ACC 206 Week 2 exercise: Chapter Two and Three Problems
Please complete the following 7 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the
appropriate week using the Assignment Submission button.
Chapter 2 Exercise 1
1. Issuance of stock
Prepare journal entries to record the issuance of 100,000 shares of common stock at $20 per share for each of the following independent cases:
a.
Jackson Corporation has common stock with a par value of $1 per share.
b.
Royal Corporation has no-par common with a stated value of $5 per share.
c.
French Corporation has no-par common; no stated value has been assigned
Chapter 2 Exercise 3
3. Analysis of stockholders’ equity
Star Corporation issued both common and preferred stock during 20X6. The stockholders’ equity sections of the company’s balance sheets at the end of
20X6
and
20X5
follow.
|
Preferred |
$580,000 |
$500,000 |
||
|
Common |
2,3 |
50,000 |
1,750,000 |
|
|
Paid-in capital in excess of par value |
||||
|
24,000 |
||||
|
4,620,000 |
3,600,000 |
|||
|
Retained earnings |
8,4 |
70,000 |
6,920,000 |
|
|
Total stockholders’ equity |
$16,044,000 |
$12,770,000 |
a. Compute the number of preferred shares that were issued during 20X6.
b. Calculate the average issue price of the common stock sold in 20X6.
c. By what amount did the company’s paid-in capital increase during 20X6?
d.
Did Star’s total legal capital increase or decrease during 20X6? By what amount?
Chapter 2 Problem 1
1. Bond computations: Straight-line amortization
Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow.
·
Case A
—The bonds are issued at 100.
·
Case B
—The bonds are issued at 96.
·
Case C
—The bonds are issued at 105.
Southlake uses the straight-line method of amortization.
Instructions:
|
Complete the following table: |
||||||||||||||||||||||||
| Cash inflow on the issuance date |
_______ |
|||||||||||||||||||||||
| Total cash outflow through maturity | ||||||||||||||||||||||||
| Total borrowing cost over the life of the bond issue | ||||||||||||||||||||||||
| Interest expense for the year ended December 31, 20X1 | ||||||||||||||||||||||||
| Amortization for the year ended December 31, 20X1 | ||||||||||||||||||||||||
| Unamortized premium as of December 31, 20X1 | ||||||||||||||||||||||||
| Unamortized discount as of December 31, 20X1 | ||||||||||||||||||||||||
| Bond carrying value as of December 31, 20X1 |
Chapter 3 Exercise 1
1. Product costs and period costs
The costs that follow were extracted from the accounting records of several different manufacturers:
1.
Weekly wages of an equipment maintenance worker
2.
Marketing costs of a soft drink bottler
3.
Cost of sheet metal in a Honda automobile
4.
Cost of president’s subscription to Fortune magazine
5.
Monthly operating costs of pollution control equipment used in a steel mill
6.
Weekly wages of a seamstress employed by a jeans maker
7.
Cost of compact discs (CDs) for newly recorded releases of Rush, Billy Joel, and Bryan Adams
a. Determine which of these costs are product costs and which are period costs.
b. For the product costs only, determine those that are easily traced to the finished product and those that are not.
Chapter 3 Exercise 2
2. Definitions of manufacturing concepts Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:
Materials and supplies used
Brass
$75,000
Repair parts 16,000
Machine lubricants 9,000
Wages and salaries Machine operators 12
8,000
Production supervisors 64,000
Maintenance personnel 41,000
Other factory overhead Variable 35,000
Fixed 46,000
Sales
commissions 20,000
Compute:
a. Total direct materials consumed
b. Total direct labor
c. Total prime cost
d. Total conversion cost
Chapter 3 Exercise 5
5. Schedule of cost of goods manufactured, income statement
The following information was taken from the ledger of Jefferson Industries, Inc.:
|
Direct labor |
$85,000 |
Administrative |
$59,000 |
|
|
Selling |
34,000 |
Work in. process |
||
|
300,000 |
Jan. 1 |
29,000 |
||
|
Finished goods |
Dec. 31 |
21,000 |
||
|
115,000 |
Direct material purchases |
88,000 |
||
| 1 |
31,000 |
Depreciation: factory |
18,000 |
|
|
Raw (direct) materials on hand |
Indirect materials used |
10,000 |
||
|
Indirect labor |
||||
|
40,000 |
Factory taxes |
|||
|
Factory utilities |
11,000 |
Prepare the following:
a. A schedule of cost of goods manufactured for the year ended December 31.
b. An income statement for the year ended December 31.
Chapter 3 Problem 3 3. Manufacturing statements and cost behavior
Tampa Foundry began operations during the current year, manufacturing various products for industrial use. One such product is light-gauge aluminum, which the company sells for $36 per roll. Cost information for the year just ended follows.
|
Per Unit |
Variable Cost |
Fixed Cost |
|
Direct materials |
$4.50 |
$ — |
|
Direct labor |
6.5 |
|
|
Factory overhead |
||
|
135,000 |
Production and sales totaled 20,000 rolls and 17,000 rolls, respectively There is no work in process. Tampa carries its finished goods inventory at the average unit cost of production.
Instructions:
a. Determine the cost of the finished goods inventory of light-gauge aluminum.
b. Prepare an income statement for the current year ended December 31
c. On the basis of the information presented:
1. Does it appear that the company pays commissions to its sales staff? Explain.
2. What is the likely effect on the $4.50 unit cost of direct materials if next year’s production increases? Why?
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Achiever Papers is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Dissertation Writing Service Works
First, you will need to complete an order form. It's not difficult but, if anything is unclear, you may always chat with us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download