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Ashford ACC205 WEEK 5 E9-21 E9-24 P9-28A P10-15A P10-18A

Price: $19.99


 Ashford ACC205 WEEK 5 E9-21 E9-24 P9-28A P10-15A P10-18A


Course Text:
Horngren, C., Harrison W. &Oliver, M. (2012). Accounting (9th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. ISBN: 9780132569057

Week Five Problems.
a) Chapter 9, P 9-28A
b) Chapter 9, E 9-21
c) Chapter 9, E 9-24
d) Chapter 10, P10-15A
e) Chapter 10, P10-18A

E9-21 Trade in asset—two situations [10–15 min]
Community Bank recently traded in office fixtures. Here are the facts:

Requirements

1. Record Community Bank’s trade-in of old fixtures for new ones.

2. Now let’s change one fact and see a different outcome. Community Bank feels
compelled to do business with Mountain Furniture, a bank customer, even
though the bank can get the fixtures elsewhere at a better price. Community
Bank is aware that the new fixtures’ market value is only $127,000. Now record
the trade-in.

E9-24 Acquisition of patent, amortization, and change in useful life [10–15 min]
Miracle Printers (MP) manufactures printers. Assume that MP recently paid $600,000
for a patent on a new laser printer. Although it gives legal protection for 20 years, the
patent is expected to provide a competitive advantage for only eight years.

Requirements

1. Assuming the straight-line method of amortization, make journal entries to
record (a) the purchase of the patent and (b) amortization for year 1.

2. After using the patent for four years, MP learns at an industry trade show that
another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with year 5, to amortize the remaining cost of
the patent over two remaining years, giving the patent a total useful life of six
years. Record amortization for year 5.

P9-28A Capitalized asset cost and first year depreciation, and identifying
depreciation results that meet management objectives [30–40 min]

On January 3, 2012, Trusty Delivery Service purchased a truck at a cost of $90,000.
Before placing the truck in service, Trusty spent $3,000 painting it, $1,500 replacing
tires, and $4,500 overhauling the engine. The truck should remain in service for
five years and have a residual value of $9,000.

The truck’s annual mileage is expected
to be 22,500 miles in each of the first four years and 10,000 miles in the fifth year—
100,000 miles in total. In deciding which depreciation method to use, Mikail
Johnson, the general manager, requests a depreciation schedule for each of the depreciation
methods (straight-line, units-of-production, and double-declining-balance).

Requirements

1. Prepare a depreciation schedule for each depreciation method, showing asset
cost, depreciation expense, accumulated depreciation, and asset book value.

2. Trusty prepares financial statements using the depreciation method that reports
the highest net income in the early years of asset use. For income tax purposes,
the company uses the depreciation method that minimizes income taxes in the
early years. Consider the first year that Trusty uses the truck. Identify the depreciation
methods that meet the general manager’s objectives, assuming the income
tax authorities permit the use of any of the methods.

P10-15A Journalizing liability transactions [30–40 min]
The following transactions of Denver Pharmacies occurred during 2011 and 2012:

Purchased computer equipment at a cost of $9,000, signing a six-month,
6% note payable for that amount.

Recorded the week’s sales of $64,000, three-fourths on credit, and
one-fourth for cash. Sales amounts are subject to a 6% state sales tax.
Sent the last week’s sales tax to the state.

Borrowed $204,000 on a four-year, 10% note payable that calls for $51,000
annual installment payments plus interest. Record the current and
long-term portions of the note payable in two separate accounts.
Paid the six-month, 6% note, plus interest, at maturity.

Purchased inventory for $12,000, signing a six-month, 9% note payable.
Accrued warranty expense, which is estimated at 2% of sales of $603,000.
Accrued interest on all outstanding notes payable. Make a separate
interest accrual for each note payable.

Paid the first installment and interest for one year on the four-year note
payable.  Paid off the 9% note plus interest at maturity.

Requirement
1. Journalize the transactions in Denver’s general journal. Explanations are not
required.

P10-18A Computing and journalizing payroll amounts [25–35 min]
Louis Welch is general manager of United Tanning Salons. During 2012, Welch
worked for the company all year at a $6,200 monthly salary. He also earned a yearend
bonus equal to 10% of his salary.

Welch’s federal income tax withheld during 2012 was $850 per month, plus $924
on his bonus check. State income tax withheld came to $70 per month, plus $40 on the
bonus. The FICA tax withheld was 7.65% of the first $106,800 in annual earnings.
Welch authorized the following payroll deductions: Charity Fund contribution of 1%
of total earnings and life insurance of $5 per month.

United incurred payroll tax expense on Welch for FICA tax of 7.65% of the first
$106,800 in annual earnings. The company also paid state unemployment tax of 5.4%
and federal unemployment tax of 0.8% on the first $7,000 in annual earnings. In addition,
United provides Welch with health insurance at a cost of $150 per month. During
2012, United paid $4,000 into Welch’s retirement plan.

Requirements

1. Compute Welch’s gross pay, payroll deductions, and net pay for the full year
2012. Round all amounts to the nearest dollar.

2. Compute United’s total 2012 payroll expense for Welch.

3. Make the journal entry to record United’s expense for Welch’s total earnings for
the year, his payroll deductions, and net pay. Debit Salary expense and Bonus
expense as appropriate. Credit liability accounts for the payroll deductions and
Cash for net pay. An explanation is not required.

Ashford ACC205 WEEK 4 P7-27A P7-31A P8-26A P8-27A P8-32A

Price: $18.99


Textbook: Accounting 9e Horngren
Week Four Problems.

a. Chapter 7, P 7-27A (Dunlap Insurance)
b. Chapter 7, P 7-31A
c. Chapter 8, P8-26A
d. Chapter 8, P8-27A (Mountain Terrace Medical Center)
e. Chapter 8, P8-32A


P7-27A Preparing a bank reconciliation and journal entries [20–25 min]
The December cash records of Dunlap Insurance follow

Date Cash Debit Chech No. Cash Credit
4-Dec $4,170 1416 $860
9 510 1417 130
14 530 1418 650
17 2,180 1419 1,490
31 1,850 1420 1,440
1421 900
1422 630

Additional data for the bank reconciliation follows:
The EFT credit was a receipt of rent. The EFT debit was an insurance payment.
The NSF check was received from a customer.
The $1,400 bank collection was for a note receivable.
The correct amount of check 1419 for rent expense is $1,940. Dunlap’s controller
mistakenly recorded the check for $1,490.

Requirements
1. Prepare the bank reconciliation of Dunlap Insurance at December 31, 2012.
2. Journalize any required entries from the bank reconciliation.

P7-31A Accounting for petty cash transactions [20–30 min]

Suppose that on June 1, Rockin’ Gyrations, a disc jockey service, creates a petty cash
fund with an imprest balance of $500. During June, Michael Martell, fund custodian,
signs the following petty cash tickets

On June 30, prior to replenishment, the fund contains these tickets plus cash of
$325. The accounts affected by petty cash payments are Office supplies expense,
Entertainment expense, and Postage expense.

Requirements

1. On June 30, how much cash should this petty cash fund hold before it is
replenished?

2. Journalize all required entries to (a) create the fund and (b) replenish it. Include
explanations.

3. Make the entry on July 1 to increase the fund balance to $550. Include
an explanation.

P8-26A Accounting for uncollectible accounts using the allowance and
direct write-off methods, and reporting receivables on the balance sheet
[20–30 min]

On August 31, 2012, Daisy Floral Supply had a $155,000 debit balance in Accounts
receivable and a $6,200 credit balance in Allowance for uncollectible accounts.
During September, Daisy made
2 3 6
sales on account, $590,000.
collections on account, $627,000.
write-offs of uncollectible receivables, $7,000

Requirements
1. Journalize all September entries using the allowance method. Uncollectible
account expense was estimated at 3% of credit sales. Show all September activity
in Accounts receivable, Allowance for uncollectible accounts, and
Uncollectible account expense (post to these T-accounts).

2. Using the same facts, assume instead that Daisy used the direct write-off method
to account for uncollectible receivables. Journalize all September entries using
the direct write-off method. Post to Accounts receivable and Uncollectible
account expense and show their balances at September 30, 2012.

3. What amount of uncollectible account expense would Daisy report on its
September income statement under each of the two methods? Which amount
better matches expense with revenue? Give your reason.

4. What amount of net accounts receivable would Daisy report on its September 30,
2012 balance sheet under each of the two methods? Which amount is more realistic?
Give your reason.

P8-27A Accounting for uncollectible accounts using the allowance method,
and reporting receivables on the balance sheet [25–35 min]

At September 30, 2012, the accounts of Mountain Terrace Medical Center (MTMC)
include the following:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . .145,000
Allowance for uncollectible accounts (credit balance) . . .3,500

Requirements

1. Journalize the transactions.

2. Open the Allowance for uncollectible accounts T-account, and post entries
affecting that account. Keep a running balance.

3. Show how Mountain Terrace Medical Center should report net accounts receivable
on its December 31, 2012 balance sheet. Use the three line reporting format.

P8-32AUsing ratio data to evaluate a company's financial position.

The comparative financial statements of Lakeland Cosmetic Supply for 2012, 2011,
and 2010 include the data shown here:
2012 2011 2010
Balance sheet-partial
Current assets:
Cash ................................................. $ 90,000 $ 70,000 $ 30,000
Short-term investments ....................... 145,000 175,000 125,000
Receivables, net ……………………………………. 290,000 260,000 250,000
Inventories……………………………………………. 370,000 335,000 325,000
Prepaid expenses…………………………………… 60,000 15,000 50,000
________ ________ ________

Total current assets ........................... $ 955,000 $ 855,000 $ 780,000
Total current liabilities…………………………. $ 560,000 $ 600,000 $ 690,000

Income statement-partial
Sales revenue (all on account) ............ $5,860,000 $5,140,000 $4,200,000

Requirements:

1. Compute these ratios for 2012 and 2011:
a. Acid-test ratio
b. Days' sales in receivables
c. Accounts receivable turnover

2. Considering each ratio individually, which ratios improved from 2011 to 2012 and
which ratios deteriorated? Is the trend favorable or unfavorable for the company?

ASHFORD ACC205 WEEK 3 E5-16 P5-29A E6-23 E6-28

Price: $16.99


Week Three Problems
a. Chapter 5, E5-16
b. Chapter 5, P5-29A
c. Chapter 6, E 6-23
d. Chapter 6, E 6-28


E5-16 Computing inventory and cost of goods sold amounts [10–15 min]

Consider the following incomplete table of merchandiser’s profit data:
Sales Sales Net Cost of Gross profit
discounts sales goods sold
$89,500 $1,560 $87,940 $60,200 (a)
103,600 (b) 99,220 (c) $34,020
66,200 2,000 (d) 40,500 (e)
(f) 2,980 (g) 75,800 36,720
Requirement
1. Calculate the missing table values to complete the table.

P5-29A Journalizing purchase and sale transactions—perpetual inventory
[20–25 min]

Thelma’s Amusements completed the following transactions during November 2012:

1-Nov Purchased supplies for cash, $700.

4 Purchased inventory on credit terms of 3/10, n/eom, $9,600.

8 Returned half the inventory purchased on November 4. It was not the inventory ordered.

10 Sold goods for cash, $1,200 (cost, $700).

13 Sold inventory on credit terms of 2/15, n/45, $9,900 (cost, $5,300).

14 Paid the amount owed on account from November 4, less the return (November 8) and the discount.

17 Received defective inventory as a sales return from the November 13 sale, $600. Thelma’s cost of the
inventory received was $450.

18 Purchased inventory of $4,100 on account. Payment terms were 2/10, net 30.

26 Paid the net amount owed for the November 18 purchase.

28 Received cash in full settlement of the account from the customer who purchased inventory on
November 13, less the return and the discount.

29 Purchased inventory for cash, $12,000, plus freight charges of $20

Requirement
1. Journalize the transactions on the books of Thelma’s Amusements

E6-23 Comparing cost of goods sold in a perpetual system—FIFO, LIFO, and
average-cost methods [15–20 min]

Assume that a JR Tire Store completed the following perpetual inventory transactions
for a line of tires:
Beginning inventory . . . . . . 16 tires @ $65
Purchase . . . . . . . . . . . . . . . 10 tires @ $78
Sale . . . . . . . . . . . . . . . . . . 12 tires @ $90

Requirements

1. Compute cost of goods sold and gross profit using FIFO.

2. Compute cost of goods sold and gross profit using LIFO.

3. Compute cost of goods sold and gross profit using average-cost. (Round average
cost per unit to the nearest cent and all other amounts to the nearest dollar.)

4. Which method results in the largest gross profit and why?

E6-28 Estimating ending inventory by the gross profit method [10–15 min]
Deluxe Auto Parts holds inventory all over the world. Assume that the records for
one auto part show the following:

Beginning inventory . . . . . . $220,000
Net purchases . . . . . . . . . . . 800,000
Net sales . . . . . . . . . . . . . . . 1,100,000
Gross profit rate . . . . . . . . . 45%

Suppose this inventory, stored in the United States, was lost in a fire.

Requirement

1. Estimate the amount of the loss to Deluxe Auto Parts. Use the gross profit
method.

ASHFORD ACC205 WEEK 2 P3-32A P3-33A E4-21 P4-25A

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 Week 2 problems
a. Chapter 3, P3-32A
b. Chapter 3, P3-33A
c. Chapter 4, E4-21
d. Chapter 4, P4-25A

P3-32A Journalizing adjusting entries [15–25 min]
Laughter Landscaping has the following independent cases at the end of the year on
December 31, 2014.

a. Each Friday, Laughter pays employees for the current week’s work. The amount of the
weekly payroll is $7,000 for a five-day workweek. This year December 31 falls on a
Wednesday.

b. Details of Prepaid insurance are shown in the account:
Jan 1 $4,500 Prepaid insurance Laughter prepays a full year’s insurance each year on January 1. Record insurance expense for the year ended December 31.

c. The beginning balance of Supplies was $4,000. During the year, Laughter purchased
supplies for $5,200, and at December 31 the supplies on hand total $2,400.

d. Laughter designed a landscape plan, and the client paid Laughter $7,000 at the start of
the project. Laughter recorded this amount as Unearned service revenue. The job will
take several months to complete, and Laughter estimates that the company has earned
60% of the total revenue during the current year.

e. Depreciation for the current year includes Equipment, $3,700; and Trucks, $1,300.
Make a compound entry.

Requirement

1. Journalize the adjusting entry needed on December 31, 2014, for each of the previous
items affecting Laughter Landscaping.

P3-33A Analyzing and journalizing adjustments [15–20 min]

Galant Theater Production Company unadjusted and adjusted trial balances at
December 31, 2012, follow.

GALANT THEATER PRODUCTION COMPANY
Adjusted Trial Balance
31-Dec-12

Account Debit Credit Debit Credit
Cash $3,900 $3,900
Accounts receivable 6,100 6,900
Supplies 1,700 300
Prepaid insurance 2,700 2,100
Equipment 25,000 25,000
Accumulated depreciation $8,800 $13,200
Accounts payable 4,000 4,000
Salary payable 300
Common stock 16,000 16,000
Retained earnings 4,300 4,300
Dividends 30,500 30,500
Service revenue 71,000 71,800
Depreciation expense 4,400
Supplies expense 1,400
Utilities expense 4,700 4,700
Salary expense 29,500 29,800
Insurance expense 600
Total $104,100 $104,100 $109,600 $109,600

Requirement

1. Journalize the adjusting entries that account for the differences between the two
trial balances.

E4-21 Identifying and journalizing closing entries [10-15 min]
The accountant for Klein Photography has posted adjusting entries (a)–(e) to the following
selected accounts at December 31, 2012.
Requirements
1. Journalize Klein Photography’s closing entries at December 31, 2012.
2. Determine Klein Photography’s ending Retained earnings balance at
December 31, 2012.

P4-25A Preparing a worksheet, financial statements, and closing entries
[50-60 min]

The trial balance of Fugazy Investment Advisers, Inc., at December 31, 2012, follows:
FUGAZY INVESTMENT ADVISERS, INC.
Trial Balance
31-Dec-12

Account Debit Credit
Cash $32,000
Accounts receivable 46,000
Supplies 3,000
Equipment 25,000
Accumulated depreciation $11,000
Accounts payable 15,000
Salary payable
Unearned service revenue 2,000
Note payable, long-term 39,000
Common stock 17,600
Retained earnings 20,400
Dividends 50,000
Service revenue 97,000
Salary expense 32,000
Supplies expense
Depreciation expense
Interest expense 3,000
Rent expense 9,000
Insurance expense 2,000
Total $202,000 $202,000

Requirements

1. Enter the account data in the Trial Balance columns of a worksheet, and complete
the worksheet through the Adjusted Trial Balance. Key each adjusting entry
by the letter corresponding to the data given. Leave a blank line under Service
revenue.

2. Prepare the income statement, the statement of retained earnings, and the classified
balance sheet in account format.

3. Prepare closing journal entries from the worksheet.

4. Did the company have a good or a bad year during 2012? Give the reason for
your answer.

Ashford ACC205 WEEK 1 E1-21 P1-48 P2-30A P2-53B

Price: $16.99


 WEEK 1 PROBLEMS

a. Chapter 1, E1-21
b. Chapter 1, P1-48
c. Chapter 2, P2-30A
d. Chapter 2, P2-53B

E1-21 Using the accounting equation to analyze transactions [10–20 min]
Caren Smith opened a medical practice. During July, the first month of operation,
the business, titled Caren Smith, M.D., P.C. (Professional Corporation), experienced
the following events:

july 6 Smith invested $55,000 in the business by opening a bank account in the name
of C. Smith, M.D., P.C. The corporation issued common stock to Smith.

9 Paid $46,000 cash for land.

12 Purchased medical supplies for $1,800 on account.

15 Officially opened for business.

15-31 During the rest of the month, Smith treated patients and earned service
revenue of $8,000, receiving cash.
29 Paid cash expenses: employees’ salaries, $1,600; office rent, $900;
utilities, $100.

30 Returned supplies purchased on the 12th for the cost of those supplies, $700.

31 Paid $1,100 on account.

Requirement
1. Analyze the effects of these events on the accounting equation of the medical
practice of Caren Smith, M.D., P.C. Use a format similar to that of Exhibit 1-6,
with headings for Cash, Medical supplies, Land, Accounts payable, Common
stock, and Retained earnings.

P1-48 Analyzing transactions and preparing financial statements [20–25 min]
Draper Consulting, Inc., began operations and completed the following transactions
during the first half of December:

Dec 2 Received $18,000 cash and issued 100 shares of no-par common stock.

2 Paid monthly office rent, $550.

3 Paid cash for a Dell computer, $1,800. This equipment is expected to
remain in service for five years.

4 Purchased office furniture on account, $4,200. The furniture should last for five years.

5 Purchased supplies on account, $900.

9 Performed consulting service for a client on account, $1,500.

12 Paid utility expenses, $250.

18 Performed service for a client and received cash of $1,100.

P2-30A Journalizing transactions, posting to T-accounts, and preparing a
trial balance [45–60 min]

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:

Sep. 1 Received $42,000 cash and issued common stock.

4. Purchased supplies, $700, and furniture, $1,900, on
account.

6. Performed services for a law firm and received $1,400
cash.

7. Paid $24,000 cash to acquire land for a future office site.

10. Performed service for a hotel and received its promise to
pay the $1,000 within one week.

14. Paid for the furniture purchased September 4 on account.

15. Paid secretary’s bi-monthly salary, $490.

17. Received cash on account, $400.

20. Prepared a design for a school on account, $700.

28. Received $2,100 cash for consulting with Plummer &
Gorden.

30. Paid secretary’s bi-monthly salary, $490.

30. Paid rent expense, $650.

30. Paid cash dividends of $3,000.

Requirements

1. Open the following T-accounts: Cash, Accounts receivable, Supplies, Furniture,
Land, Accounts payable, Common stock, Dividends, 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, P.C., at September 30, 2012.

P2-53B Correcting errors in a trial balance [15–25 min]
The trial balance for Treasure Hunt Exploration Company does not balance.

Treasure Hunt Exploration Company
Trial Balance
31-Jul-12
Cash $6,600
Accounts receivable 9,000
Supplies 200
Exploration equipment 22,600
Computers 46,000
Accounts payable $2,900
Note payable 18,900
Common stock 50,100
Dividends 1,000 4,900
Service revenue
Salary expense 1,800
Rent expense 100
Advertising expense 100
Utilities expense 700
Total $88,100 $76,800

The following errors were detected:

The cash balance is overstated by $1,000.

Rent expense of $300 was erroneously posted as a credit rather than a debit.

A $6,000 credit to Service revenue was not posted.

A $500 debit to Accounts receivable was posted as $50.

The balance of Utilities expense is understated by $90.

A $600 purchase of supplies on account was neither journalized nor posted.
Exploration equipment should be $17,160.

Requirement

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

Ashford Acc206 week 3 quiz

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ACC206 Week 3 Quiz

1. At the beginning of 2011, the Taylor Company's work in process inventory account had a balance of $30,000. During 2011, $68,000 of direct materials were used in production, and $66,000 of direct labor costs were incurred. Manufacturing overhead in 2011 amounted to $90,000. The cost of goods manufactured was $220,000 in 2011. What is the balance in work in process inventory on December 31, 2011? (Points : 1)
$24,000
$66,000
$ 6,000
$34,000
None of these is correct
2. All manufacturing overhead costs incurred are accumulated as debits to a general ledger account titled Manufacturing overhead. (Points : 1)
True
False
3. The following information pertains to Bright Toy Company's operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012.
Purchases
$ 126,000
Selling and Administrative Expenses
90,000
Merchandise inventory, 1/1/2012
14,000
Merchandise inventory, 12/31/2012
10,000
Sales Revenue
250,000

What is the cost of goods available for sale for 2012? (Points : 1)
$140,000
$126,000
$104,000
$130,000
None of these is correct
4. The journal entry to issue $500 of direct materials and $30 of indirect materials to production includes which of the following? (Points : 1)
Debit to Work in process for $500 and debit to Finished goods for $30
Debit to Manufacturing overhead for $530
Debit to Work in process for $500 and debit to Manufacturing overhead for $30
Debit to Work in process inventory for $530
5. The following information pertains to Bright Toy Company's operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012.


Purchases
$ 126,000
Selling and Administrative Expenses
90,000
Merchandise inventory, 1/1/2012
14,000
Merchandise inventory, 12/31/2012
10,000
Sales Revenue
250,000

What is the gross profit for 2012? (Points : 1)
$120,000
$130,000
$140,000
$136,000
None of these is correct
6. In a manufacturing operation, depreciation of the plant and plant equipment should be debited to Depreciation expense. (Points : 1)
True
False
7. The following information pertains to Bright Toy Company's operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012.
Purchases
$ 126,000
Selling and Administrative Expenses
90,000
Merchandise inventory, 1/1/2012
14,000
Merchandise inventory, 12/31/2012
10,000
Sales Revenue
250,000

What is the cost of goods sold for 2012? (Points : 1)
$104,000
$124,000
$130,000
$140,000
None of these is correct
8. Archangel Manufacturing has just finished the year 2012. They created a predetermined manufacturing overhead allocation rate at the beginning of the year based on a percentage of direct labor costs. Below are various data:

Total manufacturing overhead estimated at the beginning of the year: $140,000
Total direct labor costs estimated at the beginning of the year: $350,000
Total direct labor hours estimated at the beginning of the year: 12,000 direct labor hours
Actual manufacturing overhead costs for the year: $159,000
Actual direct labor costs for the year: $362,000
Actual direct labor hours for the year: 12,400 direct labor hours

Based on the data above, how much manufacturing overhead was allocated to production? (Please round to nearest whole dollar.) (Points : 1)
$825,360
$905,000
$144,800
$159,280
None of these is correct
9. Selected data for Young Company for 2012 is presented below:
Direct labor incurred
$30,000
Indirect labor incurred
21,000
Factory depreciation
5,000
Factory utilities
7,000
Indirect materials used
2,000
Direct materials used
12,000
Property taxes on factory building
3,000
Sales commissions
8,000

What is the manufacturing overhead? (Points : 1)
$47,000
$50,000
$38,000
$46,000
None of these is correct
10. Indirect materials and indirect labor are tracked to individual job costing records and recorded in the Work in process account. (Points : 1)
True
False

Ashford Acc206 week 2 quiz

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ACC 206 Week 2 Quiz

1. A company reports total assets of $525,000 and stockholders' equity of $395,000. Which of the following is the debt ratio? (Points : 1)
0.29
0.71
0.55
0.25
None of these is correct
2. Which of the following is NOT a true statement about the statement of cash flows? (Points : 1)
It shows where cash came from and how it was spent.
It reports why cash increased or decreased.
It covers a specific span of time the same as the income statement.
It shows how the profits or losses of the company were generated.
3. A company reports net income of $70,000 and net sales of $950,000. Which of the following is the rate of return on net sales? (Points : 1)
0.05
0.20
0.07
0.66
None of these is correct

4. Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following section of the comparative balance sheet:



2014
2013
Increase/decrease
Cash
$ 33,000
$ 18,000
$15,000
Accounts receivable
22,000
35,000
(13,000)
Inventory
170,000
115,000
55,000
Total assets
$225,000
$168,000
$57,000


The change in inventory will be shown as a positive cash flow in the adjustments to Net income. (Points : 1)
True
False

5. The statement of cash flows explains the difference between net income and the change in cash balance. (Points : 1)
True
False

6. The investing activities section of the statement of cash flows reflects the cash flows that increase or decrease long-term assets. (Points : 1)
True
False

7. Peartree Company provides the following income statement for the year 2014:


Sales revenue
$240,000

Cost of goods sold
110,000

Gross profit

$130,000
Operating expenses


Salary expense
45,000

Depreciation expense
12,000

Other operating expenses
23,000

Total operating expenses

80,000
Operating income

50,000
Gain on sale of plant assets

5,000
Interest expense

(1,000)
Net income before income tax

$54,000
Income tax expense

5,000
Net income (loss)

$49,000



How much is the times-interest-earned ratio? (Points : 1)
0.02
49.0
50.0
0.25
None of these is correct

8. Peartree Company provides the following data:


BALANCE SHEET
Dec 31, 2014
Dec 31, 2013
Cash
$ 21,000
$ 18,000
Accounts receivable, net
31,000
35,000
Inventory
53,000
25,000
PP&E, net
120,000
90,000
Total assets
$225,000
$168,000



Accounts payable
$4,000
$ 6,000
Accrued liabilities
2,000
1,000
Long-term notes payable
84,000
90,000
Total liabilities
$ 90,000
$ 97,000



Common stock
$ 30,000
$ 2,000
Retained earnings
113,000
74,000
Treasury stock
(8,000)
(5,000)
Total stockholders’ equity
$135,000
$71,000
Total liabilities and stockholders’
equity
$225,000
$168,000



How much is the current ratio at year-end 2014? (Points : 1)
17.5
16.1
3.5
0.5
None of these is correct

9. The net income for the year ended was $300,000. The company has no preferred stock. Common stockholders’ equity was $1,400,000 at the beginning of the year and $1,600,000 at the end of the year. The return on common stockholders’ equity would be: (Points : 1)
18.75%.
20.00%.
21.43%.


87.5%
None of these is correct.

10. Zebra, Inc. has Cost of goods sold for the year of $1,900,000. The average inventory for the year is $129,000. The inventory turnover for the year is: (Points : 1)
0.1.
14.7.
33.8.
65.5.
None of these is correct

Ashford ACC206 Week1 Quiz

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1. Which of the following describes the term outstanding stock? (Points : 1)
The shares of stock that are held by the stockholders
The shares of stock that have been sold for the highest price
The total amount of stock that has been authorized by state law
The total amount of stock that has not been sold yet

2. Please refer to the following information for Petra Sales Company:

Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
Paid-in capital in excess of par: $1,600,000
Retained earnings: $2,440,000
Treasury stock: 20,000 shares purchased at $12 per share

If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, the total equity of the company will go down by $70,000. (Points : 1)
True
False

3. Which of the following statements is TRUE? (Points : 1)
The purchase of treasury stock decreases assets and decreases stockholders' equity.
The purchase of treasury stock increases assets and increases stockholders' equity.
The purchase of treasury stock increases assets and decreases stockholders' equity.
The purchase of treasury stock decreases assets and increases stockholders' equity.

4. Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of 40,000. What is the amount of dividend which will be paid for each share of common stock? (Points : 1)
$ 0.80 (40,000 - [($100 °— 4%) °— $2000] = $32,000 ……. $32,000/$40,000 = $0.80
$400.00
$ 4.00
$ 1.00
None of these is correct

5. The two basic sources of equity are: (Points : 1)
common stock and bonds.
common stock and preferred stock.
paid-in capital and retained earnings.
loans from banks and gifts from donors.

6. Cash dividends affect only stockholders' equity accounts. (Points : 1)
True
False

7. If a company does not have enough cash to pay out regular dividends, but still wishes to give the shareholders something that they would consider of value, the company should consider doing a stock split. (Points : 1)
True
False

8. If preferred stock is non-cumulative, then the company does NOT need to pay dividends that were passed in previous years. (Points : 1)
True
False

9. On March 1, 2013, Parkinson Company originally issued 10,000 shares of common stock at $4.00 per share. The stock had a par value of $0.01 per share. On March 1, 2012, Parkinson distributed a 12% stock dividend; the market price at that time had dropped to $3.75 per share. Parkinson must record a loss of $300. (Points : 1)
True
False

10. Treasury stock is a corporation's own stock that it has issued and later reacquired. (Points : 1)
True
False

ASHFORD ACC206 WEEK 4 E19-19 P19-24A

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E19-19
Impact on breakeven point if sale price, variable costs, and fixed costs Change
Dependable Drivers Driving School charges $250 per student to prepare and administer
written and driving tests. Variable costs of $100 per student include trainers' wages, study materials, and gasoline. Annual fixed costs of $75,000 include the training facility and fleet of cars.
Requirements:
I. For each of the following independent situations, calculate the contribution margin
per unit and the breakeven point in units by first referring to the original data
provided:
a. Breakeven point with no change in information.
b. Decrease sales price to $220 per student.
c. Decrease variable costs to $50 per student.
d. Decrease fixed costs to $60,000.
II. Compare the impact of changes in the sales price, variable costs, and fixed costs
on the contribution margin per unit and the breakeven point in units.

P19-24A
Analyzing CVP relationships
Kincaid Company sells flags with team logos. Kincaid has fixed cost of $583,200
per year plus variable costs of $4.80 per flag. Each flag sells for $12.00
Requirements
1. Use the income statement equation approach to compute the number of flags
Kincaid must sell each year to break even.
2. Use the contribution margin ratio CVP formula to compute the dollar sales
Kincaid needs to earn $33,000 in operating income for 2012. (Round the contribution margin to two decimal places.)
3. Prepare Kincaid's contribution margin income statement for the year December 31, 2012, for sales of 72,000 flags. Cost of goods sold is 70% of variable cost. Operating costs make up the rest of variable costs and all of fixed cost. (Round your final answers to the nearest whole number.)
4. The company is considering an expansion that will increase fixed costs by 21% and variable costs by $0.60 per flag. Compute the new breakeven point in units
and in dollars. Should Kincaid undertake the expansion? Give your reasoning. Round your final answers to the nearest whole number.

ASHFORD ACC206 WEEK 2 E14-13 P14-25A E15-18 P15-26A

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E14-13
Classifying items on the indirect statement of cash flows
The cash flow statement categorizes like transactions for optimal reporting.
Requirement:
1. Identify each of the following transactions as one of the following:
• Operating activity (0)
• Investing activity (I)
• Financing activity (F)
• Noncash investing and financing activity (NIF)
• Transaction that is not reported on the statement of cash flows (N)
For each cash flow, indicate whether the item increases (+) or decreases (-) cash.
The indirect method is used to report cash flows from operating activities.

___ a. Loss on sale of land.
___ b. Acquisition of equipment by issuance of note payable.
___ c. Payment of long-term debt.
___ d. Acquisition of building by issuance of common stock. J
___ e. Increase in salary payable.
___ f. Decrease in inventory.
___ g. Increase in prepaid expenses.
___ h. Decrease in accrued liabilities.
___ i. Cash sale of land.
___ j. Issuance of long-term note payable to borrow cash.
___ k. Depreciation
___ 1. Purchase of treasury stock.
___ m. Issuance of common stock.
___ n. Increase in accounts payable.
___ o. Net income.
___ p. Payment of cash dividend.

P14-25A
Preparing the statement of cash flows-indirect method
Accountants for Johnson, Inc., have assembled the following data for the year ended
December 31, 2012:
Requirement:
Prepare Johnson's statement of cash flows using the indirect method. Include an accompanying schedule of noncash investing and financing activities.

E15-18
Analyzing the ability to pay liabilities
Large Land Photo Shop has asked you to determine whether the company's ability to
Pay current liabilities and total liabilities improved or deteriorated during 2012. To
Answer this question, you gather the following data:
2012 2011
Cash ……………………………………………………………………………………………… $ 58,000 $ 57,000
Short-term investments ……………………………………………………………... 31,000 ---
Net receivables ……………………………………………………………………………. 110,000 132,000
Inventory …………………………………………………………………………………….. 247,000 297,000
Total assets ………………………………………………………………………………….. 585,000 535,000
Total current liabilities ………………………………………………………………... 255,000 222,000
Long-term note payable ………………………………………………………………. 46,000 48,000
Income from operations ……………………………………………………………... 180,000 153,000
Interest expense …………………………………………………………………………. 52,000 39,000
Requirements:
Compute the following ratios for 2012 and 2011:
a. Current ratio
b. Acid-test ratio
c. Debt ratio
d. Debt to equity ratio

P15-26A
Using ratios to evaluate a stock investment
Comparative financial statement data of Danfield, Inc., follow:
DANFIELD, INC.
Comparative Income Statement
Years Ended December 31, 2012 and 2011
2012 2011
Requirements:
1. Compute the following ratios for 2012 and 2011:
a. Current ratio
b. Times-interest-earned ratio
c. Inventory turnover
d. Gross profit percentage
e. Debt to equity ratio
f. Rate of return on common stockholders' equity
g. Earnings per share of common stock
h. Price/earnings ratio
Decide (a) whether of Danfield's ability to pay debts and to sell inventory improved or deteriorated during 2012 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.

ASHFORD ACC206 WEEK 1 P12-30A P12-32A P13-24A P13-25A

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  • Chapter 12, P 12-30A
  • Chapter 12, P 12-32A
  • Chapter 13, P 13-24A
  • Chapter 13, P 13-25A 
P12-30A
Issuing stock and preparing the stockholders' equity section of the
balance sheet

Lincoln-Priest, Inc., was organized in 2011. At December 31, 2011, the Lincoln-
Priest balance sheet reported the following stockholders' equity:

LINCOLN-PRIEST, INC.
Stockholders' Equity
December 31,2011
Paid-in Capital:
Preferred stock, 7%, $40 par, 110,000 shares authorized, none issued $0
Common stock, $1 par, 520,000 shares authorized, 61,000 shares issued and outstanding
………………………………………………………………………. $61,000
Paid-in capital in excess of par—common $41,000
Total paid-in capital $102,000
Retained earnings $29,000
Total stockholders' equity………………………………. $131,000

Requirements

1. During 2012, the company completed the following transactions. Journalize each transaction. Explanations are not required.

a. Issued for cash 1,300 shares of preferred stock at par value.

b. Issued for cash 2,400 shares of common stock a a price of $5 per share.

c. Net income for the year was $74,000, and the company declared no dividends. Make
the closing entry for net income.

2. Prepare the stockholders' equity section of the Lincoln-Priest
December 31, 2012.

P12-32A
Computing dividends on preferred and common stock.

Fashionista Skincare has 10,000 shares of 3%, $20 par value preferred stock and 90,000 shares $2 par common stock outstanding. During a three-year period, Fashionista declared and paid cash dividends as follows: 2010, $3,000; 2011, $13,000; and 2012, $17,000.

Requirements:
Compute the total dividends to preferred and to common for each of the three years if

a. preferred is noncumulative.

b. referred is cumulative,

For requirement 1.b., journalize the declaration of the 2012 dividends on December 22, 2012, and payment on January 14,2013. Use separate Dividends payable accounts for preferred and common.

P13-24A
Journalizing stockholders' equity transactions

Summerborn Manufacturing, Co., completed the following transactions during 2012.
Jan 16 - Declared a cash dividend on the 5%, $100 par preferred stock
(900 shares outstanding). Declared a $0.30 per share dividend on the
80,000 shares of common stock outstanding. The date of record is January 31, ,
and the payment due date is February 15.

Feb 15 - Paid the cash dividends.

Jun 10 - Split common stock 2 for 1. Before the split, Summerborn had 80,000 shares
of $6 par common stock outstanding.

Jul 30 - Distributed a 50% stock dividend on the common stock. The market value
of the common stock was $9 per share.

Oct 26 - Purchased 1,000 shares of treasury stock at $13 per share.

Nov 8 - Sold 500 shares of treasury stock for $15 per share.

Nov30 - Sold 300 shares of treasury stock for $8 per share,

Requirement
1. Record the transactions in Surnmerborn's general journal.

P13-25A

Journalizing dividend and treasury stock transactions, and preparing stockholders' equity
The balance sheet of Lennox Health Foods, at December 31, 2011 reported 120,000 shares of no-par common stock authorized, with 25,000 shares issued and a Common stock balance of $190,000. Retained earnings had a balance of $115,000. During 2012, the company completed the following selected transactions:

Mar 15 - Purchased 9,000 shares of treasury stock at $8 per share.

Apr 30 - Distributed a 10% stock dividend on the outstanding shares of common stock.
The market value of common stock was $9 per share.

Dec 31 - Earned net income of $110,000 during the year. Closed net income to Retained

Requirements:

Record the transactions in the general journal. Explanations are not required.

Prepare the stockholders' equity section of Lennox Health Foods' balance sheet at December 31, 2012.

ASHFORD ACC206 WEEK 3 E16-18 E16-20 P17-32B

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E16-18 Preparing an income statement and computing the unit cost for a
merchandising company
Snyder Brush Company sells standard hair brushes. The following information summarizes
Snyder's operating activities for 2012:
Selling and administrative expenses …………………………………… $ 49,680
Purchases …………………………………………………………………………….. 78,000
Sales revenue ………………………………………………………………………. 138,000
Merchandise inventory, January 1,2012 …………………………….. 7,500
Merchandise inventory, December 31, 2012 ……………………… 12,360
Requirements:
1. Prepare an income statement for 2012. Compute the ratio of operation expense to total revenue and operating income to total revenue.
2. Snyder sold 6,000 brushes in 2012. Compute the unit cost for one brush

E16-20
Preparing a statement of cost of goods manufactured
Knight, Corp., a lamp manufacturer, provided the following information for the year ended December 31, 2012:
Inventories: Beginning Ending
Materials $ 56,000 $23,000
Work in process 103,000 63,000
Finished goods 41,000 48,000
Other information:
Depreciation: plant building & equipment $16,000 Repairs & maint-plant $8,000
Materials purchases 159,000 Indirect labor $32,000
Insurance on plant 22,000 Direct labor 122,000
Sales salaries expense 46,000 Administrative Exp. 59,000
Requirements:
Prepare a schedule of cost of goods manufactured.
What is the unit product cost if Knight manufactured 2,160 lamps for the year?

P17-32B
Preparing and using a job cost record
True Technology, Co., manufactures CDs and DVDs for computer software and
entertainment companies. True Technology uses job order costing and has a perpetual inventory system.
On November 2, True began production of 5,500 DVDs, Job 423, for Leopard pictures for $1.60 sales price per DVD. True promised to deliver the DVD’s to Leopard by November 5. True incurred the following costs:

Date Labor Time Record No. Description Amount
11/2 655 10 hours @ $18 $ 180
11/3 656 20 hours @ $14 280
Materials
Requisition
Date No. Description Amount
11/2 63 311 bs. polycarbonate plastic @ $12 $ 372
11/2 64 25 lbs. acrylic plastic @ $29 725
11/3 74 3 lbs. refined aluminum @ $48 144
Leopard Pictures provides the movie file for True to burn onto the DVDs at a cost of
$0.45 per DVD. True Technology allocates manufacturing overhead to jobs based on
the relation between estimated overhead of $550,000 and estimated direct labor
costs of $500,000. Job 423 was completed and shipped on November 3.
Requirements:
1. Prepare a job cost record similar to Exhibit 17-6 for Job 423. Calculate the predetermined
overhead rate, then allocate manufacturing overhead to the job.
2. Journalize in summary form the requisition of direct materials (including the
movie files) and the assignment of direct labor and manufacturing overhead to
Job 423.
3. Journalize completion of the job and the sale of the 5,500 DVDs.

ASHFORD ACC206 WEEK 3 E16-17 P16-25A P17-26A P17A-11A

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  • Chapter 16, E 16-17
  • Chapter 16, P 16-25A
  • Chapter 17, P 17-26A
  • Chapter 17, P 17A-11A


E16-17
Calculating income and cost per unit for a service company
Fido Grooming provides grooming services in the local community, In April, Kevin
Oliver, the owner, incurred the following operating costs to groom 650 dogs:
Wages …………………………………………………………………… $3,900
Grooming supplies expense …………………………………. 1,625
Building rent expense ………………………………………….. 1,300
Utilities ………………………………………………………………….    325
Depreciation on equipment ..............................    130
Fido Grooming earned $16,300 in revenues from grooming for the month of April.
Requirements:
1. What is Fido's net operating income for April?
2. What is the cost to groom one dog?
P16-25A
Preparing cost of goods manufactured schedule and Income statement for a manufacturing company
Charlie's Pets succeeded so well that Charlie decided to manufacture his own brand
of chewing bone-Fido Treats. At the end of December 2012, his accounting records showed the following:
Inventories:                                      Beginning                               Ending            
Materials                                          $ 13,400                                 $9,500
Work in process                                          0                                    2,000
Finished goods                                            0                                    5,300
Other information: 
Direct material purchases                $ 33,000        Utilities for plant       $1,600     
Plant janitorial services                          800         Rent of plant            13,000
Sales salaries expense                        5,000     Cust.Serv. HotLine Exp   1,400
Delivery expense                                1,700         Direct labor              22,000
Sales revenue                                 109,000
Requirements:
1. Prepare a schedule of cost of goods manufactured for Fido Treats for the year
ended December 31, 2012.
2. Prepare an income statement for Fido Treats  for the year ended December 31, 2012.
3. How does the format of the income statement for Fido Treats differ from the income statement of a merchandiser?
4. Fido Treats manufactured 18,075 units of its product in 2012. Compute the company’s unit product cost for the year.
P17-26A
Preparing and using a job cost record
Lu Technology, Co., manufactures CDs and DVDs for computer software and entertainment companies. Lu uses job order costing and has a perpetual inventory system.
On April 2, Lu began production of 5,900 DVDs, Job 423, for Stick People Pictures for $1.30 sales price per DVD. Lu promised to deliver the DVD’s to Stick People by April 5. Lu incurred the following costs:
Date                     Labor Time Record No.                Description                   Amount
4/2                             655                                 10 hours @ $14               $ 140
4/3                             656                                 20 hours @ $13                  260
      Materials
      Requisition 
Date                   No.                          Description                                       Amount
4/2                     63             31 lbs, polycarbonate plastic @ $11                  $341
4/2                     64             25 lbs. acrylic plastic @ $27                               675
4/3                     74              3 lbs. refined aluminum @ $42                         126
Stick People provides the movie file for Lu to burn onto the DVD’s at a cost of $0.50 per DVD. Lu Technology allocates manufacturing overhead to jobs base on the relation between estimated overhead of $540,000 and estimated direct labor cost of $432,000. Job 423 was completed and shipped on April 3.
Requirements:
1. Prepare a job cost record similar to Exhibit 17-6 for job 423. Calculate the pre-determined overhead rate; then allocate manufacturing overhead to the job.
2. Journalize in summary form the requisition of direct material (including the movie files) and the assignment of direct labor and manufacturing overhead to Job 423.
3. Journalize completion of the job and the sale of the 5,900 DVD’s.
P17A-11A
Computing equivalent units and assigning costs to completed units and
ending work in process; no beginning work in process inventory or cost
transferred in
Amy Electronics makes CD players in three processes: assembly, programming, and
packaging. Direct materials are added at the beginning of the assembly process.
Conversion costs are incurred evenly throughout the process. The assembly Department had no work in process inventory on October 31. In mid-November, Amy Electronics started production on 125,000 CD players. Of this number, 95,800 CD players were assembled during November and transferred out to the Programming Department. The November 30 work in process inventory in the Assembly Department was 25% of the way through the assembly process. Direct materials costing $437,500 were placed in production in Assembly during November, and Direct labor of $200,800 and Manufacturing overhead of $134,275 were assigned to that department.
Requirements:
1. Compute the number of equivalent units and the cost per equivalent unit in the Assembly Department for November.
2. Assign total costs in the Assembly Department to (a) units completed and transferred to Programming during November and (b) units still ill process at November 30.
3. Prepare a T-account for Work in process inventory-Assembly to show its activity during November, including the November 30 balance.