Day: April 27, 2018

Acc Module Exam 14

April 27, 2018 1 Comment Uncategorized

Module Exam II: Chapter 14

1. On October 1 of the current year a corporation sold, at par plus accrued interest, $1,000,000 of its 12% bonds,

which were dated July 1 of this year. What amount of bond interest expense should the company report on its current year income statement?

2. A company issued 9%, 10years bonds with a par value of $1,000,000 on September 1, Year 1 when the market rate was 9%. The bonds were dated June 30, Year 1.

The bond issue price included accrued interest. Interest is paid semiannually on December 31 and June 30.

(a) Prepare the issuer’s journal entry to record the issuance of the bonds on September 1.

(b) Prepare the issuer’s journal entry to record the semiannual interest payment on December 31, Year 1.

 

3. A company issued 9.2%, 10-year bonds with a par value of $100,000.  Interest is paid semiannually.

The market interest rate of the issue date was 10%, and the issuer received $95,016 for the bonds.

On the first semiannual interest date, what amount of cash should be paid to the holds of these bonds for interest?

 

4. On January 1, a company issued 10-year, 10% bonds payable with a par value of $500,000, and received $442,647 in cash proceeds.

The market rate of interest at the date of issuance was 12%. The bonds pay interest semiannually on July 1 and January 1.

The issuer uses the straight-line method for amortization. Prepare the issuer’s journal entry to record the first semiannual interest payment on July 1.

5. Wiffery company had the following trading securities in its porfolio of December 31. The fair value adjustment-Trading account

had a balance of zero prior to year end adjustment. Prepare the appropriate adjusting journal entry.

6. Kramer Corporation had the following long investment transactions.

Jan 2;purchased 5,000 shares of Optic, Inc for $42 per share plus $7,000 in fess and comminssion.

These shares represent 35% of ownership of Optic.

Oct 15:Received Optic, Inc. cash dividend of $2 per share.

Dec 31:Optic reported a net loss of $66,000 for the year.

Prepare the journal entries for Karmer Corporation should record for these transactions and events.

ACC 102 Module Exam I, Chapter 10 and 13

April 27, 2018 3 Comments Uncategorized

1. A company purchased a truck on October 1 of the current year at a cost of $40,000. The truck is expected to last six years and has a salvage value of $2,200.

The company’s annual accounting period ends on December 31.

a. What is the depreciation expense for the current year, assuming the straight-line method is used?

b. What is the depreciation expense for the current year, assuming the double-decliningbalance method is used?

2. A machine was purchased for $37,000 and depreciated for five years on a straight-line basis under the assumption it would have a ten-year life and a $1,000 salvage value.

At the beginning of the machine’s sixth year it was recognized the machine had three years of remaining life instead of five and that at the end of the remaining three years

its salvage value would be $1,600. What amount of depreciation should be recorded in each of the machine’s remaining three years?

3. On April 1, Year 1, SAS Corp. purchased and placed in service a plant asset. The following information is available regarding the plant asset:

Acquiition cost130,000

Estimates Salvage value15,000

Estimates Useful life5years

Make the necessary adjusting journal entries at December 31, Year 1, and December 31, Year 2 to record depreciation for each year under the following depreciation methods:

a. Straight-line. b. Double-declining-balance.

a) Straight line method

4. A corporation received its charter and began business this year. The company is authorized to issue 50,000 shares of $100 par, 10%, noncumulative,

nonparticipating preferred stock, and 500,000 shares of no-par common stock. The following selected transactions occurred during this year:

Apr-05issued 250 shares of preferred stock for $104 cash oer share.

Jun-15Exchanged 750 shares of common stock for $15,000 in legal services

incurred in the organisation of the company

Prepare journal entries to record these transactions.

5. Marble Corporation had the following balances in its stockholders’ equity accounts at December 31, 2010:

 

Comon Stock, $10 par, 50,000 shares authorsied,

20,000 shares issued200,000

Paid In Capital in Excess of Par vale, Common250,000

Retained Earnings500,000

Traesury Stock, 1,000 shares-20,000

Total Stockholder Equity930,000

The following transactions occurred during 2011:

Feb-03Sold and issued 3,000 shares of common stock for $22 per share

May-10Declared a $0.50 per share dividend on common stock

Oct-12Sold 500 shares of traesury stock for $20 per share

Dec-31Net Income for the Year was determined to be $75,000

Based on the above information, prepare a statement of stockholders’ equity for 2011. Use the form below.

Acc 235 solution

April 27, 2018 2 Comments Uncategorized

QP Corp. sold 4,000 units of its product at $50 per unit in year 2015 and incurred operating expenses of $5 per unit in selling the units.

It began the year with 700 units in inventory and made successive purchases of its product as follows.

Jan.   1 Beginning inventory   . . . . . . . .  700 units @ $18.00 per unit

Feb. 20 Purchase  . . . . . . . . . . . . . . . . .  1,700 units @ $19.00 per unit

May 16 Purchase  . . . . . . . . . . . . . . . . .  800 units @ $20.00 per unit

Oct.  3 Purchase  . . . . . . . . . . . . . . . . .  500 units @ $21.00 per unit

Dec. 11 Purchase  . . . . . . . . . . . . . . . . .  2,300 units @ $22.00 per unit

Total . . . . . . . . . . . . . . . . . . . .  6,000 units

Required 1. Prepare comparative income statements similar to Exhibit 6.8 for the three inventory costing methods of FIFO, LIFO, and weighted average. (Round all amounts to cents.)

Include a detailed cost of goods sold section as part of each statement. The company uses a periodic inventory system, and its income tax rate is 40%.

2. How would the financial results from using the three alternative inventory costing methods change if the company had been experiencing declining costs in its purchases of inventory?

3. What advantages and disadvantages are offered by using (a) LIFO and (b) FIFO? Assume the continuing trend of increasing costs.

Acc 349 Ethics case

April 27, 2018 1 Comment Uncategorized

BYP1-6 Wayne Terrago, controller for Robbin Industries, was reviewing production cost reports for the year. One amount in these reports continued to bother him–advertising. During the year, the company had instituted an expensive advertising campaign to sell some of its slower-moving products. It was still too early to tell whether the advertising campaign was successful. There had been much internal debate as how to report advertising cost. The vice president of finance argued that advertising costs should be reported as a cost of production, just like direct materials and direct labor. He therefore recommended that this cost be identified as manufacturing overhead and reported as part of inventory costs until sold. Others disagreed. Terrago believed that this cost should be reported as an expense of the current period, based on the conservatism principle. Others argued that it should be reported as Prepaid Advertising and reported as a current asset.

The president finally had to decide the issue. He argued that these costs should be reported as inventory. His arguments were practical ones. He noted that the company was experiencing financial difficulty and expensing this amount in the current period might jeopardize a planned bond offering. Also, by reporting the advertising costs as inventory rather than as prepaid advertising, less attention would be directed to it by the financial community.

Instructions

1.     Who are the stakeholders in this situation?

2.     What are the ethical issues involved in this situation?

3.     What would you do if you were Wayne Terrago?

Accounting 504 unit 8

April 27, 2018 1 Comment Uncategorized

1. (Analyzing inventory reductions at Supervalu) In a narrative format, answer all question presented in the case. Mention some ways other than cost cutting that will improve company operations.

b. Prepare revised product-line earnings statements based on the elimination of Sugar-Bits. It will be necessary to calculate some per-unit data to accomplish this.

2. How do managers go about making segment product line elimination decisions?

 

What is a job order cost system? Describe a situation in which you would use job order cost information. What type of information is useful in making your decision? In your initial response, please do not use citations to convey your understanding. Based on your reading, please communicate your own understanding of the requirements.

Discuss the principal objections to the use of the cash payback method for evaluating capital investment proposals. In your initial response, please do not use citations to convey your understanding. Based on your reading, please communicate your own understanding of the requirements.

1. Complete the information requested in parts (a) and (b) of the Self-Study Review Problem on pg 463.

a. Compute the net present value of each project. Which project should Advo adopt based on the net present value approach?

b. Use the incremental revenue summation method to compute the payback period for each project. Which project should Advo adopt based on the payback approach?

a) What is meant by the expression, time value of money?

b) Why should all capital investment proposals include time value of money (present value) calculations of future cash flows that are to be received from the alternative investments?
 

 

2. Some nonfinancial factors included in capital investment decisions are more important now than they were 20-25 years ago. Give some examples of the types of nonfinancial factors that managers would consider more important in today’s capital investment decisions than they were in the past.

3 .What level of management would be involved in making capital investment decisions? Why? Why are these decisions more critical than day-to-day decisions made by individuals and companies?

 

ACC 290 Week 1 Discussion Questions

April 27, 2018 1 Comment Uncategorized

Week 1 Discussion Questions

                                                                            DQ1

What are the four basic financial statements? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why.

The four basic financial statements are income, retained earnings, balance, and statement of cash flows. Financial statements provide a means for the business to judge the results of their operational or financial performance over a period of time. Income statements provide investors and the business a description of how profitable the business is performing within a specific period in time. Retained earnings are income that is left in the company (reinvested) that was not distributed to the stockholders. This statement explains why the retained earnings increased or decreased during a specific period in time. Balance sheets relay the financial status of the business at a specific period in time. The balance sheet lists the business assets, liabilities, and stockholder equity or assets = liabilities + stockholder equity. Statement of cash flows shows the gross receipts and gross payments or liquidity, over a specific period in time..

ACC 290 Week 1 DQ1

April 27, 2018 3 Comments Uncategorized

What are the four basic financial statements? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why.

The four basic financial statements are income, retained earnings, balance, and statement of cash flows. Financial statements provide a means for the business to judge the results of their operational or financial performance over a period of time. Income statements provide investors and the business a description of how profitable the business is performing within a specific period in time. Retained earnings are income that is left in the company (reinvested) that was not distributed to the stockholders. This statement explains why the retained earnings increased or decreased during a specific period in time. Balance sheets relay the financial status of the business at a specific period in time. The balance sheet lists the business assets, liabilities, and stockholder equity or assets = liabilities + stockholder equity..

ACC 290 Week 1 DQ2

April 27, 2018 1 Comment Uncategorized

How would the financial statements be useful to managers and employees? How would the financial statements be useful to investors and creditors?

Financial statements alert investors of the risk that is involved in investing in the company. The information from these reports also allow investors to judge what type of return they will receive on their investment and it also helps them to determine whether to hold, buy, or sell. Creditors are concerned with any statistical financial information that helps them to determine the financial stability of the organization and whether the business will repay the loan payments on time. Creditors also want to determine the stability of the organization and understand where the money is coming in and where it is going out.

Managers need financial statements so that they can determine what activities within the organization are profitable or not. Managers also use this information to guide decisions, resources, and if operations should continue in the present manner…

ACC 290 Week 1 DQ3

April 27, 2018 5 Comments Uncategorized

What are debits and credits? How are debits and credits used to record business transactions?  Why do accountants debit asset accounts to increase them but credit liability accounts to increase them? Why do accountants debit expenses to increase them but credit revenues to increase them?

A debit is an asset or increase in cash (left column). Debits normally increase assets and decrease liabilities and credits normally decrease assets and increase liabilities. A credit is a decrease in cash (right column). Debits and credits are used to record business transactions by the type of account that is used. Expense and assets are increased on the debit or left side and liability equity and revenue accounts are increased on the credit side. Every transaction must be balanced and in order to accomplish this, a transaction must be posted to an account on the left side as well as to an account on the right side…

ACC 290 Week 1 Individual Assignment Financial Statements Paper

April 27, 2018 2 Comments Uncategorized

Financial statements is a more common term used to refer to statements produced at the end of the accounting periods, such as the income statement, balance sheet, cash flow statement and the statement of owner’s equity. These four financial statements are sometimes known as the final accounts, which the business prepares.

The income statement also known as the trading and profit and loss account is a financial statement, which helps to calculate the gross profit and the net profit of the company for a particular year. Most of the businesses prepare the income statement because they compare revenues with expenses and check the performance. If the revenue exceeds the expenses, the business has earned a profit and vice versa. The information contained in the income statement is not only, but also useful for the internal users of the business such as the managers and owners but however it is also useful for the external users such as government, investors and creditors’.

For internal users, income statement helps to check the performance and profitability of the business. Owners invest their money merely to earn profits and thus it is necessary for them to check the amount of money they have earned in an accounting period. Similarly, manager’s status is directly linked with the profitability of the business. If the organization has able to achieve higher profits, manager’s salary and status often increases. Moreover, income statements also help to check the revenues and expenses of the business and thus managers can decrease their unnecessary expenses to earn more profits. In the same way, making of income statements is also useful for the external users such as investors, creditors and the government. Investors usually check the income statements of the organization to check the past financial performance of the business and to assess the capability of generating future cash flows. Moreover, creditors also take the help of the income statement to check whether the business has enough revenue to pay its dues on time. Finally, the government needs to check in order to calculate the taxes which the firm has to pay with respect to the profits earned over time.

The balance sheet is another financial statement which shows the assets, liabilities and the capital of the business. This document is prepared at the end of the accounting period, and it helps to check the liquidity position and the current health of the organization. It is based on an accounting model (e.g., assets = capital + liabilities). Internal users, such as managers and owners take the help of the balance sheet to check the liquidity of the business…