Acct 221 final exam | Accounting homework help

ACCT 221 Final Exam

 

Part I: 20 Multiple choice questions @ 2.5 points each = 50 points

 

 1. Jackson Company is a publicly held corporation whose $1 par value stock is actively traded at $75 per share. The company issued 3,000 shares of stock to acquire land recently advertised at $200,000. When recording this transaction, Barton Company will –

 A) debit Land for $200,000.

 B) debit Land for $225,000.

 C) credit Common Stock for $195,000.

 D) credit Paid-In Capital in Excess of Par for $196,000

 

.

 

 2. Victory Corporation sold 400 shares of treasury stock for $45 per share. The cost for the shares was $35. The entry to record the sale will include a

 

 A) credit to Gain on Sale of Treasury Stock for $14,000.

 B) debit to Paid-in Capital in Excess of Par for $4,000.

 C) credit to Treasury Stock for $18,000.

 D) credit to Paid-in Capital from Treasury Stock for $4,000.

 

 

 3. Which of the following show the proper effect of a stock split and a stock dividend?

 

 

 

 

 4. Dabney, Inc., has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2014. There were no dividends declared in 2013. The board of directors declares and pays a $60,000 dividend in 2014. What is the amount of dividends received by the common stockholders in 2014?

 

 A) $0

 B) $25,000

 C) $10,000

 D) $35,000

 

 

 5. A $600,000 bond was retired at 97 when the carrying value of the bond was $590,000. The entry to record the retirement would include a

 A) gain on bond redemption of $10,000.

 B) gain on bond redemption of $8,000.

 C) loss on bond redemption of $10,000.

 D) loss on bond redemption of $8,000.

 

 

6. The following data are available for Two-off Company.

Increase in accounts payable

$120,000

Increase in bonds payable

300,000

Sale of investments

150,000

Issuance of common stock

160,000

Payment of cash dividends

90,000

 

Net cash provided by financing activities is:

 A) $180,000.

 B) $360,000.

 C) $370,000.

 D) $420,000.

 

 

 7. The net income reported on the income statement for the current year was $220,000. Depreciation recorded on plant assets was $35,000. Accounts receivable and inventories increased by $2,000 and $8,000, respectively. Prepaid expenses and accounts payable decreased by $2,000 and $12,000 respectively. How much cash was provided by operating activities?

 A) $200,000

 B) $235,000

 C) $220,000

 D) $255,000

 

 

 8. If a company reports a net loss, it

 A) will not be able to pay cash dividends.

 B) will not be able to get a loan.

 C) may still have a net increase in cash.

 D) will not be able to make capital expenditures.

 

 

 9. A creditor would be most interested in evaluating which of the following ratios?

 A) Asset turnover

 B) Earnings per share

 C) Times interest earned

 D) Payout ratio

 

 

 10. Lionel Company has beginning work in process inventory of $220,000 and total manufacturing costs of $900,000. If ending work in process is $210,000 what is the cost of goods manufactured?

 A) $700,000.

 B) $950,000.

 C) $910,000.

 D) $940,000.

 

 

11. The principal difference between a merchandising and a manufacturing income statement is the

 A) extraordinary item section.

 B) cost of goods sold section.

 C) operating expense section.

 D) revenue section.

 

 

 12. Given the following data for Good man Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:

Direct materials used

$345,000

 

Beginning work in process

$15,000

Direct labor

305,000

 

Ending work in process

60,000

Manufacturing overhead

450,000

 

Beginning finished goods

75,000

Operating expenses

525,000

 

Ending finished goods

45,000

 

 

 

 

 

 

 

Total Manufacturing Costs

Costs of Goods Manufactured

A

$1,055,000

$1,100,000

B

$1,070,000

$1,130,000

C

$1,100,000

$1,055,000

D

$1,130,000

$1,055,000

 

 

  13. For Cevu Company, the predetermined overhead rate is 80% of direct labor cost. During the month, $800,000 of factory labor costs are incurred of which $200,000 is indirect labor. The amount of overhead debited to Work in Process Inventory should be:

 A) $600,000

 B) $412,500

 C) $480,000

 D) $450,000

 

14. Hunten Manufacturing assigns overhead based on machine hours. The Milling Department logs 1,400 machine hours and Cutting Department shows 4,000 machine hours for the period. If the overhead rate is $6 per machine hour, the entry to assign overhead will show a

 A) debit to Manufacturing Overhead for $22,000.

 B) credit to Manufacturing Overhead for $27,000.

.C) credit to Manufacturing Overhead for $32,400.

 D) debit to Work in Process for $24,000.

 

 

 15. The Molding Department of Bidwell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 680,000 units, completed and transferred out 640,000 units, and ending work in process 80,000 units (50% complete). Assuming 100% of materials are added, equivalent units for conversion costs are:

A) 720,000.

B) 640,000.

C) 760,000.

D) 680,000.

 

 

 

 

 

 

 16. ThoAon, Inc. collected the following production data for the past month:

 

Units Produced

Total Cost

 

1,600

$22,000

 

 

1,300

19,000

 

 

1,500

21,500

 

 

1,100

16,500

 

           

 

If the high-low method is used, what is the monthly total cost equation?

 

 A) Total cost = $5,500 + $10/unit

 B) Total cost = $0 + $15/unit

 C) Total cost = $4,400 + $11/unit

 D) Total cost = $3,300 + $12/unit

 

 

 17. At the break-even point of 2,000 units, variable costs are $120,000, and fixed costs are $64,000. How much is the selling price per unit?

 A) $32

 B) $92

 C) $28

 D) Not enough information

 

 

18. The following information is taken from the production budget for the first quarter:

Beginning inventory in units

1,800

Sales budgeted for the quarter

678,000

Capacity in units of production facility

708,000

How many finished goods units should be produced during the quarter if the company desires 5,000 units available to start the next quarter?

 A) 675,000

 B) 681,000

 C) 711,000

 D) 681,200

 

 

19. Sales results that are evaluated by a static budget might show

1.

favorable differences that are not justified.

2.

unfavorable differences that are not justified.

 

 A) 1

 B) 2

C) neither 1 nor 2.

D) both 1 and 2.

 

 

 

 

 

 

 

 

20. It costs Maker Company $22 of variable and $15 of fixed costs to produce one Panini press which normally sells for $57. A foreign wholesaler offers to purchase 1,000 Panini presses at $40 each. Maker would incur special shipping costs of $5 per press if the order were accepted. Maker has sufficient unused capacity to produce the 1,000 Panini presses. If the special order is accepted, what will be the effect on net income?

 A) $13,000 decrease

 B) $22,000 decrease

 C) $7,000 increase

 D) $13,000 increase

 

Part II. 6 Comprehensive problems worth 50 points total

 

21. Points = 4

Brigg Enterprises produces miniature parasols. Each parasol consists of $1.40 of variable costs and $.90 of fixed costs and sells for $4.50. A French wholesaler offers to buy 7,000 units at $$2 each, of which Pederson has the capacity to produce. Brigg will incur extra shipping costs of $.12 per parasol.

 

Instructions show format to say reject, accept

Determine the incremental income or loss that the company would realize by accepting the special order.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 22. Points = 4

R&R Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for R&R for $300 each. R&R needs 1,500 clocks annually. R&R has provided the following unit costs for its commercial clocks:

Direct materials

     $100

Direct labor

      110

Variable overhead

        35

Fixed overhead(60% avoidable if

buy) 150      

 

Instructions

Prepare an incremental analysis, which shows the effect of the make-or-buy decision.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

               

23. Points = 12

The current sections of Donny Inc.’s balance sheets at December 31, 2013 and 2014, are presented here.

 

Donny’s net income for 2014 was $103,000. Depreciation expense was $15,000.

 

 

   2014 

  2013  

Current assets

 

    Cash

$115,000

$99,000

    Accounts receivable

110,000

90,000

    Inventory

160,000

 172,000

    Prepaid expense

    27,000

   21,000

           Total current assets

$412,000

$382,000

Current liabilities

 

    Accrued expenses payable

$  15,000

$  5,000

    Accounts payable

    85,000

   93,000

           Total current liabilities

$100,000

$ 98,000

       

Instructions

Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2014, using the indirect method.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24. Points = 10

Nona Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June.

 

June

1

 

Purchased raw materials for $30,000 on account.

 

 

 

8

 

 

Raw materials requisitioned by production:

 

 

 

 

Direct materials

$8,500

 

 

 

 

 

Indirect materials

1,500

 

 

 

15

 

Paid factory utilities, $3,000 and repairs for factory equipment, $7,500.

 

 

 

25

 

 

 

Incurred $98,000 of factory labor.

 

 

 

25

 

 

Time tickets indicated the following:

 

 

 

 

Direct Labor

(6,000 hrs @ $13 per hr)

=

$78,000

 

 

 

 

 

Indirect Labor

(2,500 hrs @ $8 per hr)

=

  20,000

 

 

 

 

 

 

 

$98,000

 

 

 

 

25

 

 

Applied manufacturing overhead to production based on a predetermined overhead rate of $8 per direct labor hour worked.

 

 

 

28

 

 

Goods costing $25,000 were completed in the factory and were transferred to finished goods.

 

 

30

 

 

Goods costing $22,000 were sold for $30,000 on account

                     

 

 

 

Instructions

Prepare an incremental analysis, which shows the effect of the make-or-buy decision.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25. Points = 12

Meyer Manufacturing Company uses a process cost system. The Molding Department adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Work in process on May 1 was 75% complete and work in process on May 31 was 40% complete as to conversion cost and 100% complete as to materials.

 

Instructions

Complete the Production Cost Report for the Molding Department for the month of May using the above information and the information below.

 

 

 

 

 

Instructions: Complete the Production Cost Report below for the Molding Department for the month of May.

 

 

 

 

Equivalent Units

 

QUANTITIES

Physical Units

Materials

Conversion Costs

 

Work in process, May 1

7,000

 

 

 

Started into production

28,000

 

 

 

Total units

35,000

 

 

 

 

 

 

 

 

Units accounted for:

 

 

 

 

Transferred out

30,000

 

 

 

Work in process, May 31

5,000

 

 

 

Total units

35,000

 

 

 

 

 

 

 

 

 

 

 

 

 

COSTS

 

 

 

 

Unit costs

 

Materials

Conversion Costs

Total

Costs in May

 

$140,000

$160,000

$300,000

Equivalent units

 

 

 

 

Units costs

 

 

 

 

 

 

 

 

 

Costs to be accounted for

 

 

 

 

Work in process, May 1

 

 

 

$60,000

Started into production

 

 

 

240,000

 

 

 

 

$300,000

 

 

 

 

 

Cost Reconciliation Schedule

 

 

 

 

Costs accounted for:

 

 

 

 

Transferred out

 

 

 

 

Work in process, May 31:

 

 

 

 

….Materials

 

 

 

 

….Conversion costs

 

 

 

 

Total costs

 

 

 

 

$300,000

 

 

 

 

 

26. Points = 8

Data concerning manufacturing overhead for Analina Industries are presented below. The Mixing Department is a cost center.

 

An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and that 50% of supervisory costs are controllable at the department level. Depreciation and Property Taxes are not controllable by the manager.

 

The flexible budget formula and the cost and activity for the months of June and July are as follows:

 

Instructions

(a)

Prepare the responsibility reports for the Mixing Department for each month.

 

 

 

 

June

July

Controllable Cost

Budget

Actual

Delta

F or U

Budget

Actual

Delta

F or U

Indirect materials

 

 

 

 

 

 

 

 

Indirect labor

 

 

 

 

 

 

 

 

 

Factory supplies

 

 

 

 

 

 

 

 

Supervision

 

 

 

 

 

 

 

 

 

Total costs

 

 

 

 

 

 

 

 

 

 

·         F = Favorable variance

·         U = Unfavorable variance

 

 

(b) Comment on the manager’s performance in controlling costs during the two-month period.

 

 

 

 

 

 

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