must state whether the Variance is Favourable or Unfavourable. To receive full credit your answer must be labeled as such. For example: An answer such as “- $4500” will not be given full credit, even if the number is correct. The same number shown as “$4500 Favourable” would receive full marks. The following are independent questions: 1. Information on Fleming Company's direct material costs follows: Actual amount of direct materials purchased and used 20,000 kilograms Actual direct material costs $40,000 Standard direct material costs $2.10 per kilogram Calculate the direct materials price variance – 2 marks 2. During March, Younger Company’s direct material costs for product T were as follows: Actual unit purchase price $6.50 per meter Standard quantity allowed for actual production 2,100 meters Quantity purchased and used for actual production 2,300 meters Standard unit price $6.25 per meter Calculate the materials usage variance – 2 marks 3. The following labour standards have been established for a particular product Standard labour hours per unit of output 1.7 hours Standard labour rate $14.25 per hour The following data pertains to operations concerning the product for the last month: Actual hours worked 3,700 hours Actual total labour cost $50,690 Actual output 2,300 units Calculate the labour rate variance – 2 marks 4. Yola Company manufactures a product with standards for direct labour of 4 direct labour-hours per unit at a cost of $12.00 per direct labour-hour. During June, 1,000 units were produced using 4,100 hours at $12.20 per hour. What was the direct labour efficiency variance? Calculate the labour efficiency variance – 2 marks
In: Accounting
Journal entries for a Custodial Fund The city of Belle collects property taxes for other local governments—Beau County and the Landis Independent School District (LISD). The city uses a Property Tax Collection Custodial Fund to account for its collection of property taxes for itself, Beau County, and LISD. Prepare journal entries to record the following transactions and events for Belle’s Custodial Fund during calendar year 2019. 1. During 2019, property taxes were levied for Belle ($2,000,000), Beau County ($1,000,000) and LISD ($3,000,000). Assume taxes collected by the Custodial Fund will be paid to Belle’s General Fund. 2. Property taxes in the amount of $4,500,000 are collected. The percentage collected for each entity is in the same proportion as the original levy. 3. The amount owed to the city of Belle, Beau County, and LISD is recognized. The city of Belle charges an administrative fee to Beau County ($20,000) and LISD ($60,000) to collect the taxes, which reduces the amount owed to Beau County and LISD. 4. The Custodial Fund distributes the amount owed to the three governments.
In: Accounting
Discuss the differences in using an option to hedge a foreign currency risk rather than a forward contract.
In: Accounting
1/ An asset acquired January 1, 2018, for $14,300 with an estimated 10-year life and no residual value is being depreciated in an equipment group asset account that has an average service life of eight years. The asset is sold on December 31, 2019, for $5,400. The entry to record the sale would be:
Multiple Choice
| Cash | 5,400 | |
| Accumulated depreciation | 8,900 | |
| Equipment | 14,300 |
| Cash | 5,400 | |
| Accumulated depreciation | 3,575 | |
| Loss on sale of equipment | 5,325 | |
| Equipment | 14,300 |
| Cash | 5,400 | |
| Loss on sale of equipment | 8,900 | |
| Equipment | 14,300 |
| Cash | 5,400 | |
| Equipment | 5,400 |
2/ Cutter Enterprises purchased equipment for $99,000 on January 1, 2018. The equipment is expected to have a five-year life and a residual value of $5,100.
Using the straight-line method, depreciation for 2019 and the
equipment's book value at December 31, 2019, would be:
Multiple Choice
$19,800 and $79,200 respectively.
$18,780 and $61,440 respectively.
$18,780 and $56,340 respectively.
$39,600 and $59,400 respectively.
In: Accounting
The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $4 per share.
| Common stock (65,000 shares at $2 par) | $ | 130,000 |
| Capital in excess of par | 130,000 | |
| Retained earnings | 250,000 | |
| Total equity | $ | 510,000 |
The firm intends to first declare a 10 percent stock dividend and then pay a 15-cent cash dividend (which also causes a reduction of retained earnings).
Show the capital section of the balance sheet after the first transaction and then after the second transaction.
Western Pipe Co. After Stock Dividend
Common Stock:____________________
Capital in access of par:______________
Retained Earnings:__________________
Total Equity:_______________________
Western Pipe Co. After Stock Dividend
Common Stock:____________________
Capital in access of par:______________
Retained Earnings:__________________
Total Equity:_______________________
In: Accounting
Consider the following information for Maynor Company, which
uses a perpetual inventory system:
| Transaction | Units | Unit Cost | Total Cost | |||||||
| January 1 | Beginning Inventory | 26 | $ | 76 | $ | 1,976 | ||||
| March 28 | Purchase | 36 | 82 | 2,952 | ||||||
| August 22 | Purchase | 52 | 86 | 4,472 | ||||||
| October 14 | Purchase | 57 | 92 | 5,244 | ||||||
| Goods Available for Sale | 171 | $ | 14,644 | |||||||
The company sold 57 units on May 1 and 52 units on October
28.
Required:
Calculate the company's ending inventory and cost of goods sold
using the each of following inventory costing methods.
In: Accounting
Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 7,200 units of product were as follows:
| Standard Costs | Actual Costs | ||
| Direct materials | 9,400 lb. at $4.90 | 9,300 lb. at $4.80 | |
| Direct labor | 1,800 hrs. at $17.10 | 1,840 hrs. at $17.30 | |
| Factory overhead | Rates per direct labor hr., | ||
| based on 100% of normal | |||
| capacity of 1,880 direct | |||
| labor hrs.: | |||
| Variable cost, $4.00 | $7,130 variable cost | ||
| Fixed cost, $6.30 | $11,844 fixed cost | ||
Each unit requires 0.25 hour of direct labor.
Required:
a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct materials price variance | $ | |
| Direct materials quantity variance | ||
| Total direct materials cost variance | $ |
b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct labor rate variance | $ | |
| Direct labor time variance | ||
| Total direct labor cost variance | $ |
c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Variable factory overhead controllable variance | $ | |
| Fixed factory overhead volume variance | ||
| Total factory overhead cost variance | $ |
In: Accounting
Prepare a complete statement of cash flows; report its cash flows from operating activities according to the direct method.
Golden Corp., a merchandiser, recently completed its 2017
operations. For the year, (1) all sales are credit sales, (2) all
credits to Accounts Receivable reflect cash receipts from
customers, (3) all purchases of inventory are on credit, (4) all
debits to Accounts Payable reflect cash payments for inventory, (5)
Other Expenses are all cash expenses, and (6) any change in Income
Taxes Payable reflects the accrual and cash payment of taxes. The
company’s balance sheets and income statement follow.
| GOLDEN CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 |
|||||||
| 2017 | 2016 | ||||||
| Assets | |||||||
| Cash | $ | 164,000 | $ | 107,000 | |||
| Accounts receivable | 83,000 | 71,000 | |||||
| Inventory | 601,000 | 526,000 | |||||
| Total current assets | 848,000 | 704,000 | |||||
| Equipment | 335,000 | 299,000 | |||||
| Accum. depreciation—Equipment | (158,000 | ) | (104,000 | ) | |||
| Total assets | $ | 1,025,000 | $ | 899,000 | |||
| Liabilities and Equity | |||||||
| Accounts payable | $ | 87,000 | $ | 71,000 | |||
| Income taxes payable | 28,000 | 25,000 | |||||
| Total current liabilities | 115,000 | 96,000 | |||||
| Equity | |||||||
| Common stock, $2 par value | 592,000 | 568,000 | |||||
| Paid-in capital in excess of par value, common stock | 196,000 | 160,000 | |||||
| Retained earnings | 122,000 | 75,000 | |||||
| Total liabilities and equity | $ | 1,025,000 | $ | 899,000 | |||
| GOLDEN CORPORATION Income Statement For Year Ended December 31, 2017 |
|||||
| Sales | $ | 1,792,000 | |||
| Cost of goods sold | 1,086,000 | ||||
| Gross profit | 706,000 | ||||
| Operating expenses | |||||
| Depreciation expense | $ | 54,000 | |||
| Other expenses | 494,000 | 548,000 | |||
| Income before taxes | 158,000 | ||||
| Income taxes expense | 22,000 | ||||
| Net income | $ | 136,000 | |||
Additional Information on Year 2017 Transactions
Required:
Prepare a complete statement of cash flows; report its cash flows
from operating activities according to the direct
method. (Amounts to be deducted should be
indicated with a minus sign.)
In: Accounting
Briefly describe the proper accounting (financial reporting) for each of the following items:
a. Change in Accounting Principle
B. change in accounting estimate
c. errors (mistakes or oversights) uncovered in previously issued financial statements
In: Accounting
On December 31, 2020, Ivanhoe Inc. has a machine with a book value of $1,297,200. The original cost and related accumulated depreciation at this date are as follows.
| Machine |
$1,794,000 |
|
| Less: Accumulated depreciation |
496,800 |
|
| Book value |
$1,297,200 |
Depreciation is computed at $82,800 per year on a straight-line
basis.
Presented below is a set of independent situations. For each
independent situation, indicate the journal entry to be made to
record the transaction. Make sure that depreciation entries are
made to update the book value of the machine prior to its
disposal.
A fire completely destroys the machine on August 31, 2021. An insurance settlement of $593,400 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
August 31, 2021 |
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
|
(To record current depreciation.) |
|||
|
August 31, 2021 |
enter an account title to record loss of the machine |
enter a debit amount |
enter a credit amount |
|
enter an account title to record loss of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record loss of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record loss of the machine |
enter a debit amount |
enter a credit amount |
|
|
(To record loss of the machine.) |
eTextbook and Media
List of Accounts
On April 1, 2021, Ivanhoe sold the machine for $1,435,200 to Yoakam Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
April 1, 2021 |
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
|
(To record current depreciation.) |
|||
|
April 1, 2021 |
enter an account title to record sale of the machine |
enter a debit amount |
enter a credit amount |
|
enter an account title to record sale of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record sale of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record sale of the machine |
enter a debit amount |
enter a credit amount |
|
|
(To record sale of the machine.) |
On July 31, 2021, the company donated this machine to the
Mountain King City Council. The fair value of the machine at the
time of the donation was estimated to be $1,518,000.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
July 31, 2021 |
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
|
(To record current depreciation.) |
|||
|
July 31, 2021 |
enter an account title to record donation of the machine |
enter a debit amount |
enter a credit amount |
|
enter an account title to record donation of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record donation of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record donation of the machine |
enter a debit amount |
enter a credit amount |
|
|
(To record donation of the machine.) |
In: Accounting
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
| Fixed Component per Month |
Variable Component per Job |
Actual Total for February |
|||||||
| Revenue | $ | 360 | $ | 18,950 | |||||
| Technician wages | $ | 6,400 | $ | 6,450 | |||||
| Mobile lab operating expenses | $ | 2,900 | $ | 35 | $ | 4,530 | |||
| Office expenses | $ | 2,600 | $ | 2 | $ | 3,050 | |||
| Advertising expenses | $ | 970 | $ | 995 | |||||
| Insurance | $ | 1,680 | $ | 1,680 | |||||
| Miscellaneous expenses | $ | 500 | $ | 3 | $ | 465 | |||
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus $35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in February, but actually worked 52 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
In: Accounting
|
BLOSSOM INC. |
||||||
|
12/31/17 |
12/31/16 |
|||||
| Cash |
$5,900 |
$6,900 |
||||
| Accounts receivable |
61,400 |
50,800 |
||||
| Short-term debt investments (available-for-sale) |
35,000 |
17,800 |
||||
| Inventory |
40,000 |
59,400 |
||||
| Prepaid rent |
5,000 |
3,900 |
||||
| Equipment |
155,200 |
129,000 |
||||
| Accumulated depreciation—equipment |
(35,000 |
) |
(25,000 |
) |
||
| Copyrights |
45,600 |
49,900 |
||||
| Total assets |
$313,100 |
$292,700 |
||||
| Accounts payable |
$46,300 |
$39,800 |
||||
| Income taxes payable |
3,900 |
6,100 |
||||
| Salaries and wages payable |
7,900 |
3,900 |
||||
| Short-term loans payable |
8,000 |
10,100 |
||||
| Long-term loans payable |
60,100 |
68,400 |
||||
| Common stock, $10 par |
100,000 |
100,000 |
||||
| Contributed capital, common stock |
30,000 |
30,000 |
||||
| Retained earnings |
56,900 |
34,400 |
||||
| Total liabilities & stockholders’ equity |
$313,100 |
$292,700 |
||||
|
BLOSSOM INC. |
||||
| Sales revenue |
$338,600 |
|||
| Cost of goods sold |
174,500 |
|||
| Gross profit |
164,100 |
|||
| Operating expenses |
119,100 |
|||
| Operating income |
45,000 |
|||
| Interest expense |
$11,400 |
|||
| Gain on sale of equipment |
1,900 |
9,500 |
||
| Income before tax |
35,500 |
|||
| Income tax expense |
7,100 |
|||
| Net income |
$28,400 |
|||
Additional information:
| 1. | Dividends in the amount of $5,900 were declared and paid during 2017. | |
| 2. | Depreciation expense and amortization expense are included in operating expenses. | |
| 3. | No unrealized gains or losses have occurred on the investments during the year. | |
| 4. | Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017 |
prepare a statement of cash flows using direct method
In: Accounting
Write a short report (220–250 words) on the business needs and expectations of a bookkeeper, comparing the role of the bookkeeper with that of an accountant.
In: Accounting
In: Accounting
| The income statement of Rodriquez Company is shown below: | ||||||
| RODRIQUEZ COMPANY | ||||||
| Income Statement | ||||||
| For The Year Ended December 31, 2012 | ||||||
| Sales | $6,900,000 | |||||
| Cost of goods sold | ||||||
| Beginning inventory | $1,900,000 | |||||
| Purchases | 4,400,000 | |||||
| Goods available for sale | 6,300,000 | |||||
| Ending inventory | 1,600,000 | |||||
| Cost of goods sold | 4,700,000 | |||||
| Gross profit | 2,200,000 | |||||
| Operating expenses | ||||||
| Selling expenses | 450,000 | |||||
| Administrative expenses | 700,000 | 1,150,000 | ||||
| Net income | $1,050,000 | |||||
| Additional information: | ||||||
| 1. Accounts receivable decreased | $310,000 | during the year. | ||||
| 2. Prepaid expenses increased | $170,000 | during the year. | ||||
| 3. Accounts payable to suppliers of merchandise decreased | $275,000 | during the year. | ||||
| 4. Accrued expenses payable decreased | $120,000 | during the year. | ||||
| 5. Administrative expenses include depreciation expense of | $60,000 | |||||
| Instructions: | ||||||
|
Prepare the operating activities section of the statement of cash
flows for the year ended December 31, 2012, for Rodriquez Company, using the direct method. |
||||||
In: Accounting