Accounting problem: 1/1 Mony Maker started an antique jewelry store, “ANTIQUE FOREVER’, and invested $40,000 cash in the business. He received 10000 common stock with no par value……TURN IN: 1. Unadjusted trial balance 2. adjusted trial balance 3. income statement 4. statement of retained earnings. 5. balance sheet.

JANUARY

1/1              Mony Maker started  an antique jewelry store,  “ANTIQUE FOREVER’, and invested $40,000 cash in the business.  He received 10000 common stock with no par value.

1/1              He rented  an office space and paid half year rent of $4800.

He leased office furniture at a monthly cost of $500 and this will be paid on the first of the following month.

He hired a clerk with a salary of $1200 per month.  The clerk will be paid on the first of every month.

He purchased a one year liability insurance for $3600

1/5              He purchased office supplies for $500 on account.

He purchased 800 bracelets at a cost of $25.00 on account.

1/6              He purchased 1200 bracelets for $26.50, on account.

1/8              He sold 500 bracelets at a price of $90.00, for credit

1/14           He sold 300 bracelets at a price of $ $90.00 on credit.

1/15           He borrowed $10,000 from a bank signing a three year note payable.  The entire principal and the interest will be paid at the end of three years.  The annual interest rate on this note is 12%.

He purchased computer and peripheral equipments for $4000, by signing a note payable.  The note carries an annual interest rate of 8%.  The note and the interest are due on 5/15.

1/16           he purchased 350 bracelets at $26.50 and all on account.

1/22           sold 600 bracelets for $102 each.  The sales was on cash

1/29           he paid for merchandize purchases.

1/31           He received telephone bill for $300, utility bill for $150.  These will be paid on the tenth of the following month.

1/31           company paid $10,000 cash dividend to Mony Maeker.

  1. The company does adjusting process every month.
    1. Company uses perpetual FIFO.

Other information

  • Computer has a life of 5 years and no salvage value, and will be depreciated under straight line depreciation.
  • On 1/31, supplies on hand, $400
  • Recorded the depreciation for the computers and peripherals
  • Estimated bad debt is 2% of credit sales.
  • Recorded all other necessary adjusting entries

REQUIRED:

  1. Enter all the transactions in T accounts, and with respective dates.
  2. Enter all the necessary adjusting entries and refer them as AE.
  3. Prepare the adjusted Trial Balance in proper form.
  4. Prepare the Income statement in proper form.
  5. Prepare the closing entries
  6. Prepare the balance sheet in proper form.

TURN IN:

  1. Unadjusted trial balance
  2. adjusted trial balance
  3. income statement
  4. statement of retained earnings.
  5. balance sheet.

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ACCT 221  SUMMER 2009

1) 62. Financial statement analysis:
A. Is the application of analytical tools to general-purpose financial statements and related data for making business decisions.
B. Involves transforming accounting data into useful information for decision-making.
C. Helps users to make better decisions.
D. Helps to reduce uncertainty in decision-making.
E. All of these.

2) 63. Evaluation of company performance can include comparison and/or assessment of:
A. Past performance.
B. Current performance.
C. Current financial position.
D. Future performance and risk.
E. All of these.

3) 64. External users of financial information:
A. Are those individuals involved in managing and operating the company.
B. Include internal auditors and consultants.
C. Are not directly involved in operating the company.
D. Make strategic decisions for a company.
E. Make operating decisions for a company.

4) 65. Internal users of financial information:
A. Are not directly involved in operating a company.
B. Are those individuals involved in managing and operating the company.
C. Include shareholders and lenders.
D. Include directors and customers.
E. Include suppliers, regulators, and the press.

5) 66. The building blocks of financial statement analysis include:
A. Liquidity and efficiency.
B. Solvency.
C. Profitability.
D. Market prospects.
E. All of these.


6) 67. Financial reporting refers to:
A. The application of analytical tools to general-purpose financial statements.
B. The communication of relevant financial information to decision makers.
C. Financial statements only.
D. Ratio analysis.
E. Profitability.

7) 68. The ability to meet short-term obligations and to efficiently generate revenues is called:
A. Liquidity and efficiency.
B. Solvency.
C. Profitability.
D. Market prospects.
E. Creditworthiness.

8) 69. The ability to generate future revenues and meet long-term obligations is referred to as:
A. Liquidity and efficiency.
B. Solvency.
C. Profitability.
D. Market prospects.
E. Creditworthiness.

9) 70. The ability to provide financial rewards sufficient to attract and retain financing is called:
A. Liquidity and efficiency.
B. Solvency.
C. Profitability.
D. Market prospects.
E. Creditworthiness.

10) 71. The ability to generate positive market expectations is called:
A. Liquidity and efficiency.
B. Liquidity and solvency.
C. Profitability.
D. Market prospects.
E. Creditworthiness.

11) 72. Standards for comparisons in financial statement analysis include:
A. Intracompany standards.
B. Competitors.
C. Industry standards.
D. Guidelines (Rules-of-Thumb).
E. All of these.


12) 73. Intracompany standards for financial statement analysis:
A. Are often based on a company’s prior performance.
B. Are often set by competitors.
C. Are set by the company’s industry.
D. Are based on rules of thumb.
E. Are published in Dun and Bradstreet.


13) 74. Industry standards for financial statement analysis:
A. Are based on a company’s prior performance.
B. Are set by the government.
C. Are set by the financial performance and condition of the company’s industry.
D. Are based on rules of thumb.
E. Compare a company’s income with the prior year’s income.


14) 75. Guidelines (rules-of-thumb) are developed from:
A. Industry statistics from the government.
B. Past experience.
C. Analysis of competitors.
D. Relations between financial items.
E. Dun and Bradstreet.


15) 76. Three of the most common tools of financial analysis are:
A. Financial reporting, ratio analysis, vertical analysis.
B. Ratio analysis, horizontal analysis, financial reporting.
C. Horizontal analysis, vertical analysis, ratio analysis.
D. Trend analysis, financial reporting, ratio analysis.
E. Vertical analysis, political analysis, horizontal analysis.


16) 77. The comparison of a company’s financial condition and performance across time is known as:
A. Horizontal analysis.
B. Vertical analysis.
C. Political analysis.
D. Financial reporting.
E. Investment analysis.


17) 78. The measurement of key relations among financial statement items is known as:
A. Financial reporting.
B. Horizontal analysis.
C. Investment analysis.
D. Ratio analysis.
E. Risk analysis.

18) 79. The comparison of a company’s financial condition and performance to a base amount is known as:
A. Financial reporting.
B. Horizontal ratios.
C. Investment analysis.
D. Risk analysis.
E. Vertical analysis.

19) 80. A financial statement analysis report usually includes:
A. An executive summary.
B. An analysis overview.
C. Evidential matter.
D. Assumptions.
E. All of these.


20) 81. The background on a company, its industry, and its economic setting is usually included in which of the following sections of a financial statement analysis report:
A. Executive summary.
B. Analysis overview.
C. Evidential conclusions.
D. Factor analysis.
E. Inferences.

21) 82. A financial statement analysis report:
A. Enables readers to see the process and rationale of analysis.
B. Forces preparers to organize their reasoning and to verify the logic of analysis.
C. Serves as a method of communication to users.
D. Helps users and preparers to refine conclusions based on evidence from key building blocks.
E. All of these.


22) 83. A complete income statement potentially has the following sections:
A. Items from continuing operations and earnings per share for a corporation.
B. Income or loss from operating a discontinued segment for the current period.
C. The loss from disposing of the discontinued segment’s net assets.
D. Extraordinary items.
E. Continuing operations, discontinued segments, extraordinary items, changes in accounting principles, and earnings per share for a corporation.


23) 84. Which of the following items is not likely an extraordinary item?
A. Loss from an unexpected union strike.
B. Condemnation of property by the city government.
C. Loss of use of property due to a new and unexpected environmental regulation.
D. Loss due to an earthquake in Florida.
E. Expropriation of property by a foreign government.



24) 85. Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in dollar amounts and percents, are referred to as:
A. Period-to-period statements.
B. Controlling statements.
C. Successive statements.
D. Comparative statements.
E. Serial statements.


25) 86. Horizontal analysis:
A. Is a method used to evaluate changes in financial data across time.
B. Is also called vertical analysis.
C. Is the presentation of financial ratios.
D. Is a tool used to evaluate financial statement items relative to industry statistics.
E. Evaluates financial data across industries.


26) 87. Trend analysis is also called:
A. Financial analysis.
B. Ratio analysis.
C. Index number trend analysis.
D. Industry analysis.
E. Output analysis.



27) 88. The dollar change for a financial statement item is calculated by:
A. Subtracting the analysis period amount from the base period amount.
B. Subtracting the base period amount from the analysis period amount.
C. Subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100.
D. Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100.
E. Subtracting the base period amount from the analysis amount, then dividing the result by the base amount.


28) 89. A company’s sales in 2009 were $250,000 and in 2010 were $287,500. Using 2009 as the base year, the sales trend percent for 2010 is:
A. 87%.
B. 100%.
C. 115%.
D. 15%.
E. 13%.

29) 90. Phoenix Company reported sales of $400,000 for 2009, $450,000 for 2010, and $500,000 for 2011. Using 2009 as the base year, what were the percentage increases for 2010 and 2011 compared to the base year?
A. 80% for 2010 and 90% for 2011.
B. 88% for 2010 and 80% for 2011.
C. 88% for 2010 and 90% for 2011.
D. 112.5% for 2010 and 125% for 2011.
E. 125% for 2010 and 112.5% for 2011.


30) 91. In horizontal analysis the percent change is computed by:
A. Subtracting the analysis period amount from the base period amount.
B. Subtracting the base period amount from the analysis period amount.
C. Subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100.
D. Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100.
E. Subtracting the base period amount from the analysis amount, then dividing the result by the analysis period amount.



31) 92. To compute trend percents the analyst should:
A. Select a base period, assign each item in the base period statement a weight of 100%, and then express financial numbers from other periods as a percent of their base period number.
B. Subtract the analysis period number from the base period number.
C. Subtract the base period amount from the analysis period amount, divide the result by the analysis period amount, then multiply that amount by 100.
D. Compare amounts across industries using Dun and Bradstreet.
E. All of these.


32) 93. Comparative financial statements in which each amount is expressed as a percentage of a base amount are called:
A. Asset comparative statements.
B. Percentage comparative statements.
C. Common-size comparative statements.
D. Sales comparative statements.
E. General-purpose financial statements.


33) 94. Comparative financial statements in which each amount is expressed as a percentage of a base amount, and in which the base amount is expressed as 100%, are called:
A. Comparative statements.
B. Common-size comparative statements.
C. General-purpose financial statements.
D. Base line statements.
E. Index statements.

34) 95. Common-size statements:
A. Reveal changes in the relative magnitude of each financial statement item.
B. Do not emphasize the relative magnitude of each item.
C. Compare financial statements over time.
D. Show the dollar amount of change for financial statement items.
E. Consist of two or more balance sheets arranged side-by-side.


35) 96. The common-size percent is computed by:
A. Dividing the analysis amount by the base amount.
B. Dividing the base amount by the analysis amount.
C. Dividing the analysis amount by the base amount and multiplying the result by 100.
D. Dividing the base amount by the analysis amount and multiplying the result by 1,000.
E. Subtracting the base amount from the analysis amount and multiplying the result by 100.


36) 97. A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals:
A. .0785%.
B. 7.85%.
C. 12.73%.
D. 1273%.
E. 7850%.



37) 98. Current assets minus current liabilities is:
A. Profit margin.
B. Financial leverage.
C. Current ratio.
D. Working capital.
E. Quick assets.

38) 99. Current assets divided by current liabilities is the:
A. Current ratio.
B. Quick ratio.
C. Debt ratio.
D. Liquidity ratio.
E. Solvency ratio.

39) 100. Quick assets divided by current liabilities is the:
A. Acid-test ratio.
B. Current ratio.
C. Working capital ratio.
D. Current liability turnover ratio.
E. Quick asset turnover ratio.


40) 101. Net sales divided by average accounts receivable is the:
A. Days’ sales uncollected.
B. Average accounts receivable ratio.
C. Current ratio.
D. Profit margin.
E. Accounts receivable turnover ratio.


41) 102. Dividing accounts receivable by net sales and multiplying the result by 365 is the:
A. Profit margin.
B. Days’ sales uncollected.
C. Accounts receivable turnover ratio.
D. Average accounts receivable ratio.
E. Current ratio.


42) 103. Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:
A. Inventory turnover ratio.
B. Profit margin.
C. Days’ sales in inventory.
D. Current ratio.
E. Total asset turnover.

43) 104. Net sales divided by average total assets is the:
A. Profit margin.
B. Total asset turnover.
C. Current ratio.
D. Sales return ratio.
E. Return on total assets.


44) 105. Net income divided by net sales is the:
A. Return on total assets.
B. Profit margin.
C. Current ratio.
D. Total asset turnover.
E. Days’ sales in inventory.


45) 106. Net income divided by average total assets is:
A. Profit margin.
B. Total asset turnover.
C. Return on total assets.
D. Days’ income in assets.
E. Current ratio.



46) 107. Annual cash dividends per share divided by market price per share is the:
A. Price-earnings ratio
B. Price-dividends ratio.
C. Profit margin.
D. Dividend yield ratio.
E. Earnings per share.


47) 108. The average number of times a company’s inventory is sold during an accounting period, calculated by dividing cost of goods sold by the average inventory balance, is the:
A. Accounts receivable turnover.
B. Inventory turnover.
C. Days’ sales uncollected.
D. Current ratio.
E. Price earnings ratio.


48) 109. A component of operating efficiency and profitability, calculated by expressing net income as a percent of net sales, is the:
A. Acid-test ratio.
B. Merchandise turnover.
C. Price earnings ratio.
D. Accounts receivable turnover.
E. Profit margin ratio.


49) 110. One of several ratios that reflects solvency includes the:
A. Acid-test ratio.
B. Current ratio.
C. Times interest earned ratio.
D. Total asset turnover.
E. Days’ sales in inventory.


50) 111. A company had a market price of $37.50 per share, earnings per share of $1.25, and dividends per share of $0.40. Its price-earnings ratio equals:
A. 3.1.
B. 30.0.
C. 93.8.
D. 32.0.
E. 3.3.

51) 55. Managerial accounting information:
A. Is used mainly by external users.
B. Involves gathering information about costs for planning and control decisions.
C. Is generally the only accounting information available to managers.
D. Can be used for control purposes but not for planning purposes.
E. Has little to do with controlling costs.



52) 56. Managerial accounting is different from financial accounting in that
A. Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
B. Managerial accounting never includes nonmonetary information.
C. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
D. Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
E. Managerial accounting is mainly used to set stock prices.


53) 57. Flexibility of practice when applied to managerial accounting means that
A. The information must be presented in electronic format so that it is easily changed.
B. Managers must be willing to accept the information as the accountants present it to them, rather than in the format they ask for.
C. The managerial accountants need to be on call twenty-four hours a day.
D. The design of a company’s managerial accounting system largely depends on the nature of the business and the arrangement of the internal operations of the company.
E. Managers must be flexible with information provided in varying forms and using inconsistent measures.


54) 58. Which of the following items represents a difference between financial and managerial accounting?
A. Users of the information.
B. Flexibility of practices.
C. Timeliness and time dimension of the information reported.
D. Nature of the information.
E. All of these.


55) 59. Which of the following items are management concepts that were created to improve companies’ performances?
A. Just-in-time manufacturing.
B. Customer orientation.
C. Total quality management.
D. Continuous improvement.
E. All of these.


56) 60. The Malcolm Baldridge Award was established by
A. The United Nations.
B. The U.S. Chamber of Commerce.
C. The Malcolm Baldridge Foundation.
D. The U.S. Congress.
E. The SEC.



57) 61. Continuous improvement:
A. Is a measure of profits.
B. Is a measure of costs.
C. Rejects the notion of “good enough.”
D. Is not applicable to most businesses.
E. Is possible only in service businesses.


58) 62. An attitude of constantly seeking ways to improve company operations, including customer service, product quality, product features, the production process, and employee interactions, is called:
A. Continuous improvement.
B. Customer orientation.
C. Just-in-time.
D. Theory of constraints.
E. Total quality measurement.


59) 63. A management concept that encourages all managers and employees to be in tune with the wants and needs of customers, and which leads to flexible product designs and production processes, is called:
A. Continuous improvement.
B. Customer orientation.
C. Just-in-time.
D. Theory of constraints.
E. Total quality management.


60) 64. An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:
A. Continuous improvement.
B. Customer orientation.
C. Just-in-time manufacturing.
D. Theory of constraints.
E. Total quality management.


61) 65. A management concept that applies quality improvement to all aspects of business activities is called:
A. Continuous operations.
B. Customer orientation.
C. Just-in-time.
D. Theory of constraints.
E. Total quality management.


62) 66. The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is:
A. Total quality management.
B. Managerial accounting.
C. Customer orientation.
D. Continuous improvement.
E. Lean business model.



63) 67. Benny, an employee of Parrott Company, used company assets for his own personal gain. This is an example of
A. embezzlement
B. fraud
C. internal control
D. ethics
E. employment perks

64) 68. An employee is dissatisfied with the resolution of an ethical conflict at his place of employment. According to the Institute of Management Accountants, the employee’s next step should be to
A. contact the IMA
B. contact the next level of management who is not involved in the ethical conflict
C. make the president of the company aware of the ethical conflict
D. report the incident to the State Board of Accountancy
E. resign from the company


65) 69. A direct cost is a cost that is:
A. Identifiable as controllable.
B. Variable with respect to the volume of activity.
C. Fixed with respect to the volume of activity.
D. Traceable to a cost object.
E. Sunk with respect to a cost object.


66) 70. An opportunity cost is:
A. An uncontrollable cost.
B. A cost of potential benefit lost.
C. A change in the cost of a component.
D. A direct cost.
E. A sunk cost.


67) 71. Classifying costs by behavior involves:
A. Identifying fixed cost and variable cost.
B. Identifying cost of goods sold and operating costs.
C. Identifying all costs.
D. Identifying costs in a physical manner.
E. Identifying both quantitative and qualitative cost factors.

68) 72. Costs classified by controllability are useful for:
A. The balance sheet.
B. The income statement.
C. Management reports.
D. Evaluation reports.
E. Both C and D.


69) 73. A mixed cost:
A. Requires the future outlay of cash and is relevant for future decision making.
B. Does not change with changes in the volume of activity within the relevant range.
C. Is directly traceable to a cost object.
D. Contains a combination of fixed costs and variable costs.
E. Has already been incurred and cannot be avoided so it is irrelevant for decision making.


70) 74. A fixed cost:
A. Requires the future outlay of cash and is relevant for future decision making.
B. Does not change with changes in the volume of activity within the relevant range.
C. Is directly traceable to a cost object.
D. Changes with changes in the volume of activity within the relevant range.
E. Has already been incurred and cannot be avoided so it is irrelevant for decision making.

71) 75. Last year, Smith Company sold 10,000 units of its only product. If sales increase by 15% in the current year, how will unit variable cost and unit fixed cost be affected?

A. Choice A
B. Choice B
C. Choice C
D. Choice D
E. Choice E


72) 76. A primary difference between variable costs and fixed costs is:
A. Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity.
B. Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity.
C. Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity.
D. Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company’s relevant range.
E. Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity.

73) 77. Period costs for a manufacturing company would flow directly to:
A. The current income statement.
B. Factory overhead.
C. The current balance sheet.
D. Job cost sheet.
E. The current manufacturing statement.


74) 78. For product costs associated with a particular product to be expensed on the income statement:
A. The product must be transferred to Finished Goods Inventory.
B. The product must still be in Goods In Process Inventory.
C. The product must be sold.
D. The product may be in any of the manufacturer’s inventory accounts.
E. The company must expect to sell the product during the next twelve months.

75) 79. Costs that are first assigned to inventory are called:
A. Period costs.
B. Product costs.
C. General costs.
D. Administrative costs.
E. Fixed costs.


76) 80. Costs that flow directly to the current income statement are called:
A. Period costs.
B. Product costs.
C. General costs.
D. Balance sheet costs.
E. Capitalized costs.


77) 81. Product costs:
A. Are expenditures necessary and integral to finished products.
B. Are expenditures identified more with a time period rather than with finished products.
C. Include selling and administrative expenses.
D. Are costs that vary with the volume of activity.
E. Are costs that do not vary with the volume of activity.


78) 82. Products that have been completed and are ready to be sold by the manufacturer are called:
A. Finished goods inventory.
B. Goods in process inventory.
C. Raw materials inventory.
D. Cost of goods sold.
E. Factory supplies.


79) 83. Goods a company acquires to use in making products are called:
A. Cost of goods sold.
B. Raw materials inventory.
C. Finished goods inventory.
D. Goods in process inventory.
E. Conversion costs.


80) 84. Products that are in the process of being manufactured but are not yet complete are called:
A. Raw materials inventory.
B. Conversion costs.
C. Cost of goods sold.
D. Goods in process inventory.
E. Finished goods inventory.


81) 85. Another title for goods in process inventory is:
A. Indirect materials inventory.
B. Work in process inventory.
C. Conversion costs.
D. Direct materials inventory.
E. Raw materials inventory.


82) 86. Which of the following represents the correct formula for calculating cycle time for a manufacturer?
A. Process time + inspection time – move time – wait time.
B. Process time – inspection time + move time + wait time.
C. Process time + inspection time + move time + wait time.
D. Process time – inspection time – move time – wait time.
E. Process time + inspection time + move time – wait time.


83) 87. Which of the following statements is correct concerning the elements of cycle time?
A. Move time is the time spent moving (1) raw materials, (2) goods in process while in production, and (3) finished goods prior to shipment.
B. Inspection time is the time spent producing the product.
C. Process time is considered non-value-added time.
D. Wait time is considered value-added time.
E. Cycle efficiency is the ratio of non-value-added time to total cycle time.

84) 88. The cost of labor that is not clearly associated with specific units or batches of product is called:
A. Unspecified labor.
B. Direct labor.
C. Indirect labor.
D. Basic labor.
E. Joint labor.

85) 89. Factory overhead costs normally include all of the following except:
A. Indirect labor costs.
B. Indirect material costs.
C. Selling costs.
D. Machinery oil.
E. Factory rent.


86) 90. Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products called are:
A. Sunk labor.
B. Direct labor.
C. Indirect labor.
D. Finished labor.
E. All of these.


87) 91. Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called:
A. Administrative expenses.
B. Nonmanufacturing costs.
C. Sunk costs.
D. Factory overhead.
E. Preproduction costs.


88) 92. Materials that are used in support of the production process but are not clearly identified with units or batches of product are called:
A. Secondary materials.
B. General materials.
C. Direct materials.
D. Indirect materials.
E. Materials inventory.


89) 93. The salary paid to the supervisor of an assembly line would normally be classified as:
A. Direct labor.
B. Indirect labor.
C. A period cost.
D. A general cost.
E. An assembly cost.


90) 94. Which of the following items appears only in a manufacturing company’s financial statements?
A. Cost of goods sold.
B. Cost of goods manufactured.
C. Goods available for sale.
D. Gross profit.
E. Net income.

91) 95. Which of the following costs is not included in factory overhead?
A. Payroll taxes on the wages of supervisory factory workers.
B. Indirect labor.
C. Depreciation of manufacturing equipment.
D. Manufacturing supplies used.
E. Direct materials.


92) 96. Which of the following is never included in direct materials costs?
A. Invoice costs of direct materials.
B. Outgoing delivery charges.
C. Materials storage costs.
D. Materials handling costs.
E. All of these are direct material costs.


93) 97. Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:
A. Raw materials sold.
B. Chargeable materials.
C. Goods in process.
D. Indirect materials.
E. Direct materials.


94) 98. The three major cost components of a manufactured product are:
A. Marketing, selling, and administrative costs.
B. Indirect labor, indirect materials, and miscellaneous factory expenses.
C. Direct materials, direct labor, and factory overhead.
D. Differential costs, opportunity costs, and sunk costs.
E. General, selling, and administrative costs.


95) 99. Which of the following costs would not be classified as factory overhead?
A. Property taxes on maintenance machinery.
B. Expired insurance on factory equipment.
C. Wages of the factory janitor.
D. Metal doorknobs used on wood cabinets produced.
E. Small tools used in production.


96) 100. The total cost of goods completed during the accounting period for a manufacturer is called:
A. Ending finished goods inventory.
B. Total manufacturing costs.
C. Ending goods in process inventory.
D. Cost of goods manufactured.
E. Cost of goods sold.


97) 101. A manufacturing firm’s cost of goods manufactured is equivalent to a merchandising firm’s:
A. Cost of goods sold.
B. Cost of goods purchased.
C. Cost of goods available.
D. Beginning merchandise inventory.
E. Ending merchandise inventory.

98) 102. Which one of the following items is normally not a manufacturing cost?
A. Direct materials.
B. Factory overhead.
C. General and administrative expenses.
D. Direct labor.
E. Conversion cost.


99) 103. A manufacturing company has a beginning finished goods inventory of $14,600, raw material purchases of $18,000, cost of goods manufactured of $32,500, and an ending finished goods inventory of $17,800. The cost of goods sold for this company is:
A. $21,200.
B. $29,300.
C. $32,500.
D. $47,100.
E. $27,600.


100) 104. Juliet Corporation has accumulated the following accounting data for the year:

The cost of goods manufactured for the year is:
A. $ 200.
B. $1,000.
C. $5,000.
D. $6,400.
E. $8,200


101) 105. A company’s prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:
A. $4,000,000.
B. $14,000,000.
C. $2,000,000.
D. $1,000,000.
E. $3,000,000.

102) 44. Cost accounting systems used by manufacturing companies are based on the:
A. Periodic inventory system.
B. Perpetual inventory system.
C. Finished goods inventories.
D. Weighted average inventories.
E. LIFO inventory system.


103) 45. A system of accounting for production operations that produces timely information about inventories and production costs per unit of product is a:
A. Finished goods accounting system.
B. General accounting system.
C. Manufacturing accounting system.
D. Cost accounting system.
E. Production accounting system.

104) 46. Job order costing systems normally use:
A. Periodic inventory systems.
B. Perpetual inventory systems.
C. Real inventory systems.
D. General inventory systems.
E. All of these.


105) 47. In comparison to a general accounting system for a manufacturing company, a cost accounting system places an emphasis on:
A. Periodic inventory counts.
B. Total costs.
C. Unit costs and cost control.
D. Products and average costs.
E. Large volume operations involving standardized products.


106) 48. A system of accounting for production operations that uses a periodic inventory system is called a:
A. Manufacturing accounting system.
B. Production accounting system.
C. General accounting system.
D. Cost accounting system.
E. Finished goods accounting system.


107) 49. The two basic types of cost accounting systems are:
A. Job order costing and perpetual costing.
B. Job order costing and customized product costing.
C. Job order costing and customized service costing.
D. None of the above
E. All of the above

108) 50. The production activities for a customized product represent a(n):
A. Operation.
B. Job.
C. Unit.
D. Pool.
E. Process.


109) 51. A job order cost accounting system would best fit the needs of a company that makes:
A. Shoes and apparel.
B. Paint.
C. Cement.
D. Custom machinery.
E. Pencils and erasers.


110) 52. Job order production is also known as:
A. Mass production.
B. Process production.
C. Unit production.
D. Customized production.
E. Standard costing.


111) 53. Dell Builders manufactures each house to customer specifications. It most likely would use:
A. Capital process costing.
B. A periodic inventory system.
C. Unique costing.
D. Job order costing.
E. Activity-based costing.


112) 54. A type of production that yields customized products or services for each customer is called:
A. Customer orientation production.
B. Job order production.
C. Just-in-time production.
D. Job lot production.
E. Process production.


113) 55. Target cost is calculated as
A. direct costs + desired profit
B. direct costs – desired profit
C. expected selling price – direct costs
D. expected selling price – desired profit
E. expected selling price + desired profit

114) 56. A job order production system would be appropriate for a company that produces which one of the following items?
A. A landscaping design for a new hospital.
B. Seedlings for sale in a nursery.
C. Sacks of yard fertilizer.
D. Packets of flower seeds.
E. Small gardening tools, including rakes, shovels, and hoes.


115) 57. Large aircraft producers such as McDonnell Douglas normally use:
A. Job order costing.
B. Process costing.
C. Mixed costing.
D. Full costing.
E. Simple costing.

116) 58. A document in a job order cost accounting system that is used to record the costs of producing a job is a(n):
A. Job cost sheet.
B. Job lot.
C. Finished goods summary.
D. Process cost system.
E. Units-of-production sheet.

117) 59. A job cost sheet shows information about each of the following items except:
A. The direct labor costs assigned to the job.
B. The name of the customer.
C. The costs incurred by the marketing department in selling the job.
D. The overhead costs assigned to the job.
E. The direct materials costs assigned to the job.

118) 60. The job order cost sheets used by Garza Company revealed the following:

Job No. 125 was completed during May and Jobs No. 124 and 125 were shipped to customers in May. What were the company’s cost of goods sold for May and the goods in process inventory on May 31?
A. $3,200; $ 900.
B. $2,900; $1,200.
C. $1,200; $2,900.
D. $1,700; $1,200.
E. $4,100; $ 0.


119) 61. A job cost sheet includes:
A. Direct materials, direct labor, operating costs.
B. Direct materials, overhead, administrative costs.
C. Direct labor, overhead, selling costs.
D. Direct material, direct labor, overhead.
E. Direct materials, direct labor, selling costs.


120) 62. The Goods in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company’s overhead application rate is:
A. 40%.
B. 50%.
C. 80%.
D. 200%.
E. 220%.

121) 63. A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):
A. Materials ledger card.
B. Materials requisition.
C. Purchase order.
D. Materials voucher.
E. Purchase ledger.


122) 64. A source document that production managers use to request materials for production and that is used to assign materials costs to specific jobs or to overhead is a:
A. Job cost sheet.
B. Production order.
C. Materials requisition.
D. Materials purchase order.
E. Receiving report.


123) 65. A company that uses a job order cost accounting system would make the following entry to record the flow of direct materials into production:
A. debit Work in Process, credit Cost of Goods Sold
B. debit Work in Process, credit Materials
C. debit Work in Process, credit Factory Overhead
D. debit Factory Overhead, credit Materials
E. debit Finished Goods, credit Materials


124) 66. The Goods in Process Inventory account for the AB Corp. follows:

The cost of units transferred to finished goods is:
A. $ 97,000.
B. $105,900.
C. $ 88,100.
D. $ 95,200.
E. $ 92,500



125) 67. A company’s overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used.

A. $106,400.
B. $113,120.
C. $ 30,240.
D. $211,680.
E. $324,800.


126) 68. A source document that an employee uses to record the number of hours at work and that is used to determine the total labor cost for each pay period is a:
A. Job cost sheet.
B. Hours-of-production sheet.
C. Time ticket.
D. Job order ticket.
E. Clock card.


127) 69. A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead is called a:
A. Payroll Register.
B. Factory payroll record.
C. General Ledger.
D. Time ticket.
E. Factory Overhead Ledger.

128) 70. When factory payroll costs for direct labor are recorded in a job cost accounting system:
A. Factory Payroll is debited and Goods in Process is credited.
B. Goods in Process Inventory and Factory Overhead are debited and Factory Payroll is credited.
C. Cost of Goods Manufactured is debited and Direct Labor is credited.
D. Direct Labor and Indirect Labor are debited and Factory Payroll is credited.
E. Goods in Process is debited and factory payroll is credited.


129) 71. Penn Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Penn make to assign the Factory Payroll?
A.
B.
C.
D.
E.



130) 72. Labor costs in production can be:
A. Direct or indirect.
B. Indirect or sunk.
C. Direct or payroll.
D. Indirect or payroll.
E. Direct or sunk.


131) 73. A company has an overhead application rate of 125% of direct labor costs. How much overhead would be allocated to a job if it required total labor costing $20,000?
A. $ 5,000.
B. $ 16,000.
C. $ 25,000.
D. $125,000.
E. $250,000.

132) 74. The rate established prior to the beginning of a period that relates estimated overhead to an allocation factor such as estimated direct labor, and that is used to assign overhead cost to jobs, is the:
A. Predetermined overhead allocation rate.
B. Overhead variance rate.
C. Estimated labor cost rate.
D. Chargeable overhead rate.
E. Miscellaneous overhead rate.

133) 75. Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company’s production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The overhead application rate was:
A. 5.0%.
B. 12.0%.
C. 20.0%.
D. 500.0%.
E. 16.7%.



134) 76. Alton Company has an overhead application rate of 160% and allocates overhead based on direct materials. During the current period, direct labor is $50,000 and direct materials used are $80,000. Determine the amount of overhead Alton Company should record in the current period.
A. $ 31,250
B. $ 50,000
C. $ 80,000.
D. $ 128,000.
E. $ 208,000.

135) 77. The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:
A. Jobs Overhead Expense.
B. Cost of Goods Sold.
C. Finished Goods Inventory.
D. Indirect Labor.
E. Goods in Process Inventory.

136) 78. BVD Company uses a job order cost accounting system and last period incurred $80,000 of overhead and $100,000 of direct labor. BVD estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If BVD bases applied overhead on direct labor cost, their overhead application rate for the next period should be:
A. 75%.
B. 80%.
C. 107%.
D. 125%.
E. 133%.


137) 79. O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. expects to incur $800,000 of overhead during the next period, and expects to use 50,000 labor hours at a cost of $10.00 per hour. What is O.K. Company’s overhead application rate?
A. 6.25%.
B. 62.5%.
C. 160%.
D. 1600%.
E. 67%.


138) 80. The R&R Company’s production costs for August are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000; property taxes on production equipment, $800; heat, lights and power, $1,000; and insurance on plant and equipment, $200. R&R Company’s factory overhead incurred for August is:
A. $ 2,000.
B. $ 6,500.
C. $ 8,500.
D. $21,500.
E. $36,500.

139) 81. Deltan Corp. allocates overhead to production on the basis of direct labor costs. Deltan’s total estimated overhead is $450,000 and estimated direct labor is $180,000. Determine the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory.
A. $ 8,000.
B. $20,000.
C. $70,000.
D. $50,000.
E. $90,000.



140) 82. Austin Company uses a job order cost accounting system. The company’s executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period. At the end of the period, the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?
A. $6.00 per direct labor hour.
B. $7.50 per direct labor hour.
C. $6.67 per direct labor hour.
D. $8.33 per direct labor hour.
E. $7.08 per direct labor hour.

141) 83. Using the following accounts and an overhead rate of 90% of direct labor cost, determine the amount of applied overhead.

A. $ 79,200.
B. $167,200.
C. $ 34,320.
D. $ 88,000.
E. $ 35,376.



142) 84. If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for $8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale?
A. $8.00.
B. $5.50.
C. $2.50.
D. $1.60.
E. $0.90.


143) 85. The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applied to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units?
A. $3,750.
B. $2,000.
C. $4,000.
D. $6,000.
E. $9,000.


144) 86. At the current year-end, Hardly Company found that its overhead was underapplied by $2,500, and this amount was not deemed to be a material amount. Based on this information, Hardly should
A. Close the $2,500 to Cost of Goods Sold.
B. Close the $2,500 to Finished Goods Inventory.
C. Do nothing about the $2,500, since it is not material, and it is likely that overhead will be overapplied by the same amount next year.
D. Carry the $2,500 to the income statement as “Other Expense”
E. Carry the $2,500 to the next period.


145) 87. If overhead applied is less than actual overhead, it is:
A. Fully applied.
B. Underapplied.
C. Overapplied.
D. Expected.
E. Normal.

146) 88. The amount by which the overhead applied to jobs during a period exceeds the overhead incurred during the period is known as:
A. Adjusted overhead.
B. Estimated overhead.
C. Predetermined overhead.
D. Underapplied overhead.
E. Overapplied overhead.

147) 89. The amount by which overhead incurred during a period exceeds the overhead applied to jobs is:
A. Balanced overhead.
B. Predetermined overhead.
C. Actual overhead.
D. Underapplied overhead.
E. Overapplied overhead.


148) 90. If a company applies overhead to production with a predetermined rate, a credit balance in the Factory Overhead account at the end of the period means that:
A. The bookkeeper has made an error because the debits don’t equal the credits.
B. The balance will be carried forward to the next period as an overhead cost.
C. Actual overhead was less than the overhead amount charged to production.
D. The overhead was underapplied for the period.
E. Actual overhead was greater than the overhead amount charged to production.



149) 91. M.A.E. charged the following amounts of overhead to jobs during the year: $20,000 to jobs still in process, $60,000 to jobs completed but not sold, and $120,000 to jobs finished and sold. At year-end, M.A.E. Company’s Factory Overhead account has a credit balance of $5,000, which is not a material amount. What entry should M.A.E. make at year-end?
A. No entry is needed.
B.
C.
D.
E.


150) 92. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:
A. A debit to Cost of Goods Sold for $600.
B. A credit to Factory Overhead for $600.
C. A credit to Finished Goods Inventory for $600.
D. A debit to Goods in Process Inventory for $600.
E. A credit to Cost of Goods Sold for $600.


151) 93. If it is a material amount, overapplied or underapplied overhead should be disposed of by allocating it to:
A. Cost of goods sold and finished goods.
B. Finished goods and goods in process.
C. Goods in process, finished goods, and cost of goods sold.
D. Goods in process
E. Raw materials, goods in process, and finished goods.


152) 94. The Dina Corp. has applied overhead to jobs during the period as follows:

The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is:
A.
B.
C.
D.
E. No entry is needed.

153) 40. A cost center is a unit of a business that incurs costs but does not directly generate revenues. Which of the following would definitely not be considered a cost center?
A. Accounting department.
B. Purchasing department.
C. Research department
D. Advertising department.
E. All of these could be considered cost centers.


154) 41. A unit of a business that not only incurs costs, but also generates revenues, is called a:
A. Performance center.
B. Profit center.
C. Cost center.
D. Responsibility center.
E. Expense center.


155) 42. A profit center:
A. Incurs costs, but does not directly generate revenues.
B. Incurs costs and directly generates revenues.
C. Has a manager who is evaluated solely on efficiency in controlling costs.
D. Incurs only indirect costs and directly generates revenues.
E. Incurs only indirect costs and generates revenues.


156) 43. An accounting system that provides information that management can use to evaluate the profitability and/or cost effectiveness of a department’s activities is a:
A. Departmental accounting system.
B. Cost accounting system.
C. Service accounting system.
D. Revenue accounting system.
E. Standard accounting system.


157) 44. A department that incurs costs without directly generating revenues is a:
A. Service center.
B. Production center.
C. Profit center.
D. Cost center.
E. Performance center.


158) 45. The difference between a profit center and an investment center is
A. an investment center incurs costs, but does not directly generate revenues.
B. an investment center incurs no costs but does generate revenues.
C. an investment center is responsible for effectively using center assets.
D. an investment center provides services to profit centers
E. There is no difference; investment center and profit center are synonymous.

159) 46. An expense that does not require allocation between departments is a(n):
A. Common expense.
B. Indirect expense.
C. Direct expense.
D. Administrative expense.
E. All of these.


160) 47. Expenses that are easily traced and assigned to a specific department because they are incurred for the sole benefit of that department are called:
A. Direct expenses.
B. Indirect expenses.
C. Controllable expenses.
D. Uncontrollable expenses.
E. Fixed expenses.


161) 48. Expenses that are not easily associated with a specific department, and which are incurred for the benefit of more than one department, are:
A. Fixed expenses.
B. Indirect expenses.
C. Direct expenses.
D. Uncontrollable expenses.
E. Variable expenses.


162) 49. Regardless of the system used in departmental cost analysis:
A. Direct costs are allocated, indirect costs are not.
B. Indirect costs are allocated, direct costs are not.
C. Both direct and indirect costs are allocated.
D. Neither direct nor indirect costs are allocated.
E. Total departmental costs will always be the same.


163) 50. The salaries of employees who spend all their time working in one department are:
A. Variable expenses.
B. Indirect expenses.
C. Direct expenses.
D. Responsibility expenses.
E. Unavoidable expenses.


164) 51. A difficult problem in calculating the total costs and expenses of a department is:
A. Determining the gross profit ratio.
B. Assigning direct costs to the department.
C. Assigning indirect expenses to the department.
D. Determining the amount of sales of the department.
E. Determining the direct expenses of the department.


165) 52. A company has two departments, A and B, that incur delivery expenses. An analysis of the total delivery expense of $9,000 indicates that Dept. A had a direct expense of $1,000 for deliveries. None of the $9,000 is a direct expense to Dept. B. The analysis also indicates that 60% of regular delivery requests originate in Dept. A and 40% in Dept. B.
The delivery expenses that should be charged to Dept. A and Dept. B, respectively, are:

A. Choice A
B. Choice B
C. Choice C
D. Choice D
E. Choice E

166) 53. The allocation bases for assigning indirect costs include:
A. Only physical bases.
B. Only cost bases.
C. Only value bases.
D. Only unit bases.
E. Any appropriate and reasonable bases.


167) 54. The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:
A. Floor space of each department.
B. Relative number of items each department had on sale.
C. Number of customers to enter each department.
D. An equal amount of cost for each department.
E. Total sales of each department.

168) 55. Costs that the manager has the power to determine or at least strongly influence are called:
A. Uncontrollable costs.
B. Controllable costs.
C. Joint costs.
D. Direct costs.
E. Indirect costs.

169) 56. A report that specifies the expected and actual costs under the control of a manager is a:
A. Segmental accounting report.
B. Managerial cost report.
C. Controllable expense report.
D. Departmental accounting report.
E. Responsibility accounting report.

170) 57. An accounting system that provides information that management can use to evaluate the performance of a department’s manager is called a:
A. Cost accounting system.
B. Managerial accounting system.
C. Responsibility accounting system.
D. Financial accounting system.
E. Activity-based accounting system.


171) 58. Costs that the manager does not have the power to determine or at least strongly influence are:
A. Variable costs.
B. Uncontrollable costs.
C. Indirect costs.
D. Direct costs.
E. Joint costs.


172) 59. Which of the following would appear on a responsibility accounting performance report?
A. Actual costs for a period.
B. Variance from the budget.
C. Budgeted costs for a period.
D. Controllable costs.
E. All of these.


173) 60. Within an organizational structure, the person most likely to be evaluated in terms of controllable costs would be:
A. A payroll clerk.
B. A cost center manager.
C. A production line worker.
D. A maintenance worker.
E. All of these.


174) 61. The most useful evaluation of a manager’s cost performance is based on:
A. Controllable costs.
B. Contribution percentages.
C. Departmental contributions to overhead.
D. Fixed expenses.
E. Direct costs.


175) 62. In a responsibility accounting system:
A. Controllable costs are assigned to managers who are responsible for them.
B. Each accounting report contains all items allocated to a responsibility center.
C. Organized and clear lines of authority and responsibility are only incidental.
D. All managers at a given level have equal authority and responsibility.
E. All of these.


176) 63. Responsibility account performance reports:
A. Become more detailed at higher levels of management.
B. Become less detailed at higher levels of management.
C. Are equally detailed at all levels of management.
D. Are useful in any format.
E. Are irrelevant.


177) 64. A responsibility accounting performance report reports:
A. Only actual costs.
B. Only budgeted costs.
C. Both actual costs and budgeted costs.
D. Only direct costs.
E. Only indirect costs.


178) 65. A responsibility accounting system:
A. Is designed to measure the performance of managers in terms of controllable costs.
B. Assigns responsibility for costs to the appropriate managerial level that controls those costs.
C. Should not hold a manager responsible for costs over which the manager has no influence.
D. Can be applied at any level of an organization.
E. All of these.

179) 66. A single cost incurred in producing or purchasing two or more essentially different products is a(n):
A. Product cost.
B. Incremental cost.
C. Differential cost.
D. Joint cost.
E. Fixed cost.

180) 67. Allocations of joint product costs can be based on the relative market values of the products:
A. And never on the relative physical quantities of the products.
B. Plus an adjustment for future excess margins.
C. And not on any other basis.
D. At the time the products are separated.
E. Only if the products contain both direct and indirect costs.

181) 68. Allocating joint costs to products can be based on their relative:
A. Market values.
B. Direct costs.
C. Gross margins.
D. Total costs.
E. Variable costs.


182) 69. General Chemical produced 10,000 gallons of Breon and 20,000 gallons of Baron. Joint costs incurred in producing the two products totaled $7,500. At the split-off point, Breon has a market value of $6.00 per gallon and Baron $2.00 per gallon. What portion of the joint costs should be allocated to Breon if the basis is market value at point of separation?
A. $2,500.
B. $3,000.
C. $4,500.
D. $5,625.
E. $1,500.

183) 70. Data pertaining to a company’s joint production for the current period follows:

What cost amount should be allocated to Product A for this period’s $660 of joint costs on the basis of market value at the point of separation?
A. $330.00.
B. $440.00.
C. $220.00.
D. $194.12.
E. $484.00.

184)

  1. A sawmill bought a shipment of logs for $40,000. When cut, the logs produced a million board feet of lumber in the following grades:Type 1 – 400,000 bd. ft. priced to sell at $0.12 per bd. ft.
    Type 2 – 400,000 bd. ft. priced to sell at $0.06 per bd. ft.
    Type 3 – 200,000 bd. ft. priced to sell at $0.04 per bd. ft.

    How much cost should be allocated to Type 1 and Type 2, respectively?

    A.  Choice A
    B.  Choice B
    C.  Choice C
    D.  Choice D
    E.  Choice E



185) 72. A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows:

How much of the $70,000 joint cost should be allocated to No. 2 Common?
A. $ 0.
B. $17,500.
C. $23,333.
D. $35,000.
E. $70,000.

186) 73. A dairy allocates the cost of unprocessed milk to the production of milk, cream, butter and cheese. For the current period, unprocessed milk was purchased for $240,000, and the following quantities of product and sales revenues were produced.

How much of the $240,000 cost should be allocated to milk?
A. $ 0.
B. $ 86,400.
C. $ 90,000.
D. $133,333.
E. $240,000.



187) 74. Breon Beef Company uses the relative market value method of allocating joint costs in its production of beef products. Relevant information for the current period follows:

The total joint cost for the current period was $43,000. How much of this cost should Breon Beef allocate to sirloin?
A. $ 0.
B. $ 5,909.
C. $ 8,600.
D. $10,750.
E. $43,000.

188) 75. Calculating return on total assets for an investment center is defined by the following formula for an investment center:
A. Contribution margin/Ending assets.
B. Gross profit/Ending assets.
C. Net income/Ending assets.
D. Net income/Average invested assets.
E. Contribution margin/Average invested assets.


189) 76. Investment center managers are usually evaluated using performance measures
A. that combine income and assets
B. that combine income and capital
C. based on assets only
D. based on income only
E. that combine assets and capital


190) 77. A retail store has three departments, 1, 2, and 3, and does general advertising that benefits all departments. Advertising expense totaled $50,000 for the year, and departmental sales were as follows:

How much advertising expense should be allocated to Department 2 if the allocation is based on departmental sales?
A. $11,000.
B. $14,000.
C. $16,667.
D. $22,500.
E. $50,000.


191) 78. Dresden, Inc., has four departments. Information about these departments follows:

If maintenance costs are allocated to the other departments based on floor space occupied by each, the amount of maintenance cost allocated to the Cutting Department is:
A. $ 2,769.
B. $ 3,000.
C. $ 3,724.
D. $ 6,000.
E. $18,000.

192) 79. Baker Corporation has two operating departments, Machining and Assembly, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

The amount of the total office expenses that should be allocated to Assembly for the current period is:
A. $ 35,750.
B. $ 45,000.
C. $ 54,250.
D. $ 90,000.
E. $600,000.


193) 80. In a firm that manufactures clothing, the department that is responsible for actually assembling the garments could best be described as a:
A. Service department.
B. Operating or production department.
C. Cost center.
D. Department in which all of the costs incurred are direct expenses.
E. Department in which all of the costs incurred are indirect expenses.


194) 81. A company rents a building with a total of 100,000 square feet, which are evenly divided between two floors. The space on the first floor is considered twice as valuable as that on the second floor. The total monthly rent for the building is $30,000. How much of the monthly rental expense should be allocated to a department that occupies 10,000 square feet on the first floor?
A. $6,000.
B. $5,000.
C. $3,000.
D. $4,000.
E. $2,000.


195) 82. A company pays $15,000 per period to rent a small building that has 10,000 square feet of space. This cost is allocated to the company’s three departments on the basis of the amount and value of the space occupied by each. Department One occupies 2,000 square feet of ground-floor space, Department Two occupies 3,000 square feet of ground-floor space, and Department Three occupies 5,000 square feet of second-floor space. If rents for comparable floor space in the neighborhood average $2.20 per square foot for ground-floor space and $1.10 per square foot for second-floor space and the rent is allocated based on the total value of the space, Department One should be charged rent expense for the period of:
A. $4,400.
B. $4,000.
C. $3,000.
D. $2,200.
E. $2,000.


196) 83. Able Company has two operating (production) departments: Assembly and Fabricating. Assembly has 150 employees and occupies 44,000 square feet; Fabricating has 100 employees and occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:

Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The total amount of indirect factory expenses that should be allocated to the Assembly Department for the current period is:
A. $ 48,000.
B. $ 55,000.
C. $103,000.
D. $104,000.
E. $110,000.

197) 84. Wilson Trade School allocates administrative costs to its respective departments based on the number of students enrolled, while maintenance and utilities are allocated per square feet of the classrooms. Based on the information below, what is the total amount allocated to the Automotive Department (rounded to the nearest dollar) if administrative costs for the school were $50,000, maintenance fees were $12,000, and utilities were $6,000?

A. $ 0.
B. $17,000.
C. $18,500.
D. $22,667.
E. $30,000.



198) 85. White Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period:

The total cost of operating the Milling Department for the current period is:
A. $14,280.
B. $15,912.
C. $76,500.
D. $90,780.
E. $92,412.


199) 86. Farber, Inc., has four departments. The Administrative Department costs are allocated to the other three departments based on the number of employees in each and the Maintenance Department costs are allocated to the Assembly and Packaging Departments based on their occupied space. Data for these departments follows:

The total amount of the Administrative Department’s cost that would eventually be allocated to the Packaging Department is:
A. $ 4,800.
B. $12,000.
C. $10,000.
D. $18,000.
E. $13,000.

200) 87. Mace Department store allocates its service department expenses to its various operating (sales) departments. The following data is available:

The following information is available for its three operating (sales) departments:

What is the total expense allocated to Department B?
A. $29,375.
B. $30,462.
C. $30,500.
D. $30,775.
E. $32,160.

201) 88. Activity based costing can be applied to:
A. Manufacturing activities only.
B. Service activities only.
C. Merchandising activities only.
D. Any company in any industry.
E. Government only.


202) 89. A system of assigning costs to departments and products on the basis of a variety of activities instead of only one allocation base is called:
A. A responsibility accounting system.
B. A cost center accounting system.
C. Controllable costing.
D. Activity-based costing.
E. Performance costing.


203) 90. A factor that causes the cost of an activity to go up or down is a(n):
A. Direct factor.
B. Indirect factor.
C. Cost driver.
D. Product cost.
E. Contribution factor.

204) 91. An activity-based cost allocation system:
A. Is one form of a direct or variable costing system.
B. Does not provide total unit cost data.
C. Traces costs to products on the basis of activities performed on them.
D. Does not provide for the allocation of any cost to products that cannot be directly attributable to those products.
E. Does not involve the level of detail and the number of allocations that companies make with traditional allocation methods.

If you want the answer key of these problems kindly write to us.

Protected: Vftngei Co. produces and sells two products, BB and TT. It manufactures these products in separate fac- Problem 22»SB :ories and markets them through different channels. They have no shared costs. This year, Mingei Co. Break-even analysis, different sold 50,000 units of each product. Sales and costs for each product follow. cost structures, and income C3 calculations Product BB Product TT Sales $800,000 $800,000 Variable costs 560,000 100,000 Contribution margin 240,000 700,000 Fixed costs 100,000 560,000 Income before taxes 140,000 140,000 Income taxes (32% rate) …. 44,800 44,800 Net income $ 95,200 $ 95,200 Required I • Compute the break-even point in dollar sales for each product. 2. 3. Assume that the company expects sales of each product to decline to 33,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement as shown above with columns for each of the two prod¬ucts (assume a 32% tax rate, and that any loss before taxes yields a 32% tax savings). Assume that the company expects sales of each product to increase to 64,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement as shown above with columns for each of the two prod¬ucts (assume a 32% tax rate). Check (2) After-tax income: BB, $39,712; TT, $(66,640) (3) After-tax income: BB, $ 140,896; TT, $228,480 Analysis Component 4. If sales greatly increase, which product would experience a greater increase in profit? Explain. 5. Describe some factors that might have created the different cost structures for these two produ products

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Protected: BTN 10-9 pg 424 Team up with one or more classmates for this activity. Identify companies in your community or area that must account for at least one of the following assets: natura; resourse;patnet;lease;leasehold improvement;copyright;trademark;or goodwill. You might find a company having more than one type of asset. Once you identify a company with a specific asset, describe the accounting this company uses to allocate the cost of that asset to the periods benefited from its use.

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Protected: GAAP stands for Generally Accepted Accounting Principles .. purpose of GAAP..350 words

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Protected: what is an acocunting cycle and what are steps for accounting cycle? In 595 words

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ACCOUNTACY ASSIGNMENT

QS 4-2

Identifying the accounting cycle

a. Preparing the post-closing trial balance.                                                

b. Posting the journal entries.

c. Journalizing and posting adjusting entries.

d. Preparing the adjusted trial balance.

e. Journalizing and posting closing entries.

f. Analyzing transactions and events.

g. Preparing the financial statements.

h. Preparing the unadjusted trial balance.

i. Journalizing transactions and events.

 

Exercise 4-4

Preparing a classified balance sheet

Use the following adjusted trial balance of Webb Trucking Company to prepare a classified balance sheet as of December 31, 2005:

 

Exercise 4-5

Preparing the financial statements

Use the information in the adjusted trial balance reported in Exercise 4-4 to prepare Webb Trucking Company’s (1) income statement, and (2) statement of owner’s equity. The K. Webb, Capital account balance is $161,000 at December 31, 2004.

 

Exercise 4-5

Preparing the financial statements

Use the information in the adjusted trial balance reported in Exercise 4-4 to prepare Webb Trucking Company’s (1) income statement, and (2) statement of owner’s equity. The K. Webb, Capital account balance is $161,000 at December 31, 2004.

 

Problem 4-5A

Preparing a work sheet, adjusting and closing entries, and financial statements

The following unadjusted trial balance is for Adams Construction Co. as of the end of its 2005 fiscal year. The June 30, 2004, credit balance of the owner’s capital account was $52,660, and the owner invested $25,000 cash in the company during the 2005 fiscal year.

 

Required

1. Prepare a 10-column work sheet for fiscal year 2005, starting with the unadjusted trial balance and including adjustments based on these additional facts:

a. The supplies available at the end of fiscal year 2005 had a cost of $3,200.

b. The cost of expired insurance for the fiscal year is $3,900.

c. Annual depreciation on equipment is $8,500.

d. The June utilities expense of $550 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $550 amount owed needs to be recorded.

e. The company’s employees have earned $1,600 of accrued wages at fiscal year-end.

f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $200.

g. Additional property taxes of $900 have been assessed for this fiscal year but have not been paid or recorded in the accounts.

h. The long-term note payable bears interest at 1% per month. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2005 fiscal year. The $240 accrued interest for June has not yet been paid or recorded. (Note that the company is required to make a $5,000 payment toward the note payable during the 2006 fiscal year.)

2. Use the work sheet to enter the adjusting and closing entries; then journalize them.

3. Prepare the income statement and the statement of owner’s equity for the year ended June 30 and the classified balance sheet at June 30, 2005.

 

Problem 4-6AA

Preparing adjusting, reversing, and next period entries

The following six-column table for Bulls eye Ranges includes the unadjusted trial balance as of December 31, 2005.

 

Required

1. Complete the six-column table by entering adjustments that reflect the following information:

a. As of December 31, 2005, employees had earned $900 of unpaid and unrecorded salaries. The next payday is January 4, at which time $1,600 of salaries will be paid.

b. The cost of supplies still available at December 31, 2005, is $2,700.

c. The notes payable requires an interest payment to be made every three months. The amount of unrecorded accrued interest at December 31, 2005, is $1,250. The next interest payment, at an amount of $1,500, is due on January 15, 2006.

d. Analysis of the unearned member fees account shows $5,600 remaining unearned at December 31, 2005.

e. In addition to the member fees included in the revenue account balance, the company has earned another $9,100 in unrecorded fees that will be collected on January 31, 2006. The company is also expected to collect $8,000 on that same day for new fees earned in January 2006.

f. Depreciation expense for the year is $12,500.

 

2. Prepare journal entries for the adjustments entered in the six-column table for part 1.

3. Prepare journal entries to reverse the effects of the adjusting entries that involve accruals.

4. Prepare journal entries to record the cash payments and cash collections described for January.

 

 

 

 

List the following steps of the accounting cycle in their proper order:

Accounting problem

Instructions

(a) From the account balances listed above and the information given below, prepare the annual adjusting entries necessary on December 31. (Omit explanations.)

(1) The equipment has an estimated life of 16 years and a salvage value of $40,000 at the end of that time. (Use straight-line method.)

(2) The note payable is a 90-day note given to the bank October 20 and bearing interest at 10%.

(Use 360 days for denominator.)

(3) In December 2,000 coupon admission books were sold at $25 each. They could be used for admission any time after January 1.

(4) Advertising expense paid in advance and included in Advertising Expense $1,100.

(5) Salaries accrued but unpaid $4,700.

 

(b) What amounts should be shown for each of the following on the income statement for the year?

(1) Interest expense.                                               (3) Advertising expense.

(2) Admissions revenue.                                         (4) Salaries expense.

 

 I just have to answer part B of number 5

Create a Person DB with 2 tables – Employees, and Payroll.

1. Create a Person DB with 2 tables – Employees, and Payroll.

2. Employees table will have the following fields:

a. EmployeeID – This should be the ID generated by your code

b. First Name

c. Last Name

d. SSN

e. Address

f. City

g. State

h. Zip

i. Home Phone

j. Work Phone

3. Payroll table will have the following fields:

a. ID – Autogenerate

b. EmployeeID – Foreign key

c. FromDate

d. ToDate

e. Hours

f. Salary

4. Integrate the Add/Remove functionality of the Employee form with the database.

5. Create a Login Form for the employees with EmployeeID and SSN as two input textboxes

a. Check the database to ensure that the employeeID match with that of the SSN and that they exist.

b. If the login was successful, give an option to enter FromDate, ToDate & hrs worked.

c. Add a “Submit” button to calculate the pay (assume $10/hr) and insert a row in the Payroll table with the corresponding values

d. Add a Menu control with the following 3 events:

i. Display Salary Information – This will display all the payroll data for that employee

ii. Display Personal Information – This will display the employee information from the Employees table

iii. Logout

e. (Optional) For the display salary and personal information option, provide a “Save to file” button on the form to save the rows from the dataset to a file.

A 20-year maturity 9% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,060. The bond currently sells at a yield to maturity of 7%. What is the yield to call?

1)       Consider a bond with a par value of $1,000.  The coupon is paid semi-annually and the market interest rate (effective interest rate) is 10 percent.  How much would you pay for the bond if:

a)       The coupon rate is 8% and the remaining time to maturity is 20 years?

b)       The coupon rate is 12% and the remaining time to maturity is 15 years?

2)       A 20-year maturity 9% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,060.  The bond currently sells at a yield to maturity of 7%.  What is the yield to call?

3)       In this problem, you will need to go to yahoo finance.  Find the information for General Motors, and then click on statistics.  Get the current beta value, current stock price, dividend information and next five years growth rate.  Use the current US treasury rate as your risk-free rate and determine the current required rate of return for GM.  Then, determine the expected rate based on the current market price.  Is GM overpriced or underpriced based on your analysis?  Be sure to show all work and discuss.  Also, make sure you note the date from which you draw your information from yahoo and include a copy of those pages.