Question;ACC 206 Week 1 Assignment: Chapter One;Problems;Please complete the following 5 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.;Ch 1 Critical Thinking Question 5;Answer the following questions;Why are noncash transactions, such as the exchange;of common stock for a building for example, included on a statement of cash;flows? How are these noncash transactions disclosed?;Chapter 1 Exercise 1;1. Classification of activities;Classify each of the following transactions as;arising from an operating (O), investing (I), financing (F), or noncash;investing/financing (N) activity.;a. ________ Received $80,000 from the sale of;land.;b. ________ Received $3,200 from cash sales.;c. ________ Paid a $5,000 dividend.;d. ________ Purchased $8,800 of merchandise for;cash.;e. ________ Received $100,000 from the issuance of;common stock.;f. ________ Paid $1,200 of interest on a note;payable.;g. ________ Acquired a new laser printer by paying;$650.;h. ________ Acquired a $400,000 building by;signing a $400,000 mortgage note.;Chapter 1 Exercise 4;4. Overview of direct and indirect methods;Evaluate the comments that follow as being True or;False. If the comment is false, briefly explain why.;a. Both the direct and indirect methods will;produce the same cash flow from operating activities.;b. Depreciation expense is added back to net;income when the indirect method is used.;c. One of the advantages of using the direct;method rather than the indirect method is that larger cash flows from financing;activities will be reported.;d. The cash paid to suppliers is normally;disclosed on the statement of cash flows when the indirect method of statement;preparation is employed.;e. The dollar change in the Merchandise Inventory;account appears on the statement of cash flows only when the direct method of;statement preparation is used.;Chapter 1 Exercise 6;6. Equipment transaction and cash flow reporting;Dec. 31, 20X4 Dec. 31, 20X3;Property, Plant & Equipment;Land;$94,000;$94,000;Equipment 652,000 527,000;Less: Accumulated depreciation -316,000 -341,000;New equipment purchased during 20x4 totaled;$280,000. The 20x4 income statement disclosed equipment depreciation expense of;$41,000 and a $9,000 loss on the sale of equipment.;a. Determine the cost and accumulated depreciation;of the equipment sold during 20X4.;b. Determine the selling price of the equipment;sold.;c. Show how the sale of equipment would appear on;a statement of cash flows prepared by using the indirect method.;Chapter 1 Problem 3;3. Cash flow information: Direct and indirect;methods;The comparative year-end balance sheets of Sign;Graphics, Inc., revealed the following activity in the company's current;accounts;20X5 20X4 Increase / Decrease);Current assets;Cash $55,400 $35,200 $20,200;Accounts receivable (net) 83,800 88,000 -4,200;Inventory 243,400 233,800 9,600;Prepaid expenses 25,400 24,200 1,200;Current liabilities;Accounts payable $123,600 $140,600 ($17,000);Taxes payable 43,600 49,200 -5,600;Interest payable 9,000 6,400 2,600;Accrued liabilities 38,800 60,400 -21,600;Note payable 44,000 ? 44,000;The accounts payable were for the purchase of;merchandise. Prepaid expenses and accrued liabilities relate to the firm's;selling and administrative expenses. The company's condensed income statement;follows.;SIGN GRAPHICS INC.;Income Statement;for the Year Ended December 31, 20x5;Sales $713,800;Less: Cost of goods sold 323,000;Gross profit $390,800;Less: Selling & administrative expenses;$186,000;Depreciation expense 17,000;Interest expense 27,000 230,000;Add: gain on sale of land $160,800;21,800;Income before taxes $182,600;Income taxes 36,800;Net income $145,800;Other data;1. Long-term investments were purchased for cash;at a cost of $74,600.;2. Cash proceeds from the sale of land totaled;$76,200.;3. Store equipment of $44,000 was purchased by;signing a short-term note payable. Also, a $150,000 telecommunications system;was acquired by issuing 3,000 shares of preferred stock.;4. A long-term note of $49,400 was repaid.;5. Twenty thousand shares of common stock were;issued at $5.19 per share.;6. The company paid cash dividends amounting to;$128,600.;Instructions;a. Prepare the operating activities section of the;company's statement of cash flows, assuming use of;1. The direct method.;2. The indirect method.;b. Prepare the investing and financing activities;sections of the statement of cash flows.;ACC 206 Week 2 Assignment;ACC;206 Week 2 Assignment: Chapter Two and Three Problems;Please;complete the following 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 3;1.;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;20X6;20X5;Preferred;stock, $100 par value, 10% $580,000 $500,000;Common;stock, $10 par value 2,350,000 1,750,000;Paid-in;capital in excess of par value;Preferred;24,000 ?;Common;4,620,000 3,600,000;Retained;earnings 8,470,000 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;2.;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;Case A;Case B Case C;a.;Cash inflow on the issuance date;b.;Total cash outflow through maturity;c.;Total borrowing cost over the life of the bond issue;d.;Interest expense for the year ended December 31, 20X1;e.;Amortization for the year ended December 31, 20X1;f.;Unamortized premium as of December 31, 20X1;g.;Unamortized discount as of December 31, 20X1;h.;Bond carrying value as of December 31, 20X1;Chapter;3 Exercise 2;3.;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 128,000;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;4.;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 expenses $59,000;Selling;expenses 34,000 Work in. process;Sales;300,000 Jan. 1 29,000;Finished;goods Dec. 31 21,000;Jan. 1;115,000 Direct material purchases 88,000;Dec.;31 131,000 Depreciation: factory 18,000;Raw;(direct) materials on hand Indirect materials used 10,000;Jan. 1;31,000 Indirect labor 24,000;Dec.;31 40,000 Factory taxes 8,000;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;5.;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 9 50,000;Selling;? 70,000;Administrative;? 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?;ACC;206 Week Three Assignment;Please complete the following five;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.;1. Overhead application: Working backward;The Towson Manufacturing Corporation applies overhead on the basis of machine;hours. The following divisional information is presented for your review;Division A Division B;Actual machine hours 22,500?;Estimated machine hours 20,000?;Overhead application rate $4.50 $5.00;Actual overhead $110,000?;Estimated overhead? $90,000;Applied overhead? $86,000;Over- (under-) applied overhead? $6,500;FIND THE UNKNOWNS FOR EACH OF THE DIVISIONS.;2. Computations using a job order system;General Corporation employs a job order cost system. On May 1 the following;balances were extracted from the general ledger;Work in process $ 35,200;Finished goods 86,900;Cost of goods sold 128,700;Work in Process consisted of two jobs, no. 101 ($20,400) and no. 103 ($14,800).;During May, direct materials requisitioned from the storeroom amounted to;$96,500, and direct labor incurred totaled $114,500. These figures are subdivided;as follows;Direct Materials Direct Labor;Job No. Amount Job No. Amount;101 $5,000 101 $7,800;115 19,500 103 20,800;116 36,200 115 42,000;Other 35,800 116 18,000;$96,500 Other 25,900;$114,500;Job no. 115 was the only job in process at the end of the month. Job no. 101;and three "other" jobs were sold during May at a profit of 20% of;cost. The "other" jobs contained material and labor charges of;$21,000 and $17,400, respectively.;General applies overhead daily at the rate of 150% of direct labor cost as;labor summaries are posted to job orders. The firm's fiscal year ends on May;31.;Instructions;a. Compute the total overhead applied to production during May.;b. Compute the cost of the ending work in process inventory.;c. Compute the cost of jobs completed during May.;d. Compute the cost of goods sold for the year ended May 31.;3. High-low method;The following cost data pertain to 20X6 operations of Heritage Products;Quarter 1 Quarter 2 Quarter 3 Quarter 4;Shipping costs $58,200 $58,620 $60,125 $59,400;Orders shipped 120 140 175 150;The company uses the high-low method to analyze costs.;a. Determine the variable cost per order shipped.;b. Determine the fixed shipping costs per quarter.;c. If present cost behavior patterns continue, determine total shipping costs;for 20X7 if activity amounts to 570 orders.;4. Break-even and other CVP relationships;Cedars Hospital has average revenue of $180 per patient day. Variable costs are;$45 per patient day, fixed costs total $4,320,000 per year.;a. How many patient days does the hospital need to break even?;b. What level of revenue is needed to earn a target income of $540,000?;c. If variable costs drop to $36 per patient day, what increase in fixed costs;can be tolerated without changing the break-even point as determined in part;(a)?;5. Direct and absorption costing;The information that follows pertains to Consumer Products for the year ended;December 31, 20X6.;Inventory, 1/1/X6 24,000 units;Units manufactured 80,000;Units sold 82,000;Inventory, 12/31/X6? units;Manufacturing costs;Direct materials $3 per unit;Direct labor $5 per unit;Variable factory overhead $9 per unit;Fixed factory overhead $280,000;Selling & administrative expenses;Variable $2 per unit;Fixed $136,000;The unit selling price is $26. Assume that costs have been stable in recent;years.;Instructions;a. Compute the number of units in the ending inventory.;b. Calculate the cost of a unit assuming use of;1. Direct costing.;2. Absorption costing.;c. Prepare an income statement for the year ended December 31, 20X6, by using;direct costing.;d. Prepare an income statement for the year ended December 31, 20X6, by using;absorption costing.;ACC 206 Week 4 Assignment: Chapter 6 and 7;Problems;Please;complete the following 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;6 Problem 3;1.;Comprehensive budgeting;The;balance sheet of Watson Company as of December 31, 20X1, follows.;WATSON;COMPANY;Balance;Sheet;December;31, 12X1;Assets;Cash;$4,595;Accounts;receivable 10,000;Finished;goods (575 units x $7.00) 4,025;Direct;materials (2,760 units x $0.50) 1,380;Plant;equipment $50,000;Less;Accumulated depreciation 10,000 40,000;Total;assets $60,000;Liabilities;Stockholders' Equity;Accounts;payable to suppliers $14,000;Common;stock $25,000;Retained;earnings 21,000 46,000;Total;liabilities &. stockholders' equity $60,000;The;following information has been extracted from the firm's accounting records;1. All;sales are made on account at $20 per unit. Sixty percent of the sales are;collected in the month of sale, the remaining 40% are collected in the;following month. Forecasted sales for the first five months of 20X2 are;January, 1,500 units,- February, 1,600 units, March, 1,800 units, April, 2,000;units, May, 2,100 units.;2.;Management wants to maintain the finished goods inventory at 30% of the;following month's sales.;3.;Watson uses four units of direct material in each finished unit. The direct;material price has been stable and is expected to remain so over the next six;months. Management wants to maintain the ending direct materials inventory at;60% of the following month's production needs.;4.;Seventy percent of all purchases are paid in the month of purchase, the;remaining 30% are paid in the subsequent month.;5. Watson's;product requires 30 minutes of direct labor time. Each hour of direct labor;costs $7.;Instructions;a.;Rounding computations to the nearest dollar, prepare the following for January;through March;1);Sales budget;2);Schedule of cash collections;3) Production;budget;4);Direct material purchases budget;5);Schedule of cash disbursements for material purchases;6);Direct labor budget;b.;Determine the balances in the following accounts as of March 31;1);Accounts Receivable;2);Direct Materials;3);Accounts Payable;Chapter;7 Problem 1;2.;Basic flexible budgeting;Centron;Inc., has the following budgeted production costs;Direct;materials $0.40 per unit;Direct;labor 1.80 per unit;Variable;factory overhead 2.20 per unit;Fixed;factory overhead;Supervision;$24,000;Maintenance;18,000;Other;12,000;The;company normally manufactures between 20,000 and 25,000 units each quarter.;Should output exceed 25,000 units, maintenance and other fixed costs are;expected to increase by $6,000 and $4,500, respectively.;During;the recent quarter ended March 31, Centron produced 25,500 units and incurred;the following costs;Direct;Materials $10,710;Direct;Labor 47,175;Variable;factory overhead 51,940;Fixed;factory overhead;Supervision;24,500;Maintenance;23,700;Other;16,800;Total;production costs $174,825;Instructions;a.;Prepare a flexible budget for 20,000, 22,500, and 25,000 units of activity.;b. Was;Centron's experience in the quarter cited better or worse than anticipated?;Prepare an appropriate performance report and explain your answer.;c.;Explain the benefit of using flexible budgets (as opposed to static budgets) in;the measurement of performance.;Chapter;7 Problem 5;3.;Straightforward variance analysis;Arrow;Enterprises uses a standard costing system. The standard cost sheet for product;no. 549 follows.;Direct;materials: 4 units @ $6.50 $26.00;Direct;labor: 8 hours @ $8.50 68;Variable;factory overhead: 8 hours @ $7.00 56;Fixed;factory overhead: 8 hours @ 2.5 20;Total;standard cost per unit $170.00;The;following information pertains to activity for December;1.;Direct materials acquired during the month amounted to 26,350 units at $6.40;per unit. All materials were consumed in operations.;2.;Arrow incurred an average wage rate of $8.75 for 51,400 hours of activity.;3.;Total overhead incurred amounted to $508,400. Budgeted fixed overhead totals;$1.8 million and is spread evenly throughout the year.;4.;Actual production amounted to 6,500 completed units.;Instructions;a.;Compute Arrow's direct material variances.;b. Compute;Arrow's direct labor variances.;c.;Compute Arrow's variances for factory overhead.;Week 5 assignment;Please complete the following 5 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 8 Exercise 1;1. Basic present value calculations;Calculate the present value of the following cash flows, rounding to the;nearest dollar;a. A single cash inflow of $12,000 in five years, discounted at a 12% rate of;return.;b. An annual receipt of $16,000 over the next 12 years, discounted at a 14%;rate of return.;c. A single receipt of $15,000 at the end of Year 1 followed by a single;receipt of $10,000 at the end of Year 3. The company has a 10% rate of return.;d. An annual receipt of $8,000 for three years followed by a single receipt of;$10,000 at the end of Year 4. The company has a 16% rate of return.;Chapter 8 Exercise 4;4. Cash flow calculations and net present value;On January 2, 20X1, Bruce Greene invested $10,000 in the stock market and;purchased 500 shares of Heartland Development, Inc. Heartland paid cash;dividends of $2.60 per share in 20X1 and 20X2, the dividend was raised to $3.10;per share in 20X3. On December 31, 20X3, Greene sold his holdings and generated;proceeds of $13,000. Greene uses the net-present- value method and desires a;16% return on investments.;a. Prepare a chronological list of the investment's cash flows. Note: Greene is;entitled to the 20X3 dividend.;b. Compute the investment's net present value, rounding calculations to the;nearest dollar.;c. Given the results of part (b), should Greene have acquired the Heartland;stock? Briefly explain.;Chapter 8 exercise 5;5. Straightforward net present value and internal rate of return;The City of Bedford is studying a 600-acre site on Route 356 for a new;landfill. The startup cost has been calculated as follows;Purchase cost: $450 per acre;Site preparation: $175,000;The site can be used for 20 years before it reaches capacity. Bedford, which;shares a facility in Bath Township with other municipalities, estimates that;the new location will save $40,000 in annual operating costs.;a. Should the landfill be acquired if Bedford desires an 8% return on its;investment? Use the net-present-value method to determine your answer.;Chapter 8 Problem 1;1. Straightforward net-present-value and payback computations;STL Entertainment is considering the acquisition of a sight-seeing boat for;summer tours along the Mississippi River. The following information is;available;Cost of boat $500,000;Service life 10 summer seasons;Disposal value at the end of 10 seasons $100,000;Capacity per trip 300 passengers;Fixed operating costs per season (including straight-line depreciation);$160,000;Variable operating costs per trip $1,000;Ticket price $5 per passenger;All operating costs, except depreciation, require cash outlays. On the basis of;similar operations in other parts of the country, management anticipates that;each trip will be sold out and that 120,000 passengers will be carried each;season. Ignore income taxes.;Instructions;By using the net-present-value method, determine whether STL Entertainment;should acquire the boat. Assume a 14% desired return on all investments- round;calculations to the nearest dollar.;Chapter 8 Problem 4;4. Equipment replacement decision;Columbia Enterprises is studying the replacement of some equipment that;originally cost $74,000. The equipment is expected to provide six more years of;service if $8,700 of major repairs are performed in two years. Annual cash;operating costs total $27,200. Columbia can sell the equipment now for $36,000;the estimated residual value in six years is $5,000.;New equipment is available that will reduce annual cash operating costs to;$21,000. The equipment costs $103,000, has a service life of six years, and has;an estimated residual value of $13,000. Company sales will total $430,000 per;year with either the existing or the new equipment. Columbia has a minimum;desired return of 12% and depreciates all equipment by the straight-line;method.;Instructions;a. By using the net-present-value method, determine whether Columbia should;keep its present equipment or acquire the new equipment. Round all calculations;to the nearest dollar, and ignore income taxes.;b. Columbia's management feels that the time value of money should be;considered in all long-term decisions. Briefly discuss the rationale that;underlies management's belief.;ACC206 final paper;Focus of the Final Paper;You?ve just been hired onto ABC Company as the corporate controller. ABC;Company is a manufacturing firm that specializes in making cedar roofing and;siding shingles. The company currently has annual sales of around $1.2 million;a 25% increase from the previous year. The company has an aggressive growth;target of reaching $3 million annual sales within the next 3 years. The CEO has;been trying to find additional products that can leverage the current ABC;employee skillset as well as the manufacturing facilities.;As the controller of ABC Company, the CEO has come to you with a new;opportunity that he?s been working on. The CEO would like to use the some of;the shingle scrap materials to build cedar dollhouses. While this new product;line would add additional raw materials and be more time-intensive to;manufacture than the cedar shingles, this new product line will be able to;leverage ABC?s existing manufacturing facilities as well as the current staff.;Although this product line will require added expenses, it will provide;additional revenue and gross profit to help reach the growth targets. The CEO;is relying on you to help decide how this project can be afforded Provide;details about the estimated product costs, what is needed to break even on the;project, and what level of return this product is expected to provide.;In order to help out the CEO, you need to prepare a six- to eight-page;report that will contain the following information (including exhibits, but;excluding your references and title page). Refer to the accompanying Excel;spreadsheet (available through your online course) for some specific cost and;profit information to complete the calculations.;Final;Paper Spreadsheet;I. An overall risk profile of the company based on current economic and;industry issues that it may be facing.;II. Current company cash flow;a. You need to complete a cash flow statement for the company using the;direct method.;b. Once you?ve completed the cash flow statement, answer the following;questions;i. What does this statement of cash flow tell you about the sources and uses;of the company funds?;ii. Is there anything ABC Company can do to improve the cash flow?;iii. Can this project be financed with current cash flow from the company?;Why or why not?;iv. If the company needs additional financing beyond what ABC Company can;provide internally (either now or sometime throughout the life of the project);how would you suggest the company obtain the additional financing, equity or;corporate debt, and why?;III. Product cost: ABC Company believes that it has an additional 5,000;machine hours available in the current facility before it would need to expand.;ABC Company uses machine hours to allocate the fixed factory overhead, and;units sold to allocate the fixed sales expenses. Bases on current research, ABC;Company expects that it will take twice as long to produce the expansion;product as it currently takes to produce its existing product.;a. What is the product cost for the expansion product under absorption and;variable costing?;b. By adding this new expansion product, it helps to absorb the fixed;factory and sales expenses. How much cheaper does this expansion make the;existing product?;c. Assuming ABC Company wants a 40% gross margin for the new product, what;selling price should it set for the expansion product?;d. Assuming the same sales mix of these two products, what are the;contribution margins and break-even points by product?;IV. Potential investments to accelerate profit: ABC company has the option;to purchase additional equipment that will cost about $42,000, and this new;equipment will produce the following savings in factory overhead costs over the;next five years;Year 1, $15,000;Year 2, $13,000;Year 3, $10,000;Year 4, $10,000;Year 5, $6,000;ABC Company uses the net-present-value method to analyze investments and;desires a minimum rate of return of 12% on the equipment.;a. What is the net present value of the proposed investment (ignore income;taxes and depreciation)?;b. Assuming a 5-year straight-line depreciation, how will this impact the;factory?s fixed costs for each of the 5 years (and the implied product costs)?;What about cash flow?;c. Considering the cash flow impact of the equipment as well as the;time-value of money, would you recommend that ABC Company purchases the;equipment? Why or why not?;V. Conclusion;a. What are the major risk factors that you see in this project?;b. As the controller and a management accountant, what is your;responsibility to this project?;c. What do you recommend the CEO do?;Writing the Final Paper;1. Must be six to eight double-spaced pages in length, and formatted;according to APA style as outlined in the Ashford Writing Center.;2. Must include a title page with the following;a. Title of paper;b. Student?s name;c. Course name and number;d. Instructor?s name;e. Date submitted;3. Must begin with an introductory paragraph that has a succinct thesis;statement.;4. Must address the topic of the paper with critical thought.;5. Must end with a conclusion that reaffirms your thesis.;6. Must document at least three, but no more than five sources in APA style;as outlined in the Ashford Writing Center.;7. Must include a separate reference page, formatted according to APA style;as outlined in the Ashford Writing Center.;Carefully review the Grading;Rubric for the criteria that will be used to evaluate your assignment.
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