Friday 21 September 2012

Brady Products manufactures a sil

Problem 4-15 Analysis of Work in Process T-account-Weighted-Average Method [LO1, LO2, LO3, LO4]

Brady Products manufactures a silicone paste wax that goes through three processing departments— Cracking, Blending, and Packing. All raw materials are introduced at the start of work in the Cracking Department. The Work in Process T-account for the Cracking Department for a recent month is given below:

 

Work in Process—Cracking Department

 


 


  Inventory, May 1

63,700  

Completed and transferred to
the Blending Department

?

  Materials

397,600  

 

 

  Conversion

187,600  

 

 



  Inventory, May 31

?

 

 

 





 


 

The May 1 work in process inventory consisted of 35,000 pounds with $43,400 in materials cost and $20,300 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 80% complete with respect to conversion. During May, 280,000 pounds were started into production. The May 31 inventory consisted of 45,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method to account for units and costs.

 

Required:

 

1.

Determine the equivalent units of production for May.

2.

Determine the costs per equivalent unit for May. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

3.

Determine the cost of the units completed and transferred to the Blending Department during May.(Omit the "$" sign in your response.)

 



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The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion. Information on work in the fi

Problem 4-15 Analysis of Work in Process T-account-Weighted-Average Method [LO1, LO2, LO3, LO4]

Brady Products manufactures a silicone paste wax that goes through three processing departments— Cracking, Blending, and Packing. All raw materials are introduced at the start of work in the Cracking Department. The Work in Process T-account for the Cracking Department for a recent month is given below:

 

Work in Process—Cracking Department

 


 


  Inventory, May 1

63,700  

Completed and transferred to
the Blending Department

?

  Materials

397,600  

 

 

  Conversion

187,600  

 

 



  Inventory, May 31

?

 

 

 





 


 

The May 1 work in process inventory consisted of 35,000 pounds with $43,400 in materials cost and $20,300 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 80% complete with respect to conversion. During May, 280,000 pounds were started into production. The May 31 inventory consisted of 45,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method to account for units and costs.

 

Required:

 

1.

Determine the equivalent units of production for May.

2.

Determine the costs per equivalent unit for May. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

3.

Determine the cost of the units completed and transferred to the Blending Department during May.(Omit the "$" sign in your response.)

 



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Nature’s Way, Inc., keeps one of its production facilities busy making a perfume

Nature’s Way, Inc., keeps one of its production facilities busy making a perfume called Essence de
la Vache. The perfume goes through two processing departments: Blending and Bottling.
The following incomplete Work in Process account is provided for the Blending Department
for March:
Work in Process—Blending
March 1 balance 32,800 Completed and transferred
Materials 147,600 to Bottling (760,000 ounces) ?
Direct labor 73,200
Overhead 481,000
March 31 balance ?
The $32,800 beginning inventory in the Blending Department consisted of the following elements:
materials, $8,000; direct labor, $4,000; and overhead applied, $20,800.
Costs incurred during March in the Bottling Department were: materials used, $45,000; direct
labor, $17,000; and overhead cost applied to production, $108,000.
Required:
1. Prepare journal entries to record the costs incurred in both the Blending Department and
Bottling Department during March. Key your entries to items (a) through (g) below:
a. Raw materials were issued for use in production.
b. Direct labor costs were incurred.
c. Manufacturing overhead costs for the entire factory were incurred, $596,000. (Credit
Accounts Payable and use a single Manufacturing Overhead control account for the
entire factory.)
d. Manufacturing overhead was applied to production using a predetermined overhead rate.
e. Units that were complete with respect to processing in the Blending Department were
transferred to the Bottling Department, $722,000.
f. Units that were complete with respect to processing in the Bottling Department were
transferred to Finished Goods, $920,000.
g. Completed units were sold on account for $1,400,000. The cost of goods sold was
$890,000.
2. Post the journal entries from (1) above to T-accounts. The following account balances existed
at the beginning of March. (The beginning balance in the Blending Department’s Work in
Process account is given above.)
Raw Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $198,600
Work in Process—Bottling Department . . . . . . . . . . $49,000
Finished Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,000
After posting the entries to the T-accounts, find the ending balances in the inventory accounts and
the manufacturing overhead account.

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Thursday 20 September 2012

Pas Company issued $1,000,000 of bonds on January 1, 2012.

Question 3


Pas Company issued $1,000,000 of bonds on January 1, 2012.

 

http://edugen.wileyplus.com/edugen/art2/common/icons/qdone.gif

Your answer is correct.

 

 

Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2), 96, and (3) 102. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)

 

http://edugen.wileyplus.com/edugen/art2/common/icons/qdone.gif

Your answer is correct.

 

 

Prepare the journal entry to record the retirement of the bonds at maturity, assuming the bonds were issued at 100.

 

http://edugen.wileyplus.com/edugen/art2/common/icons/qdone.gif

Your answer is correct.

 

 

Prepare the journal entry to record the retirement of the bonds before maturity at 96. Assume the balance in Premium on Bonds Payable is $9,050. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)

Prepare the journal entry to record the conversion of the bonds into 27,250 shares of $12 par value common stock. Assume the bonds were issued at par. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)

 



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Stewart Corporation's comparative balance sheets are presented below.

Stewart Corporation's comparative balance sheets are presented below.

 

STEWART CORPORATION

 

Balance Sheets

 

December 31

 

 

2012

 

2011

 

 

Cash

$ 3,901

 

$ 4,050

 

 

Accounts receivable

21,604

 

23,636

 

 

Inventory

10,395

 

7,465

 

 

Land

19,756

 

25,678

 

 

Building

69,550

 

69,550

 

 

Accumulated depreciation

(14,917

)

(10,388

)

 

     Total

$110,289

 

$119,991

 

 

 

 

 

 

 

 

Accounts payable

$ 11,877

 

$ 31,268

 

 

Common stock

75,280

 

68,320

 

 

Retained earnings

23,132

 

20,403

 

 

     Total

$110,289

 

$119,991

 

Stewart's 2012 income statement included net sales of $114,610, cost of goods sold of $59,225, and net income of $15,278.

Instructions

Compute the following ratios for 2012. (a) Current ratio. (b) Acid-test ratio. (c) Receivables turnover. (d) Inventory turnover. (e) Profit margin. (f) Asset turnover. (g) Return on assets. (h) Return on common stockholders' equity. (i) Debt to total assets ratio. (Round answers to 1 decimal place, e.g. 10.5.)



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The two ways that a corporation can be classified by purpose are

The two ways that a corporation can be classified by purpose are

·       state and federal.

·       general and limited.

·       Publicly held and privately held

·       Profit and not-for-profit



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Which of the following factors does not affect the initial market price of a stock?

Which of the following factors does not affect the initial market price of a stock?

  • the expected dividend rate per share
  • the current state of the economy
  • the company's anticipated future earnings
  • the par value of the stock


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On January 1, Soft Corporation had 80,000 shares of $10 par value

On January 1, Soft Corporation had 80,000 shares of $10 par value common stock outstanding. On June 17, the company declared a 15% stock dividend to stockholders of record on June 20. Market value of the stock was $15 on June 17. The entry to record the transaction of June 17 would include a

  • credit to Common Stock Dividends Distributable for $60,000.
  • debit to Stock Dividends for $180,000.
  • credit to Cash for $180,000.
  • credit to Common Stock Dividends Distributable for $180,000.


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Income statements for corporations are the same as the statements for

Income statements for corporations are the same as the statements for proprietorships except for the reporting of

  • income tax expense.
  • gross profit.
  • income from operations.
  • other revenues and gains.


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Farris Company borrowed $800,000 from BankTwo on January 1, 2011 in

Farris Company borrowed $800,000 from BankTwo on January 1, 2011 in order to expand its mining capabilities. The five-year note required annual payments of $208,349 and carried an annual interest rate of 9.5%. What is the balance in the notes payable account at December 31, 2012?

  • $800,000
  • $522,729
  • $648,000
  • $667,651


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If the market interest rate is 10%, a $10,000, 12%, 10-year bond, that pays

If the market interest rate is 10%, a $10,000, 12%, 10-year bond, that pays interest semiannually would sell at an amount

  • greater than face value.
  • that cannot be determined.
  • equal to face value.
  • less than face value.


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If a short-term debt investment is sold, the Investment account is

If a short-term debt investment is sold, the Investment account is

  • credited for the cost of the bonds at the sale date.
  • credited for the book value of the bonds at the sale date.
  • debited for the cost of the bonds at the sale date.
  • credited for the fair value of the bonds at the sale date.


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In accounting for debt investments, entries are made for each of the following

In accounting for debt investments, entries are made for each of the following except the

  • sale.
  • acquisition.
  • amortization of any discount or premium.
  • interest revenue.


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Which of the following would be added to net income using the indirect method?

Which of the following would be added to net income using the indirect method?

  • Depreciation expense
  • A decrease in accounts payable
  • An increase in prepaid expenses
  • An increase in accounts receivable


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Indicate where the event paid income taxes would appear, if at all, on the

Indicate where the event paid income taxes would appear, if at all, on the statement of cash flows.

  • Operating activities section
  • Investing activities section
  • Financing activities section
  • Does not represent a cash flow


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West Company had $375,000 of current assets and $150,000 of current

West Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $75,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on the amount of West Company's working capital?

  • No effect
  • $75,000 increase
  • $150,000 increase
  • $75,000 decrease


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The following information is available for Compton Company:

The following information is available for Compton Company:

 
2012
2011
Accounts receivable $  360,000 $  400,000
Inventory 340,000 420,000
Net credit sales 2,470,000 1,400,000
Cost of goods sold 1,860,000 1,060,000
Net income 300,000 170,000



The inventory turnover ratio for 2012 is

  • 5.5 times.
  • 4.4 times.
  • 6.2 times.
  • 4.9 times.


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Friday 14 September 2012

You are provided with the following figures for Rollins Corp. for the 2011 year.

You are provided with the following figures for Rollins Corp. for the 2011 year.

Sales                                                700,000

Direct Labor                                      92,000

Indirect Material                                8,000

Work in Progress 1/1/11 22,000

Rent – Store                                      15,000

Electricity – Factory                        20,000

Purchases, Raw Material            158,000

Sales Salaries                                    28,000

Finished Goods 1/1/11                   35,000

Advertising                                        19,000

Electricity – Store                              7,000

Factory Security                               14,000

Depreciation – Machinery             17,000

Work in Progress 12/31/11           15,000

Rent – Factory                                  36,000

Raw Material 12/31/11                  12,000

Indirect Labor                                   21,000

Finished Goods 12/31/11               23,000

Insurance – Factory                          9,000

Raw Material 1/1/11                        8,000

Sales Commission                            34,000

Depreciation – Store Fixtures         8,000

 

Required:

1. Complete a Cost of Goods Manufactured Schedule, in proper form.

2. Complete an Income Statement, in proper form.

 

Your submission MUST be a word document. Points will be deducted for any other form of submission. Your schedule and statement must be in proper form – this means they should look like they would in an annual report – and not in a spread sheet or a work sheet. As mentioned in class live, individual overheads should be listed rather than just a total being given.



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Sovereign Millwork, Ltd., produces reproductions of antique residential moldings at a plant located in

Problem 3-27 Comprehensive Problem [LO1, LO2, LO4, LO5, LO6, LO7]

Sovereign Millwork, Ltd., produces reproductions of antique residential moldings at a plant located in Manchester, England. Because there are hundreds of products, some of which are made only to order, the company uses a job-order costing system. On July 1, the start of the company’s fiscal year, inventory account balances were as follows:

 

  

 

 

  Raw materials

£

10,000 

  Work in process

£

4,000 

  Finished goods

£

8,000 


 

     The company applies overhead cost to jobs on the basis of machine-hours. Its predetermined overhead rate for the fiscal year starting July 1 was based on a cost formula that estimated £99,000 of manufacturing overhead for an estimated activity level of 45,000 machine-hours. During the year, the following transactions were completed:

 

a.

Raw materials purchased on account, £160,000.

b.

Raw materials requisitioned for use in production, £140,000 (materials costing £120,000 were chargeable directly to jobs; the remaining materials were indirect).

c.

Costs for employee services were incurred as follows:

 

  

 

 

 Direct labor

£

90,000 

 Indirect labor

£

60,000 

 Sales commissions

£

20,000 

 Administrative salaries

£

50,000 


 

d.

Prepaid insurance expired during the year, £18,000 (£13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities).

e.

Utility costs incurred in the factory, £10,000.

f.

Advertising costs incurred, £15,000.

g.

Depreciation recorded on equipment, £25,000. (£20,000 of this amount was on equipment used in factory operations; the remaining £5,000 was on equipment used in selling and administrative activities.)

h.

Manufacturing overhead cost was applied to jobs, £?. (The company recorded 50,000 machine-hours of operating time during the year.)

i.

Goods that had cost £310,000 to manufacture according to their job cost sheets were completed.

j.

Sales (all on account) to customers during the year totaled £498,000. These goods had cost £308,000 to manufacture according to their job cost sheets.

 

1.

Prepare journal entries to record the transactions for the year. (Round your intermediate calculations to 2 decimal places. Omit the "£" sign in your response.)

2.

Prepare t-accounts for inventories, manufacturing overhead, and cost of goods sold. Post relevant data from your journal entries to these t-accounts (don’t forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account. (Record the transactions in the given order. Round your intermediate calculations to 2 decimal places. Omit the "£" sign in your response.)

3-a.

Is manufacturing overhead underapplied or overapplied for the year?

3-b.

Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (Round your intermediate calculations to 2 decimal places. Omit the "£" sign in your response.)

4.

Prepare an income statement for the year. (Input all amounts as positive values. Round your intermediate calculations to 2 decimal places. Omit the "£" sign in your response.)

 



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