16. MC.15-147
A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true?
a.The company will recognize $96,000 gross profit on the balance sheet.
b.The company will decrease finished goods by $54,000.
c.The company will increase finished goods by $54,000.
d.The company will recognize sales on the balance sheet of $150,000.
17. MA.15-190
Bartel Corporation produces bar stools for restaurants. For each of the following, indicate whether the cost would typically be considered direct or indirect cost for the cost object given.
| Clear All | |||||||||
|
|
||||||||
18. MA.15-195
For each of the following, indicate whether the cost would typically be considered product or period cost for the cost object given.
| Clear All | |||||||||
|
|
||||||||
19. MC.15-141
A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and had $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000, respectively, the cost of goods manufactured was
a.$190,000
b.$226,000
c.$222,000
d.$218,000
20. MC.15-148
The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was
a.$233,000
b.$240,400
c.$225,600
d.$288,800
In: Accounting
At December 31, 2015, Layla’s Design Company received legal advice from an outside advisor that it was 75% probable that the company would be found liable in a lawsuit related to fabric used in a spring 2014 dress collection. A range of damages in the amount of $250,000 to $300,000 was equally likely. Under U.S. GAAP, should Layla’s Design Company recognize a provision for damages? If so, please record the journal entry below.
________________________________ $
_________________________________ $
Description of the journal entry:__________________________________________________________
Would your answer be different under IFRS? YES NO (circle one)
If yes, what would be the journal entry?
________________________________ $
_________________________________ $
Please explain how a decline in probability from 75% to 60% would make a difference in your analysis. _________________________________________________________________________________________ _____________________________________________________________________________________
In: Accounting
The Miller Company sells tires to a customer in Canada on December 1, 20x1 with a payment of 100,000 Canadian dollars to be received on February 1, 20x2. Miller enters into a forward contract on December 1, 20x1 to sell 100,000 Canadian dollars on February 1, 20x2. Exchange rates for the Canadian dollars are as follows:
December 1, 20x1 ‐ Spot rate: 1.10; Forward rate: 1.15
December 31, 20x1 – Spot rate: 1.12; Forward rate:1.13
February 1, 20x2 – 1.16
Miller’s incremental borrowing rate is 12%. The present value factor for one month of interest at an annual rate of 12% is .9901.
(a)Assuming that Miller Company designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars. What is the impact on 20x1 net income? What is the impact on net 20x2 income?
(b)Calculate the impact on 20x1 and 20x2 net income assuming Miller designates the forward contract as a fair value hedge of foreign currency receivable. Prepare journal entries for these transactions.
In: Accounting
I worked for Arthur Andersen Accounting Firm (AA) prior to the Enron scandal, which was prior to the SOX legislation. It was later determined that AA auditors were being hired into executive leadership positions of the Enron company and that this behavior may have contributed to Enron receiving an unqualified opinion in there audit reports.
Question: Which of the eight major provision of the SOX act do you feel was directly related to the above described behavior of AA? Why or Why not? Explain!
In: Accounting
CHO Company was formed on December 1, 2009. The following information is available from Jones's inventory record for Product X.
Units Unit Cost
January 1, 2010 (beginning inventory) 1,600 $18.00
Purchases:
January 5, 2010 2,600 $20.00
January 25, 2010 2,400 $21.00
February 16, 2010 1,000 $22.00
March 15, 2010 1,800 $23.00
A physical inventory on March 31, 2010, shows 2,500 units on hand.
Prepare schedules to compute the ending inventory at March 31, 2010, using Weighted-average.
In: Accounting
Inventory Costing Methods-Periodic Method
Merritt Company uses the periodic inventory system. The following
May data are for an item in Merritt's inventory:
| May | 1 | Beginning inventory | 164 | units @ | $30 | per unit |
| 12 | Purchased | 140 | units @ | $35 | per unit | |
| 16 | Sold | 220 | units @ | |||
| 24 | Purchased | 300 | units @ | $36 | per unit |
Calculate the cost of goods sold for May and ending inventory at May 31 using (a) first-in, first-out, (b) last-in, first-out, and (c) the weighted-average cost methods.
Do not round until your final answers. Round your final answers to the nearest dollar.
| A. | First-in, First-out: | |
| Ending Inventory | $ | |
| Cost of Goods Sold: | $ | |
| B. | Last-in, first-out: | |
| Ending Inventory | $ | |
| Cost of Goods Sold: | $ | |
| C. | Weighted-average cost: | |
| Ending Inventory | $ | |
| Cost of Goods Sold | $ |
In: Accounting
Corporate Finance, BOOK: Principles of Corporate Finance, Richard Brealey 12
A six-month Treasury bill and a nine-month bill both sell at a discount of 12%.
a-1. Calculate the annual yield of the six-month Treasury bill. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Annual yield = %
a-2. Calculate the annual yield of the nine-month Treasury bill. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Annual yield = %
In: Accounting
|
Date |
Accounts involved in transaction? | Classification of the account? | Increasing or Decreasing? | Debit or Credit the Account? | Amount? |
| Ye | |||||
| 7/1 | Cash | Asset | Increasing | Debit | $ 63,000 |
| York, Capital | Capital | Increasing | Credit | $ 63,000 | |
| 7/5 | |||||
| 7/9 | Cash | ||||
| 7/10 | |||||
| 7/19 | |||||
| 7/22 | |||||
| 7/28 | Accounts Payable | ||||
| 7/31 | This is a compound entry. | ||||
| 7/31 | This is a compound entry. | ||||
| 7/31 | |||||
|
7/31 P2-29A Journalizing transactions, posting journal entries to T-accounts, 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: Jul. 1 Yung contributed $63,000 cash to the business in exchange for capital. 5 Paid monthly rent on medical equipment, $510. 9 Paid $23,000 cash to purchase land to be used in operations. 10 Purchased office supplies on account, $1,600. 19 Borrowed $22,000 from the bank for business use. Yung signed a note payable to the bank in the name of the business. 22 Paid $1,100 on account. 28 The business received a bill for advertising in the daily newspaper to be paid in August, $240. 31 Revenues earned during the month included $6,400 cash and $6000 on account. 31 Paid employees’ salaries $2,200, office rent $1,900, and utilities, $560. Record as a compound entry. 31 The business received $1,120 for medical screening services to be performed next month. 31 Yung withdrew cash of $7,200. The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Yung, Capital; Yung, Withdrawals; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense. Requirements 1. Journalize each transaction. Explanations are not required. 2. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal. 3. Prepare the trial balance of Vernon Yung, M.D. as of July 31, 2015. |
In: Accounting
The TMI Corporation has been in operation for over 30 years and, at December 31, 2017, it had:
• 10,000 shares of $300 par-value common stock authorized, of which 4,000 shares had been issued, and
• 10,000 shares authorized, issued, and outstanding of $20 stated-value preferred stock, that pays a dividend of 4%.
On January 2, 2018, TMI’s Board of Directors declared and issued a 3-for-1 common stock split. Then, on September 1, 2018, TMI’s Board declared (i) a 20% (small) common stock dividend to holders of record on October 1, to be distributed on November 1, and (ii) the preferred stock dividend.
The company’s accounts also showed the following balances on August 31, 2018, before the declaration of the dividends: Additional contributed capital . . . . . . . . . . . . . . . . . . . . . . . . $ 90,000
Retained earnings (includes all net income earned through August 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000
When distributed in November, the stock dividend included 6,000 fractional share rights, representing 600 potential shares. On December 15, 90% of the rights were exercised; the remaining rights will not be exercised until 2019.
On December 20, 2018, TMI acquired 2,000 shares of its own common stock at the current market value.
On December 30, 2018, TMI established a $206,000 sinking fund, with an equivalent reserve in stockholders’ equity.
The company had additional net income of $114,000 for the period September 1 through December 31, 2018.
After the stock split, the market value of TMI’s common stock throughout 2018 was $96 per share. Using the information above, prepare a statement of stockholders’ equity of The TMI Corporation at December 31, 2018, providing full disclosure.
In order to provide the necessary disclosures in the statement of stockholders’ equity, it will be necessary to consider the information relating to the stock split and the stock dividend. However, do not provide any supporting journal entries for those transactions.
In: Accounting
A corporation buys shares of another domestic corporation. They receive $100,000 of dividend income. They hold the shares for 75 days and then sell the stock. What tax consequences accrue to the corporation from the receipt of the dividend? What is the rationale for the rule? Would the result change if the corporation only held the stock for 5 days? If so, why? Does it really violate the rationale for the general rule?
In: Accounting
Two years ago, MTR issued $1,000 ten-year bonds that carry a coupon rate of 8% payable semi-annually.
a.) If you require an effective annual rate of return of 12%, how much are you willing to pay for the bond today?
b.) What will be the bond price if the yield to maturity falls to 6% in one year?.
C.) From the answer computed in above part (b), identify, with brief explanation (within 30 words), whether the bond is issued at par, premium or discount without involving any calculation.
In: Accounting
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:
| Beech Corporation | ||
| Balance Sheet | ||
| June 30 | ||
| Assets | ||
| Cash | $ | 76,000 |
| Accounts receivable | 137,000 | |
| Inventory | 86,100 | |
| Plant and equipment, net of depreciation | 230,000 | |
| Total assets | $ | 529,100 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ | 91,000 |
| Common stock | 312,000 | |
| Retained earnings | 126,100 | |
| Total liabilities and stockholders’ equity | $ | 529,100 |
Beech’s managers have made the following additional assumptions and estimates:
Estimated sales for July, August, September, and October will be $410,000, $430,000, $420,000, and $440,000, respectively.
All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
Each month’s ending inventory must equal 30% of the cost of next month’s sales. The cost of goods sold is 70% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
Monthly selling and administrative expenses are always $58,000. Each month $8,000 of this total amount is depreciation expense and the remaining $50,000 relates to expenses that are paid in the month they are incurred.
The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Required:
1. Prepare a schedule of expected cash collections for July, August, and September.
2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.
2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September.
3. Prepare an income statement for the quarter ended September 30.
4. Prepare a balance sheet as of September 30.
In: Accounting
People tend to think of accountants as “bean counters”, but this is far from the truth. My textbook even goes so far as to say that “accountants are instrumental in helping to create a prosperous society” (Miller-Nobles, Mattison & Matsumura, 2016, p.2). Please explain and support how this statement is true.
In: Accounting
Discuss and define the nature of sampling risk and non-sampling risk. **Please make sure to include all effects of sampling risk on substantive tests of details and on tests of internal controls.
In: Accounting
true or false-
1. Goods purchased, shipped FOB shipping point, and in transit should be included in the purchasers year end inventory.
2. In a period of changing prices, the consistency principle prohibits a company from changing to a more favorable inventory cost method.
Explain reason in detail.
In: Accounting