanced Music Technology’s income statement for the quarter ending September 30.

b. Determine the cost of inventory that will appear on Advanced Music Technology’s balance sheet at the end of September

use the following data to answer the following question 538741

Aug 29, 2021 | Uncategorized

Apply the lower-of-cost-or-market rule. (LO 5)

Use the following data to answer the following question.

What inventory amount will this firm report on its balance sheet at December 31,2011?

ian s small appliances reported cost of goods sold as follows 538746

Aug 29, 2021 | Uncategorized

Calculate inventory errors. (LO 8)

Ian’s Small Appliances reported cost of goods sold as follows.

I an’s made two errors:

1. 2005 ending inventory was understated by 95,000.

2. 2006 ending inventory was overstated by $2,000.

Calculate the correct cost of goods sold for 2005 and2006.

assume the following transactions for jennifer s fix it up inc took place during mar 538748

Aug 29, 2021 | Uncategorized

Record merchandising transaction perpetual inventory system.( LO I,2)

Assume the following transactions for Jennifer’s Fix-It-Up Inc. took place during March. Jennifer’s uses a perpetual inventory system. Enter each of the transactions into the accounting equation.

March 3 Purchased televisions from Sanyo on account at a total cost of $650,000, terms 2/10, n/25

March 8 Paid freight of $1,000 on televisions purchased from Sanyo March 16 Returned televisions to Sanyo because they were damaged. Received a credit of $ 1 5,000 from Sanyo.

March22 Sold televisions costing $125,000 for $225,000 to Joe’s Sport’s Bar & Grille on account, terms n/15

March 28 Gave a credit of $2,800 to Joe’s Sport’s Bar & Grille for the return of a television not ordered. Jennifer’s cost was $1,600.

discount wines inc had a beginning inventory balance of 85 450 and engaged in the fo 538749

Aug 29, 2021 | Uncategorized

Record merchandising transaction perpetual inventory system.( LOI,2)

Discount Wines Inc. had a beginning inventory balance of $85,450 and engaged in the following transactions during the month of October.

October 2 Purchased $15,000 of merchandise inventory on account from Joe’s Winery with terms 2/10, nl30 and FOB destination. Freight costs for this purchase were $750.

October 5 Returned $ 100 of damaged merchandise to Joe’s October6 Sold $18,000 of merchandise to Tasty Catering Service on account, terms2 115,n /30 and FOB shipping point. Freight costs were $155.

The cost of the inventory sold was $10,500.

October l0 Paid the amount owed to Joe’s

October 10 Discount granted Tasty an allowance on the October 6 sale of $200 for some soured wine.

October 23 Received payment from Tasty

October 29 Paid sales salaries of $1, 500

October 31 Paid the rent on the ware house of $1,450

Enter each of the transactions for Discount Wines Inc. into the accounting equation, assuming they use a perpetual inventory system.

calculate cost of goods sold and ending inventory periodic weighted average cost 538750

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory: periodic weighted average cost.

(LO 3,4)

Sandy’s Clean Carpet Company sells commercial vacuums. The company’s fiscal year begins July 1,2006, and ends June 30, 2007. Sandy’s began the year with 1,500 units of inventory on hand. These units cost $200 each.T he following transactions related to the company’s merchandise inventory occurred during the first quarter of the year’

All unit costs include the purchase price and freight charges paid by Sandy’s Clean Carpet.

During the quarter ending September 30, 2006, sales in units totaled 1,950 units.

Assume Sandy’s Clean Carpet uses a periodic inventory system and the weighted average cost flow method.

a. Calculate the cost of goods sold that will appear on Sandy’s Clean Carpet Company’s income statement for the quarter ending September 30.

b. Determine the cost of inventory that will appear on Sandy’s Clean Carpet Company’s balance sheet at the end of September

calculate cost of goods sold and ending inventory perpetual weighted average cost lo 538751

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory: perpetual weighted average cost. (LO 3,4)

Cutting Edge Enterprises Inc. sells flat-screen televisions. The company began the last quarter of the year on October 1, 2009, with 750 units of inventory on hand. These units cost $1,000 each. The following transactions related to the company’s merchandise inventory occurred during the last quarter of2009.

All unit costs include the purchase price and freight charges paid by Cutting Edge Enterprises.

Assume Cutting Edge uses a perpetual inventory system and the weighted average cost flow method.

a. Calculate the cost of goods sold that will appear on Cutting Edge Enterprises’ income statement for the quarter ending December 31, 2009.

b. Determine the cost of inventory that will appear on Cutting Edge Enterprises’ balance sheet at the end of December.

radio tech sales amp service inc began the month of april with three top of the line 538752

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory: periodic FIFO. (LO 3,4)

Radio Tech. Sales & Service Inc. began the month of April with three top-of-the-line radios in inventory, Model # RD58V6Q; each unit cost $235. During April, nine additional radios of the same model were purchased.

Assume Radio Tech. uses a periodic inventory system and the FIFO cost flow method.

a. Calculate the cost of goods sold that will appear on Radio Tech.’s income statement for the month of April.

b. Determine the cost of inventory that will appear on Radio Tech.’s balance sheet at the end of April.

use the following data to answer the following question 538756

Aug 29, 2021 | Uncategorized

Apply the lower-of-cost-or-market rule. (LO 5)

Use the following data to answer the following question.

ASB Hardware Inc. uses a perpetual inventory system and the FIFO cost flow method to account for its inventory. What inventory amount will ASB Hardware report on its balance sheet at June 30, 2010?

tire pro company s records reported the following at the end of the fiscal year 538761

Aug 29, 2021 | Uncategorized

Calculate inventory errors. (LO 8)

Tire Pro Company’s records reported the following at the end of the fiscal year.

A physical inventory count showed that the ending inventory was actually $78,000. If this error is not corrected, what effect would it have on the income statement for this financial year and the following fiscal Year?

the records of florida tools shop received the following information related to the 538762

Aug 29, 2021 | Uncategorized

Estimate Inventory

the records of Florida Tools Shop received the following information related to the inventory destroyed in Hurricane Frances.

The company needs to file a claim for lost inventory with its insurance company. What is the estimated value of the lost inventory?

guppies amp mollies inc made the following purchases in july of the current year 538763

Aug 29, 2021 | Uncategorized

Analyze purchases of merchandise inventory. (LO l)

Guppies & Mollies Inc. made the following purchases in July of the current year.

July 3 Purchased$ 7,500 of merchandise terms 3/10, n/30, FOB shipping point

July 6 Purchased$ 4,100o f merchandise terms 2 /15, n/45, FOB shipping point

July 11 Purchased$ 8,600 of merchandise terms 3/5, n/15, FOB destination

Required

a. For each of the purchases listed, how many days does the company have to take advantage of the purchase discount?

b. What is the amount of the cash discount allowed in each case?

c. Assume the freight charges are $250 on each purchase. What is the amount of

freight that Guppies & Mollies must pay for each purchase?

d. What is the total cost of inventory for Guppies & Mollies for the month of July, assuming that all discounts were taken?

record merchandising transactions prepare financial statements and calculate gross p 538765

Aug 29, 2021 | Uncategorized

Record merchandising transactions, prepare financial statements, and calculate gross profit ratio: perpetual inventory system. (LO 1,2,4,6)

At the beginning of February, Ace Distribution Company Inc. started with a contribution of $10,000 cash in exchange for common stock from its shareholders. The company engaged in the following transactions during the month of February.

Required

a. Enter each transaction into the accounting equation, assuming Ace Distribution Company uses a perpetual inventory system. Start with the opening balances in cash and common stock described at the beginning of the problem.

b. Calculate the balance in the inventory account at the end of February.

c. Prepare the four financial statements (including multiple-step income statement) for the month of February.

d. Calculate the gross profit ratio.

record merchandising transactions and prepare multi step financial statement perpetu 538766

Aug 29, 2021 | Uncategorized

Record merchandising transactions and prepare multi-step financial statement: perpetual inventory system (LO 1, 2,4,6)

The following transactions occurred during March 2007 at the Five Oaks Tennis Club.

Required

a. Suppose the Five Oaks Tennis Club started the month with cash of $8,000, merchandise inventory of $2,000, and common stock of $10,000. Enter each transaction into the accounting equation, assuming Five Oaks Tennis Club uses a perpetual inventory system.

b. Calculate the cost of goods sold for March and the ending balance in inventory.

c. Prepare the multiple-step income statement, and the statement of changes in shareholders’ equity for the month of March, and the balance sheet at March 31.

d. Calculate the gross profit ratio for Five Oaks. Explain what the ratio measures.

you are the accountant for baldwin company and your assistant has prepared the follo 538767

Aug 29, 2021 | Uncategorized

Analyze accounting methods and prepare corrected income statement.

You are the accountant for Baldwin Company, and your assistant has prepared the followings income statement for the year ended September 30, 2001.

You have uncovered the following errors:

1. Sales revenue includes $5,000 of items that have been back-ordered. (The items have not been delivered to the customers, and the customers have not been billed for the items.)

2. Selling expenses includes $250 of allowances that were given to customers who received damaged product.

3. Insurance expense includes $100 worth of insurance that applies to 2008.

4. Administrative expenses include a loan made to worker who had some serious financial trouble and needed $500 to pay a hospital bill. The worker plans to repay the money by the end of December.

Required

a. Prepare a corrected multistep income statement for the year. Baldwin shows sales as the net amount only on its income statement.

b. Write a memo to your assistant explaining why each error you found is incorrect and what the correct accounting treatment should be.

beard company uses a perpetual inventory system the company s accounting records sho 538768

Aug 29, 2021 | Uncategorized

Analyze results of physical count of Inventory and calculate cost of goods sold. (LO1,2,7,9)

Beard company uses a perpetual inventory system. The company’s accounting records showed the following related to June 2006 transactions.

On June 30, 2006, Beard conducted a physical count of its inventory and discovered there were only 375 units of inventory actually on hand.

Required

a. Using the information from the physical count, correct Beard’s cost of goods sold for June.

b. (Appendix A) How would this correction change the financial statements for the year?

c. What are some possible causes of the difference between the inventory amounts in Beard’s accounting records and the inventory amount from the physical count?

jefferson company had the following sales and purchases during 2006 its first year o 538769

Aug 29, 2021 | Uncategorized

Calculate cost of goods sold and ending inventory and analyze effect of each method on financial statements (.L O 3,4)

Jefferson Company had the following sales and purchases during 2006, its first year of business.

Required

Calculate the ending inventory, the cost of goods sold, and the gross profit for the December 31, 2006. Financial statements under each of the following assumptions:

a. FIFO periodic

b. LIFO periodic

c. Weighted average cost Periodic

d. How will the differences between the methods affect the income statement and balance sheet for the Year?

acme print shop purchased a new printing press in 200 7 the invoice price was 158 50 538667

Aug 29, 2021 | Uncategorized

Calculate capitalized cost and depreciation expense (L O 1,2)

Acme Print Shop purchased a new printing press in 200’7.The invoice price was $158,500, but the manufacturer of the press gave Acme a2%o discount for paying cash for the machine on delivery. Delivery costs amounted to $1,500, and Acme paid $500 for a special insurance policy to cover the press while in transit. Installation cost was $1,350, and Acme spent $3,000 training the employees to use the new press. Additionally, Acme hired a new supervisor at an annual salary of $65,000 to be responsible for keeping the press online during business hours.

Required

a. What amount should be capitalized for this new asset?

b. To calculate the depreciation expense for 2007 , what other information do you need? Do you think the company should gather this information before purchasing the asset? Why or why not?

on january l 2007 the oviedo manufacturing company purchased equipment for 170 000 t 538668

Aug 29, 2021 | Uncategorized

Calculate and analyze depreciation under alternative methods. (LO 2)

On January l, 2007, the Oviedo Manufacturing Company purchased equipment for $170,000. The estimated useful life of the equipment is 4 years, and the estimated salvage value is $10,000. The company expects the equipment to produce 480,000 units during its service life. Actual units produced were:

a. Calculate the depreciation expense for each year of the 4-year life of the equipment using

1. Straight-line method

2. Double-declining balance method

3. Activity method (Round your answers to the nearest dollar.)

b. How does the choice of depreciation methods affect net income in each of the years? How does the choice of depreciation methods affect the balance sheet in each of the years?

peps co purchased a new machine at the beginning of 2006 for 6 400 the company expec 538670

Aug 29, 2021 | Uncategorized

Calculate and analyze depreciation under alternative methods. (LO 2)

Peps Co. purchased a new machine at the beginning of 2006 for $6,400. The company expects the machine to last for 5 years and have a salvage value of $400. The estimated productive life of the machine is 100,000 units. Yearly production: in 2006-28,000 units; in 2008-16,000 units; in 2OO9-14,000 units; in 2010-20,000 units.

Required

a. Calculate the depreciation expense for each year of the 5-year life of the machine using

1. Straight-line method

2. Double-declining balance method (Round to the nearest dollar.)

3. Activity method using units

b. For each method, give the amount of accumulated depreciation that would be shown on the balance sheet at the end of each year.

c. Calculate the book value of the machine at the end of each year for each method.

lb company had the following balances in its intangible assets accounts at the begin 538671

Aug 29, 2021 | Uncategorized

Account for intangible assets (LO 3)

LB Company had the following balances in its intangible assets accounts at the beginning of the year. The patents have a remaining useful life of l0 years, and the copyright has a remaining useful life of 7 years.

Transactions during the year:

1. At the beginning of the year, LB filed for a new patent. The costs totaled $20,000. Its useful life is estimated at 10 years.

2. LB incurred R&D costs of $60,000 related to new product development’ No new products have been identified.

3. LB evaluated the goodwill for impairment and reduced its book value by $2,000.

4. LB successfully defended one of its patents in court. Fees totaled $ 24,000.

Required

Show each of the transactions in the accounting equation, including any adjustments that would need to be made for the year-end financial statements. Then, prepare the intangible assets section of the balances sheet at year-end.

in january 2004 harvey s hoola hoop company purchased a computer system that cost 37 538672

Aug 29, 2021 | Uncategorized

Account for change in estimates for depreciation. (LO 4)

In January 2004, Harvey’s Hoola Hoop Company purchased a computer system that cost $37,000. Harvey’s estimated that the system would last for 5 years and have a salvage value of $2,000 at the end of 2008. The company uses the straight-line method of depreciation.

Analyze each of the following independent scenarios.

a. Before the depreciation expense is recorded for the year 2006, computer experts tell Harvey’s that the system can be used until the end of 2008 as planned but that it will be worth only $500.

b. Before depreciation expense is recorded for the year2O06, Harvey’s decides that the computer system will last only until the end of 2007. The company anticipates the value of the system at that time will still be $2,000.

c. Before depreciation expense is recorded for the year 2006, Harvey’s decides that the computer system will last until the end of 2008, but that it will be worth only $ 1.000 at that time.

d. Before the depreciation expense is recorded for the year 2006, computer expenses tell Harvey’s that the system can be used until the end of 2012 if the company spends $4,000 on upgrades. However, the estimated salvage value at that time would be $0. Harvey’s decides to follow the experts’ advice and upgrade the computer system.

Required

Calculate the amount of depreciation expense related to the computer system Harvey’s Hoola Hoop Company would report on its income statement for the year ended December 31, 2006, for each scenario.

a a truck that cost 25 000 had an estimated useful life of 5 years and no salvage va 538673

Aug 29, 2021 | Uncategorized

Account for disposal of an asset. (LO 5)

Analyze each of the following independent scenarios.

a. A truck that cost $25,000 had an estimated useful life of 5 years and no salvage value. After 4 years of using straight-line depreciation, the company sold the truck for $6.000.

b. A machine that cost $50,000 had an estimated useful life of 12 years and a salvage value of $2,000. After 10 years of using straight-line depreciation, the company sold the completely worn-out machine for $400 as scrap.

c. An asset that cost $40,000 had an estimated useful life of 4 years and a salvage value of $2,000. After 3 years of using double-declining balance depreciation, the company sold the asset for $11,000.

d. A machine that cost $15,000 had an estimated useful life of 5 years and no salvage value. After 4 years of using straight-line depreciation, the company deemed the asset worthless and hauled it to the dump.

Required

For each scenario, calculate the gain or loss, if any, that would result upon disposal.

calculate depreciation under alternative methods and account for disposal of an asse 538674

Aug 29, 2021 | Uncategorized

Calculate depreciation under alternative methods and account for disposal of an asset.( LO 2,5)

Bella Interiors purchased a new sewing machine on January 2, 2007, for 948,000. The company expects the machine to have a useful life of 5 years and a salvage value of $3,000. The company’s fiscal year ends on December 31.

Required

a. Calculate the depreciation expense for the fiscal years 2007 and 2008 using each of the following methods:

1. Straight-line method

2. Double-declining balance method

b. Assume that Bella Interiors decided to use the straight-line method and that the sewing machine was sold at the end of December 2009, for $27,000. What was the gain or loss on the sale? On which financial statement would the gain or loss appear? What information does this accounting calculation provide for future decisions?

calculate depreciation under alternative methods and account for disposal of an asse 538675

Aug 29, 2021 | Uncategorized

Calculate depreciation under alternative methods and account for disposal of an asset.( LO 2,5)

Perfect Heating and Air purchased a truck 3 years ago for $50,000. The company expects the truck to have a useful life of 5 years with no salvage value. The company has taken three full years of depreciation expense.

Required

a. Assume that the company uses straight-line depreciation. If the truck is sold for $25,000, will there be a gain or loss on the sale? If so, how much? How will the sale affect the financial statements for the year?

b. Assume that the company uses double-declining balance depreciation. If the truck is sold for $15,000, will there be a gain or loss on the sale? If so, how much? How will the sale affect the financial statements for the year?

c. Assume the company uses straight-line depreciation and sells the truck for $20,000. Would there be a gain or loss on the sale? How would that change if the company had been using double-declining balance depreciation?

due to an umpire strike early in 2006 umpire s empire had some trouble with its info 538676

Aug 29, 2021 | Uncategorized

Analyze and correct accounting errors related to long-term assets.(Lo 9)

Due to an umpire strike early in 2006, Umpire’s Empire had some trouble with its information processing and some efforts were made in accounting for certain transactions. Evaluate the following independent situations that occurred during the year:

a. At the beginning of 2006, a building and land were purchased together for $100,000. Even though the appraisers determine that 90% of the price should be allocated to the building, Umpire’s decided to allocate the entire purchase price to the building. The building is being depreciated using the straight-line method over 40 years, with an estimated salvage value of $10,000.

b. During the year, Umpire did some R&D on a new gadget to keep track of balls and strikes. The R&D cost $20,000, and Umpire capitalized it. The company intends to write it off over 5 years, using straight-line depreciation with no salvage value.

c. Near the beginning of the year, Umpire spent $ 10,000 on routine maintenance for its equipment, and the accountant decided to capitalize these costs as part of the equipment. (Equipment is depreciated over 5 years with no salvage value.)

d. Umpire spent $5,000 to extend the useful life of some of its equipment. The accountant capitalized the cost.

Required

a. For each, describe the error made and list the effect, if any, that the uncorrected error would have on the following items for Umpire’s 2006 financial statements: net income, long-term assets and retained earnings. If there is no error, simply write N/A next to the item.

b. Describe the adjustments that would correct the company’s accounting records and make the 2006 financial statements accurate. If there is no error, write N/A next to the item.

the executives for sea world bought a piece of property adjacent to the park with an 538677

Aug 29, 2021 | Uncategorized

Calculate capitalized cost and depreciation expense (LO 1,2)

The executives for Sea World bought a piece of property adjacent to the park with an old, run-down motel. The cost of the land with the old motel was $1,500,000 Real estate commissions and fees including the title search were $317,850. SeaWorld paid its attorney $15,000 to review the contract and complete the purchase of the land on July 1, 2008. The resort paid $25,750 for the old motel to be demolished and an additional $17,850 for sugar white sand to be hauled in to prepare the land for use. The company paid $80,000 for some palm trees for the new area. Sea World hired three new employees at a salary of $35,000 a year each to maintain the landscaping for the new area.

Required

a. What amount should be capitalized for this new asset?

b. Would there be any depreciation expense for land at the end of 2008? Explain your answer.

wta tennis academy purchased a new ball machine at a cost of 18 000 at the beginning 538678

Aug 29, 2021 | Uncategorized

Calculate and analyze depreciation under alternative methods. (LO 2)

WTA Tennis Academy purchased a new ball machine at a cost of $18,000 at the beginning of January 2005. The machine was estimated to have a salvage value of $2,000 at the end of its useful life of 4 years. A machine like this is supposed to deliver 160,000 hours of service. The actual number of hours that the machine was used per year was:

Required

a. Calculate the depreciation expense for each year of the 4-year life of the ball machine using

1. Straight-line method

2. Activity method

3. Double-declining method

b. How does the choice of depreciation methods affect income in each of the years?

c. How does the choice of depreciation methods affect the balance sheet in each of the years?

clean water co purchased a new water filter at the beginning of 2010 for 200 000 it 538680

Aug 29, 2021 | Uncategorized

Calculate and analyze depreciation under alternative methods. (LO2)

Clean Water Co. purchased a new water filter at the beginning of 2010 for $200,000. It is expected to last for 8 years and have a salvage value of $32,000. The estimated productive life of the machine is 200,000 units. Yearly production: in20l0-45,000 units; in 2011-29,000 units; in 2012-41,000 units; in 2013-22,000 units; in 2014-25,000 units: in 2015- 15,000 units ; in 201 6-1 6,000 units ; and in 2017 -7,000 units.

Required

a. Calculate the depreciation for each year using each of these depreciation methods:

1. Straight-line method

2. Activity method based on units

3. Double-declining balance method (round to the nearest dollar)

a. For each method, give the amount of accumulated depreciation that would be shown on the balance sheet at the end of each year.

b. Calculate the book value of the water filter at the end of each year for each method.

larkin company had the following balances in its intangible asset accounts at the be 538681

Aug 29, 2021 | Uncategorized

Account for intangible assets.( LO 3)

Larkin Company had the following balances in its intangible asset accounts at the beginning of the year. The trademarks have a remaining useful life of 5 years, and the copyright has a remaining useful life of 10 years.

Transactions during the year:

1. At the beginning of the year, Larkin filed for a new trademark. The costs totaled $40,000. Its useful life is estimated at 5 years.

2. Larkin incurred R&D costs of $30,000, related to new product development. No new products have been identified.

3. Larkin evaluated the goodwill for impairment and reduces its book value by $20,000.

4. Larkin successfully defended its copyrights in court. Fees totaled $10,000.

Required

Show each of the transactions in the accounting equation, including any adjustments that would need to be made for the year-end financial statements. Then, prepare the intangible assets section of the balance sheet at year-end.

in july 2006 hallmark company purchased a computer system that cost 7 000 the compan 538682

Aug 29, 2021 | Uncategorized

Account for change in estimates for depreciation.(LO 4)

In July 2006, Hallmark Company purchased a computer system that cost $7,000. The company estimates that the system will last for 5 years and will have a salvage value of $2,000.

The company uses the straight-line method of depreciation and has a June 30 fiscal yearend.

Analyze each of the following independents scenarios.

a. Before depreciation expense is recorded for the fiscal year ended June 30,2009,

Hallmark decides that the computer system will last until June 30,2011 but that it will be worth only $800 at that time.

b. Before depreciation expense is recorded for the fiscal year ended June 30, 2009, Hallmark decides that the computer system will last only until June 30, 2010. The company anticipates the value of the system at that time will still be $2,000.

c. Before depreciation expense is recorded for the fiscal year ended June 30, 2009,

Hallmark decides that the computer system will last until June 30,201I but that it will be worth only $1,500 at that time.

d. Before depreciation expense is recorded for the fiscal year ended June30,2009, Hallmark’s computer experts decide that the system can be used until June 30, 2013 if the company spends $1,000 on upgrades However, the estimated salvage value at that time would be 0. Hallmark decides to follow the experts’ advice and upgrade the computer system.

Required

Calculate the amount of depreciation expense related to the computer system Hallmark will report on its income statement for the fiscal year ended June 30,2009, for each scenarl0.

a a company van that cost 32 000 had an estimated useful life of 8 years and no salv 538683

Aug 29, 2021 | Uncategorized

Account for disposal of an asset. (LO 5)

Analyze each of the following independent scenarios.

a. A company van that cost $32,000 had an estimated useful life of 8 years and no salvage value. After 6 years of using straight-line depreciation, the company sold the van for $12,000.

b. A copy machine that cost $35,000 had an estimated useful life of 5 years and a salvage value of $5,000. After 2 years of using double-declining balance depreciation the company sold the copy machine for $10,000.

c. A company truck that cost $48,000 had an estimated useful life of 7 years and a salvage value of $6,000. After 5 years of using straight-line depreciation and driving the truck many miles on tough terrain, the company sold the completely worn-out truck for $850 for spare parts.

d. A state-of-the-art computer that cost $29,000 had an estimated useful life of 4 years and a salvage value of $2,000. After 3 years of using double-declining balance depreciation, the company sold the computer for $6,000.

Required

For each scenario, calculate the gain or loss, if any, that would result upon disposal.

calculate depreciation under alternative methods and account for disposal of an asse 538684

Aug 29, 2021 | Uncategorized

Calculate depreciation under alternative methods and account for disposal of an asset. (LO 2,5)

A&W Root Beer Company bought new brewery equipment on January 1, 2008, for $64,000. The company expects the equipment to have a useful life of 8 years and a salvage value of $8,000. The company’s fiscal year ends on December 31.

Required

a. Calculate the depreciation expense for the fiscal years 2008 and 2009 using each of the following methods:

1. Straight-line method

2. Double-declining balance method

b. Assume that the company decided to use the double-declining balance method and that the brewery equipment was sold at the end of December 2009, for $42,000. What was the gain or loss on the sale? On which financial statement would the gain or loss appear? What information does this accounting calculation provide for future decisions

calculate depreciation under alternative methods and account for disposal of an asse 538685

Aug 29, 2021 | Uncategorized

Calculate depreciation under alternative methods and account for disposal of an asset.( LO 2,5)

The Queen Grande View Hotel purchased a van 3 years ago for $62,000. The company expects the van to have a useful life of 4 years and a $10,000 salvage value. Queen Grande View has taken three full years of depreciation expense.

Required

a. Assume that Queen Grande View uses straight-line depreciation. If the van is sold for $20,000, will there be a gain or loss on the sale? If so, how much? How will it affect Queen Grande View’s financial statements for the year?

b. Assume that Queen Grande View uses double-declining balance depreciation. If the van is sold for $9,750, will there be a gain or loss on the sale? If so, how much? How will it affect Queen Grande View’s financial statements for the year?

c. Assume Queen Grande View uses double-declining balance depreciation and sells the van for $23,000. Would there be a gain or loss on the sale? How would that change if Queen Grande View had been using straight-line depreciation?

during 2007 jule s gym had some trouble with its information processing due to sever 538686

Aug 29, 2021 | Uncategorized

Analyze and correct accounting errors related to long-term assets. (L0 9)

During 2007, Jule’s Gym had some trouble with its information processing due to several hurricanes, and some effors were made in accounting for certain transactions. The firm uses straight-line depreciation for a1lo f its long-term assets. Evaluate the following independent situations that occurred during the year:

a. At the beginning of the year, a basket purchase of a building and land was made for $350,000. The appraisers indicated that the market value of the land was $135,000 and the market value of the building was $250,000. So, Jule’s Gym allocated $135,000 of the purchase price to the land and the remainder of the purchase price to the building. The building has an estimated useful life of 20 years and an estimated salvage value of $25,000.

b. The plumber spent a great deal of time repairing broken toilets in one of the gym’s buildings this year. Total cost, which Jule’s Gym capitalize do was $5,000.

Jule’s Gym decided it was best to leave it on the books as an asset and not write it off, because the toilets will be used for quite a few more years. (Use 20 years as the estimated remaining useful life of the toilets.)

c. Jule’s Gym purchased a new van. It cost $20,000 and is expected to last 3 years.

It has a salvage value of $2,000. To properly equip it for transporting gym equipment between locations, the inside was customized at a cost of $6,000. The cost of the van was capitalized, and the cost of the customization was expensed.

d. Jule’s Gym spent $5,500 on routine maintenance of its exercise equipment. The cost was expensed.

Required

a. For each, describe the error made and list the effect, if any, that the uncorrected error would have on the following items for Jule’s Gym’s 200’7 financial statements: net income, long-term assets, and retained earnings. If there is no error, simply write N/A next to the item.

b. Use the accounting equation to show the adjustments that would correct the company’s accounting records and make the 2001 financial statements accurate.

when inventory is purchased it is recorded as a n and when sold it becomes a n 538709

Aug 29, 2021 | Uncategorized

When inventory is purchased it, is recorded as a (n) and when sold it becomes a(n)

a. liability, withdrawal

b. assets expense

c. liability, asset

d. assets contra-asset

Use the following information to answer the questions 2 through 5.

Inventory data for Newman & Frith Merchandisers Inc. is provided here. Sales for the period were 2,800 units. Each sold for $8. The company maintains a periodic inventory system.

celebration coordinators corporation began operations on april 1 the following trans 538720

Aug 29, 2021 | Uncategorized

Calculate cost of inventory. (LO l)

Celebration Coordinators Corporation began operations on April 1. The following transactions took place in the month of April.

a. Cash purchases of merchandise during April were $300,000.

b. Purchases of merchandise on account during April were $400,000.

c. The cost of freight to deliver the merchandise to Celebration was $25,000; the terms were FOB shipping point. The freight bill was paid in April.

d. Celebration returned $22,0000 merchandise purchased in part a to the supplier for a full refund.

e. The store manager’s salary was $3,000 for the month.

Calculate the amount that Celebration Coordinators Corporation should record for the total cost of merchandise inventory purchased in April.

use the chart of accounts you created in chapter 1 and add accounts where necessary 538352

Aug 29, 2021 | Uncategorized

Journalizing transactions, posting to T-accounts, and preparing a trial balance

Use the chart of accounts you created in Chapter 1 (and add accounts where necessary). All of the first month”s activity for Shine King Cleaning is as follows.

Requirements

1. Journalize transactions as required from the activity data.

2. Post journal entries to T-accounts and calculate account balances.

3. Prepare the trial balance at November 30.

you have been requested by a friend named dean mcchesney to advise him on the effect 538353

Aug 29, 2021 | Uncategorized

You have been requested by a friend named Dean McChesney to advise him on the effects that certain transactions will have on his business. Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal.

McChesney will continue the business only if he can expect to earn monthly net income of $6,000. The business completed the following transactions during June:

Requirements

1. Open the following T-accounts: Cash; Accounts receivable; Supplies; Accounts payable; McChesney, capital; Service revenue; Salary expense; Rent expense; and Advertising expense.

2. Post the transactions directly to the accounts without using a journal. Key each transaction by letter. Follow the format illustrated here for the first transaction.

3. Prepare a trial balance at June 30, 2014. List the largest expense first, the next largest second, and so on. The business name is A-Plus Travel Planners.

4. Compute the amount of net income or net loss for this first month of operations. Would you recommend that McChesney continue in business?

contact a local business and arrange with the owner to learn what accounts the busin 538356

Aug 29, 2021 | Uncategorized

Contact a local business and arrange with the owner to learn what accounts the business uses.

Requirements

1. Obtain a copy of the business”s chart of accounts.

2. Prepare the company”s financial statements for the most recent month, quarter, or year. (You may omit the statement of cash flows.) You may use either made-up account balances or balances supplied by the owner.

If the business has a large number of accounts within a category, combine related accounts and report a single amount on the financial statements. For example, the company may have several cash accounts. Combine all cash amounts and report a single Cash amount on the balance sheet.

You will probably encounter numerous accounts that you have not yet learned. Deal with these as best you can.

Keep in mind that the financial statements report the balances of the accounts listed in the company”s chart of accounts, either by individual account or in summarized categories.

Therefore, the financial statements must be consistent with the chart of accounts.

assume that the weekly payroll of in the woods camping supplies is 300 538361

Aug 29, 2021 | Uncategorized

Assume that the weekly payroll of In the Woods Camping Supplies is $300. December 31, end of the year, falls on Tuesday, and In the Woods will pay its employee on Friday for the full week. What adjusting entry will In the Woods make on Tuesday, December 31? (Use five days as a full work week.)

d. No adjustment is needed because the company will pay the payroll on Friday.

a select list of transactions for anuradha s goals follows 538371

Aug 29, 2021 | Uncategorized

Identifying types of adjusting entries

A select list of transactions for Anuradha”s Goals follows:

3

2

Requirement

1. For each transaction, identify what type of adjusting entry would be needed.

famous cut hair stylists has begun the preparation of its adjusted trial balance as 538376

Aug 29, 2021 | Uncategorized

Preparing an adjusted trial balance

Famous Cut Hair Stylists has begun the preparation of its adjusted trial balance as follows:

.

5

4

Year-end data include the following:

a. Supplies on hand, $300.

b. Depreciation, $1,000.

c. Accrued interest expense, $600.

Requirement

1. Complete Famous Cut’s adjusted trial balance. Key each adjustment by letter.

momentous occasions is a photography business that shoots videos at college parties 538377

Aug 29, 2021 | Uncategorized

Comparing accrual and cash-basis accounting, and applying the revenue recognition principle

Momentous Occasions is a photography business that shoots videos at college parties. The freshman class pays $100 in advance on March 3 just to guarantee your services for its party to be held April 2. The sophomore class promises a minimum of $280 for filming its formal dance, and actually pays cash of $410 on February 28 at the party.

1 2

Requirement

1. Answer the following questions about the correct way to account for revenue under the accrual basis.

a. Considering the $100 paid by the freshman class, on what date was revenue earned? Did the earnings occur on the same date cash was received?

b. Considering the $410 paid by the sophomore class, on what date was revenue earned? Did the earnings occur on the same date cash was received?

comparing accrual and cash basis accounting preparing adjusting entries and preparin 538378

Aug 29, 2021 | Uncategorized

Comparing accrual and cash-basis accounting, preparing adjusting entries, and preparing income statements

Sweet Catering completed the following selected transactions during May, 2012:

1 4 6

4

4

Requirements

1. Prepare journal entries for each transaction.

2. Using the journal entries as a guide, show whether each transaction would be handled as a revenue or an expense using both the accrual and cash basis by completing the following table.

1

3. After completing the table, calculate the amount of net income or net loss for Sweet Catering under the accrual and cash basis for May.

4. Considering your results from Requirement 3, which method gives the best picture of the true earnings of Sweet Catering? Why?

settler company was quickly outgrowing its rented office space the company decided t 538602

Aug 29, 2021 | Uncategorized

Calculate the cost of an asset. (LO 1)

Settler Company was quickly outgrowing its rented office space. The company decided that it could raise enough capital to buy land and build a new office building. The building was completed on September 15. Consider the following costs incurred for the new building.

What amount should Settler Company record on the books for its new building?

corona company purchased and for 75 000 cash and a building for 300 000 cash 538626

Aug 29, 2021 | Uncategorized

Calculate the cost of an asset and depreciation expense. (LO l, 2)

Corona Company purchased and for $75,000 cash and a building for $300,000 cash. The company paid real estate closing costs of $8,000 and allocated that cost to the building and the land based on the purchase price. Renovation costs on the building were $35,000.

Use the accounting equation to record the purchase of the property, including all related expenditures.

Assume that all transactions were for cash and that all purchases occurred at the beginning of the year.

a. Compute the annual straight-line depreciation, assuming a 2}-year estimated useful life and a $10,000 estimated salvage value for the building.

b. What would be the book value of the building at the end of the second year?

c. What would be the book value of the land at the end of the second year?

classify the following items as either a capital expenditure or a revenue expenditur 538635

Aug 29, 2021 | Uncategorized

Distinguish between capital and revenue expenditures (expenses).(LO1,4)

Classify the following items as either a capital expenditure or a revenue expenditure (an expense).

a. Changed oil in the delivery truck

b. Replaced the engine in the delivery truck

c. Paid sales tax on the new delivery truck

d. Installed a new, similar roof on the office building

e. Paid freight and installation charges for a new computer system

f. Repainted the administrative offices

g. Purchased and installed a new toner cartridge in the laser printer

h. Replaced several missing shingles on the roof

i. Trained an employee prior to using the new computer system

j. Replaced the brake pads on the delivery truck

yester mfg co has had a piece of equipment for 6 years at the beginning of the seven 538636

Aug 29, 2021 | Uncategorized

Account for capital and revenue expenditures (expenses) and calculate depreciation expense (.LO 2,4)

Yester Mfg. Co. has had a piece of equipment for 6 years. At the beginning of the seventh year, the equipment was not performing as well as expected. First, Yester relubricated the equipment, which cost $150. Then, the company replaced some worn-out parts, which cost $520. Finally, at the beginning of the seventh year, the company completed a major overhaul of the equipment that not only fixed the machine but also added new functionality and extended its useful life by 3 years (to a total of 10 years) with no salvage value. The overhaul cost $10,000. (Originally, the machine cost $60,000, had a salvage value of $4,000, and had an estimated useful life of 7 years.)

a. Which of these costs are capital expenditures? How would these amounts appear on the financial statements?

b. Which are revenue expenditures? How would these amounts appear on the financial statements?

c. Assuming Yester Mfg. uses the straight-line method of depreciation, how much depreciation expense will be reported on the income statements for years 7 through 10?

sharper company operates a small repair facility for its products at the beginning o 538637

Aug 29, 2021 | Uncategorized

Account for capital and revenue expenditures (expenses) and calculate depreciation expense(.LO 2,4)

Sharper Company operates a small repair facility for its products. At the beginning of 2006, the accounting records for the company showed the following balances for its only piece of equipment, purchased at the beginning of 2004:

During 2006, the following costs were incurred for repairs and maintenance on the equipment:

The company uses the straight-line method, and it now estimates the equipment will last for a total of 11 years with $5,000 estimated salvage value. The company’s fiscal year ends on December 31.

a. How much depreciation did Shaper Company record on the equipment at the end of 2005?

b. After the overhaul at the beginning of 2006, what is the remaining estimated life of the equipment?

c. What is the amount of depreciation expense the company will record for 2006?

dave s delivery disposed of a delivery truck after using it 4 years the records of t 538640

Aug 29, 2021 | Uncategorized

Account for disposal of an asset. (LO 5)

Dave’s Delivery disposed of a delivery truck after using it 4 years. The records of the company provide the following information:

Calculate the gain or loss on the disposal of the truck for each of the following independent situations:

a. Dave’s Delivery sold the truck to Papa John’s Pizza for $12,000.

b. Dave’s Delivery sold the truck to Cornerstone Grocery for $15’000.

c. Dave’s Delivery sold the truck to John’s Plumbing for $16,000.

d. The truck was stolen out of Dave’s parking lot, and the company had no insurance.

wilson smith amp knight beer brewers purchased a building for 125 000 cash and the l 538647

Aug 29, 2021 | Uncategorized

Calculate the cost of an asset and depreciation expense. (LO 1,2)

Wilson, Smith & Knight Beer Brewers purchased a building for $125,000 cash and the land for $275,000 cash. The company paid real estate closing costs of $6,000 and allocated that cost to the building and the land based on the purchase price. Renovation costs on the building were $45,000.

Use the accounting equation to record the purchase of the property, including all related expenditures.

Assume that all transactions were for cash and that all purchases occurred at the beginning of the year.

a. Compute the annual straight-line depreciation, assuming a 20-year estimated useful life and an $11,875 estimated salvage value for the building.

b. What would be the book value of the building at the end of the tenth year?

c. What would be the book value of the land at the end of the tenth year?

on january 1 2008 hsieh amp wen s gourmet taste of asia purchased kitchen equipment 538649

Aug 29, 2021 | Uncategorized

Calculate depreciation expense: straight-line and double-declining balance methods. (LO 2)

On January 1, 2008, Hsieh & Wen’s Gourmet Taste of Asia purchased kitchen equipment for $51,500. Hsieh & Wen’s was also charged $1,650 for shipping and installation. The equipment is expected to have a useful life of 8 years and a salvage value of $3,150.

a. Compute the depreciation expense for the years 2008 through 2010, using the straight-line method (December 31 is the fiscal year-end.).

b. compute the depreciation expense for the years 2008 through 2010, using the double-declining balance method. (Round your answers to the nearest dollar.)

c. What is the book value of the equipment at the end of 2008 under each method?

classify the following items as either a capital expenditure or a revenue expenditur 538656

Aug 29, 2021 | Uncategorized

Distinguish between capital and revenue expenditures (expenses)(LO 1, 4)

Classify the following items as either a capital expenditure or a revenue expenditure (expense).

a. Changed the filter in the moving van

b. Painted the moving van

c. Paid sales tax on the new moving van

d. Installed a new energy-efficient air-conditioning system for the office building

e. Cleaned and lubricated sewing equipment

f. Performed routine yearly maintenance on copy machine

g. Purchased and installed a new set of energy-efficient deep fryers

h. Replaced several cracked tiles in company bathroom floor

i. Trained an employee prior to using the new energy-efficient deep fryers

j. Replaced the tires on the moving van

account for capital and revenue expenditures expenses and calculate depreciation exp 538657

Aug 29, 2021 | Uncategorized

Account for capital and revenue expenditures (expenses) and calculate depreciation expense (LO2,4)

Shiny & New Auto Mechanic Shop has had a piece of equipment for five years. At the beginning of the sixth year, it wasn’t performing as well as it should have been. First, Shiny & New had the equipment serviced, which cost $175. Then, the company tried replacing some worn-out parts, which cost $480. Finally, at the beginning of the sixth year, it completed a major overhaul of the equipment that not only fixed the machine, but also added new functionality to it and extended the useful life by four years (to a total of ten years with five remaining) with no salvage value. The overhaul cost $20,000. (Originally, the machine cost $65,000, had a salvage value of $5,000, and an estimated useful life of six years.)

a. Which of these costs are capital expenditures? How would these amounts appear on the financial statements?

b. Which are revenue expenditures? How would these amounts appear on the financial statements?

c. Assuming Shiny & New uses the straight-line method of depreciation how much depreciation expense will be reported on the income statements for years six through ten?

account for capital and revenue expenditures expenses and calculate depreciation exp 538658

Aug 29, 2021 | Uncategorized

Account for capital and revenue expenditures (expenses) and calculate depreciation expense (L O 2,4)

Global Electronics operates a manufacturing plant for production of its products. At the beginning of 2008, the accounting records for the company showed the following balances for its only piece of equipment, purchased at the beginning of 2005:

During 2008, the following cash costs were incurred for repairs and maintenance on the equipment:

The company uses straight-line depreciation and estimates the equipment will last for 5 years beginning in 2008 with a $4,000 estimated salvage value. The company’s fiscal year ends on December 31.

a. How much did the firm record for depreciation on the equipment at the end of 2008?

b. After the overhaul, at the beginning of 2008, what is the remaining estimated life?

c. What is the amount of depreciation expense the company will record for 2008?

kat amp jen s solar tan disposed of a high pressure tanning bed that had been used i 538661

Aug 29, 2021 | Uncategorized

Account for disposal of an asset. (LO 5)

Kat & Jen’s Solar Tan disposed of a high-pressure tanning bed that had been used in the business for 3 years. The records of the company provide the following information:

Calculate the gain or loss on the disposal of the tanning bed for each of the following independent situations:

a. Kat & Jen’s sold the tanning bed to Dark Bodies for $21,000.

b. Kat & Jen’s sold the tanning bed to a customer for $22,550′

c. Kat & Jen’s sold the tanning bed to Angela’s Fitness Center for $18,000.

d. The tanning salon was broken into and the tanning bed was stolen; Kat & Jen’s had no insurance.

the following trial balance of joy mcdowell tutoring service at may 31 2012 does not 538320

Aug 29, 2021 | Uncategorized

Correcting errors in a trial balance

The following trial balance of Joy McDowell Tutoring Service at May 31, 2012, does not balance:

Investigation of the accounting records reveals that the bookkeeper:

a. Recorded a $500 cash revenue transaction by debiting Accounts receivable. The credit entry was correct.

b. Posted a $1,000 credit to Accounts payable as $100.

c. Did not record utilities expense or the related account payable in the amount of $400.

d. Understated McDowell, capital by $600.

Requirement

1. Prepare the corrected trial balance at May 31, 2012, complete with a heading;

journal entries are not required.

showtime amusements company owns movie theaters showtime engaged in the following bu 538321

Aug 29, 2021 | Uncategorized

Identifying common accounts and normal account balances

Showtime Amusements Company owns movie theaters. Showtime engaged in the following business transactions in 2012:

Requirements

1. Create the list of accounts that Showtime Amusements will use to record these transactions.

2. Identify the account type and normal balance of each account identified in Requirement 1.

vernon yung practices medicine under the business title vernon yung m d during 538322

Aug 29, 2021 | Uncategorized

Analyzing and journalizing transactions, posting, and preparing a trial balance

Vernon Yung practices medicine under the business title Vernon Yung, M.D. During

July, the medical practice completed the following transactions:

2 3 4 5

The business uses the following accounts: Cash; Accounts receivable; Supplies; Land;

Accounts payable; Notes payable; Yung, capital; Yung, drawing; Service revenue; Salary expense; Rent expense; and Utilities expense.

Requirements

1. Journalize each transaction, as shown for July 1. Explanations are not required.

2. Post the transactions to the T-accounts, using transaction dates as posting references

in the ledger accounts. Label the balance of each account Bal, as shown in the chapter.

3. Prepare the trial balance of Vernon Yung, M.D. at July 31, 2012.

doris stewart started her practice as a design consultant on september 1 2012 538323

Aug 29, 2021 | Uncategorized

Journalizing transactions, posting to T-accounts, and preparing a tranil balance

Doris Stewart started her practice as a design consultant on September 1, 2012.

During the first month of operations, the business completed the following

transactions:

Requirements

1. Open the following T-accounts: Cash; Accounts receivable; Supplies; Furniture; Land; Accounts payable; Stewart, capital; Stewart, drawing; Service revenue; Salary expense; and Rent expense.

2. Record each transaction in the journal, using the account titles given. Key each transaction by date. Explanations are not required.

3. Post the transactions to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal, as shown in the chapter.

4. Prepare the trial balance of Doris Stewart, Designer, at September 30, 2012.

trevor moore opened a law office on september 2 2012 during the first month ofoperat 538324

Aug 29, 2021 | Uncategorized

Journalizing transactions, posting to accounts in four-column format, and preparing a trial balance

Trevor Moore opened a law office on September 2, 2012. During the first month of operations, the business completed the following transactions:

journalizing transactions posting to accounts in four column format and preparing a 538325

Aug 29, 2021 | Uncategorized

Journalizing transactions, posting to accounts in four-column format, and preparing a trial balance Trevor Moore opened a law office on September 2, 2012. During the first month of operations, the business completed the following transactions:

Requirements

1. Open the following T-accounts: Cash; Accounts receivable; Supplies; Furniture; Land; Accounts payable; Moore, capital; Moore, drawing; Service revenue; Salary expense; and Rent expense.

2. Record each transaction in the journal, using the account titles given. Key each transaction by date. Explanations are not required.

3. Post the transactions to T-accounts, using transaction dates as posting references in the ledger. Label the balance of each account Bal, as shown in the chapter.

4. Prepare the trial balance of Trevor Moore, Attorney, at September 30, 2012.

journalizing transactions posting to accounts in four column format and preparing a 538326

Aug 29, 2021 | Uncategorized

Journalizing transactions, posting to accounts in four-column format, and preparing a trial balance

The trial balance of Sam Mitchell, CPA, is dated January 31, 2012:

During February, Mitchell or his business completed the following transactions:

Requirements

1. Record the February transactions in the journal. Include an explanation for each entry.

2. Post the transactions to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Open the ledger accounts listed in the trial balance, together with their balances at January 31.

3. Prepare the trial balance of Sam Mitchell, CPA, at February 29, 2012.

recording transactions using four column accounts posting and preparing a trial bala 538327

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Recording transactions, using four-column accounts, posting, and preparing a trial balance

Maurey Wills started an environmental consulting company and during the first month

of operations (February 2012), the business completed the following transactions

a. Wills began the business with an investment of $48,000 cash and a building at $30,000. The business gave $78,000 ofcapital to Wills.

b. Purchased office supplies on account, $2,000.

c. Paid $14,000 for office furniture.

d. Paid employee”s salary, $2,200.

e. Performed consulting services on account, $3,700.

f. Paid $900 of the account payable created in transaction (b).

g. Received a $600 bill for advertising expense that will be paid in the near future.

h. Performed consulting service for cash, $1,100.

i. Received cash on account, $1,100.

j. Paid the following cash expenses:

(1) Rent on equipment, $1,000.

(2) Utilities, $900.

k. Wills withdrew cash of $2,300.

4 5

Requirements

1. Open the following four-column accounts: Cash; Accounts receivable; Office supplies; Office furniture; Building; Accounts payable; Wills, capital; Wills, drawing; Service revenue; Salary expense; Rent expense; Advertising expense; and Utilities expense.

2. Record each transaction in the journal. Use the letters to identify the transactions.

3. Post to the accounts and keep a running balance for each account.

4. Prepare the trial balance of Wills Environmental Consulting Company at

February 29, 2012.

the trial balance of smart tots child care does not balance 538328

Aug 29, 2021 | Uncategorized

Correcting errors in a trial balance

The trial balance of Smart Tots Child Care does not balance.

The following errors are detected:

a. Cash is understated by $1,000.

b. A $4,000 debit to Accounts receivable was posted as a credit.

c. A $1,000 purchase of supplies on account was neither journalized nor posted.

d. Equipment”s cost is $78,500, not $87,000.

e. Salary expense is overstated by $200.

Requirement

1. Prepare the corrected trial balance at August 31, 2012. Journal entries are not required.

the trial balance for treasure hunt exploration company does not balance 538329

Aug 29, 2021 | Uncategorized

Correcting errors in a trial balance

The trial balance for Treasure Hunt Exploration Company does not balance.

The following errors were detected:

a. The cash balance is overstated by $5,000.

b. Rent expense of $340 was erroneously posted as a credit rather than a debit.

c. A $6,800 credit to Service revenue was not posted.

d. A $400 debit to Accounts receivable was posted as $40.

e. The balance of Utilities expense is understated by $70.

f. $900 purchase of supplies on account was neither journalized nor posted.

g. Exploration equipment should be $16,490.

Requirement

1. Prepare the corrected trial balance at February 29, 2012. Journal entries are not required.

party time amusements company owns movie theaters party time engaged in the followin 538335

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Identifying common accounts and normal account balances

Party Time Amusements Company owns movie theaters. Party Time engaged in the following business transactions in 2012:

1 2

5 Requirements

1. Create the list of accounts that Party Time Amusements will use to record these transactions.

2. Identify the account type and normal balance of each account identified in Requirement 1.

vince rockford practices medicine under the business title vince rockford m d during 538337

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Analyzing and journalizing transactions, posting, and preparing a trial balance

Vince Rockford practices medicine under the business title Vince Rockford, M.D. During March, the medical practice completed the following transactions:

3 4

The business uses the following accounts: Cash; Accounts receivable; Supplies; Land; Accounts payable; Notes payable; Rockford, capital; Rockford, drawing; Service revenue; Salary expense; Rent expense; and Utilities expense.

Requirements

1. Journalize each transaction, as shown for March 1. Explanations are not required.

2. Post the transactions to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal, as shown in the chapter.

3. Prepare the trial balance of Vince Rockford, M.D., at March 31, 2012.

vince smith opened a law office on april 2 2012 during the first month of operations 538338

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Journalizing transactions, posting to accounts in four-column format, and preparing a trial balance

Vince Smith opened a law office on April 2, 2012. During the first month of operations, the business completed the following transactions:

Requirements

1. Open the following T-accounts: Cash; Accounts receivable; Supplies; Furniture; Land; Accounts payable; Smith, capital; Smith, drawing; Service revenue; Salary expense; and Rent expense.

2. Record each transaction in the journal, using the account titles given. Key each transaction by date. Explanations are not required.

3. Post the transactions to T-accounts, using transaction dates as posting references in the ledger. Label the balance of each account Bal, as shown in the chapter.

4. Prepare the trial balance of Vince Smith, Attorney, at April 30, 2012.

the trial balance of john hilton cpa is dated march 31 2012 538339

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Journalizing transactions, posting to accounts in four-column format, and preparing a trial balance

The trial balance of John Hilton, CPA, is dated March 31, 2012:

During April, Hilton or his business completed the following transactions:

Requirements

1. Record the April transactions in the journal. Include an explanation for each entry.

2. Post the transactions to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Open the ledger accounts listed in the trial balance, together with their balances at March 31.

3. Prepare the trial balance of John Hilton, CPA, at April 30, 2012.

the trial balance of shermana peters registered dietician at june 30 2012 follows 538340

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Journalizing transactions, posting to accounts in four-column format, and preparing a trial balance

The trial balance of Shermana Peters, Registered Dietician, at June 30, 2012, follows:

During July, Peters or her business completed the following transactions:

Requirements

1. Record the July transactions in the business’s journal. Include an explanation for each entry.

2. Post the transactions to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references.

3. Prepare the trial balance of Shermana Peters, Registered Dietician, at July 31, 2012.

van stubbs started an environmental consulting company and during the first month of 538341

Aug 29, 2021 | Uncategorized

Recording transactions, using four-column accounts, posting, and preparing a trial balance

Van Stubbs started an environmental consulting company and during the first month of operations (October 2012), the business completed the following transactions:

4 5

Requirements

1. Open the following four-column accounts: Cash; Accounts receivable; Office supplies; Office furniture; Building; Accounts payable; Stubbs, capital; Stubbs, drawing; Service revenue; Salary expense; Rent expense; Advertising expense; and Utilities expense.

2. Record each transaction in the journal. Use the letters to identify the transactions.

3. Post to the accounts and keep a running balance for each account.

4. Prepare the trial balance of Stubbs Environmental Consulting Company at October 31, 2012.

the trial balance of building blocks child care does not balance 538342

Aug 29, 2021 | Uncategorized

Correcting errors in a trial balance

The trial balance of Building Blocks Child Care does not balance.

The following errors are detected: