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## Accounting

 Accounting Basics Cost Accounting Financial Accounting Managerial Accounting Auditing Taxation

Task1.

Issuance of stock

Make journal entries to record the issuance of 100,000 shares of common stock at \$20 per share for every of the following independent cases:

a. Jackson Corporation has common stock with a par value of \$1 per share.

b. Royal Corporation has no-par common with a stated value of \$5 D share.

c. French Corporation has no-par common; no stated value has been as signed

Task2.

Analysis of stockholders' equity

Star Corporation issued both common and preferred stock throughout 19X6. The stockholders' equity sections of the company's balance sheets at the end of 19X6 and 19X5 follow.

19X6            19X5
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. find out the number of preferred shares that were issued throughout 19X6.
b. find out the average issue price of the common stock sold in 19X6.
c. By what amount did the company's paid-in capital increase throughout 19X6?
d. Did Star's total legal capital increase or decrease throughout 19X6? By what amount?

Task3.

Bond computations: Straight-line amortization

Southlake Corporation issued \$900,000 of 8% bonds on March 1, 19X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Suppose 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 employs the straight-line method of amortization.

Instructions:

Fill the following table:
Case A       Case C       Case B
a. Cash inflow on the issuance date
b. Total cash out-flow through maturity
c. Total borrowing cost over the life of the bond issue
d. Interest expense for the year ended December 31, 19X1
e. Amortization for the year ended December 31, 19X1
f. Unamortized premium as of December 31, 19X1
g. Unamortized discount as of December 31, 19X1
h. Bond carrying value as of December 31, 19X1

Task4.

Product costs and period costs

The costs that follow were extracted from accounting records of various different manufacturers:

1. Weekly wages of an equipment maintenance worker

2. Marketing costs of a soft drink bottler

3. Cost of sheet metal in a Honda automobile

4. Cost of president's subscription to Fortune magazine

5. Monthly operating costs of pollution control equipment used in a steel mill

6. Weekly wages of a seamstress employed by a jeans maker

7. Cost of compact discs (CDs) for newly recorded releases of Rush, Billy Joel, and Bryan Adams

a. Find out which of these costs is product costs and which are period costs.

b. For the product costs only, find out those which are simply traced to  finished product and those that are not.

Task5.

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

find out:

a. Total direct materials consumed

b. Total direct labour

c. Total prime cost

d. Total conversion cost

Task6.

Schedule of cost of goods manufactured, income statement

The following information was taken from 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.

Task7.

Manufacturing statements and cost behaviour

Tampa Foundry began operations throughout the current year, manufacturing several products for industrial use. One such product is light-gauge aluminium, that 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. Find out the cost of the finished goods inventory of light-gauge aluminum.

b. Make an income statement for the current year ended December 31

c. On the basis of the information presented:

1. Does it seem which the company pays commissions to its sales staff? Describe.

2. What is the likely effect on the \$4.50 unit cost of direct materials if next year's production raises? Why?

Managerial Accounting, Accounting

• Category:- Managerial Accounting
• Reference No.:- M9692

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