assignment rubric to help you focus

  1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.
  2. Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
  3. Consider the discussion and the any insights you gained from it.
  4. Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

Exercise #1: Open Kellogg’s Annual Reports and find paragraph entitled “property” under ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, and explain what the term impairment means.

Exercise #2: Journalize the following transactions for the Round Company for 201X and show all calculations:

  • Jan. 1      Sold a truck for $1,300 that cost $6,700 and had accumulated depreciation of $6,000.
  • Feb 10    A machine costing $3,100 with accumulated depreciation of $2,150 was destroyed in a fire. The insurance company settled the claim for $450.
  • May 1      Traded in a machine costing $18,000 with $14,500 of accumulated depreciation for a new machine costing $25,100 with a trade-in allowance of $3,000. Note that depreciation is up-to-date. The loss is to be recognized.
  • July 8      Traded in a machine costing $46,000 with $34,000 of accumulated depreciation (which is up-to-date) for a new machine for a cash price of $47,000 and a trade-in allowance of $15,000.
  • Aug. 9     Journalize the May 1 transaction using the income tax method.
  • Sept. 12  A truck costing $7,500 and fully depreciated was disposed of.

Exercise #3: Record the following transactions in the general journal of White Company for 201X:

  • Feb. 5     Purchased land for $93,000. The $93,000 included attorney’s fees of $6,300.
  • Feb. 18   White Company decided to pave the parking lot for $5,400.
  • Mar. 24   Purchased a building for $91,000, putting down 34% and mortgaging the remainder.
  • Mar. 29   Bought equipment for $36,000. Freight and assembly were an additional $3,600.
  • May 10   Added a new wing for $160,000 to building that was purchased on March 24.
  • June 15  Performed ordinary repair work on equipment purchased March 29, $850, to maintain its normal operations.
  • July 1     Bought a truck for $14,500.
  • Oct. 15   Added a hydraulic loader to truck, $2,300.
  • Nov. 30  Truck purchased in July was brought in for grease and oil, $32.
  • Dec. 30  Overhauled truck’s motor for $900, extending its life by more than one year.
  • Dec. 31  Changed tires on truck, $400.

Exercise #4: At the beginning of January 201X, the stockholders’ equity of Mountain View Corporation consisted of the following:

Paid-In Capital
Common Stock, $30 par value, authorized 60,000 shares, 15,000 shares issued and outstanding$450,000
Paid-In Capital in Excess of Par Value – Common80,000
Total Paid-In Capital by Common
Stockholders$530,000
Retained Earning170,000
Total Stockholders’ Equity$700,000

Figure 4

Tasks:

  1. Record the transactions in general journal form.
  2. Prepare the stockholders’ equity section at year-end using the Blueprint as a guide.
  3. Prepare a statement of retained earnings at December 31, 201X. Accounts are provided in the working papers that accompany this text. Be sure to put in the beginning balances.
  • June  5      Mountain View Corporation purchased 1,000 shares of treasury stock at $34.
  • June 25     The board of directors voted a $0.20 per share cash dividend payable on July 20 to stockholders of record on July 4.
  • July  20     Cash dividend declared on June 25 is paid.
  • Sept. 10    Sold 300 shares of the treasury stock at $43 per share.
  • Sept. 30    Sold 700 shares of the treasury stock at $33 per share.
  • Oct. 15     The board of directors declared a 10% stock dividend distributable on January 2 to stockholders of record on November 2. The market value of the stock is  currently $50 per share.
  • Dec. 31     Closed the net income of $70,000 in the Income Summary account to Retained Earnings.

Exercise #5: The following is the stockholders’ equity of Piesco Corporation on October 1, 201X:

Paid-In Capital
Preferred 17% Stock, $11 par value, authorized 6,300 shares, shares, 3,300 shares issued and outstanding$36,300
Common Stock, $8 par value, authorized 24,000 shares,
10,000 shares issued and outstanding
80,000
Additional Paid-In Capital
Paid-In Capital in Excess of Par Value – Preferred$10,000
Paid-In Capital in Excess of Par Value – Common7,000
Paid-In Capital in Excess of Par Value – Stock Dividend2,500
Total Additional Paid-In Capital19,500
Total Paid-In Capital$135,800
Retained Earnings180,000
Total Stockholders’ Equity$315,800

Figure 5

Tasks:

  1. Journalize the transactions in general journal form.
  2. Prepare the stockholders’ equity section of the balance sheet using the legal capital approach as of December 31, 201X.

The working papers that accompany this text have accounts to update ledger balances. Be sure to put in the beginning balances. Use the Blueprint as a guide to the setup of stockholders’ equity.

  • Oct. 3     Declared a $0.50 per shared dividend on the common stock and a $1.20 per share dividend on the preferred. (The Dividends Payable account will record amounts for both common and preferred, although companies could set up Common Dividend Payable and Preferred Dividend Payable accounts.)
  • Nov. 15   Dividends were paid that were declared on October 3.
  • Nov. 18   Purchased 340 shares of its own common stock at $14 per share.
  • Nov. 25   Reissued 90 shares at $17 per shared.
  • Nov. 26   Declared a 15% stock dividend on common. Market value of stock is $48 per share.
  • Dec. 29   Distributed stock dividend declared on November 26.
  • Dec. 30   Reissued 80 shares of treasury stock at $12 per share.
  • Dec. 31   Closed the Income Summary account, which had net income of $89,000, to Retained Earnings.

MOD 4

Start by reading and following these instructions:

  1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.
  2. Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
  3. Consider the discussion and the any insights you gained from it.
  4. Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

Exercise #1: Open the most recent Kellogg’s Annual Report and explain why Kellogg’s is not classified as a partnership.

Go to the consolidated balance sheet in the annual report for Kellogg’s Company. What is the amount of retained earnings in the most recent year? What is the par value of the stock? (Click on the Kellogg pdf file)

Exercise #2: In Good Company

The waitress set down a plate of nachos and two pints of beer in front of Stan and his old college buddy, Ron Ebbers. Ever since they’d run into each other at Stan’s Subway restaurant, the two had rekindled their friendship over beer and nachos at a local restaurant.

“Sales still on the up and up?” Ron asked Stan. “Yep. It just doesn’t seem to matter how weak the economy is,” said Stan. “People will always want a sandwich that’s healthy, great tasting, and a good value.”

And now,” Stan lifted a glass, “ salu—a toast—because as of today I’m a corporation!” “Cheers, Stan the Man!” exclaimed Ron and clinked Stan’s beer mug. “But doesn’t incorporating cost you more money in legal fees and taxes?” “Well, that may be true, but if I don’t incorporate and anything goes wrong or some wacko sues me, it could cost me my shirt! Now I have limited liability, but I still pay wages to my employees, send in my royalty fees to Subway, and  muchos profits still go to me.”

“Maybe I should buy stock in Subway,” Ron interrupted. “I’ve been dabbling in the market lately and Subway seems like a good bet!” “Unfortunately, you can’t buy stock in Subway,” said Stan. “Doctor’s Associates, the corporation that owns the Subway brand, is privately owned by the founders Fred DeLuca and Dr. Peter Buck.

“Doctor’s Associates?” Stan exclaimed. “That’s strange. I know the food has helped people lose weight and eat healthy, but is Subway run by a health-care outfit?”

“No, it’s actually kind of interesting. In 1965 Fred DeLuca was just a teenager who wanted to go to college and become a doctor, but he didn’t have enough money.

Then his family friend, Peter Buck, loaned him the money to start a submarine sandwich joint. DeLuca, of course, never did become a doctor, but Peter Buck holds a Ph.D. in nuclear physics, so they called themselves Doctor’s Associates—they’re the ‘doctors’ and we franchisees are the ‘associates.’”

“I guess we all have dreams that we don’t carry out,” Ron mused. “Hey, don’t look so  triste, amigo. I know you’re stuck in a dead-end job now, but maybe now is the time to think about new opportunities.”

“Whaddaya mean?” Ron asked.

“There’s a great space on Alameda Avenue on the other side of Los Palmos—near that fancy new apartment complex. I’ve been thinking of eventually opening up another store, but I don’t want to go it alone. However, I might consider going into a partnership with you to own Subway number 2.”

“Well, given the liability risks you just mentioned—which I assume apply to partnerships as well as sole proprietorships, what about a corporation?” said Ron eagerly. “You could be the majority shareholder and I could have a smaller interest in the restaurant until I learn the ropes and eventually buy you out.”

“Whoa there. Let’s not talk about buying anyone out just yet,” laughed Stan. “Before you do anything—if you’re serious about being a Subway owner—you’ll need to go to Subway University.”

Ron raised his glass, “Salute.”

“No man, salud,” corrected Stan. “A toast. To opportunidades del futuro y amistad. To future opportunities and friendship.”

Tasks

  1. What are all the advantages and disadvantages of forming a corporation?
  2. What do you think is the best way for Stan and Ron to own a Subway restaurant jointly? Partnership or corporation? Why?
  3. From the following partial mixed list, select the appropriate titles and prepare a stockholders’ equity section using the source-of-capital approach  as shown in the Blueprint example for Ununoctium Corporation on July 31, 201X.
Office Equipment$110,000
Land215,000
Paid-In Capital in Excess of Par Value-Preferred Stock85,000
Building70,000
Accounts Receivable135,000
Notes Receivable38,000
Organization Costs10,500
Common Stock, $8 par value (60,000 shares issued and outstanding; 85,000 shares authorized)81,000
Retained Earnings200,000
Subscriptions Receivable-Common Stock81,000
Patents12,000
Preferred 17% Stock, $49 par value (6000 shared issued; 8,500 shared authorized)294,000
Common Stock Subscribed at Par240,000
Paid-In Capital in Excess of Par Value-Common Stock17,000

Figure 6

  1. Perform the following:
  2. Journalize the entries to record the stock subscription plan for Orange Co. On June 1, Orange received subscriptions for 500 shares of $24 par value common stock at $48 per share. The buyer will pay two equal installments on August 31 and November 30.
  3. From the following, calculate the dividends for common and preferred stock:
  • 8% fully participating preferred stock.
  • The board declared a $210,000 dividend.
  • Preferred stock 5,000 shares, $50 par value; common stock 10,000 shares,  $100 par.
  1. The partnership of Jackson, Rackley, and Surber is being liquidated. All gains and losses are shared in a 3:2:1 ratio. Before liquidation their balance sheet looks as follows:
Cash$23,000Liabilities$7,700
Other Assets15,000A. Jackson, Capital11,000
C. Rackley, Capital18,100
J. Surber, Capital1,900
Total Assets38,700Total Liability + Equity$38,700

Figure 7

Journalize the entries needed in the liquidation process under the following independent situations and assume a date of July 1, 201X, for sale of assets and a date of July 15 to pay off liabilities and distribute cash to partners:

  1. Situation 1: Sold other assets for $33,900.
    b. Situation 2: Sold other assets for $6,900.
    c. Situation 3: Sold other assets for $2,100. Surber cannot cover his deficit.

MOD 5

Start by reading and following these instructions:

  1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.
  2. Read the required chapter(s) of the textbook and any additional recommended resources.  Some answers may require you to do additional research on the Internet or in other reference sources.  Choose your sources carefully.
  3. Consider the discussion and the any insights you gained from it.
  4. Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

Exercise #1: On January 1, 201X, Acorn Corporation issued $600,000 of 10%, 20-year bonds for $509,580, yielding a market rate of 12%. Interest is paid on July 1 and December 31. Acorn uses the interest method to amortize the discount.

Tasks:

  1. Prepare an amortization schedule for the first three semiannual periods.
  2. Prepare journal entries to record the following:
  • Bond issue on January 1.
  • Semiannual interest payments on July 1 and December 31 as well as amortization of discount.
  1. If the bond were issued on March 1 and interest was paid on September 1 and March 1, what would be the year-end adjusting entry on December 31, 201X, to record accrued interest and amortization of discount?

Exercise #2: Open the most recent Kellogg’s Annual Report and find note 7 for Debt. What is Kellogg’s scheduled repayment of long-term debt in the most recent year (in millions)?

Go to the annual report for Kellogg’s Company and find the consolidated balance sheet. What is the cost of treasury stock for Kellogg’s in the last two years?

Exercise #3: From the following, prepare the long-term liabilities section of a balance sheet:

  1. Sinking Fund  $275,000
  2. Premium on 13% bonds  7,000
  3. Discount on 16% bonds  13,000
  4. 13% Bonds Payable  600,000
  5. 16% Bonds Payable  180,000

Exercise #4: At the beginning of January 201X, the stockholders’ equity of Mountain View Corporation consisted of the following:

Paid-In Capital:
Common Stock, $30 par value, authorized 60,000 shares,
15,000 shares issued and outstanding
$450,000
Paid-In Capital in Excess of Par Value-Common80,000
Paid-In Capital by Common
Stockholders$530,000
Retained Earnings170,000
Total Stockholders’ Equity$700,000

Figure 8

Tasks:

  1. Record the transactions in general journal form.
  2. Prepare the stockholders’ equity section at year-end using the Blueprint as a guide.
  3. Prepare a statement of retained earnings at December 31, 201X.

Accounts are provided in the working papers that accompany this text. Be sure to put in the beginning balances.

201X

  • June 5     Mountain View Corporation purchased 1,000 shares of treasury stock at $34.
  • June 25   The board of directors voted a $0.20 per share cash dividend payable on July 20 to stockholders of record on July 4.
  • July 20    Cash dividend declared on June 25 is paid.
  • Sept. 10  Sold 300 shares of the treasury stock at $43 per share.
  • Sept. 30  Sold 700 shares of the treasury stock at $33 per share.
  • Oct. 15    The board of directors declared a 10% stock dividend distributable on January 2 to stockholders of record on November 2. The market value of the stock is currently $50 per share.
  • Dec. 31   Closed the net income of $70,000 in the Income Summary account to Retained Earnings.

Exercise #5: BUCKING TRADITION

“A convenience store?” asked Stan, incredulous. “Yep, a convenience store,” replied Carrie Zabrinsky, “or, as they say in the business, a c-store.” Stan had arranged a meeting with his Subway development agent, Carrie, to discuss expansion of his Subway franchise to another location. His future partner, Ron, was almost through with his training program at Subway University, and Stan had just promoted his Sandwich Artist, Rashid, to manager. By leaving a lot of the day-to-day operations in Rashid’s hands, Stan planned to help Ron open the new Subway. Everything seemed to be going according to plan, yet he hadn’t bargained on the new location being in a Pitt’s Stop convenience store!

“Stan, just hear me out,” Carrie insisted. “That site you have your eye on is extremely expensive. Also, with nothing around it but that new luxury apartment complex and some very upscale shops, it won’t generate the foot traffic you need. This c-store, however, is in a prime high-traffic location.” “But the square footage is so small,” Stan protested, pointing to the floor plan in front of him.

“Listen, Stan, in the fast-food industry, Subway leads the pack in opening nontraditional units. We have more than 3,700 Subway restaurants in c-stores, airports, gas stations, schools, grocery stores, and even in hospitals. Headquarters wouldn’t encourage these arrangements if they weren’t highly lucrative. Sure, these smaller units typically generate less revenue than a full-size restaurant, but they’re also cheaper to build and maintain. Look at the figures: Opening in a c-store typically costs as little as $30,000 to develop, while the traditional venue is more like $66,000.”

“And you’ve got a captive audience, I guess,” admitted Stan, “particularly in hospitals and schools. What I would’ve given to eat a sweet onion chicken teriyaki sandwich instead of that stuff that passed for food in high school!”

“Now you’re getting the picture,” Carrie smiled. “Just imagine. You go into the c-store at 10:00 P.M. to buy a quart of milk or some batteries and then you smell fresh-baked gourmet bread. Your stomach growls and you buy a Subway 6-inch.”

“Okay, okay,” Stan said. “Once I get some figures for the lease and find out more about this Pitt’s Stop’s business and its management, I’ll run it by Ron. I’m not sure it is what he had in mind when he quit his job to own a Subway.”

“Well, he had profits in mind, didn’t he?” asked Carrie.

Tasks

  1. How might opening a Subway in a convenience store reduce expenses?
  2. How might this arrangement increase sales? Suppose you’re Stan’s development agent and you want him to open a Subway in a gas station. How would you sell him on this arrangement?
  3. Like all corporations, Subway’s goal is to increase earnings per share. How does expansion into nontraditional sites help achieve this goal?

MOD 6

Start by reading and following these instructions:

  1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.
  2. Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
  3. Consider the discussion and the any insights you gained from it.
  4. Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

Exercise #1: From the following, calculate the net cash flows from operating activities (use the direct method):

Sales$9,900
Cost of Goods Sold$4,520
Salaries Expense$1,400
Insurance Expense$960
Other Expenses (all cash)$1,300
Changes in current assets and liabilities:
Accounts Receivable increased by $600.
Inventory increased by $500.
Accounts Payable increased by $120.
Salaries Payable decreased by $200.
Prepaid Insurance decreased by $160.

Figure 9

Exercise #2: For each of the following transactions, identify the appropriate section of the statement of cash flows.

  1. Receive payments on account from customers.
  2. Sale of equipment.
  3. Sale of stock or bond investments.
  4. Purchase and reissuance of treasury stock.
  5. Paid insurance expense.
  6. Issue stock in exchange for equipment.

Exercise #3: Open the most recent Kellogg’s Annual Report and find the Statement of Cash Flows for Kellogg’s. What is net cash provided by operations?

Also within Kellogg’s Annual Report, find the Consolidated Balance Sheet. Calculate for Kellogg’s the current ratio for the last two years.

Exercise #4: From the following, calculate the net cash flows from operating activities (use the indirect method):

20112012
Accounts Receivable$5,800$7,500
Prepaid Insurance$950$830
Accounts Payable$5,500$6,200
Salaries Payable$1,250$2,650
For the year ended 2007:
Net Income:$17,900
Depreciation Expense$4,800

Figure 10

Exercise #5: “And the Winner is . . .”

“And the Number 1 for sales this month is . . .” Carrie Zabrinsky smiled broadly and paused to add a little suspense to the announcement. As a development agent for Subway, she had decided to give the franchisees in her region a little push by spurring some healthy rivalry among them. Every month for the next year she was holding a contest to see which franchisee had the highest sales.

“. . . Stan Hernandez for his Subway of Los Palmos!” announced Carrie. “Stan, come up here and get your award.” Stan bounded up to the stage, still in a state of shock. Carrie handed him a handsome framed certificate as well as a travel voucher for two nights—all expenses paid—in the Sunset Sands resort.

“Wow!” was all Stan could say at first, but he quickly gained his composure and even delivered a short speech. Stan thanked Subway for providing a wonderful business concept and product. He thanked his wonderful, hardworking employees, his junior partner Ron, and also his accountant Lila. “While it’s true that we rang up the sales, Lila Hernandez crunched those numbers,” Stan told Carrie, “and gave me a crash course in accounting!”

Carrie’s new contest requires the franchisees in her region to send her a lot of accounting information—information that not only enables her to see which restaurant has the highest sales, but also allows her to do some troubleshooting. Stan e-mails a monthly management report to Carrie that includes an income statement. He does the balance sheet quarterly, and Carrie then does a horizontal analysis of Stan’s balance sheet, comparing each line to its budget and to last year. That information tells her whether Stan is on target and points out any weak areas in the business. Then she does a vertical analysis of Stan’s balance sheet to arrive at percentages of the totals.

Carrie compares Stan’s results (in percentages) with each of the other restaurants in his region, using a common-size statement. This exercise is useful because, although each shop is different in size, a common-size statement deals only in percentages. This comparison quickly points up exceptions, which may be good or bad. In either case, Carrie Zabrinskythen has the clues she needs to discover a strength other shops can copy or a weakness Stan can fix.

“So, Stan the Man,” said Ron Ebbers after the award ceremony, “are you going to take me to the Sunset Sands to celebrate? As your junior partner, I feel I should share in your success.”“So, Stan the Man,” said Ron Ebbers after the award ceremony, “are you going to take me to the Sunset Sands to celebrate? As your junior partner, I feel I should share in your success.”

“We’ll just wait until our c-store is number 1 in sales!” said Stan. “In the meantime, I think it’s the perfect time for Ana and me to take our first trip together.” Stan Hernandez had a lot to celebrate—a budding love relationship, a thriving business, and a renewed friendship with Ron that had turned into a promising partnership. “In fact,” said Stan, getting out his cell phone, “I’m going to call Ana right now to tell her the good news!”

Task:

  1. Why does the development agent use a common-size statement to compare restaurants in her region?
  2. Why does she use both horizontal and vertical analyses of the balance sheets for the restaurants in her region?

MOD 7

Start by reading and following these instructions:

  1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.
  2. Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
  3. Consider the discussion and the any insights you gained from it.
  4. Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

Exercise #1: When you look at the details of the most recent Kellogg’s Annual Report, can you conclude whether or not Kellogg’s uses a voucher system?  Explain.

Exercise #2: The Stokes Company uses a voucher system and records invoices at gross. Record the following transactions in the voucher register and/or check register as appropriate:

201X

  • Dec. 1     Voucher no. 300 was prepared for the purchase of $5,000 worth of merchandise inventory from Rodgers Company terms 2/10, n/30.
  • Dec. 2     Voucher no. 301 was prepared for freight-in that was to be paid to Labaro Company, $360.
  • Dec. 3     Office supplies were purchased from Mabin Company for $480; terms 2/10, n/30; voucher no. 302 was prepared.
  • Dec. 8     Check no. 610 was issued in payment of voucher no. 300.
  • Dec. 10   Purchased office equipment from Hanks Company for $9,400; payment is to be in two equal installments. Vouchers nos. 303 and 304 were prepared to cover these payments.
  • Dec. 12   Check no. 611 was issued to pay voucher no. 303.
  • Dec. 12   Check no. 612 was issued to pay voucher no. 301.
  • Dec. 18   Purchased $8,000 of merchandise from Lou Corporation terms 2/10, n/30; voucher no. 305 was prepared.
  • Dec. 20   Purchased $3,300 of merchandise from Ken Company; terms 2/10, n/30; voucher no. 306 was prepared.
  • Dec. 25   Check no. 613 was issued to pay voucher no. 305.
  • Dec. 27   Returned $800 of merchandise bought from Ken Company; voucher no. 306 was canceled and voucher no. 307 was prepared.
  • Dec. 29   Issued check no. 614 to pay voucher no. 307.

Exercise #3: Sabin Corporation uses a voucher system and records invoices at gross. Record the following transactions in the voucher register and/or check register as appropriate:

201X

  • July 5     Purchased merchandise for $1,900 from Daisy Company; terms 5/10, n/30; voucher no. 280 was prepared authorizing payment on July 15.
  • July 8     Purchased merchandise for $8,000 from Hank Company; terms 2/10, n/30; voucher no. 281 was prepared authorizing payment on July 18.
  • July 15   Paid amount due Daisy Company from voucher no. 280; check no. 91.
  • July 18   Paid amount due Hank Company from voucher no. 281; check no. 92.
  • July 29   Voucher no. 282 was prepared for July rent to be paid to Lamar Realty, $2,300.
  • July 30   Purchased office equipment for $3,400 from Lucky Company; voucher no. 283 was prepared.
  • July 30   Paid amount due Lamar Realty from voucher no. 282; check no. 93.

Exercise #4: The Stearns Company uses a voucher system and records invoices at gross. Record the following transactions in the voucher register and/or check register as appropriate:

201X

  • Dec. 1     Voucher no. 400 was prepared for the purchase of $4,500 worth of merchandise inventory from Rolo Company; terms 2/10, n/30.
  • Dec. 2     Voucher no. 401 was prepared for freight-in that was to be paid to Langston Company, $340.
  • Dec. 3     Office supplies were purchased from Mabra Company for $430; terms 2/10, n/30; voucher no. 402 was prepared.
  • Dec. 8     Check no. 560 was issued in payment of voucher no. 400.
  • Dec. 10   Purchased office equipment from Huer Company for $9,800; payment is to be in two equal installments. Voucher nos. 403 and 404 were prepared to cover these payments.
  • Dec. 12   Check no. 561 was issued to pay voucher no. 403.
  • Dec. 12   Check no. 562 was issued to pay voucher no. 401.
  • Dec. 18   Purchased $7,000 of merchandise from Lou Corporation; terms 2/10, n/30; voucher no. 405 was prepared.
  • Dec. 20   Purchased $3,100 of merchandise from Kote Company; terms 2/10, n/30; voucher no. 406 was prepared.
  • Dec. 25   Check no. 563 was issued to pay voucher no. 405.
  • Dec. 27   Returned $1,100 of merchandise bought from Kote Company; voucher no. 406 was canceled and voucher no. 407 was prepared.
  • Dec. 29   Issued check no. 564 to pay voucher no. 407.

Exercise #5: Gordon Company records invoices at gross in its voucher system. From the following transaction, (a) record in general journal form the appropriate entries at gross and (b) record the entries as if Gordon Company recorded invoices at net.

201X

  • Oct. 13   Bought merchandise on account from Joyce Corporation; terms 2/10, n/30, $8,000. Voucher no. 303 was prepared.
  • Oct. 25   Issued check no. 570 in payment of voucher no. 303

MOD 8

Start by reading and following these instructions:

  1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.
  2. Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
  3. Consider the discussion and the any insights you gained from it.
  4. Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

Exercise #1: Reading the most recent Kellogg’s Annual Report and find Note 16. What is the cost of finished goods and materials in process for the most recent year?

Go to the most recent annual report for Kellogg’s Company and locate Item 17. Find the net sales figure for Latin America for the most recent year.

Exercise #2: As the bookkeeper of Knight Manufacturing, you are to record the following transactions in the general journal for the month of November:

  1. Raw materials of $72,000 were issued from the storeroom.
  2. Charged $62,000 of direct labor to production.
  3. Supplies costing $7,600 were issued from the storeroom.
  4. Incurred indirect labor costs of $15,000.
  5. The following expenses were charged to overhead: rent, $3,400; supervision, $7,400; depreciation, $3,600; electricity, $6,400.
  6. Overhead was applied at 90% of direct labor dollars.
  7. Transferred completed products costing $155,000 to finished goods.
  8. Sold products costing $196,000.

Exercise #3: From the trial balance in Figure 12 and the provided year-end information, prepare a worksheet for Hall Corporation (assume no adjustments).

Exercise #4: Doan Company requested that you (1) assign indirect expenses to its jewelry and shoes departments as appropriate and (2) prepare an income statement for July 201X showing departmental contribution margins along with net income. Assume a 30% tax rate.

Salaries are based on net sales. All other indirect expenses are based on square footage.

Exercise #5: From the following data, prepare in proper form an income statement showing departmental gross profit (assume a 30% tax rate) for Accelerated Stop for the year ended December 31, 201X:

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