The following transactions are February 2010 activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern United States (A+)

The following transactions are February 2010 activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern United States.

a. Swing Hard collected $15,000 from customers for lessons given in February.

b. Swing Hard sold a gift card for golf lessons for $150 cash in February.

c. Swing Hard received $4,000 from credit sales made to customers in January.

d. Swing Hard collects $2,250 in advance payments for golf lessons to start in June.

e. Swing Hard bills a customer $125 for golf lessons given between February 25 and February 28. The bill is to be paid in March.

Required:

1 Prepare journal entries for each of the transactions.

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2. Southworth Company uses a job-order costing system and applies manufacturing overhead cost (A+)

Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $246,400 of manufacturing overhead for an estimated allocation base of $154,000 direct material dollars.

a. Raw materials purchased $151,000.

b. Raw materials requisitioned for use in production (all direct materials), $143,000.

c. Utility bills incurred in the factory, $24,000.

d. Costs for salaries and wages were incurred as follows:

Direct labor $219,000

Indirect labor $98,100

Selling and administrative salaries $144,000

e. Maintenance costs incurred in the factory, $19,000.

f. Advertising costs incurred $124,000.

g. Depreciation recorded for the year, $45,000 (70% relates to factory assets, and the remainder relates to selling and administrative assets).

h. Rental cost incurred on buildings, $85,000 (70% of the space is occupied by the factory, and 30% is occupied by sales and administration).

i. Miscellaneous selling and administrative costs incurred $12,000.

j. Manufacturing overhead cost was applied to jobs, $?

k. Cost of goods manufactured for the year, $553,000.

l. Sales for the year (all on account) totaled $1,500,000. These goods cost $510,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were as follows:

Prepare a schedule of cost of goods manufactured

Raw materials $20,000

Work in process $24,000

Finished Goods $32,000

Required:

1. Prepare journal entries to record the above data.

2 Post your entries to T-accounts. Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account

3 Prepare a schedule of cost of goods manufactured.

4 Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold

5 Prepare an income statement for the year.

6 Job 218 was one of the many jobs started and completed during the year. The job required $3,300 in direct materials and 500 hours of direct labor time at a rate of $11 per hour. If the job contained 560 units and the company billed at 65% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer

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Skid Road Recording, Inc. is a small audio recording studio located in Seattle (A+)

Skid Road Recording, Inc. is a small audio recording studio located in Seattle. The company handles work for advertising agencies—primarily for radio ads—and has a few singers and bands as clients. Skid Road Recording handles all aspects of recording from editing to making a digital master from which CDs can be copied. The competition in the audio recording industry in Seattle has always been tough, but it has been getting even tougher over the last several years. The studio has been losing customers to newer studios that are equipped with more up-to-date equipment and that are able to offer very attractive prices and excellent service. Summary data concerning the last two years of operations follow:

2010 2011

Estimated hours of studio service 1,200 950

Estimated studio overhead cost $100,000 $100,000

Actual hours of studio service provided 1,100 800

Actual studio overhead cost incurred $100,000 $100,000

Hours of studio service at capacity 2,000 2,000

The company applies studio overhead to recording jobs on the basis of the hours of studio service provided. For example, 47 hours of studio time were required to record, edit, and master the Slug Fest music CD for a local band. The entire studio overhead is fixed, and the actual overhead cost incurred was exactly as estimated at the beginning of the year in both 2010 and 2011.

Required:

1.

a. Skid Road Recording computes its predetermined overhead rate at the beginning of each year based on the estimated studio overhead and the estimated hours of studio service for the year. How much overhead would have been applied to the Slug Fest job if it had been done in 2010? In 2011?

b By how much would overhead have been under applied or over applied in 2010? In 2011?

2.

a. The president of Skid Road Recording has heard that some companies in the industry have changed to a system of computing the predetermined overhead rate at the beginning of each year based on the hours of studio service that could be provided at capacity. He would like to know what effect this method would have on job costs. How much overhead would have been applied using this method to the Slug Fest job if it had been done in 2010? In 2011?

b. By how much would overhead have been under applied or over applied in 2010 using this method? In 2011?

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2. Ortiz Company’s sales budget projects unit sales of part 198Z of 10,900 units in January, 12,000 units in February, and 12,900 units in March (A+)

Ortiz Company\’s sales budget projects unit sales of part 198Z of 10,900 units in January, 12,000 units in February, and 12,900 units in March. Each unit of part 198Z requires 3 pounds of materials, which cost $6 per pound. Ortiz Company desires its ending raw materials inventory to equal 40% of the next month\’s production requirements, and its ending finished goods inventory to equal 20% of the next month\’s expected unit sales. These goals were met at December 31, 2010.

Required:

1. Prepare a production budget for January and February 2011.

2. Prepare a direct materials budget for January 2011. (Enter all amounts as positive amounts and subtract

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Dewitt Industries has adopted the following production budget for the first 4 months of 2012 (A+)

Dewitt Industries has adopted the following production budget for the first 4 months of 2012.

Month Units Month Units

January 11,300 March 4,500

February 7,700 April 3,600

Each unit requires 5 pounds of raw materials costing $3 per pound. On December 31, 2011, the ending raw materials inventory was 19,775 pounds. Management wants to have a raw materials inventory at the end of the month equal to 35% of next month\’s production requirements.

Required:

Complete a direct materials purchases budget by month for the first quarter.

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Pletcher Company produces and sells automobile batteries, the heavy-duty HD-240 (A+)

Pletcher Company produces and sells automobile batteries, the heavy-duty HD-240. The 2011 sales budget is as follows.

Quarter HD-240

1 5,000

2 6,540

3 8,270

4 10,710

The January 1, 2011, inventory of HD-240 is 2,120 units. Management desires an ending inventory each quarter equal to 60% of the next quarter\’s sales. Sales in the first quarter of 2012 are expected to be 30% higher than sales in the same quarter in 2011.

Required:

Prepare quarterly production budgets for each quarter and in total for 2011.

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Crede and Rensing, CPAs, are preparing their service revenue (sales) budget for the coming year (2011) (A+)

Crede and Rensing, CPAs, are preparing their service revenue (sales) budget for the coming year (2011). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department Quarter 1 Quarter 2 Quarter 3 Quarter 4

Auditing 2,251 1,678 1,920 2,467

Tax 2,912 2,418 1,980 2,487

Consulting 1,442 1,442 1,442 1,442

Average hourly billing rates are: auditing $79, tax $91, and consulting $102.

Required:

Complete the service revenue (sales) budget for 2011 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

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ACCT 2121 Tree Company had assets of $23,000 at the beginning of the year (A+)

ACCT 2121 Tree Company had assets of $23,000 at the beginning of the year. It also had a balance of $5,000 in Contributed Capital and $8,000 in Retained Earnings. During the year, Tree Company had revenues of $72,000 and expenses of $58,000.

Tree Company sold $3,000 in stock. (That would increase Contributed Capital.) They paid out $1,000 in dividends and liabilities increased by $4,000. What were total assets at the end of the year?

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ACCT 2121 Following are accounts and their balances for ABC Corporation at 12/31/11 (A+)

ACCT 2121 Following are accounts and their balances for ABC Corporation at 12/31/11. Calculate total stockholders’ equity at the end of the year.

Present your answer as a number with no commas or decimals.

Accounts Payable 10,000

Accounts Receivable 17,000

Advertising Expense 2,500

Cash 35,000

Contributed Capital 25,000

Dividends 2,200

Notes Payable 7,500

Rent Expense 3,000

Retained Earnings, BEGINNING of Year 7,800

Service Revenue 23,000

Supplies 4,000

Wages Expense 9,600

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2. ACCT 2121 Following are the accounts and their balances for XYZ Corporation at 12/31/11 (A+)

ACCT 2121 Following are the accounts and their balances for XYZ Corporation at 12/31/11. What is net income for the year?

Present your answer as a number with no commas or decimals.

Accounts Payable 375

Accounts Receivable 4,750

Cash 4,000

Contributed Capital 5,000

Dividends 1,000

Income Tax Expense 1,825

Retained Earnings 4,500

Salaries Expense 12,000

Service Revenue 19,000

Supplies 2,000

Supplies Expense 2,600

Utilities Expense 700

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