# Description Question
Use the net present value methodology when creating a cost-benefit analysis to evaluate the following project:

The State of Massachusetts would like to replace a National Guard armory rapidly reaching the end of its service life. The Department of Military Affairs has been told that continued special maintenance would be $275,000 annually. Rehabilitation of facility would cost $4,000,000, and would extend the armory’s service life by 15 years.

  1. Calculate the discount factor for each year (use 4% discount rate @ 15 years)
  2. Calculate the annual present value cost of maintenance (15 years)
  3. Calculate the discounted benefit of rehabilitating the armory
  4. Given the discounted cost of rehabilitation, what is the cost- benefit ratio for the proposal?

Be sure to include information regarding the following items when completing your evaluation of the project:

  • the objectives of the project
  • the demand and consumer surplus of the project
  • a categorization of the project expenses
  • an estimation of potential delays
Cost Benefit Analysis
  1. How does research design control for rival causal factors? 
  1. What is experimental design? 
  1. What effect does questionnaire wording have on response surveys, public opinion polls, and victim surveys?
. How does research design control for rival causal factors

Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on).
Using the sample financial statements, create pro forma statements of five year projectionsthat are clear, concise, and easy to read. Be sure to double check the calculations in your pro forma statements. Make assumptions that support each line item increase or decrease for your forecasted statements.
Discuss and interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs.

Write a 350 - 700 word analysis of the company's short term and long term financing needs and determine strategies for the company to manage working capital.

XYZ Company, INC. 

Profit and Loss Statement 

Year Ended December 31, 20XX










Returns and allowances




Net Sales





Cost of Sales




Beginning Inventory








Production Labor




Ending Inventory




Total Cost of Sales









Gross Profit





Selling Expense
















Total Selling Expenses





Operating Expense








Payroll taxes








Office Supplies








Professional Fees












Training & Education








Total Operating Expense





Operating Profit—EBITDA




Other Income (Expense)
















Total Other Income (Expense)





Total Pre-tax Profit




Income Tax Allowance








Net Profit





XYZ Company, INC.


Balance Sheet


For Year Ending December 31, 20XX




Current Assets




Accounts Receivable




Prepaid Expenses


Total Current Assets


Fixed Assets


Property—net of depreciation


Equipment—net of depreciation


Vehicles—net of depreciation


Total Fixed Assets


Total Assets




Current Liabilities


Revolving lines of credit


Accounts Payable


Current Portion of Long-term Debt


Total Current Liabilities


Long-term Liabilities


Long-term debt and capital leases


Loans payable to stockholders


Total Long-term Liabilities


Total Liabilities


Stockholders Equity


Common stock


Additional Paid-in Capital


Retained Earnings (Cum from prior years)


Retained Earnings (From current P&L)


Total Stockholders Equity


Total Liabilities and Stockholders Equity






Proforma statements analysis

For this assignment you need to write a report THREE PAGES LONG, 12 FRONT, SINGLE SPACE, compare and contrast the following: the IIA, the DCAA, and the OIG;

write report

Submission Instructions:

  • Make sure your name is listed on a cover sheet as the first page of the document. 
  • Each question should be numbered. 
  • Hand written homework will be accepted. However, you will have a credit of 5% of the total possible points for typing the entire homework in MS word. 

Read Chapter 5 in your Textbook

 CCC Engineering Company is analyzing the costs of its production. The cost data and activity level for the past 12 month are given below:









































































  1. Use the high-low method to estimate next month's overhead costs, assuming the company is planning to operate 1650 maintenance hours. (3 points)


  1. Use the high-low method to estimate next month's overhead costs, assuming the company is planning 

to complete 840 set-up hours. (3 points)


  1. Using MS Excel, 
  • Prepare a scattergraph showing overhead costs plotted against maintenance hours. (2 points
  • Prepare a scattergraph showing the overhead costs plotted against the monthly set-up hours. (2 points


If linear regression is to be employed to derive a regression equation for estimating costs. 

  1. Considering the maintenance as predictor (i) show the summary output of the simple regression analysis (ii) what is the simple regression equation? (3 points
  1. Estimate the overhead if the company expects to have 1820 maintenance hours next month. (2 points

Dr. Mojahid F. Saeed Osman/ISE304.01/Term132/HW3/March 17, 2014


ISE304.02 Principles of Industrial Costing                                                           1st Semester 2013-14


  1. Considering the set-up hours as predictor (i) show the summary output of the simple regression analysis (ii) what is the simple regression equation? (3 points
  1. Estimate overhead if the company expects to complete 720 set-up hours next month. (2 points
  1. Considering both maintenance hours and set-up hours as predictors (i) show the summary output of the multiple regression analysis (ii) what is the multiple regression equation? (3 points
  1. Estimate the overhead if the company expects to produce complete 1780 maintenance hours and 740 set-up hours next month. (2 points

Read Chapter 6 in your Textbook 

  1. BBM manufacturing company produces two products, BBM-X and BBM-XL. Data on operations and costs for February 2014 are:





Direct labor costs per unit



Direct material costs per unit



Total machine hours



Units produced






Total Manufacturing overhead costs




  1. Compute the predetermined overhead rate and the overhead cost for each model, assuming the company uses:
    • Direct number of machine hours to allocate overhead costs. (3 points)
    • Direct labor costs to allocate overhead costs. (3 points
  1. Compute the unit cost for each product considering the predetermined overhead rates obtained in 

(a) and (b). (10 points

  • BBM manufacturing prefers to use two allocation bases (two-stage allocation) to allocate overhead to the products. First the overhead cost pool of 6,600,000 is assigned to the intermediate cost pools. 35% of overhead is labor-related, 50% of overhead is material-related, and 15% of overhead is machine-related. BBM will use labor-cost to allocate labor-related overhead costs, material costs to allocate material-related overhead costs, and machine hours to allocate machine-related overhead costs: 
  • Compute the predetermined overhead rates (2 points
  • Calculate the total costs of production and the cost per unit for each of the two products. (7 points

Show your work 

Total Possible Points: 50


ISE304.01 Principles of Industrial Costing

Like many new graduates in 2014, Marie Little struggled to find a sustained professional job. In early April she had finally found a good position, but was laid off by June. This ended her brief corporate career, finding herself once again without income. Marie packed her personal items from her office cubicle, passing too many empty spaces created by temporary tan walls. It was a long walk through the lending company’s hall, but she began to think about starting her own business…as far away from mortgage institutions as possible. She began to think; “If I own the business they cannot lay me off and I can actually create a business where I can use my degree.” Like many hired by the giant lender, she had no financial experience.

Her job had been to sell a mortgage product and push her customers into a longer term refinance agreement with upfront profitable fees for her financial institution. Financial knowledge was not a premium, the institution wanted sales. Marie had graduated from the University of Michigan-Dearborn’s College of Arts, Science, and Letters with a bachelor’s degree majoring in art, but had also taken a few elective courses in web design. During her summer breaks she had working for a marketing firm in their web advertising department. The job had been interesting, which was why she enrolled in the three elective web design and development courses. She decided to rely on her summer job experience in developing web pages for clients.

The five years she spent getting an art degree would also be helpful, and could be easily applied to her technical web design skills. And it would certainly be a lot less boring than selling the same mortgage product…over and over again. After a week of notes and thoughts, she began to formalize her strategy into a business plan. The purpose of Marie’s firm would be to create original, edgy web sites, web advertisements, and consult on existing web page designs. She knew of several similar companies in the southeast Michigan area, and planned to focus on the metro area, eventually expanding into most of southern Michigan.

On June 20, 2014, she transferred all of her savings, $35,000, to a new bank account with the company name, and two days later she added $18,000 borrowed from her uncle to the account. After that things moved quickly as she rented a second floor office for $3,500 a month, paying one month’s rent in advance as a security deposit to apply to the end of the lease, and $3,500 for July 2014. She purchased some used computer equipment with software from her last employer, and ordered stationary and office supplies that cost $4,000 when they were delivered on June 29.

Websites by Marie opened for business on July 2, 2014. Although Marie was not an accountant, she took stock of her company’s financial position as she began to seek her first contracts. The company had spent all but $13,000 of the cash that had been put into the bank account, but it had some assets as well. Assets Liabilities and Owner’s Equity Cash in bank $13,000 Loan $18,000 Office supplies 4,000 Marie’s equity 35,000 Equipment and software 29,000 Prepaid rent 7,000 Marie was a little worried that the cash had gone so quickly, but she also had confidence in herself and her willingness to work hard.

In the first few days, Marie lined up two webpage design projects from local businesses. She spent part of each day working on the projects, and the remainder of her time was spent looking for new clients. By early August she had four other designers at work and a steady stream of new work coming in by way of referrals.

She also felt far too busy to attend to any financial aspects of the business. When clients paid, the money went into the bank account. The associates were paid weekly, and she paid rent and other bills when they were received. In the ninth week of operations, Marie’s uncle telephoned her to ask how things were going, and she could not answer the question with any confidence. It was time for an accounting, and the end of August would be a good time to do it.

Little found the following information she had accumulated during the two months of operations:

1. Clients had paid $39,000 for completed work, and two clients still owed a total of $9,000 for work that had been completed and delivered to them. There were no projects underway as the office closed on August 31 for the Labor Day weekend.

2. Additional office supplies had been purchased for cash of $1,000, and office supplies and stationery that had cost $3,900 were still on hand.

3. Rent of $7,000 for August and September was paid in cash. Utility bills, a repair of equipment, and the salaries paid to designers (including Marie Little) were paid in cash totaling $35,000.

4. Additional equipment and software was purchased on August 27 for $15,000, with half of that amount being paid in cash and the remainder due one month later.

As Marie thought about the first two month’s operations, she was perplexed by the fact that cash in the bank had decreased even though she was sure the business was operating profitably. She also wondered how to account for the following:

  1. She had agreed to pay her uncle interest on his loan of 4% per year, but no interest had been paid so far. 2
  2. . The equipment and software were working out well, but Little knew that they had a technological life of no more than three years from the time that she had purchased them.
  3.  In brief, Marie felt that the first two months had been successful, but she was puzzled about how to draft meaningful reports to mail to her uncle. Instructions and Questions for the Marie Little Case You are a friend of Marie and a recent graduate of the University of MichiganDearborn’s MBA program.
  4. You are looking for work as a business consultant. Knowing your excellent credentials, Marie has asked you to help her get her business finances in order, report on the status of her business and make any recommendations that you can to help her make her business a success. She cannot pay you but she would be willing to help you set up your own webpage. Having taken financial accounting and eager to show off your newly acquired business skills, you accept her offer. You want the report to be very professional so you decide to perform the following:
  5. 1. Record journal entries to summarize the transactions from June 20 to August 31.
  6. 2. Set up T accounts to post the entries with proper references, since the company (a corporation) does not yet have a general ledger.
  7. 3. Prepare an unadjusted trial balance at August 31 from the T accounts. The trial balance should have extra columns to post adjusting entries and references to come up with an adjusted trial balance.
  8. 4. Prepare adjusting entries and post them to the trial balance and T accounts.
  9. 5. Prepare an income statement and a classified balance sheet.
  10. 6. Analyze the information you developed in the financial statements. What risks does Marie’s company face? Can the selection of alternative accounting policies mitigate these risks? If no, how can the identified risks to be covered? Defend your position.
  11. 7. Had the company made a profit through August 31, 2014 as Marie Little believed? If so, how would you explain why the cash in the bank had declined?
  12. 8. How would you report the status of the business on August 31, 2014? Other assumptions:
  13. • The books are to be prepared using the accrual method of accounting.
  14. • The tax rate is 22%.
  15. • Depreciation is computed using the straight line method.
  16. • The business started on 6-20-14 when it was formed
  17. • Ratio analysis may be necessary. You should discuss ratios that could be important.
  18. What other specific recommendations would you give to your friend Marie to help her get on the road to success? (Analyze and be thorough.)
Marie mini case

3 Excel spreadsheets in 1 workbook

 You are a staff accountant in a CPA firm. Your manager has asked you to provide a report containing accounting information on the following 3 clients:

Global Inc. purchased a machine and incurred the following expenditures:

Purchase price


Freight costs


Sales tax


Insurance on shipment


Insurance for the first year on the machine


Installation of the machine


  • Calculate the cost to be capitalized.
  • Make an entry that will show which expenses will be capitalized when recording the machine on the books.
  • Show the entry that will be recorded to expense the cost that will not be capitalized.

Brands Resources traded an old machine for a new machine. The book value of the old machine was $150,000 (original cost $320,000, less accumulated depreciation of $170,000). The fair value was $180,000. Brands Resources paid $20,000 to complete the exchange.

  • Prepare the journal entry to record the exchange.

Reliable Company purchased a machine on January 1, 2008 at a net cost of $85,000. At the end of the 4-year life, it expects the machine will have a salvage value of $5,000. It also estimates that the machine will run for 10,000 hours during its 4-year life. The company has a fiscal year that ends on December 31.


Machine hours









  • Calculate the depreciation under the straight line method.
  • Calculate the depreciation under the double declining method.
  • Calculate the depreciation under the units of production method.
Intermediate Accounting-simple


Obtain data on bilateral exchange rates and consumer price index for three countries: France, Belgium and Germany. The frequency of the data should be monthly and should span a period post-Bretton-Woods system and before introduction of a single currency, that is, from 1973 to 1990. Take the natural log of the variables and split the sample period into two parts: one part containing all of the observations excluding the last 10 observations and the other part containing the last 10 observations. The larger sub-sample is to be used to answer questions (1) to (4) and the smaller sample is to be used in the forecasting question (question (5)).

Analyse the time-series properties of your series as follows;

  1. (1)  Identify the summary statistics which describe the statistical properties of each series and provide a rationale for your choice. Calculate the chosen summary statistics and analyse briefly the results obtained.

    (10 marks)

  2. (2)  Test for the presence of unit roots in all series. Explain carefully the testing procedure used.

    (10 marks)

  3. (3)  Explain what you can do to test the hypothesis of the long-run Purchasing Power Parity (PPP) for a given pair of countries, with the reference to the appropriate theoretical and empirical literature. Find if there is evidence in your data in support of the long-run PPP hypothesis for each pair of countries.

    (30 marks)

  4. (4)  Identify and estimate a suitable autoregressive (AR) model for any one of the exchange rate series. Test for ARCH effects in the chosen series. Re-estimate your model using an appropriate GARCH model for the conditional variance. Comment succinctly on the usefulness of your GARCH model in finance.

    (25 marks)

  5. (5)  Forecast the mean and the variance of the model obtained in question (4) for the last 15 observations. Re-estimate your model using an asymmetric GARCH model. Critically compare the properties of the two models in the context of their usefulness in finance.

    (25 marks) 

Financial modelling and business forecasting

F1a. Different financial institutions offer a variety of similar services, but with different levels of competence. What are some explanations for this? 

F1b. What are major types of financial intermediaries? How are they similar and different? 

F2a. What are a chief financial officer’s (CFO) two roles? Use real-world examples to explain why these roles are important to a company’s success.

Explain business ethics in your own words. Why are business ethics important in strategic planning? How do business ethics affect the workplace?


F2b.  A firm’s senior managers delay a planned maintenance to make profits look better. Is this ethical? Why or why not? What is another example of questionable ethical behavior? 

What is the role of the accounting manager in completing the financial portion of a strategic plan? How does this role differ from the CFO’s role?  Why are these roles important? How may each role affect the success of a strategic plan?



Part 1:  Locate the following information.  Be sure to provide the location where you found the requested data.


  1. What is the Company’s full legal name? 
  1. What is the address of the main corporate office? 
  1. What is the Company’s business goal? 
  1. What products and/or services does the Company sell or produce? 
  1. Where does the Company sell its products? 
  1. Ingredients and Packaging: (Form 10K, pages 6 & 7)

Main ingredients and raw materials used in/for production

Country of Origin














  1. Competition:
  2. Who are the largest players in the overall U.S. market for this product and competitors? 
  1. What market category does the Company compete within? 
  1. How large is this market category within the overall U.S. market for this product and competitors? 
  1. Employees: How many employees worked for the Company at year-end?  How many were covered by any collective bargaining agreement?  
  1. On which market exchange does the Company’s Class A Common Stock trade? What is their trading symbol?  
  1. If someone wanted to purchase stock in this company without going through a stockbroker, who would they contact for instructions and information? 
  1. What were the market prices for the Company’s Class A Common Stock for Each Quarter? (Form 10K, page 21)






High ($)





Low ($)






  1. Capitalization Concentration: (Form 10K, pages 21-22)

At year end,

Class A

Class B

How many shares were authorized?



How many shares were issued?



How many shares were outstanding?



What was the Par Value ($)?



How many shareowners as of February 17, 2012?



Closing Price as of February XX, 2012?




  1. Results of Operations: What was the percentage change in total production volume (core brand and non-core brands combined) from the previous year’s results? 
  1. Financial Statement Audit:

Who provided the outside auditor opinion on the Company’s financial statementsErnst & Young, LLP, Boston, MA

What opinion was issued? 

  1. Current Year Cash Flows: (Form 10K, page 39)
  2. What was the largest use of cash in financing activities?
  3. What was the smallest source of cash in investing activities?
  4. What was the net change in cash and cash equivalents from the prior year? 
  1. How does the Company value inventory? 
  1. How does the Company compute depreciation? What estimated useful lives are used? 
  1. Internal Controls:

Who provided the outside opinion of the Company’s internal controls?   

What was the opinion rendered?  

  1. Whose signature(s) is(are) attached to the Form 10-K report and what title(s) did the signer(s) provide? (Form 10K, page 71)




























Part 2:  Financial Statement Comparisons:

Note:  You must compute the $ and % changes between years.  They aren’t given.


Amount in Thousands of US Dollars

% Change

2010 to 2011


On what page of the 10K did you find this?




2010 to 2011

Current Assets






Total Assets






Current Liabilities






Total Liabilities






Common Stock (Class A + Class B)






Additional Paid in Capital






Retained Earnings






Dividends Declared






Total Stockholders’ Equity






Net Revenue






Gross Profit






Operating Expenses






Operating Income






Interest Expense






Other Expense, Net






Income Before Income Tax






Income Tax Expense (“Provision”)






Income Taxes Paid






Net Income







Amount in US Dollars



Net Income per Share (Basic)






Weighted Average Number of Shares (Basic)







Part 3:  Ratio Analysis:

Ratio Name

2011 Value

Show your work or the page of the 10K where you found this value.

Gross Margin Percentage



Earnings Per Share of Common Stock



Price-Earnings Ratio



Dividend Payout Ratio



Dividend Yield Ratio



Return on Total Assets



Return on Common Stockholders’ Equity




Ratios (continued)

2011 Value

Show your work or the page of the 10K where you found this value.

Book Value Per Share



Working Capital



Working Capital as a % of Total Assets



   (Current Assets/Total Assets)    x  100

(Current Liabilities/Total Assets)

Current Ratio



Acid-test Ratio



Accounts Receivable Turnover



Average Collection Period




Ratios (continued)

2011 Value

Show your work or the page of the 10K where you found this value.

Inventory Turnover



Average Sale Period



Times Interest Earned



Debt-to-equity Ratio




Part 4:  Compare the Company to the Overall Industry:

Input your computed values from above and compare them Company to the overall Industry. 

 Prepare a short commentary about this analysis and post it to the next page.

  • What does this comparison say about the Company?
  • How are they financing operations? Is this effective or in-effective?
  • Would you invest in the Company? Why or Why Not?


Ratio Name


Industry Average *


Gross Margin Percentage




Return on Total Assets




Working Capital  as a % of Total Assets




Current Ratio




Acid-test Ratio




Accounts Receivable Turnover


21.7 times


Average Collection Period


16.82 days


Inventory Turnover


6.9 times


Average Sale Period


52.90 days


Times Interest Earned


6.6 times


Debt-to-equity Ratio










Accounting help needed

Kidswear House is an organization specializing in sale and distribution of children’s necessities ranging from clothing to diapers and other kid’s necessities and it is located in Philadelphia Pennsylvania. The company began its operations in the year 1999, its products are priced from $5 to $50 but there exists high end items which are sold at a fraction cost as compared to other stores. Lytoya Jackson in partnership with her children Desiree, Melvin and Anthony started this limited liability company with the idea of reorganizing quality clothing in the area by providing affordable yet high quality commodities for the middle income families.

Due to rapid expansion and growth Lytoya Jackson invited her extended family in other states and franchised the business in those states .they had managed to franchise the business in over five states by the year 2004 with an employee base of over 160 and this brought about the need for aggressive oversight so as to incorporate the requirements of corporate policies and procedures. This was necessary to maintain ethical practices in the company whereas developing and enforcing internal and external operational behaviors as well as promoting transparency across the franchises .there was established a Board of directors consisting of the CEO, President and the Vice President, others included the CFO who are appointed by the company’s shareholders. The positions were delegated but they could be revoked if one of the BOD members behaved in an unethical manner or violates the federal or state laws willingly and knowingly.

 KidswearHouse has made a commitment to provide clothing for children at affordable prices as well as reinvest in the communities they operate in to enhance empowerment of such communities. The company hires residents and youths residing in their areas of operations and also provides college education scholarships for youths who engage in community service for lengths of time exceeding 100hrs.


  • KidswearHouse Chart of business Accounts
  •  Use of Generally Accepted Accounting Principles at KidswearHouse (GAAP)
  • Considering the value of assets (assigned per your balance sheet) used within your business, recommend two (2) specific internal controls that you will implement to protect your company’s assets and resources, justifying how each will provide assurances to management. Based on the internal control recommendations that you made, suggest how you will implement each within your business environment, indicating how challenges or resistances will be overcome.
  •  Evaluate the impact of the regulatory environment, including the Sarbanes-Oxley Act and other regulatory requirements, on your business venture, giving considering to how you intend to comply with the requirements and the general impact to decision making within your business.

Auditing Kidswear

Brian Miller is an entrepreneur. He started a small-town friendly grocery store. People stopped by his store to pick up things they did not want to run to the regular grocery store for. In 3 years, because of popular demand, he started adding more items on his shelf and pretty soon, he had grown into a regular grocery store. People loved his store because he knew everyone by their first name and would try to fulfill everyone’s requests. He now needs some help with his inventory. He hired a CPA firm that would give him some advice on how he should maintain his inventory.

You are his CPA. You want to give Brian an overview on the inventory system, some different methods of recording cost of goods sold, and educate him on the accounting side of recording inventory and recording cost of goods sold.

Part 1

  1. Explain to Brian the perpetual and periodic inventory systems, covering the main differences between the two systems, and why companies use perpetual inventory system.
  2. Contrast the 4 methods of recording cost of goods sold:
    • Specific identification
    • Average cost
    • First in, First out (FIFO)
    • Last in, Last out (LIFO)
  3. ABC, a grocery company, uses a periodic inventory system. They have the following information for the month of January:

    Beginning inventory

    Jan 1: 400 units @ $10 each


    Jan 10: 300 units @$12 each

    Jan 15: 200 units @$15 each


    Jan 5: 200 units @ $15 each

    Jan 12: 200 units @ $20 each

    Jan 18: 100 units @ $25 each

    Ending inventory

    Jan 31: 400 units

    • Will LIFO or FIFO generate the highest cost of goods sold? Why? Show all calculations.
    • Will the ending inventory balance will be higher under LIFO or FIFO? Why? Show all calculations.
    • What is the cost of goods sold under LIFO? Show all calculations.
    • What is the cost of goods sold under FIFO? Show all calculations.

Part 2

  1. Discuss the revenue principle and the matching principle as per the generally accepted accounting principles (GAAP).
  2. Contrast the percentage-of-completion method of revenue recognition versus the completed contract method.
  3. Solve this accounting problem for the ABC grocery company relating to revenue and expense recognition as per GAAP: ABC Corporation uses the percentage-of-completion method of accounting. In 2010, ABC entered into a contract for a contract price of $2,000,000.


    Costs incurred during the year


    Estimated costs to complete as of Dec 31


    Billings during the year


    Collections during the year


    • What portion of the total contract price is recognized as revenue in 2010?
    • What is the profit recognized for 2010?
    • Prepare the journal entries for 2010 under the percentage completion method.
Accounting 4

Answer each of the following 10 questions. Show all work. 

1. On March 1, 2011, Navy Corporation used excess cash to purchase U.S. Treasury bonds for $103,000 plus accrued interest. The appropriate interest rate is 6%. Interest on these bonds is payable on January 1 and July 1 of each year. Navy's investment is accounted for as held to maturity. The fair value of the Treasury bonds is $104,000 at year end. Required: Prepare the appropriate journal entries to record the transactions for the year, including any year-end adjustments. Show calculations, rounded to the nearest dollar.

  1. Ontario resources, a natural energy supplier, borrow $80 million cash on November 1, 2011 , to fund a geological survey. The loan was made by Quebec Banque under a short-term credit line. Ontario Resources issued a 9-month, 12% promissory note with interest payable at maturity. Ontario Resources? financial period is the calendar year.
    A. Prepare the journal entry for the issuance of the note by Ontario Resources. 
  1. Prepare the appropriate adjusting entry for the note by Ontario Resources on December31, 2011. Show calculation.
  2. Prepare the journal entry for the payment of the note at maturity. Show calculation
  3. On January 1, 2011 Bishop Company issued 10% bonds dated January 1, 2011, with a face amount of 20million. The bonds mature in 2020 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.

    A. Determine the price of the bonds at January 1, 2011
  4. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2011.

  5. Prepare the journal entry to record interest on June 30, 2011, using the effective interest method.

  6. Prepare the journal entry to record interest on December 31, 2011, using the effective interest method.

  7. On January 1, 2011 Holbrook Company leased a building under a 3-year operating lease. The annual rental payments are $ 68,000 on January 1, 2011 the inception of the lease, and $5000 January 1 of 2012 and 2013. Holbrook made structural modifications to the building costing $90,000 before occupying the building. The useful life of the building and the modifications is 30 years with no expected residual value.

    Required: Prepare the appropriate journal entries for Holbrook Company for 2011. Holbrook?s fiscal year is the calendar year, and the company uses straight-line depreciation.

  8. At the end of preceding year, world industries had a deferred tax asset of $17,500,000 attributable to its only temporary difference of $50,000,000 for estimated expenses. At the end of the current year, the temporary difference is $45,000,000. At the beginning of the year was no valuation account for the deferred tax asset. At year-end, world industries now estimates that it?s more likely than not that one-third of the deferred tax asset will never be realized. Taxable income is $ 12,000,000 for the current year, and the tax rate is 30% for all years.

    Required: Prepare journal entries to record world Industries?s income tax expense for the current year. Show well-labeled supporting computations for each component of the journal entries.
  9. Vrable Corporation has a defined benefit pension plan. Two alternative possibilities for pension-related data for the current calendar year are shown below.
    Case 1 case 2
    Net loss (gain), Jan.1
    $240, 00 $(230,000)
    Loss (gain) on plan assets (8,000) (6,000)
    Loss (gain) on PBO (17,000) (12,000)
    ABO, Jan 1 (1,900,000) (1,700,000)
    PBO, Jan 1 (2,500,000) (1,700,000)
    Plan assets, Jan 1 2,100,000 2,000,000
    Average remaining service period
    of active employees (years) 10 12

    Required: For each independent case, calculate amortization of the net loss or gain that should be included as a component of pension expense for the current year.

  10. During its first year of operations, Criswell Inc. completed the following transactions relating to shareholders? equity.

    Jan. 5: Issued 300,000 of its common shares for $8 per share and 3,000 preferred shares at $110

Feb. 12: Issued 300,000 of common stock in exchange for equipment with a known cash price of $310,000
The articles of incorporation authorize 5,000,000 shares with a par value of $1 per share of common and 1,000,000 preferred shares with a par value of $100 per share.


Required: Record the above transactions in general journal form.

8. On December 31, 2010, Brisbane Company had 100,00 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2011, Brisbane purchased 24,000 of common stock on the open market as treasure stock paying $$40 per share. Net income for 2011 was $180,905. Also outstanding during the year were fully vested incentive stock options giving key personnel the option to buy 50,000 common shares at $40. The market price of the common shares averaged $50 during 2011.
Required: Compute Brisbane?  Basic and diluted earnings per share for 2011.



  1. Johnson Company receives royalties on a patent it developed several years ago. Royalties are %5 of net sales, receivable on September 30 for sales from January through June and receivable on March 31 for sales from July through December. The patent rights were distributed on July 1, 2010, and Johnson accrued royalty revenue of $50,000 on December 31, 2010, as follows.
    Receivable ? royalty revenue 50,000
    Royalty revenue 50,000
    Johnson received royalties of $65,000 on March 31, 2011, and $90,000 on September 30, 2011. The patent user indicated to Johnson that sales subject to royalties for the second half of 2011 should be $600,000.

    Required: Prepare any journal entries Johnson should record during 2011 related to the royalty revenue.

  2. Partial balance sheets and additional information are listed below for Sowell Company.

    Sowell Company
    Partial Balance Sheets
    As of December 31
    Assets 2011 2010
    Cash $40,000 $20,000
    Accounts receivable 70,000 85,000
    Inventory40,000 35,000
    Account Payable $54,000 $62,000
    Additional information:
    Net income was $88,000.
    Depreciation expense was $19,000.
    Required: prepare the operating activities section of the statement of cash flows for 2011 using the indirect method.

Original Teacher assignment details: 

Complete the master operating budgets for a fictitious bottled water company on spreadsheet(s) in a workbook, using formulas and linking figures for maximum effectiveness of the spreadsheet. The information you will need to complete these budgets can be found in the attached Mod 8 data pdf: 

Additionally, complete the budgeted income statement, linking the numbers from the supporting budgets to the income statement. Note that you are not given the information to complete the budgeted balance sheet, so a balance sheet is not expected to be a part of the assignment package. 

Finally, prepare an executive summary to Ginnie Adams, the owner of the Bottled Water Company, with your results from the comprehensive budget for the new product and how launching the new product would affect net income. 

 this project requires both a detailed and lengthy Excel component as well as an MSWord component 

Part 1 should include: 

 1.Sales Budget  

2.Production Budget  

3.Direct Materials Budget  

4.Direct Labor Budget  

5.Overhead Budget  

6.Selling and Administrative Expense Budget  

7.Cost of Goods Manufactured Budget  

8.Budget and Income Statement  

Part 2 should include: 

1.Executive Summary (2-3 pages) 

Must be APA Formated 

Original work only as it will be checked 

You will be fixing Students Original Excel and Students original Executive summary below

Master Operating Budget & Executive Summary

What are the important findings in Austin RoadCo. v. OSHRC and Builders Steel Co. v. Marshall?

Provide approximately 200-300 words in your response and a citation for your source materia

OSHA-What are the important findings in Austin Road Co. v. OSHRC and Builders Steel Co. v. Marshall?


Analyze the implications for Build-A-Bear Workshop of a change in lease accounting consistent with current proposals by FASB and IASB.  You should write up your analysis in the form of a business memo (not just answers to the case questions).  Your memo should:

  • Incorporate the following and may include additional relevant information.
  1. What is an operating lease? What is a capital lease?
  2. Why do accountants distinguish between different types of leases?
  3. Calculate the present value of the minimum lease payments at December 29, 2012 (the final day of fiscal 2012).  Assume the implicit rate of interest is 7%.  Use the future minimum lease payments disclosed in Note 11, Commitments and Contingencies. Assume that all lease payments are made on the final day of each fiscal year. Also assume that payments made subsequent to 2017 are made evenly over three years.
  4. If Build-A-Bear Workshop had entered into all of these leases on the last day of the year (December 29, 2012), what journal entry would the company have recorded if the leases were considered capital leases?
  5. What journal entry would the company record in fiscal 2013 for these leases if they were considered capital leases?
  6. What would the company have reported as “Property and equipment, net” at December 29, 2012?  As Total assets?
  7. What would the company have reported as “Long-term obligations under capital leases” at December 29, 2012? As current liabilities?  As Total liabilities?
  8. How would key financial ratios be affected?  Consider the potential impact on the current ratio, debt-to-equity ratio, and long-term debt-to-equity ratio.
  • Explicitly state your conclusion – the likely implications of the change on Build-A-Bear.
  • Follow the format guidelines in the handout on writing business memos on the BbLearn.
  • Should be 2 pages plus table(s) or appendix with any supporting numbers/analysis. 

You may work on your own, with a partner or in a team of up to three students.  

Grading Considerations: 

Grading will be based primarily on the effort shown for the case and will include the quality of your research, the effectiveness of your analysis, and the professional quality of your memo. 

The Bear Case
Read the background information for Business Solutions, Inc.      
Create QB company file for Business Solutions, Inc. with 12/31/12 balances (from Trial Balance) 
Enter first quarter 2013 transactions (Transactions tab), using appropriate transaction module (see note below*)
Make adjusting entries necessary (AJE details tab) at March 31, 2013 (use working trial balance)
Print to hand-in:              
a)  Working Trial Balance at 3/31/13 (Accountant tool) after adjustments    
b)  Income Statement for the first quarter, 2013        
c)  Balance Sheet at March 31, 2013          
d)  Vendor Balance Summary at 3/31/13  (Accts Payable list subsidiary ledger)  
e)  Customer Balance Summary at 3/31/13  (Accts Receivable subsidiary ledger)  
f)  Journal for first quarter, 2013          
Transactions modules:         Entry made by QB
  Use   To record       Debit Credit
  Enter bills   purchase on account     Inventory/supplies Acc pay
  Pay bills   payment to vendor     Acc pay Cash
  Enter invoices billing customers for goods/services Acc rec Sales/Revenue
  Receive payments customer payment on account   Cash Acc rec
  Write checks cash disbursement to non-vendor Expense/asset Cash
  Make deposits cash receipt from non-customer    Cash various
  Journal entries non-recurring transactions   various



Business Solutions, Inc. is a closely-held corporation.  It's sole stockholder, Santana Rey, started the business in early 2012 with and  
initial investment of cash, furniture and equipment, and computer equipment in exchange for $73,000 of capital stock.  He operates the  
business to provide computer consulting services to small business, and to sell a particular product, a "widget".  BI Inc. caters to    
small businesses in the immediate geographic area, mostly owned by friends and acquaintences of Mr. Rey.  He is        
still establishing credit-worthiness with new vendors, who are offering him new customer level discounts as he proves his payback  
BI Inc. operates out of a small storefront in a local shopping mall.  Mr. Rey employs an administrative assistant, Lyn Addie, to handle  
office operations, answer the phone, and keep his schedule. She works for the flat rate of $125 per day with no benefits.       
She isn't a full-time employee and is considered contract labor, without payroll deductions.        
BI Inc. maintains a simple retailer bookkeeping system using Quickbooks 2013.  The company maintains (tracks) inventory with a perpetual system.
They invoice Computer Consulting revenues using a service invoice, and invoice merchandise sales (sales of widgets) using a product invoice.  
They source their widgets from vendors at $10 per widgets, selling them to different customers at different prices, depending upon their line of
business.  Because of his technical speciality, Mr. Rey customizes widgets for each customer's use, thus justifying a variable sales price structure.
BI Inc. offers terms of 2/10, n/30 to all of its credit customers for widget sales in order to encourage rapid payment and repeat business.      
The terms are favorable in the marketplace, and therefore BI Inc. is quickly building a loyal customer base for its widgets.    
BI, Inc. maintains one bank account for all business transactions.  The business reimburses the owner mileage at the rate of $.32/mile for  
use of his personal automobile when he is working.                
Depreciation is recorded on the fixed assets as follows:              
Furniture and equipment:  6 yr useful life, $400 salvage value, straightline method          
Computer equipment:  3 yr useful life, double-declining balance method            
A physical count of widgets (merchandise inventory) and computer supplies is conducted at the end of each quarter.  Shortage in the merchandise
inventory will be expensed to an inventory shrinkage account, when needed.  So far the physical count of inventory has been in agreement with the 

Financial Accounting Principles                                 Name: ___________________________

Quiz 3 Worth 30 Points


  1. 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?   Please show all your calculations.  (10 Points) 
  1. On July 1 of the current year, a company purchased and placed in service a machine with a cost of $240,000. The company estimated the machine's useful life to be four years or 60,000 units of output with an estimated salvage value of $60,000. During the current year, 15,000 units were produced. (15 Points)
    Prepare the necessary December 31 adjusting journal entry to record depreciation for the current year assuming the company uses:

    a. The straight-line method of depreciation

    b. The units-of-production method of depreciation

    c. The double-declining balance method of depreciation 
  2. A company purchased a special purpose machine on August 1 of the past year, and it was installed and ready to run on January 1 of this year. The following costs were incurred in the purchase and installation of the machine. (5 Points) 

Invoice price........................................................................


Freight costs.........................................................................


Installation costs..................................................................


Electrical and power connections .......................................


Repairs to correct damage incurred during uncrating..........


Costs to adjust machine to appropriate specifications..........


Spare parts for future use.....................................................


Sales tax...............................................................................


Fines incurred during transport of machine.........................


Cost of special foundation required for machine installation


accounting quiz 3

Question 4(a) – 6 marks

  • What is the time period covered by ALS Ltd’s Profit and loss statement?     (1 mark)
  • Which other of ALS Ltd’s financial statements cover this same period?     (1 mark)
  • Why doesn’t ALS Ltd’s balance sheet cover this time period?     (1 mark)
  • What was the total amount of profit (after tax) earned by ALS Ltd and its subsidiaries in 2013?       (1 mark)
  • How much of this profit are the shareholders of ALS Ltd entitled to?     (1 mark)
  • Why are the shareholders of ALS Ltd not entitled to all profits?     (1 mark)

Question 6(b) – 3 marks

  • Refer to Note 17 ‘Other Assets’: What do ‘Prepayments’ represent?     (1 mark)
  • Explain why these items are recognised as assets.     (1 mark)
  • What are the three types of intangible assets recognised by ALS Ltd in 2012-13?     (1 mark)

Question 7(a) – 3 marks

  • What was the value of cash receipts from customers in 2013?     (1 mark)
  • Why does this amount differ from the total amount of revenue from sale of goods plus revenue from rendering of services?     (1 mark)
  • Observe that ALS Ltd has reported negative net cash flows from investing activities in 2013. Explain whether, in your opinion, this negative net cash flow represents a potential problem for ALS Ltd.     (1 mark)  
four questions-accounting

Respond to the following ethical issue concerning the reclassification of receivables in your initial post:

 Moss Exports is having a bad year. Net income is only $60,000. Also, two important overseas customers are falling behind in their payments to Moss, and Moss's accounts receivable are ballooning.

The company desperately needs a loan. The Moss Exports board of directors is considering ways to put the best face on the company's financial statements. Moss's bank closely examines cash flow from operations. Daniel Peavey, Moss's controller, suggests reclassifying as long-term the receivables from the slow-paying clients. He explains to the board that removing the $80,000 rise in accounts receivable from current assets will increase net cash provided by operations. This approach may help Moss get the loan. 

1. Using only the amounts given, compute net cash provided by operations, both without and with the reclassification of the receivables. Which reporting makes Moss look better? 

2. Under what condition would the reclassification of the receivables be ethical? Unethical? Support your response.

Accounting Issues -Ethics

RATIO COMPARISON - Nordstom v Macy’s

Now that you have thoroughly prepared financial statements, it is important to understand how the users of those statements will interpret the data. One tool that lenders and investors use to determine the financial health of a company is ratio analysis. Review the latest annual reports (10-Ks) for Nordstrom, Inc. and Macy’s, Inc. in order to conduct a ratio analysis of the two companies. Prepare a memo to your Student Assistant that addresses the following:

1. For each company, compute the ratios listed below from the financial statements for the 2013 fiscal year (show calculations). The ratios must be presented in the appropriate denomination (percent, dollar value, number of days, etc.)

***See appendix for instructions on researching financial statements, and for stock price information***

 Current ratio

 Days in Inventory (365/Inventory Turnover Ratio)

 Debt to total assets ratio

 Times interest earned

 Profit margin ratio

 Gross profit rate

 Price-Earnings ratio (use basic Earnings Per Share)

 Return on assets ratio

 Asset turnover ratio

 Return on equity


2. For each ratio above, state the type of ratio it is, indicate which company has the more favorable ratio, and explain the useful information that each ratio provides to users. (What does each ratio tell you?)

Ex: The current ratio is a liquidity ratio. Nordstrom has a more favorable current ratio, which means it’s in a better position to pay off its current debt with its current assets.

3. If you were asked to provide a 5 year loan to one of these companies, which would you choose and why? Use two ratios to support your answer.

4. Considering the role that financial reporting plays in society, why do you think it is important for accounting information to be accurate?


 Nordstrom, Inc.’s ticker symbol is “JWN”. The ticker symbol for Macy’s, Inc. is “M”. To ensure consistency, please use the following to look up a company’s financial information:

 SEC EDGAR Database - is the web address to start your search. Click on “Search for Company Filings” and then click on the first bullet point “Company or fund name, ticker symbol…”

Search by the Ticker Symbol, provided above.

Once you see the company’s filings, enter “10-K” under Filing Type to filter the results. The top filing will be the latest Annual Report (10-K) and should have a filing date of 2014-03-17 for Nordstrom, Inc. and 2014-04-02 for Macy’s, Inc.

Click "Interactive Data" to view the 10-K and financial statements by category.

 Please use the following stock price data:


Closing Date

Stock Price

Nordstrom, Inc.

January 31, 2014


Macy’s, Inc.

January 31, 2014




RATIO COMPARISON - Nordstom v Macy’s

Herrestad Company does produce and sell two products and the details below will be used to prepare a segmented income statement (showing the income for each product and the total) for the company. Use ABC to allocate all fixed costs to the two products.





Background information






Prod A

Prod B

Beginning inventory




Units produced




Units sold








Selling price per unit




Variable costs per unit




Direct material




Direct labor




Variable overhead




Variable selling and admin. exp.








Fixed costs




Fixed manufacturing overhead




Fixed selling and administrative












Production runs (not $)




Number of sales reps (not $)




Here are the first few lines of the segmented income statement to help you get started. Complete the statement in good format and make sure you allocate the fixed costs to the two products. When done, comment on the information and the relative profitability of the two products.

Herrestad Company

Segmented Income Statement

For the period ending Dec. 31, 2011










Variable costs:




Direct material








SLP Assignment Expectations

The submission should be 2 to 4 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format. 

This case has two separate parts.

 Part I

 How can activity based management and activity based costing (ABC) benefit an organization? Specifically, address the following points.

  • How does ABC differ from other allocation methods?
  • Describe the main characteristics of ABC.
  • What type of companies tends to benefit from ABC?
  • Comment on a company (research Internet) that has implemented ABC. ◦What type of company is it?

◦Was it successful?

 Part II

 The below concepts are all applied by many business in an attempt to be more efficient and reduce costs. Create a table describing at least three of the concepts below and how implementation may benefit an organization.

  • Lean manufacturing
  • Just-in-time
  • Theory of constraints
  • Total quality control
  • Value chain

 The submission should be 3 to 5 pages and need to include answers to all the questions listed above. Include references in APA format.

 Assignment Expectations

 It is important to answer the questions above. The discussion should be three to five pages and written in a clear and concise manner. Support your discussion with references in APA format. You are encouraged to use Excel or other compatible spreadsheet when computations are involved.

Herrestad Company

NEED Research paper Construction Safety class final



 Research Paper

 Accidents from falling are one of the leading causes of death and injuries in the construction industry. Find and review several articles in professional publications on construction-related fall accidents. Also, find and review several sample fall protection programs for construction companies, as well as visit for relevant fall protection requirements. Choose at least one accident you would like to research further and construct a paper that includes the following:

A brief introduction of the problem with fall-related accidents in the construction industry.

 A review and analysis of the fall accident chosen for further research.

A detailed discussion on the causative factors associated with the fall accident.

 A sample fall protection program developed to suit only the type of work being performed in the accident that is being reviewed. Be specific and include the factors related to the accident. (Do not include portions of a program not directly related to the work in the researched accident.)

  A summary of the student's conclusions on fall hazards in the construction industry, and opinions on the necessity for a fall protection plan.

Your research paper analysis should be at least five pages of text in 12-point double-spaced Times Roman font. Please include an APA style reference for the in-text citations and references that you use. APA Guidelines

CSU requires that students use the APA style for papers and projects. Therefore, the APA rules for formatting, quoting, paraphrasing, citing, and listing of sources are to be followed

Research paper Construction Safety class final






Current Assets






Accounts Receivable



$  61,685


$  87,654

$  67,426

$  33,713

Other Current Assets


$    2,791

$    1,396

Total Current Assets





Long-Term Assets

Long-Term Assets



$  80,935

Accumulated Depreciation

$  22,338

$  20,466

$  10,233

Total Long-Term Assets



$  70,702


Total Assets






Current Liabilities

Accounts Payable

$  33,634

$  30,301

$  18,181

Current Borrowing

$       246


Other Current Liabilities

$       930

$    1,860


Total Current Liabilities

$  34,810

$  32,161

$  18,181


Total Long-Term Liabilities

$    5,901

$    7,684

$    3,842


Total Liabilities

$  40,711

$  39,845

$  22,023


Stockholders' Equity

Common Stock

$    9,652

$    9,303

$    4,652

Retained Earnings




Capital Surplus



$  90,946

Total Stockholders' Equity





Total Liabilities & Stockholders' Equity






Riordan Industries Income Statement 000 Omitted (Unaudited)











Direct Cost of Goods Sold



$  83,703










$  83,520

Sales, Marketing & Other Expenses

$  33,199

$  27,666

$  20,750


$    5,846

$    4,176

$    2,671

Quality Assurance

$  13,311

$  13,050

$    9,788

Research & Development

$  25,120

$  18,270

$  13,703

General & Administrative

$  19,073

$  18,165

$  15,655

Machining & Systems

$  14,056

$  11,484

$    8,312

Payroll Taxes

$  16,443

$  15,660

$  11,745

Total Operating Expenses





Profit Before Interest & Taxes




Interest Expense

$       768

$    1,301


Taxes Incurred

$  67,652

$  56,772

$  48,930

Net Profit




Net Profit/Sales





I need the followinng calculated

 Access the information contained in your selected organization’s balance sheet and income statement to calculate the following:

  • Liquidity ratios
    • Current ratio
    • Acid-test, or quick, ratio
    • Receivables turnover
    • Inventory turnover
  • Profitability ratios
    • Asset turnover
    • Profit margin
    • Return on assets
    • Return on common stockholders’ equity
  • Solvency ratios
    • Debt to total assets
    • Times interest earned

Show your calculations for each ratio.

Create a horizontal and vertical analysis for the balance sheet and the income statement.

Riordan Industries Balance Sheet 000 Omitted

Question description

Question 1.1. If a company is given credit terms of 2/10, n/30, it should (Points : 1)

       hold off paying the bill until the end of the credit period, while investing the money at 10% annual interest during this time.
       pay within the discount period and recognize a savings.
       pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill.
       recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price.


Question 2.2. Manufacturers usually classify inventory into all the following general categories except: (Points : 1)

       work in process.
       finished goods.
       merchandise inventory.
       raw materials.


Question 3.3. Which of the following should be included in the physical inventory of a company? (Points : 1)

       Goods held on consignment from another company
       Goods in transit to another company shipped FOB shipping point
       Goods in transit from another company shipped FOB shipping point
       Both b and c above


Question 4.4. Which of the following statements is true regarding inventory cost flow assumptions? (Points : 1)

       A company may use more than one costing method concurrently.
       A company must comply with the method specified by industry standards.
       A company must use the same method for domestic and foreign operations.
       A company may never change its inventory costing method once it has chosen a method.


Question 5.5. If a company determines cost of goods sold each time a sale occurs, it (Points : 1)

       must have a computer accounting system.
       uses a combination of the perpetual and periodic inventory systems.
       uses a periodic inventory system.
       uses a perpetual inventory system.


Question 6.6. A company just starting business made the following four inventory purchases in June:

June 1

150 Units $390

June 10

200 units  585

June 15

200 units  630

June 28

150 units  510



A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is (Points : 1)



Question 7.7. Jake's Market recorded the following events involving a recent purchase of merchandise:

Received goods for $50,000, terms 2/10,n/30
Returned $1,000 of the shipment for credit
Paid $250 freight on the shipment.
Paid the invoice within the discount period.

As a result of these events, the company's inventory increased by

(Points : 1)



Question 8.8. A perpetual inventory system would likely be used by a(n) (Points : 1)

       automobile dealership.
       hardware store.
       convenience store.


Question 9.9. Costner's Market recorded the following events involving a recent purchase of merchandise:

Received goods for $20,000, terms 2/10,n/30
Returned $400 of the shipment for credit
Paid $100 freight on the shipment
Paid the invoice within the discount period

As a result of these events, the company's inventory

(Points : 1)

       increased by $19,208.
       increased by $19,306.
       increased by $19,308.
       increased by $19,700.


Question 10.10. Which of the following is a true statement about inventory systems? (Points : 1)

       Periodic inventory systems require more detailed inventory records.
       Perpetual inventory systems require more detailed inventory records.
       A periodic system requires cost of goods sold be determined after each sale.
       A perpetual system determines cost of goods sold only at the end of the accounting period.


Question 11.11. At May 1, 2012, Kibbee Company had beginning inventory consisting of 100 units with a unit cost of $7. During May, the company purchased inventory as follows:

400 units at $7
300 units at $8

The company sold 500 units during the month for $12 per unit. Kibbee uses the average cost method. The average cost per unit for May is

(Points : 1)



Question 12.12. Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2012 are as follows:

                        Units   Per unit price   Total

Balance,  1/1/12    200   $5.00          $1,000
Purchase, 1/15/12 100     5.30             530
Purchase, 1/28/12 100     5.50             550

An end of the month (1/31/12) inventory showed that 140 units were on hand. How many units did the company sell during January, 2012?

(Points : 1)



Question 13.13. Fetherston Company's goods in transit at December 31 include:

Sales Made                          

Purchases made

1) FOB Destination   

3) FOB destination

2) FOB Shipping point 

4) FOB shipping point

Which items should be included in Fetherston's inventory at December 31? (Points : 1)

       (2) and (3)
       (1) and (4)
       (1) and (3)
       (2) and (4)


Question 14.14. Which one of the following inventory methods is often impractical to use? (Points : 1)

       Specific identification
       Average cost


Question 15.15. Eneri Company's inventory records show the following data:



Unit Cost

Inventory, January 1



Purchases: June 18



November 8



A physical inventory on December 31 shows 2,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used? (Points : 1)

       $880 additional taxes
       $496 additional taxes
       $384 additional taxes
       $496 tax savings


Question 16.16. Which of the following items will increase inventoriable costs for the buyer of goods? (Points : 1)

       Purchase returns and allowances granted by the seller
       Purchase discounts taken by the purchaser
       Freight charges paid by the seller
       Freight charges paid by the purchaser


Question 17.17. The cost of goods available for sale is allocated between (Points : 1)

       beginning inventory and ending inventory.
       beginning inventory and cost of goods on hand.
       ending inventory and cost of goods sold.
       beginning inventory and cost of goods purchased.


Question 18.18. Beginning inventory plus the cost of goods purchased equals (Points : 1)

       cost of goods sold.
       cost of goods available for sale.
       net purchases.
       total goods purchased.


Question 19.19. Priscilla has the following inventory information.

July 1

Beginning Inventory       20 units at $19          $380

July 7

Purchases                   70 units at $20         1,400

July 22

Purchases                   10 units at $23           230



A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is (Points : 1)



Question 20.20. Under a consignment arrangement, the (Points : 1)

       consignor has ownership until goods are sold to a customer.
       consignor has ownership until goods are shipped to the consignee.
       consignee has ownership when the goods are in the consignee's possession.
       consigned goods are included in the inventory of the consignee.


Question 21.21. Partridge Bookstore had 500 units on hand at January 1, costing $18 each. Purchases and sales during the month of January were as follows:




Jan 14



Jan 17

250 @ $20


Jan 25

250 @ $22


Jan 29


260 @ $32

Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31.
The cost of the inventory at January 31, under the LIFO method is: (Points : 1)



Question 22.22. A buyer would record a payment within the discount period under a perpetual inventory system by crediting (Points : 1)

       Accounts Payable.
       Purchase Discounts.
       Sales Discounts.


Question 23.23. Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2012 are as follows:

                           Units   Per unit price  Total
Balance,  1/1/12    200       $5.00          $1,000
Purchase, 1/15/12 100         5.30             530
Purchase, 1/28/12 100         5.50             550

An end of the month (1/31/12) inventory showed that 140 units were on hand. If the company uses FIFO, what is the value of the ending inventory?

(Points : 1)



Question 24.24. Which of the following is not a common cost flow assumption used in costing inventory? (Points : 1)

       First-in, first-out
       Middle-in, first-out
       Last-in, first-out
       Average cost


Question 25.25. A company just starting business made the following four inventory purchases in June:

June 1

150 Units $390

June 10

200 units  585

June 15

200 units  630

June 28

150 units  510



A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30 is (Points : 1)


Question 1.1. The relationship between current assets and current liabilities is important in evaluating a company's (Points : 1)

       market value.
       accounting cycle.


Question 2.2. The income statement for the month of June, 2012 of Camera Obscura Enterprises contains the following information:

Revenues          $7,000



Salaries and Wages Expense    $3,000

Rent Expense      1,000

Advertising Expense     800

Supplies Expense  300

Insurance Expense     100

Total expenses            5,200

Net income (loss)       $1,800

The entry to close the revenue account includes a (Points : 1)

       debit to Income Summary for $1,800.
       credit to Income Summary for $1,800.
       debit to Income Summary for $7,000.
       credit to Income Summary for $7,000.


Question 3.3. Current liabilities (Points : 1)

       are obligations that the company is to pay within the forthcoming year.
       are listed in the balance sheet in order of their expected maturity.
       are listed in the balance sheet, starting with accounts payable.
       should not include long-term debt that is expected to be paid within the next year.


Question 4.4. The income statement for the month of June, 2012 of Camera Obscura Enterprises contains the following information:

Revenues          $7,000



Salaries and Wages Expense    $3,000

Rent Expense      1,000

Advertising Expense     800

Supplies Expense  300

Insurance Expense     100

Total expenses            5,200

Net income (loss)       $1,800

The entry to close Income Summary to Ramirez, Capital includes (Points : 1)

       a debit to Revenues for $7,000.
       credits to Expenses totalling $5,200.
       a credit to Income Summary for $1,800
       a credit to Owner's Capital for $1,800.


Question 5.5. Office Equipment is classified in the balance sheet as (Points : 1)

       a current asset.
       property, plant, and equipment.
       an intangible asset.
       a long-term investment.


Question 6.6. Which of the following would not be classified a long-term liability? (Points : 1)

       Current maturities of long-term debt
       Bonds payable
       Mortgage payable
       Lease liabilities


Question 7.7. On September 23, Sebagoh Company received a $350 check from Surfer Rosa Inc. for services to be performed in the future. The bookkeeper for Sebadoh Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should (Points : 1)

       debit Cash $350 and credit Unearned Service Revenue $350.
       debit Accounts Receivable $350 and credit Unearned Service Revenue $350.
       debit Accounts Receivable $350 and credit Cash $350.
       debit Accounts Receivable $350 and credit Service Revenue $350.


Question 8.8. Correcting entries are made (Points : 1)

       at the beginning of an accounting period.
       at the end of an accounting period.
       whenever an error is discovered.
       after closing entries.


Question 9.9. The income statement and balance sheet columns of Iron and Wine Company's worksheet reflect the following totals:

                          Income Statement  Balance Sheet     
                         Dr.            Cr.            Dr.            Cr.  
      Totals      $72,000     $48,000     $60,000     $84,000

To enter the net income (or loss) for the period into the above worksheet requires an entry to the (Points : 1)

       income statement debit column and the balance sheet credit column.
       income statement credit column and the balance sheet debit column.
       income statement debit column and the income statement credit column.
       balance sheet debit column and the balance sheet credit column.


Question 10.10. The income statement for the month of June, 2012 of Camera Obscura Enterprises contains the following information:

Revenues          $7,000



Salaries and Wages Expense    $3,000

Rent Expense      1,000

Advertising Expense     800

Supplies Expense  300

Insurance Expense     100

Total expenses            5,200

Net income (loss)       $1,800

After the revenue and expense accounts have been closed, the balance in Income Summary will be (Points : 1)

       a debit balance of $1,800.
       a credit balance of $1,800.
       a credit balance of $7,000.


Question 11.11. What is the order in which assets are generally listed on a classified balance sheet? (Points : 1)

       Current and long-term
       Current; property, plant, and equipment; long-term investments; intangible assets
       Current; property, plant, and equipment; intangible assets; long-term investments
       Current; long-term investments; property, plant, and equipment; intangible assets


Question 12.12. The following information is for Sunny Day Real Estate:

Balance Sheet

December 31, 2012

Cash                  $  25,000

Accounts Payable         $  60,000

Prepaid Insurance           30,000

Salaries and Wages Payable      15,000

Accounts Receivable     50,000

Mortgage Payable            85,000

Inventory                      70,000

Total Liabilities         $160,000

Land Held for Investment      85,000


Land                    120,000


Building                     $100,000




Less Accumulated Depreciation                 (20,000)


Owner’s Capital            370,000

Trademark                      70,000


Total Assets              $530,000

Total Liabilities and Owner’s Equity                      $530,000

The total dollar amount of assets to be classified as investments is (Points : 1)



Question 13.13. The post-closing trial balance contains only (Points : 1)

       income statement accounts.
       balance sheet accounts.
       balance sheet and income statement accounts.
       income statement, balance sheet, and owner's equity statement accounts.


Question 14.14. Which one of the following statements concerning the accounting cycle is incorrect? (Points : 1)

       The accounting cycle includes journalizing transactions and posting to ledger accounts.
       The accounting cycle includes only one optional step.
       The steps in the accounting cycle are performed in sequence.
       The steps in the accounting cycle are repeated in each accounting period.


Question 15.15. All of the following are owner's equity accounts except (Points : 1)

       the Capital account.
       Capital Stock.
       Investment in Stock.
       Retained Earnings.


Question 16.16. Which statement about long-term investments is not true? (Points : 1)

       They will be held for more than one year.
       They are not currently used in the operation of the business.
       They include investments in stock of other companies and land held for future use.
       They can never include cash accounts.


Question 17.17. The following information is for Bright Eyes Auto Supplies:

Balance Sheet

December 31, 2012

Cash                  $  20,000

Accounts Payable         $  65,000

Prepaid Insurance           40,000

Salaries and Wages Payable      25,000

Accounts Receivable     50,000

Mortgage Payable           75,000

Inventory                      70,000

Total Liabilities         $165,000

Land Held for Investment      90,000


Land                    125,000

Building                     $100,000


Less Accumulated

Depreciation      (30,000)  70,000

Owner’s Capital            370,000


Trademark                      70,000


Total Assets              $535,000

Total Liabilities and Owner’s Equity                      $535,000

The total dollar amount of liabilities to be classified as current liabilities is (Points : 1)



Question 18.18. Which of the following liabilities are not related to the operating cycle? (Points : 1)

       Wages payable
       Accounts payable
       Utilities payable
       Bonds payable


Question 19.19. Balance sheet accounts are considered to be (Points : 1)

       temporary owner's equity accounts.
       permanent accounts.
       capital accounts.
       nominal accounts.


Question 20.20. Intangible assets include each of the following except (Points : 1)

       land improvements.


Question 21.21. The following information is for Sunny Day Real Estate:

Balance Sheet

December 31, 2012

Cash                  $  25,000

Accounts Payable         $  60,000

Prepaid Insurance           30,000

Salaries and Wages Payable      15,000

Accounts Receivable     50,000

Mortgage Payable            85,000

Inventory                      70,000

Total Liabilities         $160,000

Land Held for Investment      85,000


Land                    120,000


Building                     $100,000




Less Accumulated Depreciation                 (20,000)


                                        Owner’s Capital           370,000

Trademark                      70,000


Total Assets              $530,000

Total Liabilities and Owner’s Equity                      $530,000

The total dollar amount of assets to be classified as current assets is (Points : 1)



Question 22.22. The most important information needed to determine if companies can pay their current obligations is the (Points : 1)

       net income for this year.
       projected net income for next year.
       relationship between current assets and current liabilities.
       relationship between short-term and long-term liabilities.


Question 23.23. The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2012:

Accounts payable                                              $  19,000

Accounts receivable                                               11,000

Accumulated depreciation – equipment                    28,000

Advertising expense                                               21,000

Cash                                                                    11,000

Owner’s capital (1/1/12)                                         105,000

Owner’s drawings                                                   14,000

Depreciation expense                                             12,000

Equipment                                                            190,000

Insurance expense                                                   3,000

Note payable, due 6/30/13                                       70,000

Patent                                                                   20,000

Prepaid insurance (12-month policy)                          6,000

Rent expense                                                         17,000

Salaries and wages expense                                   32,000

Service revenue                                                     125,000

Supplies                                                                  4,000

Supplies expense                                                     6,000

Accounts payable

What is total liabilities and owner's equity at December 31, 2012? (Points : 1)




Question 24.24. The income statement and balance sheet columns of Iron and Wine Company's worksheet reflect the following totals:

                  Income Statement            Balance Sheet     
                         Dr.            Cr.            Dr.            Cr.  
      Totals      $72,000     $48,000     $60,000     $84,000

The net income (or loss) for the period is (Points : 1)

       $48,000 income.
       $24,000 income.
       $24,000 loss.
       not determinable.


Question 25.25. The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2012:

Accounts payable                                              $  19,000

Accounts receivable                                               11,000

Accumulated depreciation – equipment                    28,000

Advertising expense                                               21,000

Cash                                                                    11,000

Owner’s capital (1/1/12)                                        105,000

Owner’s drawings                                                  14,000

Depreciation expense                                            12,000

Equipment                                                          190,000

Insurance expense                                                  3,000

Note payable, due 6/30/13                                      70,000

Patent                                                                  20,000

Prepaid insurance (12-month policy)                         6,000

Rent expense                                                        17,000

Salaries and wages expense                                  32,000

Service revenue                                                    125,000

Supplies                                                                 4,000

Supplies expense                                                    6,000

The sub-classifications for assets on the company's classified balance sheet would include all of the following except: (Points : 1)

       Current Assets.
       Property, Plant, and Equipment.
       Intangible Assets.
       Long-term Assets.



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