ACC 522- Final Exam Guide - Comprehensive Notes for the exam ( 41 pages long!)

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orangeminnow913

30 Nov 2017

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Gross profit is calculated as: sales less cost of goods sold, sales less operating expenses, net sales less cost of goods sold, net sales less operating expenses, net sales less cost of goods sold and operating expenses. Cooper inc. sells inventory to greene ltd. for ,000, credit terms of. 2/10, n/30, on may 12, fob shipping point. , paid in cash by the appropriate party. Greene returns of inventory on may 14 and pays the outstanding balance on may 22. What would be the amount that greene ltd. paid cooper: ,469. 60, ,400. 00, ,057. 60, ,352. 00, ,645. 60. The following information is available for akde inc. What is the retained earnings that would be reported at the end of the year on the balance sheet: ,800, ,000, ,000, ,800, ,800. If total assets decreased by ,000 and total equity increased by. Accounting information should be unbiased in order to increase it"s: verifiability, understandability, faithfulness, comparability, relevance.

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Please help on the following questions:) Thank you in advanced!

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:


Current assets as of March 31:
Cash	$	8,800
Accounts receivable	$	25,200
Inventory	$	47,400
Building and equipment, net	$	114,000
Accounts payable	$	28,425
Capital stock	$	150,000
Retained earnings	$	16,975

a.	The gross margin is 25% of sales.
b.	Actual and budgeted sales data:


March (actual)	$63,000
April	$79,000
May	$84,000
June	$109,000
July	$60,000

c.	Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.
d.	Each monthâs ending inventory should equal 80% of the following monthâs budgeted cost of goods sold.
e.	One-half of a monthâs inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory.
f.	Monthly expenses are as follows: commissions, 12% of sales; rent, $3,600 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $855 per month (includes depreciation on new assets).
g.	Equipment costing $2,800 will be purchased for cash in April.
h.	Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the data above:

Complete the following schedule.

Schedule of Expected Cash Collections
	April	May	June	Quarter
Cash sales	$47,400
Credit sales	25,200
Total collections	$72,600

2.) Complete the following:

Merchandise Purchases Budget
	April	May	June	Quarter
Budgeted cost of goods sold	$59,250
Add desired ending inventory	50,400
Total needs	109,650
Less beginning inventory	47,400
Required purchases	$62,250

Budgeted cost of goods sold for April = $79,000 sales Ã 75% = $59,250.

Add desired ending inventory for April = $63,000 Ã 80% = $50,400.

Schedule of Expected Cash DisbursementsâMerchandise Purchases
	April	May	June	Quarter
March purchases	$28,425			$28,425
April purchases	31,125	31,125		62,250
May purchases
June purchases
Total disbursements

3.)

Complete the following cash budget: (Borrow and repay in increments of $1,000. Cash deficiency, repayments and interest should be indicated by a minus sign.)

Shilow Company
Cash Budget
	April	May	June	Quarter
Beginning cash balance	$8,800
Add cash collections	72,600
Total cash available	81,400
Less cash disbursements:
For inventory	59,550
For expenses	17,820
For equipment	2,800
Total cash disbursements	80,170
Excess (deficiency) of cash	1,230
Financing:
Borrowings
Repayments
Interest
Total financing
Ending cash balance

4.)

Prepare an absorption costing income statement for the quarter ended June 30.\

Shilow Company
Income Statement
For the Quarter Ended June 30

Cost of goods sold:





Selling and administrative expenses:

5.)

Prepare a balance sheet as of June 30.

Shilow Company
Balance Sheet
June 30
Assets
Current assets:





Total current assets

Total assets
Liabilities and Stockholdersâ Equity


Stockholders' equity:




Total liabilities and stockholdersâ equity

coralherring96

The following data relate to the operations of Shilow Company, awholesale distributor of consumer goods:


Current assets as of March 31:
Cash	$10,200
Accounts receivable	$20,800
Inventory	$30,000
Buildings and equipment, net	$121,000
Accounts payable	$21,800
Capital stock	$150,000
Retained earnings	$10,200

a.	The gross margin is 20% of sales.
b.	Actual and budgeted sales data:


March (actual)	$52,000
April	$61,000
May	$75,000
June	$80,000
July	$30,000

c.	Sales are 60% for cash and 40% on credit. Credit sales arecollected in the month following sale. The accounts receivable atMarch 31 are a result of March credit sales.
d.	Each month's ending inventory should equal 80% of the followingmonth's budgeted cost of goods sold.
e.	One-half of a month's inventory purchases is paid for in the monthof purchase; the other half is paid for in the following month. Theaccounts payable at March 31 are the result of March purchases ofinventory.
f.	Monthly expenses are as follows: commissions, 13% of sales; rent,$2,000 per month; other expenses (excluding depreciation), 3% ofsales. Assume that these expenses are paid monthly. Depreciation is$200 per month (includes depreciation on new assets.)
g.	Equipment costing $1,000 will be purchased for cash in April.
h.	Management would like to maintain a minimum cash balance of atleast $4,000 at the end of each month. The company has an agreementwith a local bank that allows the company to borrow in incrementsof $1,000 at the beginning of each month, up to a total loanbalance of $20,000. The interest rate on these loans is 1% permonth and for simplicity we will assume that interest is notcompounded. The company would, as far as it is able, repay the loanplus accumulated interest at the end of the quarter.

Requirement 1:

Complete the following schedule using the above data. (Omitthe "$" sign in your response.)

Schedule of Expected Cash Collections
	April	May	June	Quarter
Cash sales	$36,600	$	$	$
Credit sales	20,800

Total collections	$57,400	$	$	$

Requirement 2:

Complete the following using the above data. (Input all amounts as positive values. Leave no cells blank - becertain to enter "0" wherever required. Round the "Schedule ofExpected Cash Disbursements %u2014 Merchandise Purchases" answersto 2 decimal places. Omit the "$" sign in yourresponse.)

Merchandise Purchases Budget
	April	May	June	Quarter
Budgeted cost of goods sold	$48,800	$60,000	$	$
Add desired ending inventory	48,000

Total needs	96,800
Less beginning inventory	30,000

Required purchases	$66,800	$	$	$

Schedule of Expected Cash Disbursements%u2014MerchandisePurchases
	April	May	June	Quarter
March purchases	$21,800.00	$	$	$21,800.00
April purchases	33,400.00	33,400.00		66,800.00
May purchases
June purchases

Total disbursements	$55,200.00	$	$	$

Requirement 3:

Complete the following using the above data. (Omit the "$" sign in your response.)

Schedule of Expected Cash Disbursements%u2014Selling andAdministrative Expenses
	April	May	June	Quarter
Commissions	$7,930	$	$	$
Rent	2,000
Other expenses	1,830

Total disbursements	$11,760	$	$

orangecricket476

"Y" Company began the accounting period with $60,000 of merchandise, and net cost of purchases was $240,000. A physical inventory showed $72,000 of merchandise unsold at the end of the period. The cost of goods sold of Y Company for the period is:

Select one:

a. $300,000.

b. $228,000.

c. $252,000.

d. $168,000.

e. None of the above.

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A business purchased merchandise for $12,000 on account; terms are 2/10, n/30. If $2,000 of the merchandise was returned and the remaining amount due was paid within the discount period, the purchase discount would be:

Select one:

a. $1,200.

b. $200.

c. $240.

d. $1,000.

e. $3,600.

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On a sales invoice, "2/10, n/30" means

Select one:

a. Pay the invoice by February 10, or November 30th.

b. If paid within 2 days, take a cash discount of 10%. Otherwise, the full amount is due within 30 days.

c. Nothing. Things like that are usually typos.

d. If paid within 10 days, take a cash discount of 2%. Otherwise, the full amount is due within 30 days.

e. Pay for two items within 10 days, and the remaining items (n) within 30 days.

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The major differences between unclassified and classified income statements are

Select one:

a. A classified income statement only has two categoriesârevenues and expenses. An unclassified income statement divides both revenues and expenses into operating and non-operating items.

b. An unclassified income statement is made available to the public, while a classified income statement is private.

c. None of these.

d. An unclassified income statement only has two categoriesârevenues and expenses. A classified income statement divides both revenues and expenses into operating and non-operating items.

e. There is no real difference. The terminology depends upon the company's industry classification.

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Gross margin percentage is calculated by

Select one:

a. (Gross margin divided by Net inventory turnover)*100.

b. None of these.

c. (Net cost of sales divided by Net Sales)*100.

d. (Gross margin divided by Net sales)*200

e. ((Gross margin minus non-operating expenses) divided by Gross Sales).

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ACC 522- Final Exam Guide - Comprehensive Notes for the exam ( 41 pages long!)

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