P9-6 (Retail Inventory Method) The records for the Clothing Department of Sharapova’s Discount

P9-6 (Retail Inventory Method) The records for the Clothing Department of Sharapova’s Discount Store are summarized below for the month of January.

Inventory, January 1,            at retail:    $25,000     at cost:    $17,000
Purchases in January,            at retail:    137,000     at cost:    82,500
Freight-in,                7,000
Purchases returns,            at retail:    3,000     at cost:    2,300
Transfers in from suburban branch,            at retail:    13,000     at cost:    9,200
Net markups:                8,000
Net markdowns:                4,000
Inventory losses due to normal breakage, etc, at retail:            at retail:    400
Sales            at retail:    95,000
Sales returns:                2,400

Instructions:       
(a) Compute the inventory for this department as of January 31, at Retail
(b) Compute the inventory using lower of average cost or market.
Note: Due to significant digits of worksheets and calculators, small differences may occur.

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P8-4 (Compute FIFO, LIFO, and Average Cost) Hull Company’s record of transactions (A+ Guaranteed)

P8-4 (Compute FIFO, LIFO, and Average Cost) Hull Company’s record of transactions concerning part X for the month of April was as follows.

Purchases                Sales
Quantity:    Unit Cost:        Quantity:
Apr 1    (Balance on hand)        100     $5.00    Apr 5    300
Apr 4            400     5.10    Apr 12    200
Apr 11            300     5.30    Apr 27    800
Apr 18            200     5.35    Apr 28    150
Apr 26            600     5.60
Apr 30            200     5.80

Instructions:       
(a) Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. Carry unit costs to the nearest cent.

(1) First-in, First-out, (FIFO). (Assuming costs are not computed for each withdrawal – Perpetual.)
(2) Last-in, First-out, (LIFO). (Assuming costs are not computed for each withdrawal – Perpetual.)
(3) Average cost.
“(b) If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, what amount would
be shown as ending inventory in 1, 2, and 3 above? Carry average unit costs to four decimal places.”

(1) First-in, First-out, (FIFO). (Assuming costs are computed for each withdrawal – Perpetual.)
(2) Last-in, First-out, (LIFO). (Assuming costs are computed for each withdrawal – Perpetual.)
(3) Average Cost. (Perpetual.)

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P8-3 (Purchases Recorded Gross and Net) Some of the transactions of Torres Company (A+ Guaranteed)

P8-3 (Purchases Recorded Gross and Net) Some of the transactions of Torres Company during August are listed below. Torres uses the periodic inventory method.

Aug 10    Purchased merchandise on account, terms 2/10, n/30 $12,000
Aug 13    Returned part of the purchase of Aug 10, and received credit on acct $1,200
Aug 15    Purchased merchandise on account, terms 1/10, n/60 $16,000
Aug 25    Purchased merchandise on account, terms 2/10, n/30 $20,000
Aug 28    Paid invoice of August 15 in full.

Instructions:       
“(a) Assuming that purchases are recorded at gross amounts and that discounts are to be recorded
when taken:”

(1) Prepare general journal entries to record the transactions.
(2) Describe how the various items would be shown in the financial statements.
“(b) Assuming that purchases are recorded at net amounts and that discounts lost are treated as
finance expenses:”

(1) Prepare general journal entries to record the transactions.
“   (2) Prepare the adjusting entry necessary on August 31 if financial statements are to be prepared
at that time.”

(3) Describe how the various items would be shown in the financial statements.
(c) Which of the two methods do you prefer and why?

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E8-2 (Inventoriable Costs) In your audit of Jose Oliva Company (A+ Guaranteed)

E8-2 (Inventoriable Costs) In your audit of Jose Oliva Company, you find that a physical inventory on December 31, 2014, showed merchandise with a cost of $441,000 was on hand at that date.You also discover the following items were all excluded from the $441,000

1. Merchandise of $61,000 which is held by Oliva on consignment. The consignor is the Max Suzuki Company.
2. Merchandise costing $38,000 which was shipped by Oliva f.o.b. destination to a customer on December 31, 2014. The customer was expected to receive the merchandise on January 6, 2015.
3. Merchandise costing $46,000 which was shipped by Oliva f.o.b. shipping point to a customer on December 29, 2014. The customer was scheduled to receive the merchandise on January 2, 2015.
4. Merchandise costing $83,000 shipped by a vendor f.o.b. destination on December 30, 2014, and received by Oliva on January 4, 2015.
5. Merchandise costing $51,000 shipped by a vendor f.o.b. seller on December 31, 2014 and received by Garza on January 5, 2015.

Instructions:  
Based on the above information, calculate the amount that should appear on Oliva’s balance sheet at December 31, 2014, for inventory.

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Fong Sai-Yuk Company sells one product (A+ Guaranteed)

E8-9 (Periodic versus Perpetual Entries) Fong Sai-Yuk Company sells one product. Presented below is information for January for Fong Sai-Yuk Company.

Jan 1    Inventory    100     units at    $5.00     each
Jan 4    Sale    80     units at    $8.00     each
Jan 11    Purchase    150     units at    $6.00     each
Jan 13    Sale    120     units at    $8.75     each
Jan 20    Purchase    160     units at    $7.00     each
Jan 27    Sale    100     units at    $9.00     each

Fong Sai-Yuk uses the FIFO cost flow assumption. All purchases and sales are on account.

Instructions:
(a) Assume Fong Sai-Yuk uses a periodic system. Prepare all necessary journal entries, including the end-of-month closing entry to record cost of goods sold. A physical count indicates that the ending inventory for January is 110 units.
(b) Compute the gross profit using the periodic system.
(c) Assume Fong Sai-Yuk uses a perpetual system. Prepare all necessary journal entries.
(d) Compute the gross profit using the perpetual system.

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Fortune, Inc., is preparing its master budget for the first quarter (A+ Guaranteed)

Merchandising: Budgeted income statement

Fortune, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are forecasted at 45,000 for January, 55,000 for February, and 50,000 for March. Cost of goods sold is $14 per unit. Other expense information for the first quarter follows. Prepare a budgeted income statement for this first quarter.

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Use the following information to prepare the July cash budget for Acco Co (A+ Guaranteed)

Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash disbursements for the month and the cash balance expected on July 31.

a.Beginning cash balance on July 1: $50,000.

b.Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,720,000; June (actual), $1,200,000; and July (budgeted), $1,400,000.

c.Payments on merchandise purchases: 60% in the month of purchase and 40% in the month following purchase. Purchases amounts are: June (actual), $700,000; and July (budgeted), $750,000.

d.Budgeted cash disbursements for salaries in July: $275,000.

e.Budgeted depreciation expense for July: $36,000.

f.Other cash expenses budgeted for July: $200,000.

g.Accrued income taxes due in July: $80,000.

h.Bank loan interest due in July: $6,600.

Check Ending cash balance, $122,400

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Acct 211 Quiz 2 (A+ Guaranteed)

Acct 211 Quiz 2

1. When purchase costs of inventory regularly decline, which method of inventory costing will yield the lowest cost of goods sold?
FIFO.
LIFO.
Weighted average.
Specific identification.
Gross margin.

2. Some companies choose to avoid assigning incidental costs of acquiring merchandise to inventory by recording them as expenses when incurred. The argument that supports this is called:
The matching principle.
The materiality constraint.
The cost principle.
The conservation constraint principle.
The lower of cost or market principle.

3. An error in the period-end inventory causes an offsetting error in the next period and therefore:
Managers can ignore the error.
It is sometimes said to be self-correcting.
It affects only income statement accounts.
If affects only balance sheet accounts.
Is immaterial for managerial decision making.

4. Management decisions in accounting for inventory cost include all of the following except:
Costing method.
Inventory system (perpetual or periodic).
Customer demand for inventory.
Use of market values or other estimates.
Items included in inventory and their costs.

5. Generally accepted accounting principles require that the inventory of a company be reported at:
Market value.
Historical cost.
Lower of cost or market.
Replacement cost.
Retail value.

6. In applying the lower of cost or market method to inventory valuation, market is defined as:
Historical cost.
Current replacement cost.
Current sales price.
FIFO.
LIFO.

7. The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost, and also mimics the actual flow of goods for most businesses is:
FIFO.
Weighted average.
LIFO.
Specific identification.
All of the inventory valuation methods accomplish this.

8. Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except:
Prenumbered inventory tickets.
A manager does not confirm that all inventories are ticketed once, and only once.
Counters must confirm the validity of inventory existence, amounts, and quality.
Second counts by a different counter.
Counters of inventory should not be those who are responsible for the inventory.

9. Damaged and obsolete goods that can be sold:
Are never counted as inventory.
Are included in inventory at their full cost.
Are included in inventory at their net realizable value.
Should be disposed of immediately.
Are assigned a value of zero.

10. Costs included in the Merchandise Inventory account can include all of the following except:
Invoice price minus any discount.
Transportation-in.
Storage.
Insurance.
Damaged inventory that cannot be sold.

11. The operating cycle for a merchandiser that sells only for cash moves from:
Purchases of merchandise to inventory to cash sales.
Purchases of merchandise to inventory to accounts receivable to cash sales.
Inventory to purchases of merchandise to cash sales.
Accounts receivable to purchases of merchandise to inventory to cash sales.
Accounts receivable to inventory to cash sales.

12. The gross margin ratio:
Is also called the net profit ratio.
Measures a merchandising firm’s ability to earn a profit from the sale of inventory.
Is also called the profit margin.
Is a measure of liquidity.
Should be greater than 1.

13. An account used in the periodic inventory system that is not used in the perpetual inventory system is
Merchandise Inventory
Sales
Sales Returns and Allowances
Accounts Payable
Purchases

14. The current period’s ending inventory is:
The next period’s beginning inventory.
The current period’s cost of goods sold.
The prior period’s beginning inventory.
The current period’s net purchases.
The current period’s beginning inventory.

15. Liquidity problems are likely to exist when a company’s acid-test ratio:
Is less than the current ratio.
Is 1 to 1.
Is higher than 1 to 1.
Is substantially lower than 1 to 1.
Is higher than the current ratio.

16. The following statements regarding gross profit are true except:
Gross profit is also called gross margin.
Gross profit less other operating expenses equals income from operations.
Gross profit is not calculated on the multiple-step income statement.
Gross profit must cover all operating expenses to yield a return for the owner of the business.
Gross profit equals net sales less cost of goods sold.

17. A debit memorandum is:
Required whenever a journal entry is recorded.
The source document for the purchase of merchandise inventory.
Required when a purchase discount is granted.
The document a buyer issues to inform the seller of a debit made to the seller’s account in the buyer’s records.
Not necessary in a perpetual inventory system.

18. All of the following statements related to U.S. GAAP and IFRS are true except:
Accounting for basic inventory transactions is the same under the two systems.
The closing process for merchandisers is the same under both systems.
U.S. GAAP offers little guidance about the presentation order of expenses.
Neither system requires separate disclosure of items when their size, nature, or frequency are important for proper interpretation.
Neither system defines operating income.

19. Beginning inventory plus net purchases is:
Cost of goods sold.
Merchandise available for sale.
Ending inventory.
Sales.
Shown on the balance sheet.

20. All of the following statements regarding sales returns and allowances are true except:
Sales returns and allowances can include a reduction is the selling price because of damaged merchandise.
Sales returns and allowances do not reflect the possibility of lost future sales.
Sales returns and allowances are recorded in a separate contra-revenue account.
Sales returns and allowances are rarely disclosed in published financial statements.
Sales returns and allowances are closed to the Income Summary account.

21. A columnar working paper used to prepare a company’s unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements, and which is an optional tool in the accounting process is a(n):
Adjusted trial balance.
Work sheet.
Post-closing trial balance.
Unadjusted trial balance.
General ledger.

22. An error is indicated if the following account has a balance appearing on the post-closing trial balance:
Office Equipment.
Accumulated Depreciation-Office Equipment.
Depreciation Expense-Office Equipment.
Ted Nash, Capital.
Salaries Payable.

23. Which of the following statements is true?
Owner’s capital must be closed each accounting period.
A post-closing trial balance should include only permanent accounts.
Information on the work sheet can be used in place of preparing financial statements.
By using a work sheet to prepare adjusting entries you need not post these entries to the ledger accounts.
Closing entries are only necessary if errors have been made.

24. The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner’s capital account is the:
Income Summary account.
Closing account.
Balance column account.
Contra account.
Nominal account.

25. If in preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is:
An expense amount placed in the Balance Sheet Credit column.
A revenue amount placed in the Balance Sheet Debit column.
A liability amount placed in the Income Statement Credit column.
An asset amount placed in the Balance Sheet Credit column.
A liability amount placed in the Balance Sheet Debit column.

26. A post-closing trial balance reports:
All ledger accounts with balances, none of which can be temporary accounts.
All ledger accounts with balances, none of which can be permanent accounts.
All ledger accounts with balances, which include some temporary and some permanent accounts.
Only revenue and expense accounts.
Only asset accounts.

27. The balances in the unadjusted columns of a work sheet will agree with:
the balances reflected in the company’s financial statements.
the balances reflected in the company’s unadjusted trial balance.
whatever balances management has decided to report.
the balances in the company’s post-closing trial balance.
the balances management budgeted for the accounting period.

28. Temporary accounts include all of the following except:
Consulting revenue.
Withdrawals.
Rent expense.
Prepaid rent.
Income Summary.

29. Another name for temporary accounts is:
Real accounts.
Contra accounts.
Accrued accounts.
Balance column accounts.
Nominal accounts.

30. A trial balance prepared after the closing entries have been journalized and posted is the:
Unadjusted trial balance.
Post-closing trial balance.
General ledger.
Adjusted trial balance.
Work sheet.

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LDR 531 Final Exam (A+ Guaranteed)

1) Which of the following is best defined as a consciously coordinated social unit, composed of two or more people, which functions on a relatively continuous basis to achieve a common goal or set of goals?
a.    party
b.    unit
c.    team
d.    community
e.    organization

2) Over the past 2 decades, business schools have added required courses on organizational design to many of their curricula. Why have they done this?
a.    Managers no longer need technical skills in subjects such as economics and accounting to succeed.
b.    There is an increased emphasis in controlling employee behavior in the workplace.
c.    Managers need to understand human behavior if they are to be effective.
d.    These skills enable managers to effectively lead human resources departments.
e.    A manager with good people skills can help create a pleasant workplace.

3) Robert Katz identified three essential skills that managers must have to reach their goals. What are these skills?
a.    technical, decisional and interpersonal
b.    technical, human, and conceptual
c.    interpersonal, informational and decisional
d.    conceptual, communication and networking
e.    human, informational and communication

4) __________ is a field of study that investigates the effect that individuals, groups, and structures have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness.
a.    Organizational development
b.    Human Resources Management
c.    Organizational behavior
d.    People management
e.    Corporate strategy

5) What do the fundamental consistencies underlying the behavior of all individuals enable researchers to do?
a.    observe human behavior
b.    systematize human behavior
c.    research human behavior
d.    predict human behavior
e.    detect human behavior

6) Which of the following is a generic term that covers a broad range of feelings that people experience?
a.    Affect
b.    emotions
c.    moods
d.    emotional labor
e.    cognition

7) What term is used for intense feelings that are directed at someone or something?
a.    affect
b.    cognition
c.    moods
d.    thoughts
e.    emotions
8) If personality characteristics were completely dictated by __________, they would be fixed at
birth and no amount of experience could alter them.

a.    job satisfaction
b.    heredity
c.    environment
d.    situations
e.    religion

9) Which of the following are classifications on the Myers-Briggs Type Indicator?
a.    extroverted/introverted
b.    sensing/intuitive
c.    perceiving/judging
d.    independent/dependent
e.    thinking/feeling

10) Maria is dissatisfied with the way that her manager treats her. She has quit her job and found a new position with another firm. How has she expressed her dissatisfaction?
a.    exit
b.    voice
c.    loyalty
d.    neglect
e.    social voice

11) You quietly continue to do your work when you know things will not improve. This is what type of response to dissatisfaction?
a.    exit
b.    voice
c.    loyalty
d.    neglect
e.    social voice

12) A group
a.  generates positive synergy through coordinated effort
b.  generates greater outputs with no increase in inputs
c.  is two or more individuals interacting and interdependent
d.  engages in collective work that requires joint effort

13) __________ results in a level of performance that is greater than the sum of the individual input.
a.    Synergy
b.    Enthusiasm
c.    Energy
d.    Initiative
e.    Inversion

14) What happens in the second stage of Tuckman’s five stage model of group development?
a. Close relationships are developed.
b. The group demonstrates cohesiveness.
c. Intragroup conflict often occurs.
d. Groups disband.

15) Zach is devout and very active in his church. He is also a very dedicated employee. His manager offers him a promotion, but the new role will require him to work Sundays. Zach would like the promotion, but realizes that it would force him to miss some church activities. It is likely that Zach is experiencing which of the following:
a.    role conflict
b.    role expectation
c.    role perception
d.    psychological conflict
16) Which role focuses on bringing about order and consistency by drawing up formal plans?
a.    leadership
b.    management
c.    task structure
d.    initiating structure
e.    none of the above

17) Which statement regarding leadership is true?
a.    All leaders are managers.
b.    Formal rights enable managers to lead effectively.
c.    All managers are leaders.
d.    All leaders are hierarchically superior to followers.
e.    Nonsanctioned leadership is as important as or more important than formal influence.

18) What are three situational criteria identified in the Fiedler model?
a.    job requirements, position power, and leadership ability
b.    charisma, influence, and leader-member relations
c.    leader-member relations, task structure, and position power
d.    task structure, leadership ability, and group conflict
e.    emotional intelligence, group orientation, and employee status

19) The reconceptualization of the contingency model by Garcia and Fiedler is called _____ theory.
a.    situational
b.    cognitive resource
c.    evaluative
d.    leadership recognition
e.    cognitive dissonance

20) Which path-goal leadership style leads to greater satisfaction when tasks are ambiguous or stressful?
a.    directive
b.    supportive
c.    participative
d.    mixed
e.    reactive

21) According the Path-Goal Theory, what leader is friendly and shows concern for the needs of followers?
a.    the achievement-oriented leader
b.    the directive leader
c.    the laissez-faire leader
d.    the participative leader
e.    the supportive leader

22) Phrases such as “more cultural diversity,” “many new entrants with inadequate skills,” and “increase in professionals” are all examples of what force for change?
a.    technology
b.    world politics
c.    nature of the work force
d.    social trends

23) What is a goal of planned change?
a.    to change the forces of change
b.    to alter the agents of change
c.    to change employees’ responsibilities
d.    to improve the ability to adapt to the environment
e.    to alter the employees’ environment

24) Using covert influence to overcome resistance to change is called what?
a.    negotiation
b.    cooptation
c.    education
d.    coercion
e.    manipulation

25) If individuals resisting change are included in making change decisions in an attempt to gain their support, what is this approach is called?
a.    cooptation
b.    exploitation
c.    manipulation
d.    coercion
e.    education

26) Which of the following is a characteristic of organizational control?
a. Formality orientation
b. Decision orientation
c. Team orientation
d. Managerial orientation

27) What term describes the key characteristic of organizational control that addresses the degree to which employees are expected to exhibit precision?
a.    accuracy orientation
b.    accountability
c.    attention to detail
d.    stability
e.    reactivity

28) Power is
a. a means for leaders to achieve goals
b. defined by leaders’ hopes and aspirations
c. a goal in and of itself
d. not an influence on leaders’ goals

29) Leaders achieve goals, and power is
a. defined by leaders’ hopes and aspirations
b. usually used by poor leaders
c. a means of achieving goals
d. a goal in and of itself
e. a strong influence on leaders’ goals

30) The most important aspect of power is probably that it _____.
a.    is needed to get things done in an organization
b.    is a function of dependency
c.    tends to corrupt people
d.    is counterproductive
e.    involves control

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Case 9-42: Comprehensive Master Budget, Borrowing, Acquisition of Automated Material-Handling System

Case 9-42: Comprehensive Master Budget, Borrowing, Acquisition of Automated Material-Handling System

We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank.” This statement by Beth Davies-Lowry, president of Global Electronics Company, concluded a meeting shehad called with the firm’s top management.

AND SO ON

Check Figures:
1. Sales in Account, First Quarter: $2,184,600
3. Purchases, First Quarter: $2,103,640
5. Cash Receipts, First Quarter: $2,734,060
7. Net Income: $321,312

Click here: Case 9-42: Comprehensive Master Budget, Borrowing, Acquisition of Automated Material-Handling System

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