Accounting 260 Take Home Final February 27, 2012 Name: _________________________________
Accounting 260 Take Home...
Accounting 260 Take Home Final February 27, 2012 Name: _____________________________________Submitted: 8 years ago.Category: Multiple Problems
1. The following transactions apply to Copeland's Fitness Center for 2012.
1) Started the business by issuing $18,000 of common stock for cash
2) Provided services to clients and received $28,000 cash
3) Borrowed $6,500 from the bank for the business
4) Paid $4,500 for rent of equipment
5) Paid $6,000 of salary expense
6) Cash dividends of $11,500 were paid to the stockholders
Required: a) What are the total assets of the business at the end of 2012? b) Prepare a Statement of Cash Flows for 2012.
2. Anderson Book Company shows the following transactions for the accounting period ending December 31, 2012:
1) Sold books to customers for $34,000 on account
2) Collected $28,000 from customers
3) Issued common stock for $8,000 cash
4) Prepaid four months rent for $4,400 on October 1, 2012
5) Purchase supplies for $10,500 cash
6) Physical count shows $3,250 of supplies left over on December 31, 2012
7) Recorded adjustment for prepaid rent used up
Show how the above transactions and yearend adjustments affect the financial statement accounts on the accounting equation. After entering all the transactions and adjustments, enter column totals.
3. Scott Company is a merchandising business that was started in 2012. Scott uses the perpetual inventory system. It experienced the following events during 2012.
1. Acquired $25,000 cash by issuing common stock
2. Purchased inventory on account that cost $14,000, terms 2/10, n/30
3. Sold inventory that had cost $8,400 for $15,000 cash
4. Paid for the merchandise referred to in event 2, within the discount period
Required: a) Record the events in the financial statements model below; include column totals.
b) Prepare an income statement for 2012. c) What is the amount of total assets at the end of 2012?
4. The May 31, 2012, balance per bank statement for Lipton Company was $7,200. The cash balance per books was $9,500. Outstanding checks amounted to $800, and deposits in transit were $2,400. The bank statement contained an NSF check for $500, a service charge for $25, and a debit memo for direct payment of the telephone bill of $175. Required: Prepare a bank reconciliation to determine the true cash balance at May 31, 2012
5. Wiley Corporation accepted credit cards for $107,200 of services performed in 2012. The credit card company charged a 3% service fee and paid Riley as soon as it received the credit card receipts.
Required: Based on this information only, determine
a) the amount of revenue that Riley should report on its 2012 income statement.
b) the amount of expense that Riley should report on its 2012 income statement.
c) the amount of assets that Riley has at the end of 2012.
d) Riley's cash flows from operating activities for 2012.
6. In 2012, Albert Mining Co. purchased a coal mine that contained an estimated 1,000,000 tons of coal for a cash price of $7,500,000. The company mined 250,000 tons of coal in 2012. Required: a) What is the depletion charge per ton of coal? b) What is the amount of depletion expense for 2012?
7. The following is a list of balance sheet accounts (in random order) and balances for the Community Naval Supply Company. They have been updated as of December 31, 2012.
Required: Prepare a classified balance sheet for Community Naval Supply Company at December 31, 2012.
8. Austin Corporation was authorized to issue 100,000 shares of $10 par common stock. During 2012 Austin issued 30,000 shares at a market price of $15 per share. On December 1, 2012, Austin declared a cash dividend of $2 per share payable on December 30 to stockholders of record as of December 15.
Required: a) Indicate effect on financial statements on the date of declaration, date of record, and date of payment of the cash dividends. Use the model below.
b) What kind of transaction is the declaration of a cash dividend?
c) What kind of transaction is the payment of a cash dividend?
11. The following information is for a product manufactured and sold by Rivera Corporation:
Sales price per unit, $30 Variable cost per unit, $20 Total fixed costs, $200,000
Last year, Rivera earned a profit of $60,000.
Required: a) How many units did Rivera sell last year? b) Rivera's managers are considering decreasing the sales price to $28 in an effort to increase market share. Also, the company wants a profit of $80,000. How many units would it have to sell at the lower selling price to achieve this target?
12. Davis Electronics expects to make 100,000 DVD players during 2012. Direct materials cost per unit are estimated at $18, and direct labor cost is expected to be $10 per unit. The total manufacturing overhead for the year is budgeted at $750,000. Required 1) Calculate the amount of overhead that should be allocated to each DVD player during 2012. 2) Assume that, during the month of October, Davis made and sold 7,000 DVD players. What would the cost of goods sold be for the month? 3) Assume that the company sells the DVD players at cost plus 25% of cost. What would be the selling price for each DVD player?
14. Corinthian Furniture Company's sales for the fourth quarter of 2012 totaled $500,000. Sales are expected to grow at a rate of 10% per quarter. All sales are made on account. The company's collection experience is that 60% of accounts receivable will be collected in the quarter of sale and 35% in the next quarter. Five percent of receivables will prove uncollectible. The balance in accounts receivable at the end of December 2012 was $75,000.
Required: 1) Prepare a sales budget for the four quarters of 2013. Include a total column that shows total budgeted sales for the year. 2) Prepare a cash receipts schedule for all four quarters of 2013 and the year as a whole.
15. The Woods and Water Company has two operating divisions, the Service Division and the Irrigation Division. The company evaluates the performance of its divisions using the return on investment (ROI) measure. The following information pertains to the two divisions as of the end of the current year:
During the year, the Service Division repaired 8,000 units at an average service fee of $50.00 per unit. The Irrigation Division sold 250 units at an average price of $5,000. The company requires a minimum rate of return of 12%. Required: Compute the Return on Investment (ROI) measure for both divisions and the company as a whole. Based on ROI alone which division had the better performance? Round ROI measures to the nearest whole %.
16. Rob's Food Stop is considering installing video games in its stores. The machines cost $350,000 and have an estimated seven-year useful life. Ignore income taxes. The following projected income statement is provided:
Video game revenue $ 100,000
Electricity, supplies, etc. $2,000
Depreciation 50,000 60,000
Net income $ 40,000
Required: Bob's Food Stop's target unadjusted rate of return is 12%. Compute the unadjusted rate of return on the original investment. Would you recommend that the machines be purchased? Why or why not?