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The following information is available from the current period financial statements: Net income $121,106 Depreciation expense 22,215 Increase in accounts receivable 21,015 Decrease in accounts payable 21,542 The net cash flows from operating activities using the indirect method is

$100,764

he following information is available from the current period financial statements: Net income$121,106Depreciation expense22,215Increase in accounts receivable21,015Decrease in accounts payable21,542 The net cash flows from operating activities using the indirect method is

$100,764

Sales for the year were $592,656. Accounts receivable were $108,186 and $80,555 at the beginning and end of the year, respectively. Cash received from customers to be reported on the statement of cash flows using the direct method is

$620,287

Journalizing the entries for jobs shipped and customers billed would include a credit to

Cost of Goods Sold

Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The journal entry for the materials requisitioned by the production department is

Work in Process 156,000 Materials 156,000

The amortization of intangible assets would appear on the statement of cash flows as a(n)

addition to net income in the operating activities section using the indirect method

A company had net income of $216,380 and depreciation expense of $25,824. During the year, accounts receivable and inventory increased by $17,920 and $30,489, respectively. Prepaid expenses and accounts payable decreased by $3,442 and $6,896, respectively. There was also a loss on the sale of equipment of $4,166. How much was the net cash flows from operating activities on the statement of cash flows using the indirect method?

$194,507

Jensen Company reports the following: Direct materials used $345,000 Direct labor incurred 250,000 Factory overhead incurred 400,000 Operating expenses 175,000 Jensen Company's product costs are

$995,000

Cash and accounts receivable for Ashfall Co. are as follows: Current Year Cash $62,400 PriorYearCash $58,000 Accounts receivable Current Year 42,000 Accounts receivable PriorYear 50,000 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Use the minus sign to indicate negative numbers or decreases. Round percent change answer to one decimal place. Account Dollar Change Percent Change Cash Accounts Receivable

Cash: $4,400 increase ($62,400 - $58,000) or 7.6% Accounts receivable: $8,000 decrease ($42,000 - $50,000) or (16)%

Compute conversion costs given the following data: direct materials, $361,100; direct labor, $202,900; factory overhead, $175,400 and selling expenses, $45,800.

Conversion Costs = Direct Labor Cost + Factory Overhead Cost = $202,900 + $175,400 = $378,300

Rho, Sigma, and Tau Companies have the following data for the current year: Rho Company Sigma Company Tau CompanyPrice-earnings ratio 23.7 16.9 30.1 Which company would be expected to have the best potential for future common stock price appreciation?

Tau

Given the following data: Cost of materials used $45,000 Direct labor costs 48,000 Factory overhead 39,000 Work in process, beginning 28,000 Work in process, ending 18,000 Finished goods, beginning 28,000 Finished goods, ending18,000 What is cost of goods sold?

Cost of Goods Sold = Work in Process, Beginning + Cost of Materials Used + Direct Labor Costs + Factory Overhead - Work in Process, Ending + Finished Goods, Beginning - Finished Goods, Ending = $28,000 + $45,000 + $48,000 + $39,000 - $18,000 + $28,000 - $18,000 = $152,000

SunnyRest Hotel has 300 rooms. During the month of March, it had 7,440 guests, each staying a single night. The occupancy rate for SunnyRest Hotel for the month of March was

Occupancy Rate = Guest Nights ÷ Available Room Nights = 7,440 ÷ (300 × 31) = 7,440 ÷ 9,300 = 80%

Aspen Technologies has the following budget data: Amount Estimated direct labor hours 11,100 Estimated direct labor dollars $64,300 Estimated factory overhead costs $179,400 If factory overhead is to be applied based on direct labor hours, the predetermined factory overhead rate is

Predetermined Factory Overhead Rate = Estimated Total Factory Overhead Costs ÷ Estimated Activity Base = $179,400 ÷ 11,100 labor hours = $16.16 per labor hour

Which of the following is both a prime cost and a conversion cost for Cupcake Company?

baker's wages

A plant manager's salary is a(n)

indirect cost

The sale of land would appear on the statement of cash flows as an

inflow of cash in the investing activities section

A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows as a(n)

investing activity

Which of the following systems provides for a separate record of the cost of each particular quantity of product that passes through the factory?

job order costing

Which of the following is an example of direct labor?

machine operators

The price-earnings ratio on common stock is computed as

market price per share of common stock divided by earnings per share on common stock

Cash flow per share is

not required to be reported on any statement

The income statement for both a merchandiser and a manufacturer would include

operating expenses

The acquisition of treasury stock would appear on the statement of cash flows as an

outflow of cash in the financing activities section

The payment of a long-term note payable would appear on the statement of cash flows as an

outflow of cash in the financing activities section

Which of the following represents the factory overhead applied to a product?

predetermined factory overhead rate times actual activity base

Rent expense on a factory building would be treated as a

product cost

Steel for a construction contractor would be classified as a

product cost—direct labor

Which of the following measures shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

ratio of fixed assets to long-term liabilities Feedback Area

Which of the following measures how much a company is financed by debt and equity?

ratio of liabilities to stockholders' equity

Which of the following is the correct flow of manufacturing costs?

raw materials, work in process, finished goods, cost of goods sold

When using the spreadsheet (work sheet) method to analyze noncash accounts, it is best to start with

retained earnings

Cost of goods manufactured is equal to

total manufacturing costs plus beginning work in process inventory minus ending work in process inventory

If accounts payable have increased during a period,

expenses on an accrual basis are greater than expenses on a cash basis

Indirect labor and indirect materials are classified as

factory overhead and product costs

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as

factory overhead cost

Which of the following should be shown on a statement of cash flows in the financing activities section?

payment of cash to retire a long-term note

The salary of the director of internal auditing would be classified as a

period cost—administrative expense

Managerial accounting reports are

prepared according to management needs

Accounts receivable from sales transactions were $47,911 at the beginning of the year and $69,487 at the end of the year. Net income reported on the income statement for the year was $122,714. Exclusive of the effect of other adjustments, the net cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is

$101,138

Based on the following data, what is the accounts receivable turnover? AmountSales on account during year $463,319 Cost of goods sold during year 183,675 Accounts receivable, beginning of year 46,517 Accounts receivable, end of year 49,049 Inventory, beginning of year 98,903 Inventory, end of year1 11,461

Accounts Receivable Turnover = Sales ÷ Average Accounts Receivable = $463,319 ÷ [($46,517 + $49,049) ÷ 2] = 9.7

Which of the following should be added to net income in determining the net cash flows from operating activities using the indirect method?

a decrease in accounts receivable

Question Content Area The following items are reported on a company's balance sheet: AmountCash $400,000 Marketable securities 50,000 Accounts receivable 150,000 Inventory 200,000 Accounts payable 250,000 Determine the (a) current ratio and (b) quick ratio. Round answers to one decimal place.

a. 3.2 b. 2.4

The following items are reported on Denver Company's balance sheet: Cash $190,000 Marketable securities 160,000 Accounts receivable (net) 240,000 Inventory 350,000 Accounts payable 600,000 Determine the (a) current ratio and (b) quick ratio. Round your answers to one decimal place.

a. Current ratio 1.6 b. Quick ratio 1

An increase in the accounts receivable balance would appear on the statement of cash flows as a(n)

deduction from net income in the operating activities section using the indirect method

In a vertical analysis, the base for cost of goods sold is

sales

Period costs are classified as either

selling expenses or administrative expenses

Which of the following are basic functions of the management process?

strategic planning and control

Changes in current assets and current liabilities are reported on the statement of cash flows, using the indirect method, in

the operating activities section

Depreciation on factory equipment would be reported on the statement of cash flows prepared by the indirect method in

the operating activities section

On a common-sized balance sheet, 100% is

total assets

A balance sheet that displays only component percentages is a

common-sized balance sheet

A company reports the following: Cost of goods sold $3,066,000 Average inventory 365,000 Determine (a) the inventory turnover and (b) the days' sales in inventory. Round your answers to one decimal place. Assume a 365-day year.

a. Inventory Turnover = Cost of Goods Sold ÷ Average Inventory = $3,066,000 ÷ $365,000 = 8.4 b. Days' Sales in Inventory = Average Inventory ÷ Average Daily Cost of Goods Sold = $365,000 ÷ ($3,066,000 ÷ 365) = 43.5 days

In the hotel industry, the occupancy rate is a measure of

utilization

An analysis in which all of the components of an income statement are expressed as a percentage of sales is a

vertical analysis

Number of shares of common stock outstanding 6,000 Market price per share of common stock $20 Total dividends paid $9,000 Cash provided by operations $30,000 What are the dividends per common share for Diane Company?

Dividends per Common Share = Dividends on Common Stock ÷ Shares of Common Stock Outstanding = $9,000 ÷ 6,000 shares = $1.50

Journalizing the entry for the application of factory overhead costs to jobs would include a credit to

Factory Overhead

Materials purchased on account during the month totaled $190,000. Materials requisitioned and placed in production totaled $165,000. The journal entry for the materials purchased on account is

Materials 190,000 Accounts Payable 190,000

Which of the following statements is false regarding product costs?

Product costs include sales and administrative expenses.

Cost of goods manufactured during the year is $240,000, and work in process inventory on December 31 is $50,000. Work in process inventory during the year decreased by 60%. Total manufacturing costs incurred are

Total Manufacturing Costs = Cost of Goods Manufactured - Beginning Work in Process Inventory + Ending Work in Process Inventory = $240,000 - ($50,000 ÷ 0.4) + $50,000 = $240,000 - $125,000 + $50,000 = $165,000

The direct labor and overhead costs of providing services to clients are accumulated in

Work in Process

In job order costing, the journal entry for the flow of direct labor costs into production consists of a

debit to Work in Process and a credit to Wages Payable

In determining net cash flows from operating activities using the indirect method, a gain on the sale of equipment is

deducted from net income

Which of the following costs are conversion costs?

direct labor cost and factory overhead cost

On the statement of cash flows, the operating activities section would include

cash receipts from sales of merchandise

Corporate annual reports typically do not contain

an SEC statement expressing an opinion

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Amount Cash and short-term investments $30,000 Accounts receivable (net) 20,000 Inventory 15,000 Property, plant, and equipment 185,000 Total assets$250,000 Liabilities and Stockholders' Equity Current liabilities $45,000 Long-term liabilities 70,000 Common stock 80,000 Retained earnings 55,000 Total liabilities and stockholders' equity $250,000 Sales $85,000 Cost of goods sold (45,000) Gross profit $40,000 Operating expenses (15,000) Interest expense (5,000) Net income $20,000 Number of shares of common stock outstanding 6,000 Market price per share of common stock $20 Total dividends paid $9,000 Cash provided by operations $30,000 What is the asset turnover for Diane Company?

Asset Turnover = Sales ÷ Average Total Assets = $85,000 ÷ $250,000 = 0.34

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The journal entry for the transfer of costs from finished goods to cost of goods sold is

Cost of Goods Sold 375,000 Finished Goods 375,000

Keeton Company had the following data: Cost of materials used $60,000 Direct labor costs 58,000 Factory overhead 33,000 Work in process inventory, beginning 29,000 Work in process inventory, ending 18,000 Finished goods inventory, beginning 32,000 Finished goods inventory, ending 18,000 Determine the cost of goods sold.

Cost of goods sold = $60,000 + $58,000 + $33,000 + ($29,000 - $18,000) + ($32,000 - $18,000) = $176,000

Which of the following is a characteristic of process costing?

It accumulates costs for each manufacturing department within the factory.

Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. The jobs for the quarter are as follows: BalanceJob 356 $ 450 Job 357 1,235 Job 358 378 Job 359 689 Job 360 456 Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. What is the ending balance of Finished Goods for Adams Company at the end of the first quarter?

Jobs 358 and 359 were completed during the quarter but not sold. Ending balance of Finished Goods for Adams Company at the end of the first quarter = Ending balance of Job 358 + Ending balance of Job 359 = $378 + $689 = $1,067​

Question Content Area The Thomlin Company forecasts that total factory overhead for the current year will be $11,665,000 with 185,000 total machine hours. Year to date, the actual factory overhead is $7,839,000 and the actual machine hours are 94,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours.

Predetermined Factory Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Activity Base = $11,665,000 / 185,000 machine hours = $63 per machine hour Applied Factory Overhead = Predetermined Factory Overhead Rate × Actual machine hours = $63 × 94,000 machine hours = $5,922,000 Underapplied Factory Overhead = Applied Factory Overhead - Actual Factory Overhead = $7,839,000 - $5,922,000 = $1,917,000

Winston Company estimates that the total factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000. Determine the over- or underapplied amount for the year.

Predetermined Factory Overhead Rate = Estimated Total Factory Overhead Costs ÷ Estimated Activity Base = $1,250,000 ÷ 50,000 = $25 per machine hour Applied Factory Overhead Costs = Predetermined Factory Overhead Rate × Actual Machine Hours = $25 × 54,300 machine hours = $1,357,500 Underapplied Factory Overhead = Actual Factory Overhead Costs - Applied Factory Overhead Costs = $1,375,000 - $1,357,500 = $17,500

Crain Company estimated 35,000 direct labor hours and incurred 40,000 of actual direct labor hours. It estimated total factory overhead costs of $735,000 and incurred $780,000 of actual factory overhead costs. What is Crain's predetermined factory overhead rate? Was overhead overapplied or underapplied for the year? By how much?

Predetermined factory overhead rate: $735,000 ÷ 35,000 = $21 per direct labor hour Amount Applied factory overhead: ($21 × 40,000) $840,000 Actual factory overhead (780,000) Overapplied factory overhead $60,000

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Cash and short-term investments $30,000 Accounts receivable (net) 20,000 Inventory 15,000 Property, plant, and equipment 185,000 Total assets $250,000 Liabilities and Stockholders' Equity Current liabilities $45,000 Long-term liabilities 70,000 Common stock 80,000 Retained earnings 55,000 Total liabilities and stockholders' equity $250,000 Income Statement Sales $85,000 Cost of goods sold (45,000) Gross profit $40,000 Operating expenses (15,000) Interest expense (5,000) Net income $20,000 Number of shares of common stock outstanding 6,000 Market price per share of common stock $20 Total dividends paid $9,000 Cash provided by operations $30,000 What is the price-earnings ratio for Diane Company?

Price-Earnings (P/E) Ratio = Market Price per Share of Common Stock ÷ Earnings per Share on Common Stock = $20 ÷ ($20,000 ÷ 6,000) = 6.0

Darwin Company reports the following information: AmountSales $76,500 Direct materials used 7,300 Depreciation on factory equipment 4,700 Indirect labor 5,900 Direct labor 10,500 Factory rent 4,200 Factory utilities 1,200 Sales salaries expense 15,600 Office salaries expense 8,900 Indirect materials 1,200 Product costs are:

Product Costs = Direct Materials Cost + Direct Labor Cost + Factory Overhead Cost = $7,300 + $10,500 + $4,700 + $5,900 + $4,200 + $1,200 + $1,200 = $35,000

Harding Company Accounts payable $40,000 Accounts receivable 65,000 Accrued liabilities 7,000 Cash 30,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 110,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 30,000 Prepaid expenses 2,000 Property, plant, and equipment 625,000 Based on the data for Harding Company, what is the amount of quick assets?

Quick Assets = Accounts Receivable + Cash + Marketable Securities = $65,000 + $30,000 + $36,000 = $131,000

Harding Company Accounts payable $40,000 Accounts receivable 65,000 Accrued liabilities 7,000 Cash 30,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 110,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 30,000 Prepaid expenses 2,000 Property, plant, and equipment 625,000 Based on the data for Harding Company, what is the amount of working capital?

Working Capital = (Accounts Receivable + Cash + Inventory + Marketable Securities + Prepaid Expenses) − (Accounts Payable + Accrued Liabilities + Notes Payable) = ($65,000 + $30,000 + $72,000 + $36,000 + $2,000) − ($40,000 + $7,000 + $30,000) = $128,000

Privett Company Accounts payable $31,147 Accounts receivable 73,209 Accrued liabilities 6,702 Cash 16,077 Intangible assets 38,945 Inventory 82,307 Long-term investments 106,698 Long-term liabilities 76,599 Marketable securities 34,738 Notes payable (short-term) 21,019 Prepaid expenses 2,444 Property, plant, and equipment 665,390 Based on the data for Privett Company, what is the amount of working capital?

Working Capital = Current Assets - Current Liabilities = (Accounts Receivable + Cash + Inventory + Marketable Securities + Prepaid Expenses) − (Accounts Payable + Accrued Liabilities + Notes Payable) = ($73,209 + $16,077 +$82,307 + $34,738 + $2,444) − ($31,147 + $6,702 + $21,019) = $208,775 - $58,868 = $149,907

The following data (in thousands of dollars) have been taken from the accounting records of Rayburn Corporation for the current year. Sales $1,980 Selling expenses 280 Manufacturing overhead 460 Direct labor 400 Administrative expenses 300 Purchases of direct materials 240 Finished goods inventory, beginning 240 Finished goods inventory, ending 320 Direct materials inventory, beginning 80 Direct materials inventory, ending 140 Work in process inventory, beginning 140 Work in process inventory, ending 100 Required: Enter all amounts in thousands of dollars. a. What was the cost of the direct materials used in production during the year? b. What was the cost of goods manufactured for the year? c. What was the cost of goods sold for the year? d. What was the net income for the year?

a. $180 thousand b. $1080 thousand c. $1000 thousand d. $400 thousand


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