Project #41023 - Accounting

Principles of Accounting II

ACCT221, Section 4010

Quiz #2 (Take Home)

Chapters 17, 18, 19 & 20

AT THE BEGINNING OF CLASS

 

 

#1 A comparative balance sheet for Bouvier Corporation is presented below:

BOUVIER CORPORATION

Comparative Balance Sheet

                                                                                                             2014                         2013    

Assets

Cash                                                                                              $  36,000                $  31,000

Accounts receivable (net)                                                              70,000                    60,000

Prepaid insurance                                                                           25,000                    17,000

Land                                                                                                                                   18,000    40,000

Equipment                                                                                        70,000                    60,000

Accumulated depreciation                                                            (20,000)                  (13,000)

         Total Assets                                                                         $199,000                $195,000

 

Liabilities and Stockholders' Equity

Accounts payable                                                                       $  11,000                 $   6,000

Bonds payable                                                                                 27,000                    19,000

Common stock                                                                               140,000                  115,000

Retained earnings                                                                          21,000                    55,000

         Total liabilities and stockholders' equity                        $199,000                $195,000

 

Additional information:

1.   Net loss for 2014 is $20,000.

2.   Cash dividends of $14,000 were declared and paid in 2014.

3.   Land was sold for cash at a loss of $4,000. This was the only land transaction during the year.

4.   Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash.

5.   $22,000 of bonds were retired during the year at carrying (book) value.

6.   Equipment was acquired for common stock. The fair value of the stock at the time of the exchange was $25,000.

 

 

Instructions

Prepare a statement of cash flows for the year ended 2014, using the indirect method.

#2The Joyce Corporation experienced a fire on December 31, 2015, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances.

                                                                        December 31, 2015            December 31, 2014

Cash                                                                      $  30,000                            $  10,000

Receivables (net)                                                    85,000                              125,000

Inventory                                                                 200,000                              180,000

Accounts payable                                                    50,000                                90,000

Notes payable                                                          30,000                                 60,000

Common stock, $100 par                                     400,000                               400,000

Retained earnings                                                130,000                               101,000

 

Additional information:

1.   The inventory turnover is 4 times

2.   The return on common stockholders' equity is 20%. The company had no additional paid-in capital.

3.   The accounts receivable turnover is 8.6 times.

4.   The return on assets is 16%.

5.   Total assets at December 31, 2014, were $685,000.

 

Instructions

Compute the following for The Joyce Corporation.

(a)    Cost of goods sold for 2015.

(b)    Net sales (credit) for 2015.

(c)     Net income for 2015.

(d)    Total assets at December 31, 2015.

 

 

 

 

#3Manufacturing cost data for Pear Corporation, which uses a job order cost system, are presented below:

                                                                    iPear Mini         iPear Video

         Direct Materials Used                                   (a)                $103,000

         Direct Labor                                            $ 70,000                140,000

         Manufacturing Overhead Applied         63,000                      (d)

         Total Manufacturing Costs                   240,000                      (e)

         Work in Process, 1/1/13                               (b)                     45,000

         Total Cost of Work in Process              300,000                       (f)

         Work in Process, 12/31/13                           (c)                     40,000

         Cost of Goods Manufactured               205,000                      (g)

 

Instructions

 

Indicate the missing amount for each letter. Assume that overhead is applied on the basis of direct labor cost and that the rate is the same for both products.

#4 The following information is available for Carrasco Corporation for the year ended December 31, 2014:

                                                  

         Collection of principal on long-term loan to a supplier                                   $15,000

         Acquisition of equipment for cash                                                                       10,000

         Proceeds from the sale of long-term investment at book value                      20,000

         Issuance of common stock for cash                                                                     27,000

         Depreciation expense                                                                                            28,000

         Redemption of bonds payable at carrying (book) value                                   35,000

         Payment of cash dividends                                                                                   15,000

         Net income                                                                                                               25,000

         Purchase of land by issuing bonds payable                                                      45,000

 

In addition, the following information is available from the comparative balance sheet for Carrasco at the end of 2013 and 2014:

 

                                                                                                 2014                       2013 

         Cash                                                                         $  66,000                $14,000

         Accounts receivable (net)                                         20,000                  16,000

         Prepaid insurance                                                      18,000                  13,000

         Total current assets                                               $104,000                $43,000

 

         Accounts payable                                                  $  30,000                $20,000

         Salaries payable                                                           3,000                    7,000

         Total current liabilities                                           $  33,000                $27,000

 

Instructions

Prepare Carrasco's statement of cash flows for the year ended December 31, 2014 using the indirect method.

 

 

#5 Presented below are incomplete 2013 manufacturing cost data for Sesay  Corporation.

 

 

Direct Material Used

 

Direct Labor

 

Manufacturing Overhead

Total Manufacturing Costs

Work in Process (1/1)

Work in Process (12/31)

Cost of Goods Manufactured

(a)

$38,000

$60,000

$48,000

?

$120,000

$96,000

?

(b)

$149,000

$53,000

$90,000

$292,000

?

$98,000

$311,000

(c)

$53,000

$116,000

$121,000

$290,000

$413,000

?

$515,000

 

 

Instructions

 

Determine the missing amounts. (Remember the formula!)

 

#6The comparative condensed balance sheets of Sterling Corporation are presented below.

STERLING CORPORATION

Comparative Condensed Balance Sheets

December 31

                                                                                                2015                           2014

Assets

Current assets                                                           $  72,000                    $  80,000

Property, plant, and equipment (net)                         95,400                        90,000

Intangibles                                                                      33,600                        40,000

Total assets                                                          $201,000                   $210,000

Liabilities and stockholders' equity                                                                                  

Current liabilities                                                       $  40,320                    $  48,000

Long-term liabilities                                                     142,500                      150,000

Stockholders' equity                                                      18,180                        12,000

Total liabilities and stockholders' equity         $201,000                   $210,000

 

 

 

Instructions

(a)   Prepare a horizontal analysis of the balance sheet data for Sterling Corporation using 2014 as a base.

 

(b)   Prepare a vertical analysis of the 2015 balance sheet data for Sterling Corporation in columnar form.

 
 

 

 

#7Pinkney Corporation incurred the following costs while manufacturing its product.

 

Materials used in product                    $130,000     Advertising expense               $49,000

Depreciation on plant                               65,000      Property taxes on plant             16,000

Property taxes on store                               7,700      Delivery expense                       20,000

Labor costs of assembly-line workers   112,000     Sales commissions                   31,000

Factory supplies used                              24,000      Salaries paid to sales clerks    58,000

 

Work-in-process inventory was $23,000 at January 1 and $15,800 at December 31. Finished goods inventory was $67,000 at January 1 and $52,600 at December 31.

 

Instructions

(a) Compute cost of goods manufactured.

(b) Compute cost of goods sold.

 

#8Jefferson Corporation's comparative balance sheets are presented below.

JEFFERSON CORPORATION

Comparative Balance Sheets

December 31

                                                                                                               2014                          2013  

                        Cash                                                                         $ 21,570                    $ 10,700

                        Accounts receivable                                                  18,200                       23,400

                        Land                                                                             18,000                       26,000

                        Building                                                                       70,000                       70,000

                        Accumulated depreciation                                      (15,000)                    (10,000)

                             Total                                                                    $112,770                   $120,100

                        Accounts payable                                                  $  12,370                     $31,100

                        Common stock                                                           75,000                       69,000

                        Retained earnings                                                     25,400                       20,000

                            Total                                                                     $112,770                   $120,100

 

Additional information:

 

1. Net income was $27,900. Dividends declared and paid were $22,500.

 

2. All other changes in noncurrent account balances had a direct effect on cash flows,    except the change in accumulated depreciation. The land was sold for $5,900.

 

Instructions

(a)  Prepare a statement of cash flows for 2014 using the indirect method.

(b)  Compute free cash flow.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

#9Assuming a statement of cash flows is prepared, indicate the reporting of the transactions and events listed below by major categories on the statement. Use the following code letters to indicate the appropriate category under which the item would appear on the statement of cash flows.

                                                                                    Code

Cash Flows From Operating Activities

      Add to Net Income                                      A

      Deduct from Net Income                           D

Cash Flows From Investing Activities        IA

Cash Flows From Financing Activities       FA

                                                                                                                                    Category

    1.     Common stock is issued for cash at an amount above par value.     _____

    2.     Merchandise inventory increased during the period.                           _____

    3.     Depreciation expense recorded for the period.                                      _____

    4.     Building was purchased for cash.                                                            _____

    5.     Bonds payable were acquired and retired at their carrying value.     _____

    6.     Accounts payable decreased during the period.                                   _____

    7.     Prepaid expenses decreased during the period.                                   _____

    8.     Treasury stock was acquired for cash.                                                     _____

    9.     Land is sold for cash at an amount equal to book value.                     _____

  10.     Patent amortization expense recorded for a period.                              _____

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

#10  Harrison Corporation's comparative balance sheets are presented below.

HARRISON CORPORATION

Comparative Balance Sheets

December 31

                                                                                                                2014                         2013  

                        Cash                                                                          $ 18,700                   $ 22,700

                        Accounts receivable                                                   24,700                      22,300

                        Investments                                                                  25,000                      16,000

                        Equipment                                                                    59,000                      70,000

                        Accumulated depreciation                                       (14,500)                   (10,000)

                             Total                                                                      $112,900                 $121,000

                        Accounts payable                                                    $  13,600                   $11,100

                        Bonds payable                                                               6,000                      30,000

                        Common stock                                                             50,000                      45,000

                        Retained earnings                                                      43,300                       34,900

                            Total                                                                       $112,900                 $121,000

 

Additional information:

1.       Net income was $17,700. Dividends declared and paid were $9,300.

 

2.       Equipment which cost $11,000 and had accumulated depreciation of $2,000 was sold for $4,000.

 

     3.    All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.

 

Instructions

(a)     Prepare a statement of cash flows for 2014 using the indirect method.

(b)     Compute free cash flow.

 

 

 

 

 

 

 

 

 

 

 

 

Subject Mathematics
Due By (Pacific Time) 09/26/2014 12:00 am
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