Chapter 06 Homework

Hide or show questions

1. Weighted Average Cost Method with Perpetual Inventory

   The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows:

   Date		Transaction	Number of Units		Per Unit		Total
   Apr. 3		Inventory	25		$1,200		$30,000
   8		Purchase	75		1,240		93,000
   11		Sale	40		2,000		80,000
   30		Sale	30		2,000		60,000
   May 8		Purchase	60		1,260		75,600
   10		Sale	50		2,000		100,000
   19		Sale	20		2,000		40,000
   28		Purchase	80		1,260		100,800
   June 5		Sale	40		2,250		90,000
   16		Sale	25		2,250		56,250
   21		Purchase	35		1,264		44,240
   28		Sale	44		2,250		99,000

   Required:

   1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method.

   Dunne Co. Schedule of Cost of Goods Sold Weighted Average Cost Method For the Three Months Ended June 30
   	Purchases			Cost of Goods Sold			Inventory
   Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
   Apr. 3								$	$
   Apr. 8		$	$
   Apr. 11					$	$
   Apr. 30
   May 8
   May 10
   May 19
   May 28
   June 5
   June 16
   June 21
   June 28
   June 30	Balances					$			$

   2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period.

   Total sales	$
   Total cost of goods sold	$
   Gross profit	$

   3. Determine the ending inventory cost on June 30.
   $

   Feedback

   1. When the perpetual inventory system is used, revenue is recorded each time a sale is made along with an entry to record the cost of the goods sold. Under the weighted average method the average unit cost must be determined after each purchase by dividing the total of cost of goods on hand by the total units on hand. The cost of merchandise goods sold is computed multiplying the average unit cost on the date of sales by the units sold. The inventory balance after a sale is computed by multiplying the average unit cost by the units on hand.

   2. Total sales are obtained by taking the number of units sold times their sale prices for all sales and adding these amounts together. The total cost of goods sold can be obtained by adding the weighted average costs in the perpetual inventory record. Sales minus cost of goods sold equals gross profit.

   3. The ending inventory cost can be taken from the perpetual inventory record in Part (1).

Check My Work

• Previous

Alex's favorite soccer team is Manchester United. When the last new Manchester United jersey became available for sale to the public, Alex was willing to pay $90 for it. However, he was able to buy one for a price of $40. Based on this information, how much consumer surplus did Alex receive from his purchase of the jersey?

The following is the preadjusted trial balance of Grandtown Hospital at December 31, 20X1, the end of the hospital’s current fiscal year:

Acct.

101 Cash $ 37,500

102 Temporary investments 30,000

103 Accrued interest receivable -0-

104 Accounts receivable 120,000

105 Allowance for uncollectible accounts $ -0-

106 Inventory 14,000

107 Prepaid insurance 3,600

120 Land 25,000

130 Buildings 250,000

131 Accumulated depreciation—buildings -0-

140 Equipment 140,000

141 Accumulated depreciation—equipment -0-

201 Accounts payable 37,400

203 Accrued interest payable -0-

204 Accrued salaries and wages payable -0-

205 Deferred rental income 2,700

250 Bonds payable 150,000

301 Hospital net assets 395,700

302 Revenue and expense summary -0-

401 Routine services revenue 171,200

402 Ancillary services revenue 110,300

403 Interest income -0-

404 Rental income -0-

406 Other operating revenues 23,500

501 Contractual adjustments 22,700

502 Charity care adjustments 31,100

601 Salaries and wages expense 155,600

602 Supplies expense 33,100

603 Utilities expense 14,900

604 Insurance expense -0-

605 Repairs expense 6,400

607 Depreciation expense -0-

608 Interest expense 4,500

609 Bad debt expense -0-

610 Other expenses 2,400

Totals $890,800

The following additional information is available:

1. The temporary investment consists of $30,000 (face value) of 8 percent bonds acquired by the hospital on November 1, 20X1. These bonds pay interest annually on November 1, commencing on November 1, 20X2.

2. Of the December 31, 20X1, accounts receivable, it is estimated that 14 percent will eventually prove uncollectible by reason of (1) charity care, 7 percent; (2) contractual adjustments, 4 percent; and (3) bad debts, 3 percent.

3. A two-year insurance premium of $3,600 was paid in advance by the hospital on January 1, 20X1.

4. The hospital building, which was acquired on January 1, 20X1, has an estimated useful life of 50 years and a 20 percent salvage value.

5. The equipment, which was acquired on January 1, 20X1, has an estimated useful life of 12 years and a $20,000 salvage value. 6. On January 1, 20X1, the hospital issued $150,000 of 20-year, 6 percent bonds at face value. These bonds pay interest semiannually on January 1 and July 1, commencing July 1, 20X1.

7. Unpaid salaries and wages at December 31, 20X1, amounted to $12,300.

8. The hospital received one year’s rent of $2,700 in advance on June 1, 20X1.

Required: (1) Prepare a worksheet to develop financial statements in the manner illustrated in Figure 8.3. (2) Prepare, in good form, a complete set of financial statements for 20X1. (3) Prepare, in general journal form, the necessary adjusting entries at December 31, 20X1, for the year then ended. (4) Prepare, in general journal form, the necessary closing entries on December 31, 20X1, for the year then ended.

Application Exercise:
A team of researchers recruited a random sample of migraine sufferers. Before the study began at baseline, participants were asked to record the duration of headaches they experienced in a week. A few days later, all participants were asked to practice a week-long relaxation technique designed to reduce migraine headaches. A two-week off period in which the participants practiced nothing was given between the relaxation technique. Throughout the relaxation technique participants were asked to record the duration of headaches. What can be concluded with an α of 0.05?

e) Regardless of the H₀ decision in b), conduct Tukey's post hoc test for the following comparisons:
1 vs. 3: difference =_______________ ; significant: ---Select---Yes OR No
1 vs. 2: difference =_______________ ; significant: ---Select---Yes OR No

f) Regardless of the H₀ decision in b), conduct Scheffe's post hoc test for the following comparisons:
1 vs. 3: test statistic = ______________ ; significant: ---Select---Yes OR No
2 vs. 3: test statistic = ______________ ; significant: ---Select---Yes OR No

*Repeated Measures Analysis of Variance*
Examining differences between groups on one or more variables / same participants being tested more than once / with more than two groups.

What test and method would be used to examine the difference between male and female users considering the different variable (Pain Reliever, Sedative, Tranquilizer & Stimulant)

Create a graph illustration.

Describe the Graph.

1- Use LinkList. Write removeLast(n). Delete the last occurrence of an item from a linked list. So if the item is 7 and the list is [1,3,7,4,7,3,7,2], the result is [1,3,7,4,7,3,2]

2- Use LinkList. Write removeAll(int n). Deletes all occurrences of an item n from a linked list. So if the item is 7 and the list1 is [1,3,7,4,7,3,2] , then list1.removeAll(7) then list1 becomes [1,3,4,3,2].

Demonstrate by displaying the list contents before and after calling the above methods. Eg:

lst1
[1,3,7,4,7,3,7,2]
lst1.removelast(7)
[1,3,7,4,7,3,2]

lst1.removeall(7)
[1,3,4,3,2]

------------------------------------------------------------------------------------------------------------------------------------------------------------------

// linkList.java
// demonstrates linked list
// to run this program: C>java LinkListApp
////////////////////////////////////////////////////////////////
class Link
{
public int iData; // data item
public double dData; // data item
public Link next; // next link in list
// -------------------------------------------------------------
public Link(int id, double dd) // constructor
{
iData = id; // initialize data
dData = dd; // ('next' is automatically
} // set to null)
// -------------------------------------------------------------
public void displayLink() // display ourself
{
System.out.print("{" + iData + ", " + dData + "} ");
}
} // end class Link
////////////////////////////////////////////////////////////////
class LinkList
{
private Link first; // ref to first link on list

// -------------------------------------------------------------
public LinkList() // constructor
{
first = null; // no links on list yet
}
// -------------------------------------------------------------
public boolean isEmpty() // true if list is empty
{
return (first==null);
}
// -------------------------------------------------------------
// insert at start of list
public void insertFirst(int id, double dd)
{ // make new link
Link newLink = new Link(id, dd);
newLink.next = first; // newLink --> old first
first = newLink; // first --> newLink
}
// -------------------------------------------------------------
public Link deleteFirst() // delete first item
{ // (assumes list not empty)
Link temp = first; // save reference to link
first = first.next; // delete it: first-->old next
return temp; // return deleted link
}
// -------------------------------------------------------------
public void displayList()
{
System.out.print("List (first-->last): ");
Link current = first; // start at beginning of list
while(current != null) // until end of list,
{
current.displayLink(); // print data
current = current.next; // move to next link
}
System.out.println("");
}
// -------------------------------------------------------------
} // end class LinkList
////////////////////////////////////////////////////////////////

class LinkListApp
{
public static void main(String[] args)
{
LinkList theList = new LinkList(); // make new list

theList.insertFirst(22, 2.99); // insert four items
theList.insertFirst(44, 4.99);
theList.insertFirst(66, 6.99);
theList.insertFirst(88, 8.99);

theList.displayList(); // display list

while( !theList.isEmpty() ) // until it's empty,
{
Link aLink = theList.deleteFirst(); // delete link
System.out.print("Deleted "); // display it
aLink.displayLink();
System.out.println("");
}
theList.displayList(); // display list
} // end main()
} // end class LinkListApp

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Class LinkListAppTest.Java is just for testing. Please do not edit in any form.
class LinkListAppTest
   {
   public static void main(String[] args)                      //  NEW MAIN
      {
      LinkList lst1 = new LinkList();                          //  Since the available add method is a pre-add to the first we go in reverse order
      lst1.insertFirst(8,2);                                   // last digit
      lst1.insertFirst(7,7);                                   // entering next to last
      lst1.insertFirst(6,3);                                   // until we get to the the beginning
      lst1.insertFirst(5,7);
      lst1.insertFirst(4,4);
      lst1.insertFirst(3,7);
      lst1.insertFirst(2,3);
      lst1.insertFirst(1,1);

      System.out.println("lst1");                              //  list the name of the linked-list
      lst1.displayList();                                      //  pre-print the entered list unaltered
      System.out.println("lst1.removeLast(7)");                //  list the action to be taken
      lst1.removeLast(7);                                      //  complete the action to remove the last dData == 7;
      lst1.displayList();                                      //  print list post removal of the last dData == 7;
      System.out.println("1st1.removeAll(7)");                 //  list the action to be taken
      lst1.removeAll(7);                                       //  complete the action to remove all remaining dData == 7;
      lst1.displayList();                                      //  print list post removal of all remaining dData == 7;

      }  // end main()

   }  // end class 

1- Use LinkList. Write removeLast(n). Delete the last occurrence of an item from a linked list. So if the item is 7 and the list is [1,3,7,4,7,3,7,2], the result is [1,3,7,4,7,3,2]

2- Use LinkList. Write removeAll(int n). Deletes all occurrences of an item n from a linked list. So if the item is 7 and the list1 is [1,3,7,4,7,3,2] , then list1.removeAll(7) then list1 becomes [1,3,4,3,2].

Demonstrate by displaying the list contents before and after calling the above methods. Eg:

lst1
[1,3,7,4,7,3,7,2]
lst1.removelast(7)
[1,3,7,4,7,3,2]

lst1.removeall(7)
[1,3,4,3,2]

\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\

// linkList.java
// demonstrates linked list
// to run this program: C>java LinkListApp
////////////////////////////////////////////////////////////////
class Link
{
public int iData; // data item
public double dData; // data item
public Link next; // next link in list
// -------------------------------------------------------------
public Link(int id, double dd) // constructor
{
iData = id; // initialize data
dData = dd; // ('next' is automatically
} // set to null)
// -------------------------------------------------------------
public void displayLink() // display ourself
{
System.out.print("{" + iData + ", " + dData + "} ");
}
} // end class Link
////////////////////////////////////////////////////////////////
class LinkList
{
private Link first; // ref to first link on list

// -------------------------------------------------------------
public LinkList() // constructor
{
first = null; // no links on list yet
}
// -------------------------------------------------------------
public boolean isEmpty() // true if list is empty
{
return (first==null);
}
// -------------------------------------------------------------
// insert at start of list
public void insertFirst(int id, double dd)
{ // make new link
Link newLink = new Link(id, dd);
newLink.next = first; // newLink --> old first
first = newLink; // first --> newLink
}
// -------------------------------------------------------------
public Link deleteFirst() // delete first item
{ // (assumes list not empty)
Link temp = first; // save reference to link
first = first.next; // delete it: first-->old next
return temp; // return deleted link
}
// -------------------------------------------------------------
public void displayList()
{
System.out.print("List (first-->last): ");
Link current = first; // start at beginning of list
while(current != null) // until end of list,
{
current.displayLink(); // print data
current = current.next; // move to next link
}
System.out.println("");
}
// -------------------------------------------------------------
} // end class LinkList
////////////////////////////////////////////////////////////////

class LinkListApp
{
public static void main(String[] args)
{
LinkList theList = new LinkList(); // make new list

theList.insertFirst(22, 2.99); // insert four items
theList.insertFirst(44, 4.99);
theList.insertFirst(66, 6.99);
theList.insertFirst(88, 8.99);

theList.displayList(); // display list

while( !theList.isEmpty() ) // until it's empty,
{
Link aLink = theList.deleteFirst(); // delete link
System.out.print("Deleted "); // display it
aLink.displayLink();
System.out.println("");
}
theList.displayList(); // display list
} // end main()
} // end class LinkListApp
////////////////////////////////////////////////////////////////\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\

Class LinkListAppTest.Java is just for testing. Please do not edit.
class LinkListAppTest
   {
   public static void main(String[] args)                      //  NEW MAIN
      {
      LinkList lst1 = new LinkList();                          //  Since the available add method is a pre-add to the first we go in reverse order
      lst1.insertFirst(8,2);                                   // last digit
      lst1.insertFirst(7,7);                                   // entering next to last
      lst1.insertFirst(6,3);                                   // until we get to the the beginning
      lst1.insertFirst(5,7);
      lst1.insertFirst(4,4);
      lst1.insertFirst(3,7);
      lst1.insertFirst(2,3);
      lst1.insertFirst(1,1);

      System.out.println("lst1");                              //  list the name of the linked-list
      lst1.displayList();                                      //  pre-print the entered list unaltered
      System.out.println("lst1.removeLast(7)");                //  list the action to be taken
      lst1.removeLast(7);                                      //  complete the action to remove the last dData == 7;
      lst1.displayList();                                      //  print list post removal of the last dData == 7;
      System.out.println("1st1.removeAll(7)");                 //  list the action to be taken
      lst1.removeAll(7);                                       //  complete the action to remove all remaining dData == 7;
      lst1.displayList();                                      //  print list post removal of all remaining dData == 7;

      }  // end main()

   }  // end class 

Jiminy’s Cricket Farm issued a bond with 15 years to maturity and a semiannual coupon rate of 5 percent 3 years ago. The bond currently sells for 92 percent of its face value. The company’s tax rate is 22 percent. The book value of the debt issue is $35 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 8 years left to maturity; the book value of this issue is $20 million, and the bonds sell for 65 percent of par.

a. What is the company’s total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)

b. What is the company’s total market value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)

c. What is your best estimate of the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Consider a small economy composed of six people: Nick, Rosa, Tim, Alyssa, Crystal, and Brian. Each person's employment status is described in the following table.

Based on the criteria used by the Bureau of Labor Statistics (BLS), identify each person’s status as employed, unemployed, “not in the labor force” (if not in the civilian labor force but still part of the adult population), or “not in the adult population” if not in the civilian adult population.