ACCT 330 Study Guide - Final Guide: Financial Accounting, Methamphetamine, Certified Public Accountant
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Based on your analysis, what are the strengths and weakness of Bettancort Inc.?
Problem 15 (14)- 4 A Financial & Managerial Accounting 13 th edition p.742-743 Nineteen measures of solvency and profitability.
1. | Current Assets | - | Current Liabilities | = | Calculated Value | |||||||
1. | Working capital: | $1,100,000 | $440,000 | $660,000 | ||||||||
Ratio | Numerator | ÷ | Denominator | = | Calculated Value | |||||||
2. | ||||||||||||
2. | Current ratio | $ 1,100,000 | $ 440,000 | 2.5 | ||||||||
3. | ||||||||||||
3. | Quick ratio | $ 880,000 | $ 440,000 | 2.0 | ||||||||
4. | ||||||||||||
4. | Accounts receivable | |||||||||||
turnover | $ 1,200,000 | $ 120,000 | 10.0 | |||||||||
5. | ||||||||||||
5. | Number of days' | |||||||||||
sales in receivables | $ 120,000 | $ 3,288 | * | 36.5 | * | |||||||
6. | ||||||||||||
6. | Inventory turnover | $ 500,000 | $ 62,500 | 8.0 | ||||||||
7. | ||||||||||||
7. | Number of days' | |||||||||||
sales in inventory | $ 62,500 | $ 1,370 | * | 45.6 | * | |||||||
8. | ||||||||||||
8. | Ratio of fixed assets to | |||||||||||
long-term liabilities | $ 1,320,000 | $ 1,100,000 | 1.2 | |||||||||
9. | ||||||||||||
9. | Ratio of liabilities to | |||||||||||
stockholders' equity | $ 1,540,000 | $ 3,230,000 | 0.5 | |||||||||
10. | ||||||||||||
10. | Number of times | |||||||||||
interest charges earned | $ 446,000 | $ 66,000 | 6.8 | |||||||||
11. | ||||||||||||
11. | Number of times | |||||||||||
preferred dividends earned | $ 300,000 | $ 15,000 | 20.0 | |||||||||
12. | ||||||||||||
12. | Ratio of sales to | |||||||||||
assets | $ 1,200,000 | $ 2,287,500 | 0.5 | |||||||||
13. | ||||||||||||
13. | Rate earned on total | |||||||||||
assets | $ 366,000 | $ 4,562,500 | 8.0% | |||||||||
14. | ||||||||||||
14. | Rate earned on stock- | |||||||||||
holders' equity | $ 300,000 | $ 3,092,500 | 9.7% | |||||||||
15. | ||||||||||||
15. | Rate earned on common | |||||||||||
stockholders' equity | $ 285,000 | $ 2,892,500 | 9.9% | |||||||||
16. | ||||||||||||
16. | Earnings per share | |||||||||||
on common stock | $ 285,000 | 10,000 | $28.50 | |||||||||
17. | ||||||||||||
17. | Price-earnings ratio | $ 71.25 | $ 28.50 | 2.5 | ||||||||
18. | ||||||||||||
18. | Dividends per share | |||||||||||
of common stock | $ 10,000 | 10,000 | $1.00 | |||||||||
19. | ||||||||||||
19. | Dividend yield | $ 1.00 | $ 71.25 | 1.4% | ||||||||
Prepare month end adjusting journal entries and record in thegeneral journal.
Month End Adjustments
Adjustment Number | Adjustment Description | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | Record the expiration of one month's insurance. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Depreciation on Equipment for the month is $300.00. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | After taking an inventory, it is determined there is $100 ofgas and oil on hand at the end of the month. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Nick cut the lawn for the Insurance Agency twice during themonth (refer to the November 14 business transaction). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | The interest owed for the month is $150. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Complete the bank reconciliation and record any necessaryjournal entries.
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All questions have to do with cost accounting systems,more in particular, job order costing.
Complete each of the following statements/Answer the followingquestions
1. A custom-furniture designer would probably use which methodof cost accounting? 1. ____
2. The cost of finished products on hand that have not been soldis called 2. ____
3-5. Work in process consists of these costs that have enteredthe manufacturing process on unfinished products:
3. ____
4. ____
5. ____
6. The accounting system that accumulates the product costsoriginating with inventory and ending with the cost of goods soldis the 6. ____
7. The system best suited to industries that manufacture customgoods to fill special orders is referred to as a 7. ____
8. The system that accumulates costs for each of the departmentswithin the factory is a 8. ____
9. The Receiving Department document that shows the quantityreceived and its condition is the 9. ____
10. Materials are released from the storeroom to the factory inresponse to a 10. ____
11. The amount of time spent by an employee in the factory isusually recorded on 11. ____
12. Indirect materials and indirect labor are examples of thismanufacturing cost 12. ____
13. The costing method that accumulates and allocates factoryoverhead costs to products using many overhead rates is 13.____
14. If estimated total factory overhead costs are $75,000 anddirect labor hours are 15,000, the predetermined factory overheadrate is 14. ____
15. The process of assigning factory overhead costs to a costobject is termed 15. ____
16. In highly-automated factory settings, a widely used activitybase for predetermining a factory overhead rate is 16. ____
17. The subsidiary ledger that contains cost data for the unitsmanufactured, units sold, and units on hand is 17. ____
18. The direct labor and overhead costs of a service businessare accumulated in a 18. ____
19. If the actual factory overhead costs exceed the amount offactory overhead applied, the factory overhead account balance willbe a (debit or credit) 19. ____
20. The factory overhead in Question 19 is said to be 20.____
21. The source of the data for debiting Work in Process fordirect materials is a 21. ____
22. The accounting document that is used to accumulate the costsfor each clientâs job in a service business is a 22. ____
23. The controlling account for the cost ledger is 23. ____
24. The measure used to allocate overhead that reflects itsconsumption is called 24. ____
Indicate the titles of the accounts to be debited andcredited in recording the summarized operations presented below byinserting the letter or letters of the account titles listed in theappropriate columns.
ACCOUNTS
A. Accounts Payable E. FactoryOverhead I. Selling and AdministrativeExpenses
B. Accounts Receivable F.Finished Goods J. Wages Payable
C. Cash G. MaterialsK. Work in Process
D. Cost of Goods Sold H.Sales
TRANSACTIONS | Debit | Credit | ||
0. Cash paid on account...................................................................................... | A | 0. ____ | C | 0. ____ |
1-2. Materials requisitioned for use on specific jobsand for general factory use....................................................................................................................... |
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3-4. Factory labor incurred on specific jobs and forgeneral factory use ....... | 3. ____ | 4. ____ | ||
5-6. Applied factory overhead to jobs................................................................... | 5. ____ | 6. ____ | ||
7-8. Paid salary of vice-president of finance....................................................... | 7. ____ | 8. ____ | ||
9-10. Cashpaid for overhead costs incurred......................................................... | 9. ____ | 10. ____ | ||
11-12. Transferred smallbalance of under-applied overhead ............................ | 11. ____ | 12. ____ | ||
13-14. Jobs completed................................................................................................. | 13. ____ | 14. ____ |