Directions: Be sure to make an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English spelling and grammar. Sources must be cited in APA format. Your response should be a minimum of one
(1) Single-spaced page to a maximum of two (2) pages in length; refer to the "Assignment Format" page for specific format requirements.
Assignment Details: This assignment will include the four-part graded project described below and 20 multiple choice exam questions covering this lesson, Manufacturing Accounting. The combined project and exam portions of this Assignment total 100 points.
You should complete your work for this project at this time and submit it with the exam questions (available at the Assignments tool).
Part A
The following information is given for Tripp Company, which uses the indirect method.
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Net income
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$20,000
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Depreciation expense
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3,000
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Increase in accounts receivable
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2,000
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Payment of dividends
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2,000
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Proceeds from sale of equipment
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6,000
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Increase in accounts payable
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4,000
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Decrease in inventory
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3,000
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From the information provided, answer the following questions:
1. The cash flow from operating activities is .
2. The cash flow from investing activities is .
3. The cash flow from financing activities is .
Part B
Selected data for Stick's Design are given as of December 31, Year 1 and Year 2 (rounded to the nearest hundredth).
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Year 2
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Year 1
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Net Credit Sales
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$25,000
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$30,000
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Cost of Goods Sold
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16,000
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18,000
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Net Income
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2,000
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2,800
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Cash
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5,000
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900
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Accounts Receivable
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3,000
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2,000
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Inventory
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2,000
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3,600
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Current Liabilities
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6,000
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5,000
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Compute the following:
1. Current ratio for Year 2
2. Acid-test ratio for Year 2
3. Accounts receivable turnover for Year 2
4. Average collection period for Year 2
5. Inventory turnover for Year 2
Part C
Prepare an income statement showing departmental contribution margin based on the following:
Dept. X Dept. Y Rent Expense
Space (square feet) 17,500 35,000
Net Sales $60,000 $40,000
Cost of Goods Sold 18,000 16,000
Rent Expense (allocated based on square feet) $2,700
Part D
From the following transactions, prepare the appropriate general journal entries for the month of April.
1. Raw materials costing $60,000 were issued from the storeroom.
2. Direct labor of $53,000 was charged to production.
3. Indirect labor costs of $17,000 were incurred.
4. Overhead was applied at the rate of 40% of direct labor dollars.
5. Completed products costing $42,000 were transferred to finished goods.
6. Products costing $32,000 were sold.