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2013-08-19T19:16:00.002-07:00

Hi

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2012-10-17T07:59:00.003-07:00

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Managerial Accounting P20-5A Near the end of 2011, the management of Simid Sports Co

2012-05-30T06:02:00.000-07:00

Managerial Accounting

P20-5A Preparation of a complete master budget

Near the end of 2011, the management of Simid Sports Co, a merchandising company, prepared the following estimated balance sheet for December 31, 2011

Simid Sports Company

Estimated Balance Sheet

December 31,2011

Assets

Cash 18,000

Accounts Receivable 262,500

Inventory 75,000

Total Current Assets 355,500

Equipment 270,000

Less accumulated depreciation 33,750 236,250

Total Assets $ 591,750

Liabilities and Equity

Accounts Payable 180,000

Bank loan payable 7,500

Taxes payable (due 3/15/2012) 45,000

Total liabilities 232,500

Common Stock 236,250

Retained Earnings 123,000

Total stockholders equity 359,250

Total liabilities and equity $ 591,750

To prepare a master budget for January, February and March 2012, management gathers the following information

a. Simid Sports single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 2,500 units on December 1,2011, is more than management's desired level for 2012, which is 20% of the next months expected sales (in units). Expected sales are: January, 3,500 units, February, 4,500 units, March, 5,500 units, and April, 5,000 units.

b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month, after the month of sale. For the December 31, 2011, accounts receivable balance, $62,500 is collected in January and the remaining $200,000 is collected in February.

c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purhase. For the December 31, 201, accounts payable balance, $40,000 is paid in January and the remaining $140,000 is paid in February.

d. Sales commissions equal to 20% of sales ar paid each month. Sales salaries (excluding commissions) are $30,000 per year.

e. General and administrative salaries are $72,000 per year. Maintenance expense equals $1,000 per month and is paid in cash.

f. Equipment reported in the December 31, 2011, balance sheet was purchased January 2011. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter:

January, $18,000, February, $48,000, and March, $14,400. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month's deprecation is taken for the month is which the equipment is purchased.

g. The company plans to acquire land at the end of March at a cost of $75,000, which will be paid with cash on the last day of the month.

h. Simid Sports has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at the end of each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $12,500 each month.

i. The income tax rate for the company is 40%. Income taxes on the first quarter's income will not be paid until Apri l15.

Required:

Prepare a master budget for each of the first three months of 2012; include the following component budgets (show supporting calcuations as needed, and round amounts to the nearest dollar).

1. Monthly sales budgets (showing both budgeted unit sales and dollar sales)

2. Monthly merchandise purchases budget.

3. Monthly selling expense budget.

4. Monthly general and administrative expense budgets.

5. Monthly capital expenditures budgets.

6. Monthly cash budgets.

7. Budgeted income statement for the entire first quarter (not for each month)

8. Budget balance sheet as of March 31, 2012.

P20-5A Simid Sports Co.

Acc280 Financial Accounting: Continuing Cookie Chronicles 2 (CCC2) - as proprietorship

2011-12-12T18:03:00.003-08:00

Continuing Cookie Chronicles 2 (CCC2)

After researching the different forms of business organization, Natalie Koebel decides to operate “Cookie Creations” as a proprietorship. She then starts the process of getting the business running. In November 2009, the following activities take place.

November Transactions
Nov. 8 Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.
8 She opens a bank account under the name “Cookie Creations” and transfers $500 from her personal account to the new account.
11 Natalie pays $165 to have advertising brochures and posters printed. She plans to distribute these as opportunities arise. (Hint: Use Advertising Supplies.)
13 She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash.
14 Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer that originally cost her $750. Natalie decides to start using it only in her new business. She estimates that the equipment is currently worth $300. She invests the equipment in the business.
16 Natalie realizes that her initial cash investment is not enough. Her grandmother lends her $2,000 cash, for which Natalie signs a note payable in the name of the business. Natalie deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months.As a result,the note payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.)
17 She buys more baking equipment for $900 cash.
20 She teaches her first class and collects $125 cash.
25 Natalie books a second class for December 4 for $150. She receives $30 cash in advance
as a down payment.
30 Natalie pays $1,320 for a one-year insurance policy that will expire on December 1, 2010.

Instructions

(a) Use the journal template provided and prepare journal entries to record the November transactions. Remember to use correct journal entry formatting.

(b) Post the journal entries to general ledger accounts. Remember to use correct posting references. Also, note that we do not use descriptions in the ledger account "description" column for regular journal entry postings.

(c) Prepare a trial balance at November 30. Be sure to total the columns of your trial balance. Do NOT include accounts that do not have a ledger balance.

BUY: Continuing Cookie Chronicles 2 (CCC2)

Acc280 Financial Accounting: Continuing Cookie Chronicles 2 (CCC2) - as proprietorship

2011-12-12T18:03:00.001-08:00

Continuing Cookie Chronicles 2 (CCC2)

Instructions

(a) Use the journal template provided and prepare journal entries to record the November transactions. Remember to use correct journal entry formatting.

(c) Prepare a trial balance at November 30. Be sure to total the columns of your trial balance. Do NOT include accounts that do not have a ledger balance.

Tutorial: Continuing Cookie Chronicles 2 (CCC2)

Acc280 Financial Accounting: Continuing Cookie Chronicles 2 (CCC2) - as proprietorship

2011-12-12T17:58:00.001-08:00

Continuing Cookie Chronicles 2 (CCC2)

Instructions

(a) Use the journal template provided and prepare journal entries to record the November transactions. Remember to use correct journal entry formatting.

(c) Prepare a trial balance at November 30. Be sure to total the columns of your trial balance. Do NOT include accounts that do not have a ledger balance.

Tutorial: Continuing Cookie Chronicles 2 (CCC2)

Acc280 Financial Accounting: Continuing Cookie Chronicle 3 (CCC3) - as proprietorship

2011-12-12T17:56:00.000-08:00

Chapter 3 - Continuing Cookie Chronicles 3 (CCC3)

Note: For transaction 3, round depreciation to the nearest dollar.

It is the end of November and Natalie has been in touch with her grandmother. Her grandmother asked Natalie how well things went in her first month of business. Natalie, too, would like to know if she has been profitable or not during November. Natalie realizes that in order to determine Cookie Creations’ income, she must first make adjustments.

Natalie puts together the following additional information.

1. A count reveals that $60 of brochures and posters remain at the end of November.

2. A count reveals that $35 of baking supplies were used during November.

3. Natalie estimates that all of her baking equipment will have a useful life of 5 years or 60 months. (Assume Natalie decides to record a full month’s worth of depreciation, regardless of when the equipment was obtained by the business.)

4. Natalie’s grandmother has decided to charge interest of 6% on the note payable extended on November 16. The loan plus interest is to be repaid in 24 months. (Assume that half a month of interest accrued during November.)

5. On November 30, a friend of Natalie’s asks her to teach a class at the neighborhood school. Natalie agrees and teaches a group of 35 first-grade students how to make Santa Claus cookies. The next day, Natalie prepares an invoice for $300 and leaves it with the school principal. The principal says that he will pass the invoice along to the head office, and it will be paid sometime in December.

6. Natalie receives a cellphone bill for $45. She uses her cellphone only for business. The bill is for services provided during November and is due December 15.

Instructions

Using the information that you have gathered through Chapter 2, and based on the new information above, do the following.
(a) Prepare and post the adjusting journal entries using the general journal template provided. Again, remember to use correct formatting in both the journal and the ledger.

(b) Prepare an adjusted trial balance using the correct worksheet in your template workbook. Be sure to total the columns of your ATB and include only those accounts that have a balance.

(c) Using the adjusted trial balance, calculate Cookie Creations’ net income or net loss for the month of November. You are not required to prepare an income statement.

Tutorial: Continuing Cookie Chronicle 3 (CCC3)

Acc280 Financial Accounting: Continuing Cookie Chronicle 4 (CCC4) - as proprietorship

2011-12-12T17:54:00.000-08:00

Continuing Cookie Chronicle 4 (CCC4)

Note that this is a rather difficult problem. You are asked to prepare financial statements and prepare and post closing entries, but you were not given the specific transactions for December. Instead, you are given the Adjusted Trial Balance for Dec. 31. I recommend that you take the balances on the ATB and write them in the correct ledger accounts. Just make a note to yourself in each ledger that this is the "Dec. 31 balance." Of course, if we were REALLY doing a set of books, we would have posted the entries for Dec. and this wouldn't be necessary.

Natalie had a very busy December.At the end of the month,after journalizing and posting the December transactions and adjusting entries. Natalie prepared the following adjusted trial balance.

COOKIE CREATIONS
Adjusted Trial Balance
December 31, 2009
Debit Credit
Cash $1,180
Accounts Receivable 875
Baking Supplies 350
Prepaid Insurance 1,210
Baking Equipment 1,200
Accumulated Depreciation - Baking Equipment $ 40
Accounts Payable 75
Salaries Payable 56
Interest Payable 15
Unearned Revenue 300
Notes Payable 2,000
N. Koebel, Capital 800
N. Koebel, Drawing 500
Teaching Revenue 4,515
Salaries Expense 1,006
Telephone Expense 125
Advertising Supplies Expense 165
Baking Supplies Expense 1,025
Depreciation Expense 40
Insurance Expense 110
Interest Expense 15
$7,801 $7,801

Instructions:

Using the information in the adjusted trial balance, do the following.

(a) Prepare an income statement and a statement of owner’s equity for the 2 months ended December 31, 2009, and a classified balance sheet as at December 31, 2009. The note payable has a stated interest rate of 6%, and the principal and interest are due on November 16, 2011.

(b) Natalie has decided that her year-end will be December 31, 2009. Prepare and post closing entries as of December 31, 2009.

BUY: Continuing Cookie Chronicle 4 (CCC4)

Chapter 5 - Continuing Cookie Chronicle 5 (CCC5) - as proprietorship

2011-12-12T17:52:00.000-08:00

Continuing Cookie Chronicle 5 (CCC5)

Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European mixers. The owner of Kzinski Supply Co. has approached Natalie to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these mixers. Each appliance has a serial number and can be easily identified. In the end, Natalie decides to use the perpetual inventory system to track her inventory.

The following transactions happen during the month of January.
Date Transaction
Jan 4 Bought five deluxe mixers on account from Kzinski Supply Co. for $2,875, FOB shipping point, terms n/30.
6 Paid $100 freight on the January 4 purchase.
7 Returned one of the mixers to Kzinski because it was damaged during shipping. Kzinski issues Cookie Creations credit for the cost of mixer plus $20 for the cost of freight that was paid on January 6 for one mixer
8 Collected $375 of the accounts receivable from December 2009.
12 Three deluxe mixers are sold on account for $3,450, FOB destination, terns n/30. (Cost of goods sold is $595 per mixer.)
14 Paid the $75 of delivery charges for the three mixers that were sold on January 12.
14 Bought four deluxe mixers on account from Kzinski Supply Co. for $2,300, FOB ship ping point, terms n/30.
17 Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She invests an additional $1,000 cash in Cookie Creations.
18 Paid $80 freight on the January 14 purchase
20 Sold two deluxe mixers for $2,300 cash. (Cost of goods sold is $595 per mixer.)
28 Natalie issued a check to her assistant for all the help the assistant has given her during the month. Her assistant worked 20 hours in January and is also paid the $56 owed at December 31, 2009. (Natalie’s assistant earns $8 an hour.)
28 Collected the amounts due from customers for the January 12 transaction.
30 Paid a $145 cellphone bill ($75 for the December 2009 account payable and $70 for the month of January). (Recall that the cellphone is used only for business purposes.)
31 Paid Kzinski all amounts due.
31 Natalie withdrew $750 cash for personal use.

As of January 31, the following adjusting entry data is available.

1. A count of baking supplies reveals that none were used in January.

2. Another month’s worth of depreciation needs to be recorded on the baking equipment bought in November. (Recall that the baking equipment has a useful life of 5 years or 60 months and no salvage value.)

3. An additional month’s worth of interest on her grandmother’s loan needs to be accrued. (The interest rate is 6%.)

4. During the month, $110 of insurance has expired.

5. An analysis of the unearned revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result, there is no change to the unearned revenue account. Natalie hopes to complete the remaining lessons in February.

6. An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining.

Instructions

Using the information from previous chapters and the new information above, do the following.

(a) Prepare and post the January 2010 transactions.

(b) Prepare a trial balance.

(d) Prepare an adjusted trial balance.

(e) Prepare a multiple-step income statement for the month ended January 31, 2010.

BUY: Continuing Cookie Chronicle 5 (CCC5)

Acc280 Financial Accounting: Comprehensive Problem: Appendix G - Julie Molony, Julie’s Maids Cleaning Service Inc

2011-12-12T17:50:00.000-08:00

Comprehensive Problem

Appendix G

Julie Molony opened Julie’s Maids Cleaning Service Inc. on July 1, 2008. During July, the company completed the following transactions. July 1 Issued $14,000 of common stock for $14,000 cash.

1 Purchased a used truck for $10,000, paying $3,000 cash and the balance on account.

3 Purchased cleaning supplies for $800 on account.

5 Paid $1,800 on a one-year insurance policy, effective July 1.

12 Billed customers $3,800 for cleaning services.

18 Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies.

20 Paid $1,600 for employee salaries.

21 Collected $1,400 from customers billed on July 12.

25 Billed customers $1,500 for cleaning services.

31 Paid gas and oil for the month on the truck, $400.

31 Paid a $600 cash dividend.

The chart of accounts for Julie’s Maids Cleaning Service contains the following accounts:No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable,No. 311 Common Stock,No. 320 Retained Earnings,No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense.

Instructions

(a) Journalize and post the July transactions. Use page J1 for the journal.

(b) Prepare a trial balance at July 31 on a worksheet.

(1) Earned but unbilled fees at July 31 were $1,300.

(2) Depreciation on equipment for the month was $200.

(3) One-twelfth of the insurance expired.

(4) An inventory count shows $100 of cleaning supplies on hand at July 31.

(5) Accrued but unpaid employee salaries were $500.

(d) Prepare the income statement and a retained earnings statement for July, and a classified balance sheet at July 31, 2008.

(e) Journalize and post the adjusting entries. Use page J2 for the journal.

(f ) Journalize and post the closing entries, and complete the closing process. Use page J3 for the journal.

(g) Prepare a post-closing trial balance at July 31.

BUY: Appendix G - Julie's Maid Cleaning Services

Continuing Cookie Chronicle 5 (CCC5) - 2010 New Version

2011-12-12T17:47:00.000-08:00

Continuing Cookie Chronicle (New Version - 2010)
(Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 4.)

CCC5 Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is to become the exclusive distributor of a line of fine European mixers. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these mixers. Each appliance has a serial number and can be easily identified.

Natalie asks you the following questions.
1. “Would you consider these mixers to be inventory? Or, should they be classified as supplies or equipment?”
2. “I’ve learned a little about keeping track of inventory using both the perpetual and the periodic systems of accounting for inventory. Which system do you think is better? Which one would you recommend for the type of inventory that I want to sell?”
3. “How often do I need to count inventory if I maintain it using the perpetual system? Do I need to count inventory at all?”

In the end, Natalie decides to use the perpetual method of accounting for inventory, and the following transactions happen during the month of January.
Jan. 4 She buys five deluxe mixers on account from Kzinski Supply Co. for $2,875, terms n/30.
6 She pays $100 freight on the January 4 purchase.
7 Natalie returns one of the mixers to Kzinski because it was damaged during shipping. Kzinski issues Cookie Creations credit for the cost of the mixer plus $20 for the cost of freight that was paid on January 6 for one mixer.
8 She collects the amount due from the neighborhood community center that was accrued at the end of December 2009.
12 She sells three deluxe mixers on account for $3,450, FOB destination, terms n/30. The mixers cost $595 each (including freight).
13 Natalie pays her cell phone bill previously accrued in the December adjusting journal entries.
14 She pays $75 of delivery charges for the three mixers that were sold on January 12.
14 She buys four deluxe mixers on account from Kzinski Supply Co. for $2,300, terms n/30.
17 Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She issues additional common stock for $1,000.
18 She pays $80 freight on the January 14 purchase.
20 She sells two deluxe mixers for $2,300 cash.
28 Natalie issues a check to her assistant. Her assistant worked 20 hours in January and is also paid for amounts owing at December 31, 2009. Recall that Natalie’s assistant earns $8 an hour.
28 Natalie collects amounts due from customers in the January 12 transaction.
31 She pays Kzinski all amounts due.
31 Cash dividends of $750 are paid.

As of January 31, the following adjusting entry data are available.
1. A count of brochures and posters reveals that none were used in January.
2. A count of baking supplies reveals that none were used in January.
3. Another month’s worth of depreciation needs to be recorded on the baking equipment bought in November. (Recall that the baking equipment has a useful life of 5 years or 60 months.)
4. One month’s worth of amortization (write-off) needs to be recorded on the website.
(Recall that the website has a useful life of 2 years or 24 months.)
5. An additional month’s worth of interest on her grandmother’s loan needs to be accrued. (The interest rate is 9%.)
6. One month’s worth of insurance has expired.
7. Natalie receives her cell phone bill, $75. The bill is for services provided in January and is due February 15. (Recall that the cell phone is used only for business purposes.)
8. An analysis of the unearned revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result there is no change to the unearned revenue account. Natalie hopes to book the outstanding lessons in February.
9. An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining.

Instructions

Using the information that you have gathered and the general ledger accounts that you have prepared through Chapter 4, plus the new information above, do the following.
(a) Answer Natalie’s questions.
(b) Prepare and post the January 2010 transactions.
(c) Prepare a trial balance.
(d) Prepare and post the adjusting journal entries required.
(e) Prepare an adjusted trial balance.
(f) Prepare a multiple-step income statement and retained earnings statement for the month ended January 31, 2010.
(g) Prepare a classified balance sheet as of January 31, 2010.

BUY: Continuing Cookie Chronicle 5 (CCC5)

Managerial Accounting Exercise 1-6 (Identifying product costs in a manufacturing company) Tiffany Crissler

2011-12-12T17:42:00.000-08:00

Exercise 1-6 Identifying product costs in a manufacturing company

Tiffany Crissler was talking to another accounting student, Bill Tyrone. Upon discovering that the accounting department offered an upper-level course in cost measurement, Tiffany remarked to Bill, "How difficult can it be? My parents own a toy store. All you have to do to figure out how much something costs is look at the invoice. Surely you don't need an entire course to teach you how to read an invoice."

Required

a. Identify the three main components of product cost for a manufacturing entity.

b. Explain why measuring product cost for a manufacturing entity is more complex than measuring product cost for a retail toy store.

c. Assume that Tiffany's parents rent a store for $7,500 per month. Different types of toys use different amounts of store space. For example, displaying a bicycle requires more store space than displaying a deck of cards. Also, some toys remain on the shelf longer than others. Fad toys sell quickly, but traditional toys sell more slowly. Under these circumstances, how would you determine the amount of rental cost required to display each type of toy? Identify two other costs incurred by a toy store that may be difficult to allocate to individual toys.

Tutorial: E1-6 Tiffany Crissler

Acc346 Managerial Accounting (Week 6 Quiz) - The following information relates to Vice Versa Ventures

2011-12-12T17:39:00.000-08:00

Acc346 Managerial Accounting (Week 6 Quiz)

(TCO 5) The following information relates to Vice Versa Ventures for calendar year 20XX, the company's first year of operations:

Units produced 20,000

Units sold 17,000

Selling price per unit 35

Direct material per unit 5

Direct labor per unit 5

Variable manufacturing overhead per unit 2

Variable selling cost per unit 3

Annual fixed manufacturing overhead 160,000

Annual fixed selling and administrative expense 80,000

(a) Prepare an income statement using full costing.

(b) Prepare an income statement using variable costing.

Tutorial: Vice Versa Ventures

Acc346 Managerial Accounting (Week 6 Quiz) - Thurman Munster, the owner of Adams Family RVs

2011-12-12T17:37:00.000-08:00

Acc346 Managerial Accounting (Week 6 Quiz)

(TCO 9) Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot. The building and equipment are estimated to cost $1,100,000 and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Munster's required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:

Revenue 450,000

Less: Material cost 60,000

Labor 100,000

Depreciation 110,000

Other 10,000

280,000

Income before taxes 170,000

Taxes at 40% 68,000

Net income $ 102,000

Requirements:

(a) Determine the net present value of the investment in the service center. Should Munster invest in the service center?

(b) Calculate the internal rate of return of the investment to the nearest ½ percent.

(d) Calculate the accounting rate of return.

Tutorial: Adams Family RVs

Managerial Accounting: Exercise 1-1 Identifying financial versus managerial accounting characteristics

2011-12-12T17:33:00.000-08:00

Exercise 1-1 Identifying financial versus managerial accounting characteristics.

Required
Indicate whether each of the following is representative of managerial or of financial accounting.

a. Information is factual and is characterized by objectivity, reliability, consistency, and accuracy.

b. Information is reported continuously and has a current or future orientation.

c. Information is provided to outsiders including investors, creditors, government agencies, analysts, and reporters.

d. Information is regulated by the SEC, FASB, and other sources of GAAP.

e. Information is based on estimates that are bounded by relevance and timeliness.

f. Information is historically based and usually reported annually.

g. Information is local and pertains to subunits of the organization.

h. Information includes economic and nonfinancial data as well as financial data.

i. Information is global and pertains to the company as a whole.

j. Information is provided to insiders including executives, managers, and operators.

Tutorial: E1-1 Financial versus Managerial Accounting

Managerial Accounting: Exercise 1-3 Classifying costs - product or G, S, & A, asset or expense

2011-12-12T17:31:00.000-08:00

Exercise 1-3 Classifying costs: product or G, S, & A/asset or expense.

Required Use the following format to classify each cost as a product cost or a general, selling, and administrative (G, S, & A) cost. Also indicate whether the cost would be recorded as an asset or an expense. The first item is shown as an example.

Cost Category

Research and development costs

Cost to set up manufacturing facility

Utilities used in factory

Cars for sales staff

Distributions to stockholders

General office supplies

Raw materials used in the manufacturing process

Cost to rent office equipment

Wages of production workers

Advertising costs

Promotion costs Production supplies

Depreciation on administrative building

Depreciation on manufacturing equipment

Tutorial: Exercise 1-3 Classifying Costs

Managerial Accounting：P21-6A Kudos Company (Materials, labor, and overhead variances, and overhead variance report)

2011-12-12T17:28:00.000-08:00

Problem 21-6A Materials, labor, and overhead variances, and overhead variance report

Kudos Company has set the following standard costs per unit for the product it manaufactures.

Direct materials (10 lbs @ $3 per lb.) 30.00

Direct labor (4 hrs @ $ per hr.) 24.00

Overhead (4 hrs @ $2.50 per hr.) 10.00

Total standard cost $ 64.00

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 10,000 units per month. The following flexible budget information is available:

Operating Levels 70% 80% 90%

Production in units 7,000 8,000 9,000

Standard direct labor hours 28,000 32,000 36,000

Budgeted overhead

Variable overhead costs

Indirect materials 8,750 10,000 11,250

Indirect labor 14,000 16,000 18,000

Power 3,500 4,000 4,500

Maintenance 1,750 2,000 2,250

Total variable costs 28,000 32,000 36,000

Fixed overhead costs

Rent of factory building 12,000 12,000 12,000

Depreciation - machinery 20,000 20,000 20,000

Supervisory salaries 16,000 16,000 16,000

Total fixed costs 48,000 48,000 48,000

Total overhead costs 76,000 80,000 84,000

During May, the company operated at 90% of capactiy and produced 9,000 units, incurring the following actual costs

Direct materials (92,000 lbs @ $2.95 per lb) $ 271,400

Direct labor (37,600 hrs @ $6.05 per hr) 227,480

Overhead costs

Indirect materials $ 10,000

Indirect labor 16,000

Power 4,500

Maintenance 3,000

Rent of factory building 12,000

Depreciation - machinery 19,200

Supervisory salaries 17,000 81,700

Total costs $ 580,580

Required

1. Compute the direct marterials variance, including its prince and quantity variances

2. Computer the direct labor variance, including its rate and efficiency variances

3. Computer these variances (a) variable overhead spending and efficiency, (b) fixed overhead spending and volume, and C. total overhead controllable.

4. Prepare a detailed overhead variance report that shows the variances for indivdiual items of overhead.

Tutorial: P21-6A Kudos Company

Case Study 1 - Parkview Landscaping Corporation (The Complete Accounting Cycle)

2011-12-12T17:19:00.000-08:00

CASE STUDY 1 -THE COMPLETE ACCOUNTING CYCLE

Requirements Sheet in Workbook
Requirement 1 - Prepare the Journal Entries in the General Journal Journal Entries
Requirement 2 - Post Journal Entries to the General Ledger General Ledger
Requirement 3 - Prepare a Trial Balance Trial Balance
Requirement 4 - Prepare the Adjusting Entries Adjusting Entries
Requirement 5 - Post Adjusting Entries to the General Ledger General Ledger
Requirement 6 - Prepare an Adjusted Trial Balance Adjusted TB
Requirement 7 - Prepare the Financial Statements Financial Statements
Requirement 8 - Prepare the Closing Entries Closing Entries
Requirement 9 - Post Closing Entries to the General Ledger General Ledger
Requirement 10 - Prepare the Post Closing Trial Balance Post Closing TB

During its first month of operation, the Parkview Landscaping Corporation, which specializes in residential landscaping, completed the following transactions:

July 1 Began business by making a deposit in a company bank account of $24,000, in exchange
for 4,800 shares of $5 par value common stock.

July 1 Paid the premium on a one-year insurance policy, $2,400.

July 1 Paid the current month's rent, $2,080.

July 3 Purchased landscaping equipment from Brookwood Company, $8,800. Paid $1,200 down and the balance was
placed on account. Payments will be $400.00 per month for nineteen months. The first payment is due 8/1.
Note: Use Accounts Payable for the Balance Due.

July 8 Purchased landscaping supplies from Lakeside Company on credit, $780.

July 12 Paid utility bill for July, $308.

July 16 Cash landscaping revenue for the first half of July, $2,724.

July 19 Made payment on account to Lakeside Company, $400.

July 31 Cash landscaping revenue for the last half of July, $2,620.

July 31 Declared and paid cash dividend of $1,600.

Tutorial: Parkview Landscaping Corporation

Acc225 Fundamental Accounting Principles: Comprehensive Problem 11 (CP11) Bug-Off Exterminators

2011-12-12T17:16:00.000-08:00

Comprehensive Problem 11 (CP11)

Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. The following six-column table...

BUG-OFF EXTERMINATORS

December 31, 2011

Unadjusted Trial Balance

Cash 18,000

Accounts receivable 5,000

Allowance for doubtful accounts 928

Merchandise inventory 12,700

Trucks 40,000

Accum. depreciation-Trucks -

Equipment 55,000

Accum. depreciation-Equipment 14,400

Accounts payable 4,800

Estimated warranty liability 1,400

Unearned services revenue -

Interest payable -

Long-term notes payable 15,000

D. Buggs, Capital 62,600

D. Buggs, Withdrawals 10,000

Extermination services revenue 70,000

Interest revenue 872

Sales (of merchandise) 80,000

Cost of goods sold 57,991

Depreciation expense-Trucks -

Depreciation expense-Equipment -

Wages expense 32,500

Interest expense -

Rent expense 10,000

Bad debts expense -

Miscellaneous expense 1,338

Repairs expense 671

Utilities expense 6,800

Warranty expense -

Totals 250,000 250,000

The following information in a through h applies to the company at the end of the current year.

a. The bank reconciliation as of December 31, 2011, includes the following facts.

Cash balance per bank 16,100

Cash balance per books 18,000

Outstanding checks 1,800

Deposit in transit 1,450

Interest earned (on bank account) 52

Bank service charges (miscellaneous expense) 15

Reported on the bank statement is a canceled check that the company failed to record.

b. An examination of customers' accounts shows that accounts totaling $779 should be written off as uncollectible. Using an aging of receivables....

c. A truck is purchased and placed in service on January 1, 2011. Its cost is being depreciated....

Original cost 40,000

Expected salvage value 5,000

Useful life (years) 5

d. Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2009.

e. On August 1, 2011, the company is paid $7,680 cash in advance to provide monthly service for an apartment complex for one year.

f. The company offers a warranty for the services it sells. The expected cost of providing warranty service is 2.5% of the extermination...

g. The $15,000 long-term note is an 8%, 5-year, interest-bearing note with interest payable annually on December 31...

h. The ending inventory of merchandise is counted and determined to have a cost of $12,700.

Required:

1. Use the preceding information to determine amounts for the following items.

a. Correct (reconciled) ending balance of Cash, and the amount of the omitted check.

b. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts.

c. Depreciation expense for the truck used during year 2011.

d. Depreciation expense for the two items of equipment used during year 2011.

e. The adjusted 2011 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts.

f. The adjusted 2011 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability.

g. The adjusted 2011 ending balances of the accounts for Interest Expense and Interest Payable.

2. Use the results of part 1 to complete the six-column table

3. Prepare journal entries to record the adjustments entered on the six-column table.

4.1 Prepare a single-step income statement for year 2011.

4.2 Prepare a Statement of owner's equity for year 2011.

4.3 Prepare a Classified balance sheet as at 2011.

Tutorial: CP11 - Bug-Off Exterminators

Comprehensive Problem 2: Ocean Atlantic Co. (Complete Accounting Cycle)

2011-12-12T17:11:00.000-08:00

(In Excel 2007 format)
Comprehensive Problem 2 (CP2)

Ocean Atlantic Co. is a merchandising business. the account balances for Ocean Atlantic co. as of July 1, 2012 (unless otherwise indicated), are as follows:

110 Cash 63,600

112 Accounts Receivable 153,900

115 Merchandise Inventory 602,400

116 Prepaid Insurance 16,800

117 Store Supplies 11,400

123 Store Equipment 469,500

124 Accumulated Depreciation-Store Equipment 56,700

210 Accounts Payable 96,600

211 Salaries Payable -

310 Capital stock 75,000

311 Retained earnings, Aug 1 2011 480,300

312 Dividends 135,000

313 Income summary

410 Sales 3,221,100

411 Sales Returns and Allowances 92,700

412 Sales Discounts 59,400

510 Cost of Merchandise Sold 1,623,000

520 Sales Salaries Expense 334,800

521 Advertising Expense 81,000

522 Depreciation Expense -

523 Store Supplies Expense -

529 Miscellaneous Selling Expense 12,600

530 Office Salaries Expense 182,100

531 Rent Expense 83,700

532 Insurance Expense -

539 Miscellaneous Administrative Expense 7,800

During July, the last month of the fiscal year, the following transactions were completed:

July 1, Paid rent for July, $4000.

3, Purchased merchandise on account from Lingard Co., Terms 2/10,n/30,FOB shipping point, $25,000.

4, Paid freight on purchase of July 3, $1000.

6, Sold merchandise on account to Holt Co., terms 2/10,n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $24,000.

7, Received $18000 cash from Flat Co. on account, no discount.

10, sold merchandise for cash $90,000. The cost of the merchandise sold was $50,000.

13, Paid for merchandise purchased on July 3, less discount.

14, Received merchandise returned on sale of July 6, $7000. The cost of the merchandise returned was $4500.

15, Paid advertising expense for last half of July, $9000

16, received cash from sale of July 6, less return of July 14 and discount.

19, purchased merchandise for cash, $22000.

19, Paid $23,100 to Corino Co. on account, no discount

Record the following transactions on page 21 of the journal

20, sold merchandise on account to Reedley Co., terms 1/10,n/30, FOB shipping point, $40000. The cost of the merchandise sold was $25000.

21, for the convenience of the customer, paid freight on sale of July 20, $1100.

21, received $17600 cash from Owen co. on account, no discount.

21, purchased merchandise on account from Munson Co., terms 1/10, n/30, FOB Destination, $32000.

24, Returned $5000 of damaged merchandise purchased on July21, receiving credit from the seller.

26, Refunded cash on sales made for cash, $12000. The cost of the merchandise returned was $7200.

28, paid sales salaries of $22800 and office salaries of $15200.

29, purchased store supplies for cash, $2400.

30, Sold merchandise on account to Dix co., terms 2/10, n/30, FOB shipping point, $18,750. The cost of the merchandise sold was $11,250.

30, received cash from sale of July 20, less discount, plus freight paid on July 21.

31, Paid for purchase of July 21, less return of July 24 and discount.

Instructions

1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (?) in the posting reference column. Journalize the transactions for July.

2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are no required to update or post to the accounts receivable and accounts payable subsidiary ledgers.

3. Prepare and unadjusted trial balance.

4. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).

a) Merchandise inventory on July 31 $ 565000

b) Insurance expired during the year $ 13400

c) Store supplies on hand on July 31 $3900

d) Depreciation for the current year $11500

e) Accrued salaries on July 31: Sale salaries $3200 Office salaries $1300 ($4500)

5. Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work Sheet), and complete the spreadsheet.

6. Journalize and post the adjusting entries. Record the adjusting entries on page 22 of the journal.

7. Prepare an adjusted trial balance

8. Prepare an income statement, a retained earnings statement, and a balance sheet.

9. Prepare and post the closing entries. Record the closing entries on page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the retained earnings account.

10. Prepare a post-closing trial balance.

Tutorial: CP2 - Ocean Atlantic Co.

Financial and Managerial: Comprehensive Problem 2: South Coast Boards Co (Complete Accounting Cycle)

2011-12-12T17:04:00.000-08:00

(In MS Excel 2007 format)
Comprehensive Problem 2 (CP2)
South Coast Boards Co. is a merchandising business. the account balances for South Coast Boards co. as of July 1, 2010 (unless otherwise indicated), are as follows:

110 Cash 63,600

112 Accounts Receivable 153,900

115 Merchandise Inventory 602,400

116 Prepaid Insurance 16,800

117 Store Supplies 11,400

123 Store Equipment 469,500

124 Accumulated Depreciation-Store Equipment 56,700

210 Accounts Payable 96,600

211 Salaries Payable -

310 Capital stock 100,000

311 Retained earnings, Aug 1 2009 455,300

312 Dividends 135,000

313 Income summary

410 Sales 3,221,100

411 Sales Returns and Allowances 92,700

412 Sales Discounts 59,400

510 Cost of Merchandise Sold 1,623,000

520 Sales Salaries Expense 334,800

521 Advertising Expense 81,000

522 Depreciation Expense -

523 Store Supplies Expense -

529 Miscellaneous Selling Expense 12,600

530 Office Salaries Expense 182,100

531 Rent Expense 83,700

532 Insurance Expense -

539 Miscellaneous Administrative Expense 7,800

During July, the last month of the fiscal year, the following transactions were completed:

July 1, Paid rent for July, $5000.

3, Purchased merchandise on account from Belmont Co., Terms 2/10,n/30,POB shipping point, $40000.

4, Paid freight on purchase of July 3, $600.

6, Sold merchandise on account to Modesto Co., terms 2/10,n/30, FOB shipping point, $25000. The cost of the merchandise sold was $15000.

7, Received $26500 cash from Yuba Co. on account, no discount.

10, sold merchandise for cash $80000. The cost of the merchandise sold was $50000.

13, Paid for merchandise purchased on July 3, less discount.

14, Received merchandise returned on sale of July 6, $6000. The cost of the merchandise returned was $4500.

15, Paid advertising expense for last half of July, $7500

16, received cash from sale of July 6, less return of July 14 and discount.

19, purchased merchandise for cash, $36000.

19, Paid $18000 to Blakke Co. on account, no discount

20, sold merchandise on account to Reedley Co., terms 1/10,n/30, FOB shipping point, $40000. the cost of the merchandise sold was $25000.

21, for the convenience of the customer, paid freight on sale of July 20, $1100.

21, received $17600 cash from Owen co. on account, no discount.

21, purchased merchandise on account from Nye Co., terms 1/10, n/30, FOB Destination, $20000.

24, Returned $2000 of damaged merchandise purchased on July

21, receiving credit from the seller.

26, Refunded cash on sales made for cash, $3000. The cost of the merchandise returned was $1800.

28, paid sales salaries of $22800 and office salaries of $15200.

29, purchased store supplies for cash, $2400.

30, Sold merchandise on account to Whitetail co., terms 2/10, n/30, FOB shipping point, $18750. The cost of the merchandise sold was $11250.

30, received cash from sale of July 20, less discount, plus freight paid on July 21.

31, Paid for purchase of July 21, less return of July 24 and discount.

Instructions

3. Prepare and unadjusted trial balance.

4. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).

a) Merchandise inventory on July 31 $ 589850

b) Insurance expired during the year $ 12500

c) Store supplies on hand on July 31 $4700

d) Depreciation for the current year $18800

e) Accrued salaries on July 31: Sale salaries $4400 Office salaries $2700 ($7100)

5. Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work Sheet), and complete the spreadsheet.

6. Journalize and post the adjusting entries. Record the adjusting entries on page 22 of the journal.

7. Prepare an adjusted trial balance

8. Prepare an income statement, a retained earnings statement, and a balance sheet.

10. Prepare a post-closing trial balance.

Tutorial: CP2 - South Coast Boards Co.

Managerial Accounting - Budget Project: Case 9-30 Earrings Unlimited

2011-12-12T16:58:00.000-08:00

(In Excel 2007 format)
Master Budget with Supporting Schedules

You have been hired as a new management trainees by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experience a shortage of cash.

Sine you are well trained in budgeting, you have decided to prepare comprehensive budgets for the upcoming second quarter in order to show management the benefits that can be gained from an integrated budgeting program. To this end, you have worked with accounting and other areas to gather the information assembled below.

The company sells many styles of earrings, but all are sold for the same price-$10.00 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six month follow (in pairs of earrings):

January (actual) 20,000 Febuary (actual) 26,000
March (actual) 40,000 April (budget) 65,000
May (budget) 100,000 June (budget) 50,000
July (budget) 30,000 August (budget) 28,000
September (budget) 25,000

The concentration of sales before and during May is due to Mother's Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month. Suppliers are paid $4.00 for a pair of earrings. One-half of a month's purchases in paid for in the month of the purchase; the other half is paid for in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 20 percent of a month's sales are collected in the month of sale. An additional 70 percent is collected in the following month, and the remaining 10 percent in the second month following sale. Bad debts have been negligible.

Monthly operation expenses for the company are given below:

Variable:
Sales Commission 4% of sales
Fixed:
Advertising 200,000
Rent 18,000
Salaries 106,000
Utilities 7,000
Insurance 3,000
Depreciation 14,000

Insurance is paid on an annual basis, in November of each year. The company plans to purchase 16,000 in new equipment during May and $40,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $15,000 each quarter payable in the first month of the following quarter.

A listing of the company's ledger accounts as of March 3 is given below:

Assets

Cash 74,000
Accounts receivalbe ($26,000 febuary sales;$320,00 March sale 346,000
Inventory 104,000
Prepaid Insurance 21,000
Property and equipment (net) 950,000

Total Assets 1,495,000

Liabilities and Stockholders Equity

Accounts payable 100,000
Dividends payable 15,000
capital stock 800,000
retained earnings 580,000

Total liabilities and Stockholders Equity 1,495,000

The company maintains a minimum cash balance of 50,000. All borrowing is done at the beginning of a month, and repayments are made at the end of a month. The annual interest rate is 12 percent. Interest is computed and paid at the end of each quarter on all loans outstanding during the quarter.

Required;

Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets;

1. a. A sales budget, by month and in total
b. A schedule of expected cash collections from sales, by month and in total
c. A merchandise purchaser budget in units and in dollars. Show the budget by month and in total.
d. A schedule of expected cash disbursements for merchandise purchases, by month and in total.

2. A cash budget. Show the budget by the month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $50,000

3. A budgeted income statement for the three months period ending June 30. Use the contribution approach.

4. A budgeted balance sheet as of June 30.

Tutorial: Case 9-30 Earrings Unlimited

Acc346 Managerial Accounting (Week 6 Quiz) - Paschal's Parasailing Enterprises has estimated that fixed costs

2011-12-12T16:55:00.000-08:00

Acc346 Managerial Accounting (Week 6 Quiz)

(TCO 4) Paschal's Parasailing Enterprises has estimated that fixed costs per month are $115,600 and variable cost per dollar of sales is $0.38.

(a) What is the break-even point per month in sales?

(b) What level of sales is needed for a monthly profit of $67,000?

Tutorial: Paschal's Parasailing Enterprises

Managerial Accounting P15-18 Determining sales and variable cost volume variances: Todhunter Publications

2011-12-12T16:53:00.000-08:00

P15-18 Determining sales and variable cost volume variances

Todhunter Publications established the following standard price and costs for hardcover picture book that the company produces.

Standard price and variable:

Sales price $36.00

Materials 9.00

Labor 4.50

Overhead 6.30

General, selling, and administrative 7.20

Planned fixed costs:

Manufacturing $135,000

General, selling, and administrative 54,000

Todhunter planned to make and sell 30,000 copies of the book.

Required

a. Prepare the pro forma income statement that would appear in the master budget.

b. Prepare flexible budget income statements, assuming volumes of 29,000 and 31,000 units

c. Determine the sales and variable cost volume variances, assuming volume is actually 31,000 units.

d. Indicate whether the variance are favorable (F) or unfavorable (U)

e. Comment on how Todhunter could use the variances to evaluate performance.

Tutorial: P15-18 Todhunter Publications

Managerial Accounting: P15-19 (Determining and interpreting flexible budget variances) Todhunter Publications

2011-12-12T16:51:00.000-08:00

P15-19 Determining and interpreting flexible budget variances

Use the standard price and cost data supplied in Problem above. Assume that Todhunter actually produced and sold 31,000 books. The actual sales price and costs incurred follow.

Actual price and variable costs:

Sales price $35.00

Materials 9.20

Labor 4.40

Overhead 6.35

General, selling, and administrative 7.00

Planned fixed costs:

Manufacturing $120,000

General, selling, and administrative 60,000

Required

a. Determine the flexible budget variances.

b. Indicate whether each variance is favorable (F) or (U).

c. Identify the management position responsible for each variance. Explain what could have caused the variance

Tutorial: P15-19 Todhunter Publications