ACC 206 Week 1 Chapter 1 Critical Thinking Question 5.doc ACC 206 Week 1 Problem 2 Classification of activities (Updated October 2013) ACC 206 Week 1 Problem 3 Overview of direct and indirect methods (Updated October 2013) ACC 206 Week 1 Problem...
1. Critical Thinking Question:
Answer the following questions:
What is the purpose of the statement of cash flows? What are the three main categories and give examples for each category?
2. 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. ________ Acquired a new laser printer by...
3. 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. The dollar change in the Merchandise Inventory account appears on the statement of cash...
4. Equipment transaction and cash flow reporting
Property, plant & equipment Dec. 31, 20X8 Dec. 31, 20X7
5. 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:
1. Analysis of stockholders' equity
Star Corporation issued both common and preferred stock during 20X8. The stockholders' equity sections of the company's balance sheets at the end of 20X8 and 20X7 follow.
2. Bond computations: Straight-line amortization
Southlake Corporation issued $800,000 of 7% bonds on March 1, 20X8. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow...
3. Definitions of manufacturing concepts
Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:
Materials and supplies used
. Schedule of cost of goods manufactured, income statement
The following information was taken from the ledger of Jefferson Industries, Inc.:
Direct labor $75,000 ...
5. Manufacturing statements and cost behavior.
Sioux 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 $38 per roll...
. 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
2. Computations using a job order system
Spencer Corporation employs a job order cost system. On May 1 the following balances were extracted from the general ledger;
Work in process $ 36,200
Finished goods 86,900
Cost of goods sold 130,700...
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 $56,200 $58,620 $61,000 $59,400
Orders shipped 120 135 170...
4. Break-even and other CVP relationships
Pine Hospital has average revenue of $190 per patient day. Variable costs are $50 per patient day; fixed costs total $4,620,000 per year.
a. How many patient days does the hospital need to break...
5. Direct and absorption costing
The information that follows pertains to Consumer Products for the year ended December 31, 20X8.
Inventory, 1/1/X6 26,000 units
Units manufactured 80,000
1. Comprehensive budgeting
The balance sheet of Watson Company as of December 31, 20X8, follows.
December 31, 20X1
2. Basic flexible budgeting
Sydney Inc., has the following budgeted production costs:
Direct materials ...
3. Straightforward variance analysis
Andy Enterprises uses a standard costing system. The standard cost sheet for product no. 551 follows.
Direct materials: 4 units @ $6.50 ...
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 an 11% rate of return.
b. An annual receipt...