Journalize the below transactions

A. Journalize the following transactions and post them to ledger. From the following          transactions of Phoenix Inc for Oct ,2016.

(i) Journalize the below transactions

(ii)Post the Journal entries in to ledger accounts

DateTransactions
2016 Oct 1Niel started business with cash $ 800,000
         Oct 2 purchased goods worth $ 3000
         Oct 15Sold goods for  $ 25000
        Oct 18Purchased stationeries $4000
        Oct 23Purchased furniture for $ 24,000
       Oct 25Paid electricity charges with cash $3000
      Oct 26Paid Salary $18000
     Oct 28Paid rent $500

B. “Bookkeeping is synonymous to accounting” Analyse this statement.

Question 2

A. Prepare income statement and balance sheet of Indus Corp as on 31st Dec, 2016.

ParticularsAmount ($ ‘000)
Sales37,436
Cash4,895
Cost of goods sold26,980
Accounts Payable7,156
Accounts Receivable5,714
Selling, general, and administrative expense3,624
Inventories8,517
Research and Development expense1,982
Plant and Equipment7,154
Interest expense450
Long term liability20105
Land981
Income tax expense1,100

B. Why are financial statements are so important for a business ?

Question 3

A. ABC Industries is in the Business of manufacturing agro equipment. Prepare the cash budget for the quarter April to June, based upon the following data and additional information.

MonthSalesPurchasesWagesSelling OverheadsOffice OverheadsMfg. Overheads
$$$$$$
January60,00036,0009,0004,0002,0004,000
February62,00038,0008,0005,0001,5003,000
March64,00033,00010,0004,5002,5004,500
April58,00035,0008,5003,5002,0003,500
May56,00039,0009,0004,5001,0004,000
June60,00034,0008,0004,5001,5003,000

Additional Information :

  • The Cash balance at 1 April is $ 800000.
  • Sales: 40% cash sales and 60% is collected in the month following sales.
  • Purchases are all on credit and are paid after 2 months.
  • A plot of land was purchased in December (Previous year) and $ 87,000 is payable in April.
  • Wages are paid two month in arrear and all overheads are settled after a month  they are incurred.
  • ABC Industries is due to repay a loan of $ 16,000 in May.
  • A dividend of $ 80,000 is expected to be received in May.

B. “With zero-based budgeting, each expenditure item must be justified for the new budget period.” Explain.

Question 4

A.(i)  Moment Inc. provides the following data for June 2016 when 15,000 Units are manufactured:

Standard Material Cost (Per Unit)

8.50 kg @ $ 7.50/kg

Actual Material Cost (Per Unit)

6.75 kg @ $ 13.5/kg

Standard Labor cost (Per Unit)

5.5 hrs @ $ 15/hr

Actual Labor cost (Per Unit)

6.5 hrs @ $ 12.2/hr

Calculate:

  • Direct Material Price Variance
  • Direct Material Quantity/Usage Variance
  • Total Material Cost Variance
  • Direct Labor Rate Variance
  • Direct Labor Efficiency Variance
  • Total Labor Cost Variance

(ii) Calculate Variable Overhead Spending Variance if actual labor hours used are 260,standard variable overhead rate is $10.40 per direct labor hour and actual variable overhead rate is $9.30 per direct labor hour. Also specify whether the variance is favorable or unfavorable.(iii)  Calculate the variable overhead efficiency variance using the following figures:

Number of Units Produced620
Standard Direct Labor Hours Per Unit0.2
Actual Direct Labor Hours Used260
Standard Variable Overhead Rate$10.40

B.Managers of most organizations continually plan for the future, and after the plan is implemented, managers assess whether they achieved their goals. What are the two functions that enable management to go through the process of continually planning and evaluating?

Question 5

A. Robest Industries produces only one product. The following revenues and cost have     been estimated for the forthcoming month:

Selling price, $ 250 per unit (SP)

Variable cost, $ 100 per unit (VC)

Fixed Cost, $ 56000

The managers of the firm wish to know the following:

  1. Calculate contribution margin per unit
  2. Calculate contribution margin ratio.
  3. BEP in units
  4. Calculate BEP in sales.

B. “Good Managers must not only be able to understand the conceptual underpinnings of cost behaviour, but they must also be able to apply those concepts to real world data     that do not always behave in the expected manner.” Explain cost behaviour analysis.

QUESTION 6

A. Calculate (EOQ) using following information for APEX

  1. Annual demand 90,000 units
  2. Cost of placing order $ 30
  3. Cost of carrying 1 unit in inventory $9

B. Calculate average inventory when safety stock is 2,000 units.

C. “In the process of maintaining inventory records and physical count of goods on hand, error may occur.” Explain.

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