ACCOUNTING
Chapter 10
19. “I always go for the investment with the shortest payback period.” Is this a sound strategy? Why or why not?
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Wednesday, October 12, 2011
What are the advantages and disadvantages associated with the unadjusted rate of return method for evaluating capital investments
ACCOUNTING
Chapter 10
21. What are the advantages and disadvantages associated with the unadjusted rate of return method for evaluating capital investments?
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Chapter 10
21. What are the advantages and disadvantages associated with the unadjusted rate of return method for evaluating capital investments?
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How do manufacturing costs flow through inventory accounts
ACCOUNTING
Chapter 11
3. How do manufacturing costs flow through inventory accounts?
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Chapter 11
3. How do manufacturing costs flow through inventory accounts?
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Why is the salary of a production worker capitalized while the salary of a marketing manager expensed
ACCOUNTING
Chapter 11
7. Why is the salary of a production worker capitalized while the salary of a marketing manager expensed?
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Chapter 11
7. Why is the salary of a production worker capitalized while the salary of a marketing manager expensed?
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What do the terms overapplied overhead and underapplied overhead mean
ACCOUNTING
Chapter 11
9. What do the terms overapplied overhead and underapplied overhead mean?
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Chapter 11
9. What do the terms overapplied overhead and underapplied overhead mean?
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How does the variable costing approach differ from the absorption costing approach
ACCOUNTING
Chapter 11
16. How does the variable costing approach differ from the absorption costing approach? Explain the different income statement formats used with each approach.
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Chapter 11
16. How does the variable costing approach differ from the absorption costing approach? Explain the different income statement formats used with each approach.
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The following is an auditor's report prepared in accordance with International Standards on Auditing (ISAs) issued by the International Auditing
ACCOUNTING
Auditing P 3-33 The following is an auditor's report prepared in accordance with International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB):
Independent Auditor's Report
To the Shareholders of Les Meridian, Inc.
We have audited the accompanying financial statements of Les Meridian, Inc,. which comprise the balance sheet as of December 31, 2009, and the income statement, statement of changes in equity and cash flow statement for the year then ended, and a summary significant accounting policies and other explanatory notes.
AND SO ON
Required:
a. For each of the seven distinct parts of the standard unqualified report prepared in accordance with generally accepted auditing standards in the United States, describe whether key elements of each of those seven parts are present in hte audit report based on International Standards on Auditing for Les Meridian's financial statements.
b. Describe elements in the audit report based on International Standards on Auditing that are more extensive than an audit report based on US auditing standards.
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Auditing P 3-33 The following is an auditor's report prepared in accordance with International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB):
Independent Auditor's Report
To the Shareholders of Les Meridian, Inc.
We have audited the accompanying financial statements of Les Meridian, Inc,. which comprise the balance sheet as of December 31, 2009, and the income statement, statement of changes in equity and cash flow statement for the year then ended, and a summary significant accounting policies and other explanatory notes.
AND SO ON
Required:
a. For each of the seven distinct parts of the standard unqualified report prepared in accordance with generally accepted auditing standards in the United States, describe whether key elements of each of those seven parts are present in hte audit report based on International Standards on Auditing for Les Meridian's financial statements.
b. Describe elements in the audit report based on International Standards on Auditing that are more extensive than an audit report based on US auditing standards.
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Timberland produces treated wood chips as a by-product of pulp manufacturing
ACCOUNTING
Timberland produces treated wood chips as a by-product of pulp manufacturing. The Company purchases materials (chemicals, etc.) for $32 per ton of chips. Variable costs, including labor, costs $10 per ton. The chips can be sold for $70 per ton. Fixed costs, all unavoidable, equals $84,000.Timberland's incremental tax rate is 30%.
Required: 1. Prepare a budgeted income statement assuming that Timberland sells 2,500 tons.
2. What is the contribution margin per ton?
3. Calculate breakeven.
4. Assume the Company requires income of $14,000, how much in dollars does Timberland have to sale to achieve $14,000 profit?
5. Now assume the Company wishes to earn $35,711 after tax. What is the target operating income?
6. Next assume the Company now anticipates selling 3,200 tons of chips. Management believes that if $10,000 is invested in advertising the sale of chips will increase to 4,000 tons. Would you recommend the advertising?
7. As an alternative to advertising the factory foreman suggests that if the Company reduces the selling price to $61 per ton sales can be increased to 4,500 tons. Do you recommend the reduction in sales price?
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Timberland produces treated wood chips as a by-product of pulp manufacturing. The Company purchases materials (chemicals, etc.) for $32 per ton of chips. Variable costs, including labor, costs $10 per ton. The chips can be sold for $70 per ton. Fixed costs, all unavoidable, equals $84,000.Timberland's incremental tax rate is 30%.
Required: 1. Prepare a budgeted income statement assuming that Timberland sells 2,500 tons.
2. What is the contribution margin per ton?
3. Calculate breakeven.
4. Assume the Company requires income of $14,000, how much in dollars does Timberland have to sale to achieve $14,000 profit?
5. Now assume the Company wishes to earn $35,711 after tax. What is the target operating income?
6. Next assume the Company now anticipates selling 3,200 tons of chips. Management believes that if $10,000 is invested in advertising the sale of chips will increase to 4,000 tons. Would you recommend the advertising?
7. As an alternative to advertising the factory foreman suggests that if the Company reduces the selling price to $61 per ton sales can be increased to 4,500 tons. Do you recommend the reduction in sales price?
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Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011
ACCOUNTING
E 17-27 Postretirement benefits; components of postretirement benefit expense
Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011:
Service cost 124
Accumulated postretirement benefit obligation, Jan 1 700
Prior service cost AOCI 50
Prior service cost AOCI none
Net gain AOCI (2011 amort, 1) 91
retiree benefits paid (end of year) 87
contribution to health care benefit fund (end of year) 185
Discount rate 7%
Required:
1. Determine the postretirement benefit expense for 2011.
2. Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and retiree benefits for 2011.
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E 17-27 Postretirement benefits; components of postretirement benefit expense
Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011:
Service cost 124
Accumulated postretirement benefit obligation, Jan 1 700
Prior service cost AOCI 50
Prior service cost AOCI none
Net gain AOCI (2011 amort, 1) 91
retiree benefits paid (end of year) 87
contribution to health care benefit fund (end of year) 185
Discount rate 7%
Required:
1. Determine the postretirement benefit expense for 2011.
2. Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and retiree benefits for 2011.
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Monday, October 10, 2011
Alli Co. is a merchandising business
Alli Co. is a merchandising business. The account balances for Alli Co. as of November 30, 2012 (unless otherwise indicated), are as follows:
110 Cash $ 73,920
112 Accounts Receivable 37,875
AND SO ON
Check Figures for Accounting Project:
Cash Receipts Journal; Cash Column: 90,411
Unadjusted Trial Balance Total: 1,075,455
Net Income: 254,829
Post Closing Trial Balance: 355,756
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110 Cash $ 73,920
112 Accounts Receivable 37,875
AND SO ON
Check Figures for Accounting Project:
Cash Receipts Journal; Cash Column: 90,411
Unadjusted Trial Balance Total: 1,075,455
Net Income: 254,829
Post Closing Trial Balance: 355,756
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Accounting Comprehensive Project: Alli Co. is a merchandising business. The account balances for Alli Co. as of November 30, 2012 (unless otherwise
Foundations of Accounting I
Accounting Project
Alli Co. is a merchandising business. The account balances for Alli Co. as of November 30, 2012 (unless otherwise indicated), are as follows:
110 Cash $ 73,920
112 Accounts Receivable 37,875
AND SO ON
Check Figures for Accounting Project:
Cash Receipts Journal; Cash Column: 90,411
Unadjusted Trial Balance Total: 1,075,455
Net Income: 254,829
Post Closing Trial Balance: 355,756
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Accounting Project
Alli Co. is a merchandising business. The account balances for Alli Co. as of November 30, 2012 (unless otherwise indicated), are as follows:
110 Cash $ 73,920
112 Accounts Receivable 37,875
AND SO ON
Check Figures for Accounting Project:
Cash Receipts Journal; Cash Column: 90,411
Unadjusted Trial Balance Total: 1,075,455
Net Income: 254,829
Post Closing Trial Balance: 355,756
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Sunday, October 2, 2011
The citizen of Spencer County approved the issuance of $2,000,000 in 6 percent general obligation bonds to finance the construction of a courthouse
ACCOUNTING
The citizen of Spencer County approved the issuance of $2,000,000 in 6 percent general obligation bonds to finance the construction of a courthouse annex. A capital projects fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows:
Trial Balance - December 31, 2012
Debit Credits
Cash $ 1,265,000
Contract payable $ 550,000
Due from state government 200,000
Encumbrances 750,000
Expenditures - capital 1,485,000
Intergovernmental grant 40,000
OFS: premium on bonds 35,000
OFS: proceeds sale of bonds 2,000,000
Budgetary fund balance - 750,000
Reserve for encumbrances Transfer out 35,000
$ 3,735,000 $ 3,375,000
a. Prepare any closing entries necessary at year-end.
b. Prepare a Statement of Revenues, Expenditures, And Changes in Fund Balance for the courthouse annex capital project fund.
c. Prepare a balance sheet for the Courthouse Annex Capital Project Fund, assuming all unexpected resources are restricted to construction of the courthouse annex.
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The citizen of Spencer County approved the issuance of $2,000,000 in 6 percent general obligation bonds to finance the construction of a courthouse annex. A capital projects fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows:
Trial Balance - December 31, 2012
Debit Credits
Cash $ 1,265,000
Contract payable $ 550,000
Due from state government 200,000
Encumbrances 750,000
Expenditures - capital 1,485,000
Intergovernmental grant 40,000
OFS: premium on bonds 35,000
OFS: proceeds sale of bonds 2,000,000
Budgetary fund balance - 750,000
Reserve for encumbrances Transfer out 35,000
$ 3,735,000 $ 3,375,000
a. Prepare any closing entries necessary at year-end.
b. Prepare a Statement of Revenues, Expenditures, And Changes in Fund Balance for the courthouse annex capital project fund.
c. Prepare a balance sheet for the Courthouse Annex Capital Project Fund, assuming all unexpected resources are restricted to construction of the courthouse annex.
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The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2010
ACCOUNTING
The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2010.
In 2010, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) were is- sued at a price of $57. In 2011, 1,000 shares were issued as a stock dividend when the stock was selling for $60. Three hundred shares of common stock were bought in 2012 at a cost of $64 per share. These 300 shares are still in the company treasury.
In 2011, 10,000 preferred shares were authorized and the company issued 5,000 of them ($100 par value) at $113. Some of the preferred stock was reacquired by the company and later reissued for $4,700 more than it cost the company.
The corporation has earned a total of $610,000 in net income after income taxes and paid out a total of $312,600 in cash dividends since incorporation.
Instructions
Prepare the stockholders equity section of the balance sheet in proper form for Vicario Corporation as of December 31, 2012. Account for treasury stock using the cost method.
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The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2010.
In 2010, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) were is- sued at a price of $57. In 2011, 1,000 shares were issued as a stock dividend when the stock was selling for $60. Three hundred shares of common stock were bought in 2012 at a cost of $64 per share. These 300 shares are still in the company treasury.
In 2011, 10,000 preferred shares were authorized and the company issued 5,000 of them ($100 par value) at $113. Some of the preferred stock was reacquired by the company and later reissued for $4,700 more than it cost the company.
The corporation has earned a total of $610,000 in net income after income taxes and paid out a total of $312,600 in cash dividends since incorporation.
Instructions
Prepare the stockholders equity section of the balance sheet in proper form for Vicario Corporation as of December 31, 2012. Account for treasury stock using the cost method.
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The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website, www.wiley.com/college/kieso
ACCOUNTING
The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website, www.wiley.com/college/kieso.
Refer to these financial statements and the accompanying notes to answer the following questions.
(a) What is the par or stated value of P&G’s preferred stock?
(b) What is the par or stated value of P&G’s common stock?
(c) What percentage of P&G’s authorized common stock was issued at June 30, 2007?
(d) How many shares of common stock were outstanding at June 30, 2007, and June 30, 2006?
(e) What was the dollar amount effect of the cash dividends on P&G’s stockholders’ equity?
(f) What is P&G’s rate of return on common stock equity for 2007 and 2006?
(g) What is P&G’s payout ratio for 2007 and 2006?
(h) What was the market price range (high/low) of P&G’s common stock during the quarter ended June 30, 2007?
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The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website, www.wiley.com/college/kieso.
Refer to these financial statements and the accompanying notes to answer the following questions.
(a) What is the par or stated value of P&G’s preferred stock?
(b) What is the par or stated value of P&G’s common stock?
(c) What percentage of P&G’s authorized common stock was issued at June 30, 2007?
(d) How many shares of common stock were outstanding at June 30, 2007, and June 30, 2006?
(e) What was the dollar amount effect of the cash dividends on P&G’s stockholders’ equity?
(f) What is P&G’s rate of return on common stock equity for 2007 and 2006?
(g) What is P&G’s payout ratio for 2007 and 2006?
(h) What was the market price range (high/low) of P&G’s common stock during the quarter ended June 30, 2007?
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