ACCT 1201 Chapter Notes - Chapter 7: Direct Labor Cost, Income Statement, Current Asset
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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 company’s 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 year‑end revealed an inventory on hand of $16,000.What was Kali’s 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 buyer’s 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 seller’s 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.Geraldo’s Groceries purchased milk cartons at an invoiceprice of $6,000 and terms of 2/10, n/30. On arrival of the goods,Geraldo’s realized that half of the milk was past the expirationdate, and returned them immediately to the supplier.
If Geraldo’s 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
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of March and Job Q was incomplete at the end of March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
| Estimated total fixed manufacturing overhead | $ | 14,800 | |
| Estimated variable manufacturing overhead per direct labor-hour | $ | 1.60 | |
| Estimated total direct labor-hours to be worked | 3,700 | ||
| Total actual manufacturing overhead costs incurred | $ | 21,000 | |
| Job P | Job Q | |||||
| Direct materials | $ | 14,400 | $ | 9,700 | ||
| Direct labor cost | $ | 44,800 | $ | 12,000 | ||
| Actual direct labor-hours worked | 2,800 | 750 | ||||
| Q1. If Sweeten Company requisitioned $28,200 from raw materials inventory during March, then how much indirect materials cost would be included in Manufacturing Overhead Incurred? Q2. If Sweeten Company’s labor time tickets totaled $62,400 for the month of March, then how much indirect labor cost would be included in Manufacturing Overhead Incurred? Q3. Calculate the cost of goods sold using the direct method. Q4. Calculate the cost of goods sold using the direct method. Q5. Calculate the cost of goods sold using the indirect method. Q6. How would you revise your answer to question 11 if the company had beginning work in process inventory of $9,700? Q7.How would you revise your answer to question 12 if the company had beginning finished goods inventory of $13,700? Q8. Assume that Job P includes 24 units that each sell for $3,700 and that the company’s selling and administrative expenses in March were $10,000. Prepare an absorption costing income statement for March. | ||||||
The Cold Mountain Furnace Company is a retail store withlocations across the eastern United States. The company’s projectedincome statement for its first year of operations, which endsDecember 31, 2018, and its projected balance sheet as of December31, 2018, are shown below:
Sales | $ 4,000,000 |
Cost of Goods Sold | 2,300,000 |
Gross Margin | 1,700,000 |
Selling and Administrative Expenses | 800,000 |
Net Income | $ 900,000 |
Cash | $ 660,000 |
Accounts receivable | 150,000 |
Inventory | 400,000 |
Property, plant, and equip. (net of accum. deprec.) | 200,000 |
Total assets | $1,410,000 |
Accounts payable | $ 110,000 |
Common stock | 400,000 |
Retained earnings | 900,000 |
Total liabilities and owner’s equity | $1,410,000 |
The company is currently forecasting its 2019 operational year.Anticipated Projections for 2019 follow (continues ontonext page):
Budgeted Sales | |
First quarter | $1,050,000 |
Second quarter | $1,100,000 |
Third quarter | $1,150,000 |
Fourth quarter | $1,100,000 |
All sales are made on credit. Sales are collected in twoportions, consisting of 85% in the quarter of the sale and 15% inthe quarter following the sale. All of the accounts receivable asof December 31, 2018, will relate to sales in the fourth quarter of2018.
The cost of goods sold is expected to increase to 60% of salesin 2019. Inventory is purchased in the quarter of expected sale.80% of inventory purchases are paid for in the quarter of purchaseand 20% are paid for in the quarter following purchase. Safetystock is maintained at all times.
The accounts payable balance as of December 31, 2018, willrelate to inventory purchases made in the fourth quarter of2018.
Selling and administrative costs are expected to increase to$225,000 per quarter in 2019. Of thisquarterly amount, $10,000 is depreciation expenseof the property, plant, and equipment.
The inventory balance at the end of 2019 is expected to be$400,000.
Required:
Prepare the Cold Mountain Furnace Company’s projected IncomeStatement and Balance Sheet for eachquarterly reporting period of 2019. In addition,prepare the company’s projected Income Statement and Statement ofCash Flows for the full year of 2019. Assume that the company isnot subject to federal, state, or local income tax.
