ACCT1101 Lecture Notes - Lecture 24: Book Value, European Cooperation In Science And Technology, Income Statement
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17 accounting 1 questions! HELP
9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:
Beginning inventory | 10 units at $41 |
First purchase | 15 units at $55 |
Second purchase | 30 units at $70 |
Third purchase | 25 units at $65 |
Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.
What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?
Select one:
A. $4,340
B. $9,920
C. $3,465
D. $6,200
32. Santa Fe Corporation uses the perpetual inventory method. OnMarch 1, it purchased $60,000 of merchandise inventory, terms 2/10,n/30. On March 3, Santa Fe returned goods (not damaged) that cost$6,000. On March 9, Santa Fe paid the supplier.
On March 9, Santa Fe should credit:
Select one:
A. Purchase discounts for $1,200
B. Purchase discounts for $1,080
C. Inventory for $1,080
D. Inventory for $1,200
33. Rocky Company has beginning equity of $600,000, net incomeof $100,000, dividends of $60,000 and investments by owners inexchange for stock of $20,000. Its ending equity is:
Select one:
A. $660,000
B. $480,000
C. $536,000
D. $446,000
35. On September 1, 2016, Chopper, Inc. reported RetainedEarnings of $272,000. During the month of September, Choppergenerated revenues of $40,000, incurred expenses of $24,000,purchased equipment for $10,000 and paid dividends of $12,000.
What is the balance in Retained Earnings on September 30,2016?
Select one:
A. $272,000 debit
B. $276,000 credit
C. $ 16,000 credit
D. $274,000 credit
36. Savannah Company purchases $120,000 of inventory during theperiod and sells $36,000 of it for $60,000. Beginning of the periodinventory was $6,000.
What is the companyâs inventory balance to be reported on itsbalance sheet at year end?
Select one:
A. $36,000
B. $90,000
C. $ 4,000
D. $ 6,000
37. Assuming rising prices, which method will give the highestdollar value for cost of goods sold on the income statement?
Select one:
A. FIFO
B. Average Cost
C. LIFO
D. All of these give equal values for cost of goods sold
38. Kali Company began the period with $20,000 in inventory. Thecompany also purchased an additional $20,000 of inventory andreturned $2,000 for a full credit. A physical count of theinventory at yearâend revealed an inventory on hand of $16,000.What was Kaliâs cost of goods sold for the period?
Select one:
a. $50,000
b. $22,000
c. $48,000
d. $16,000
39. The periodic inventory system differs from the perpetualinventory system:
Select one:
because the periodic system is not compatible with moderntechnology.
because the periodic system continually updates inventory, whilethe perpetual inventory system only updates inventory at the end ofthe period.
because the perpetual system continually updates inventory,while the periodic inventory system only updates inventory at theend of the period.
because the periodic system is more complex and costly.
40. Which one of the following is included in currentassets?
Select one:
A. Common stock
B. Accounts receivable
C. Taxes payable
D. Automobiles
41. For the balance sheet to be in balance, the following mustexist:
Select one:
Total assets must be less than total liabilities
Total assets must be greater than total liabilities
Total assets must equal total liabilities plus stockholders'equity
Total liabilities must equal total stockholders' equity
43. Using a perpetual inventory system, the buyerâs journalentry to record the freight costs includes a:
Select one:
A. Debit to Purchases
B. Debit to Inventory
C. Debit to Freight In
D. Debit to Cost of Goods Sold
44. Joshua records purchases at invoice price and uses theperpetual inventory system. On July 5, Joshua returned $6,000 ofgoods purchased on account to the seller.
How would Joshua record this transaction?
Select one:
A.
Accounts Payable | 6,000 | ||
Purchases | 6,000 | ||
B.
Accounts Receivable | 6,000 | ||
Inventory | 6,000 | ||
C.
Accounts Payable | 6,000 | ||
Inventory | 6,000 | ||
D.
Cash | 6,000 | ||
Purchases | 6,000 | ||
45. Smith & Sons purchased $5,000 of merchandise from theClaremont Company with terms of 3/10, n/30. How much discount isSmith & Sons entitled to take if it pays within the alloweddiscount period of 10 days?
Select one:
$100
$50
$300
$150
46. The accounting record for Max III Company reported thefollowing selected information:
Operating Expenses | $180,000 |
Sales Returns and Allowances | 52,000 |
Sales Discounts | 24,000 |
Sales Revenue | 700,000 |
Cost of Goods Sold | 268,000 |
Determine Max III Company's gross profit.
Select one:
A. $332,000
B. $280,000
C. $308,000
D. $356,000
48. Using a a perpetual inventory system, the sellerâs journalentry to record the payment for merchandise, received from thebuyer, within the discount period includes a:
Select one:
A. Debit to Accounts Receivable
B. Debit to Cost of Goods Sold
C. Credit to Sales Discounts
D. Debit to Sales Discounts
49.Geraldoâs Groceries purchased milk cartons at an invoiceprice of $6,000 and terms of 2/10, n/30. On arrival of the goods,Geraldoâs realized that half of the milk was past the expirationdate, and returned them immediately to the supplier.
If Geraldoâs pays the remaining amount of the invoice within thediscount period, the amount paid should be:
Select one:
A. $2,880
B. $5,880
C. $2,940
D. $6,000
50. Which one of the following is not a current liability?
Select one:
A. Wages payable
B. Accounts payable
C. Wage expense
D. Taxes payable
Comprehensive budgeting problem; activity-based costing,operating and financial budgets. Tyva makes a very popular undyedcloth sandal in one style, but in Regular and Deluxe. The Regularsandals have cloth soles and the Deluxe sandals have cloth-coveredwooden soles. Tyva is preparing its budget for June 2015 and hasestimated sales based on past experience.
Other information for the month of June follows:
Input Prices
Direct materials
Cloth $5.25 per yard
Wood $7.50 per board foot
Direct manufacturing labor $15 per direct manufacturinglabor-hour
Input Quantities per Unit of Output (per pair ofsandals)
Regular | Deluxe | |
Direct materials | ||
Cloth | 1.3 yards | 1.5 yards |
Wood | 0 | 2 b.f. |
Direct manufacturing labor-hours | 5 hours | 7 hours |
Setup hours per batch | 2 hours | 3 hours |
Inventory Information, Direct Materials
| Cloth | Wood |
Beginning inventory | 610 yards | 800 b.f. |
Target ending inventory | 386 yards | 295 b.f. |
Cost of beginning inventory | $3,219 | $6,060 |
Tyva accounts for direct materials using a FIFO cost flowassumption.
Sales and Inventory Information, FinishedGoods
Regular | Deluxe | |
Expected sales in units (pairs of sandals) | 2,000 | 3.000 |
Selling price | $120 | $195 |
Target ending inventory in units | 400 | 600 |
Beginning inventory in units | 250 | 650 |
Beginning inventory in dollars | $23,250 | $92,625 |
Tyva uses a FIFO cost flow assumption for finished goodsinventory.
All the sandals are made in batches of 50 pairs of sandals. Tyvaincurs manufacturing overhead costs, marketing and generaladministration, and shipping costs. Besides materials and labor,manufacturing costs include setup, processing, and inspectioncosts. Tyva ships 40 pairs of sandals per shipment. Tyva usesactivity-based costing and has classified all overhead costs forthe month of June as shown in the following chart:
Cost Type | Denominator Activity | Rate |
Manufacturing | ||
Setup | Setup hours | $18 per setup hour |
Processing | Direct man. Labor-hours | $1.80 per DMLH |
Inspection | Number of pairs of sandals | $1.35 per pair |
Nonmanufacturing | ||
Marketing & general admin | Sales revenue | 8% |
Shipping | Number of shipments | $15 per shipment |
Questions
1.Prepareeach of the following for June:
a.Revenuesbudget
b.Productionbudget in units
c.Directmaterial usage budget and direct material purchases budget in bothunits and dollars, round to dollars
d.Directmanufacturing labor cost budget
e.Manufacturing overhead cost budgets forsetup, processing, and inspection activities
f.Budgetedunit cost of ending finished goods inventory and ending inventoriesbudget
g.Cost ofgoods sold budget
h.Marketingand general administration and shipping costs budget
Tyvaâs balance sheet for May 31 follows.
TYVA BALANCE SHEET AS OF MAY 31
Assets | ||
Cash | 9,435 | |
Accounts Receivable | 324,000 | |
Less: allowance for bad debts | 16,200 | 307,800 |
Inventories | ||
Direct materials | 9,279 | |
Finished goods | 115,875 | |
Fixed assets | 870,000 | |
Less: accumulated depreciation | 136,335 | 733,665 |
Total assets | 1,176,054 |
Liabilities and Equity
Liabilities and Equity | |
Accounts payable | 15,600 |
Taxes payable | 10,800 |
Interest payable | 750 |
Long-term debt | 150,000 |
Common stock | 300,000 |
Retained earnings | 698,904 |
Total liabilities & equity | 1,176,054 |
Use the balance sheet and the following information to prepare acash budget for Tyva for June. Round to dollars.
All sales are on account; 60% are collected in the month of thesale, 38% are collected the following month, and 2% are nevercollected and written off as bad debts.
All purchases of materials are on account. Tyva pays for 80% ofpurchases in the month of purchase and 20% in the followingmonth.
All other costs are paid in the month incurred, including thedeclaration and payment of a $15,000 cash dividend in June.
Tyva is making monthly interest payments of 0.5% (6%per year) ona $150,000 long-term loan.
Tyva plans to pay the $10,800 of taxes owed as of May 31 in themonth of June. Income tax expense for June is zero.
30% of processing, setup, and inspection costs and 10% ofmarketing and general administration and shipping costs aredepreciation.
Prepare a budgeted income statement for June and a budgetedbalance sheet for Tyva as of June 30, 2015.
Listed below are the answers to the first question. Ijust need help with preparing a cash budget for June, and abudgeted income statement and budgeted balance sheet as of June30.
1 | |||||||||
a. | Revenue Budget | ||||||||
For the Month of June 2015 | |||||||||
Regular | Deluxe | ||||||||
Expected sales in units | 2,000 | 3,000 | |||||||
Selling price | 120 | 195 | |||||||
Total sales | $240,000 | $585,000 | |||||||
b. | Production Budget in Units | ||||||||
For the Month of June 2015 | |||||||||
Regular | Deluxe | ||||||||
Budgeted unit sales | 2,000 | 3,000 | |||||||
Add: target ending finished goods inventory | 400 | 600 | |||||||
Total required units | 2,400 | 3,600 | |||||||
Deduct: beginning finished goods inventory | 250 | 650 | |||||||
Units of finished goods to be produced | 2,150 | 2,950 | |||||||
c. | Direct Material Usage Budget in Units andDollars | ||||||||
For the Month of June 2015 | |||||||||
Direct materials required for | |||||||||
Cloth | Wood | Cloth | Wood | ||||||
Units | Yards | B.F. | Total | Total | |||||
Regular | 2,150 | 1.3 | 0 | 2,795 | 0 | ||||
Deluxe | 2,950 | 1.5 | 2 | 4,425 | 5,900 | ||||
7,220 | 5,900 | ||||||||
Cost Budget - to be purchased | |||||||||
Beg. | Need to | Cost to | |||||||
Inv. | purchase | purchase | |||||||
Cloth | 7,220 | 610 | 6,610 | 5.25 | 34,703 | ||||
Wood | 5,900 | 800 | 5,100 | 7.5 | 38,250 | ||||
72,953 | |||||||||
Cost of direct materials to be used thisperiod | |||||||||
available from beginning inventory | Total | ||||||||
Cloth | 34,703 | 3,219 | 37,922 | ||||||
Wood | 38,250 | 6,060 | 44,310 | ||||||
82,232 | |||||||||
Direct Materials Purchases Budget | |||||||||
For the Month of June 2015 | |||||||||
Cloth | Wood | Total | |||||||
Physical units budget | |||||||||
To be used in production | 7,220 | 5,900 | |||||||
Add: target ending direct material inventory | 386 | 295 | |||||||
Total requirements | 7,606 | 6,195 | |||||||
Deduct: beginning direct material inventory | 610 | 800 | |||||||
Purchases to be made | 6,996 | 5,395 | |||||||
Cost of product | 5.25 | 7.5 | |||||||
Totals | 36,729 | 40,463 | 77,192 | ||||||
d. | Direct Manufacturing Labor Cost Budget | ||||||||
For the Month of June 2015 | |||||||||
Output | Labor hrs | Total | Wage | Total | |||||
units | per unit | hours | rate | ||||||
Regular | 2,150 | 5 | 10,750 | 15 | 161,250 | ||||
Deluxe | 2,950 | 7 | 20,650 | 15 | 309,750 | ||||
31,400 | 471,000 | ||||||||
e. | Manufacturing Overhead Cost Budget for Setup,Processing, and Inspection Activities | ||||||||
For the Month of June 2015 | |||||||||
Total production | 2,150 | 2,950 | 5,100 | ||||||
Total sales | 2,000 | 3,000 | 5,000 | ||||||
No. of setup hours | 86 | 118 | 204 | ||||||
No. of shipments | 50 | 75 | 125 | ||||||
Labor hours | 10,750 | 20,650 | 31,400 | ||||||
Setup | Processing | Inspection | Total | ||||||
Allocation | Setup hrs | Labor hrs | No. pairs | ||||||
Rate | 18 | 1.8 | 1.35 | ||||||
No. of Activity | 204 | 31,400 | 5,100 | ||||||
Total | 3,672 | 56,520 | 6,885 | 67,077 | |||||
f. | Budgeted Unit Cost of Ending Finished GoodsInventory | ||||||||
For the Month of June 2015 | |||||||||
Cost per | Regular | Total | Deluxe | Total | |||||
Unit of | Input per | Input per | |||||||
Input | Unit | Unit | |||||||
Output | Output | ||||||||
Cloth | 5.25 | 1.3 | 6.825 | 1.5 | 7.875 | ||||
Wood | 7.5 | 0 | 0 | 2 | 15 | ||||
Direct Manufacturing hours | 15 | 5 | 75 | 7 | 105 | ||||
Machine setup | 18 | 0.04 | 0.72 | 0.06 | 1.08 | ||||
Processing | 1.8 | 5 | 9 | 7 | 12.6 | ||||
Inspection | 1.35 | 1 | 1.35 | 1 | 1.35 | ||||
Total | 92.895 | 142.905 | |||||||
Ending Inventories Budget | |||||||||
For the Month of June 2015 | |||||||||
Quantity | Cost per | Total | |||||||
Unit | |||||||||
Direct materials | |||||||||
Cloth | 386 | 5.25 | 2026.5 | ||||||
Wood | 295 | 7.5 | 2212.5 | 4239 | |||||
Finished goods | |||||||||
Regular | 400 | 92.895 | 37158 | ||||||
Deluxe | 600 | 142.905 | 85743 | 122901 | |||||
Total ending inv. | 127140 | ||||||||
g. | Cost of Goods Sold Budget | ||||||||
For the Month of June 2015 | |||||||||
Regular | Deluxe | ||||||||
Beginning finished goods inventory, Jun 1 | 23250 | 92625 | 115875 | ||||||
Direct materials used (c) | 82232 | ||||||||
Direct manufacturing labor (d) | 471000 | ||||||||
Manufacturing overhead (e) | 67077 | ||||||||
Cost of goods manufactured | 620309 | ||||||||
Cost of goods available for sale | 736184 | ||||||||
Deduct ending finished goods inventory, June 30(f) | 122901 | ||||||||
Cost of goods sold | 613283 | ||||||||
h. | Nonmanufacturing Costs Budget | ||||||||
For the Month of June 2015 | |||||||||
Marketing and general administration | 825000 | 0.08 | 66000 | ||||||
Shipping | |||||||||
(5,000 pairs / 40 pairs per shipment) | 125 | 15 | 1875 | ||||||
Total | 67875 |
Again, I just need help with the cash budget question, and thebudgeted income statement and budgeted balance sheet as ofJune.
Thank you!