Question 2
"1. A cost system determines the cost of a cost object by: (Points : 4) accumulating and then assigning costs accumulating costs assigning and then accumulating costs assigning costs 2. At a plant where a union agreement sets annual salaries and conditions, annual labor costs usually: (Points : 4) are considered a variable cost are considered a fixed cost depend on the scheduling of floor depend on the scheduling of production runs 3. The breakeven point is the activity level where: (Points : 4) revenues equal fixed costs revenues equal variable costs contribution margin equals variable costs revenues equal the sum of variable and fixed costs 4. How many units would have to be sold to yield a target operating income of $22,000, assuming variable costs are $15 per unit, total fixed costs are $2,000, and the unit selling price is $20? (Points : 4) 4,800 units 4,400 units 4,000 units 3,600 units 5. With traditional costing systems, products manufactured in small batches and in small annual volumes may be ________ because batch-related and product-sustaining costs are assigned using unit-related drivers. (Points : 4) overcosted fairly costed undercosted ignored 6. Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Product Setups Components Direct Labor Hours Standard 22 8 375 Deluxe 28 12 225 Overhead costs $20,000 $40,000 Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the deluxe model? (Points : 4) $24,800 $35,200 $37,500 $22,500 7. Which of the following statements about normal costing is TRUE? (Points : 4) Direct costs and indirect costs are traced using an actual rate. Direct costs and indirect costs are traced using budgeted rates. Direct costs are traced using a budgeted rate, and indirect costs are allocated using an actual rate. Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate 8. One reason indirect costs may be overapplied is because: (Points : 4) the actual allocation base quantity exceeds the budgeted quantity budgeted indirect costs exceed actual indirect costs requisitioned direct materials exceed budgeted material costs Both A and B are correct. 9. Activity-based budgeting would separately estimate: (Points : 4) the cost of overhead for a department a plant-wide cost-driver rate the cost of a setup activity All of these answers are correct. 10. Activity-based budgeting does NOT require: (Points : 4) knowledge of the organization's activities specialized expertise in financial management and control knowledge about how activities affect costs the ability to see how the organization's different activities fit together 11. The following items are the same for the flexible budget and the master budget EXCEPT the same: (Points : 4) variable cost per unit total fixed costs units sold sales price per unit 12. An unfavorable flexible-budget variance for variable costs may be the result of: (Points : 4) using more input quantities than were budgeted paying higher prices for inputs than were budgeted selling output at a higher selling price than budgeted Both A and B are correct. 13. The variable overhead efficiency variance is computed ________ and interpreted ________ the direct-cost efficiency variance. (Points : 4) the same as; the same as the same as; differently than differently than; the same as differently than; differently than 14. A favorable fixed overhead spending variance might indicate that: (Points : 4) more capacity was used than planned the denominator level was less than planned the fixed overhead cost-allocation base was not used efficiently a plant expansion did not proceed as originally planned 15. Learning curve effects can be incorporated: (Points : 4) into performance evaluations into production schedules when using costs to price products All of these answers are correct. 16. The learning-curve models presented in the text examine: (Points : 4) how quality increases over time how efficiency increases as more units are produced how setup costs decline as more workers are added the change in variable costs when quantity discounts are available 17. When deciding whether to discontinue a segment of a business, relevant costs include all of the following EXCEPT: (Points : 4) fixed supervision costs that can be eliminated variable marketing costs per unit of product sold cost of goods sold future administrative costs that will continue 18. Discontinuing unprofitable products will increase profitability: (Points : 4) if the resources no longer required by the discontinued product can be if capacity constraints are adjusted automatically when a large portion of the fixed costs are unavoidable 19. The markup percentage is usually higher if the cost base used is: (Points : 4) the full cost of the product the variable cost of the product variable manufacturing costs total manufacturing costs 20. Which of the following statements is FALSE regarding cost-plus pricing? (Points : 4) A company selects a cost base that it regards as reliable. A company uses a markup percentage that estimates a product price that covers full product costs and earns the required return on investment. The selling price computed is only a prospective price. The cost-plus price chosen has already been studied for customer reaction to the price. 21. balanced scorecard measures an organization's performance from all of the following perspectives EXCEPT: (Points : 4) financial government customer learning and growth 22. The purpose of the balanced scorecard is BEST described as helping an organization: (Points : 4) develop customer relations mobilize employee skills for continuous improvements in processing capabilities, quality, and response times introduce innovative products and services desired by target customers translate an organization's mission and strategy into a set of performance measures that help to implement the strategy 23. Costs which are not economically feasible to trace but which are related to a cost object are known as: (Points : 4) fixed costs direct costs indirect costs variable costs 24. ABC systems use the concept of a ________ to identify the cost drivers that best demonstrate the cause-and-effect relationship between each activity and the costs in the related cost pool. (Points : 4) cost hierarchy cost pool cost allocation cost driver 25. The dual-rate cost-allocation method classifies costs in each cost pool into a: (Points : 4) budgeted-cost pool and an actual-cost pool variable-cost pool and a fixed-cost pool used-capacity-cost pool and a practical-capacity-cost pool direct-cost pool and a reciprocal-cost pool 26. When using the single-rate method, fixed cost allocation may be based on: (Points : 4) actual usage budgeted usage incremental cost allocation Either A or B are correct. 27. Which method of accounting recognizes byproducts in the financial statements at the time their production is completed? (Points : 4) production allocation method sale method production method None of these answers is correct. 28. Which statement is NOT true regarding the sales method of accounting for byproducts. (Points : 4) the method makes no journal entries until the byproduct is sold this method is the preferred method because of the matching principle revenues of the byproduct can be recorded in the income statement as revenue revenues of the byproduct can be recorded as a reduction of cost of goods sold in the income statement 29. Which one of the following statements is true? (Points : 4) In a job-costing system, individual jobs use different quantities of production resources. In a process-costing system each unit uses approximately the same amount of resources. An averaging process is used to calculate unit costs in a job-costing system. Both A and B are correct. 30. Which of the following statement(s) concerning conversion costs is correct? (Points : 4) Estimating the degree of completion of direct materials in a partially completed unit is usually easier to calculate than estimating the degree of completion for conversion costs. The calculation of equivalent units is relatively easy for the textile industry. Estimates are usually not considered acceptable. Both B and C are correct. 31. A liability claim is an example of: (Points : 4) prevention costs appraisal costs internal failure costs external failure costs 32. Design engineering is an example of: (Points : 4) prevention costs appraisal costs internal failure costs external failure costs 33. Relevant total costs in the economic-order-quantity decision model equal relevant ordering costs plus relevant: (Points : 4) carrying costs stockout costs quality costs purchasing cost 34. Which of the following statements about the economic-order-quantity decision model is FALSE? (Points : 4) It assumes purchasing costs are relevant when the cost per unit changes due to the quantity ordered. It assumes quality costs are irrelevant if quality is unaffected by the number of units purchased. It assumes stockout costs are irrelevant if no stockouts occur. It assumes ordering costs and carrying costs are relevant. 35. The stage of the capital budgeting process in which a firm obtains funding for the project is the: (Points : 4) make decisions by choosing among alternatives stage. make predictions stage. obtain information stage. implement the decision, evaluate performance, and learn stage. 36. Which capital budgeting technique(s) measure all expected future cash inflows and outflows as if they occurred at a single point in time? (Points : 4) net present value internal rate of return payback Both A and B are correct. 37. Transfer prices should be judged by whether they promote: (Points : 4) goal congruence. the balanced scorecard method. a high level of subunit autonomy in decision making. Both A and C are correct. 38. A transfer-pricing method leads to goal congruence when managers: (Points : 4) always act in their own best interest act in their own best interest and the decision is in the long-term best interest of the manager's subunit act in their own best interest and the decision is in the long-term best interest of the company act in their own best interest and the decision is in the short-term best interest of the company 39. Thacker Company has two regional offices. The data for each are as follows: Maryland New York Revenues $ 580,000 $ 596,000 Operating assets 4,800,000 9,000,000 Net operating income 2,016,000 4,860,000 What is the return on investment for the New York Division? (Points : 4) 0.42 0.54 0.96 4.12 40. During the past twelve months, the Zenith Corporation had a net income of $39,200. What is the return on investment if the amount of the investment is $280,000? (Points : 4) 10% 12% 14% 16%,I received a 13/40 from your answers. I also remember paying you $60 for this as well. Could you please elaborate on why and how this happened?
Question 3
1. (TCO B) At the beginning of 2012, Barbara, Inc. has a deferred tax asset of $8,000 and deferred tax liability of $6,500. In 2012, pretax financial income was $600,000 and the tax rate was 35%. Pretax income included: Interest income from municipal bonds $25,000 Accrued warranty costs, estimated to be used in 2013 $74,000 Prepaid rent expense, will be used in 2013 $16,000 Installment sales revenue, to be collected in 2013 $45,000 Operating loss carryforward $36,000 Deferred tax liability ending balance December 31, 2012 is (Points : 5) $14,850. $15,750. $21,350. $41,650. 2. (TCO C) Presented below is pension information related to Baked Goods, Inc. for the year 2013. Service cost $85,000 Interest on projected benefit obligation $52,000 Interest on vested benefits $28,000 Amortization of prior service cost due to increase in benefits $15,000 Expected return on plan assets $56,000 The amount of pension expense to be reported for 2013 is (Points : 5) $81,000. $124,000. $180,000. $96,000. 3. (TCO C) Bunny Hopping, Inc. sponsors a defined-benefit pension plan. The following data relate to the operation of the plan for the year 2013. Service cost $150,000 Contributions to the plan $120,000 Actual return on plan assets $130,000 Projected benefit obligation (beginning of year) $1,800,000 Fair value of plan assets (beginning of year) $1,650,000 The expected return on plan assets and the settlement rate were both 10%. The amount of pension expense reported for 2013 is (Points : 5) $150,000.00. $200,000.00. $165,000.00. $330,000.00. 4. (TCO F) Balancing Act, Inc recognized net income of $489,000 including $7,500 in depreciation expense. Additional changes from the balance sheet are as follows. Accounts Receivable $2,600 decrease Prepaid Expenses $4,500 decrease Inventory $26,400 increase Accrued Liabilities $2,300 decrease Accounts Payable $3,800 increase Compute the net cash from operating activities based on the above information. (Points : 5) $501,100 $453,900 $519,200 $478,700 5. (TCO G) The disclosure of accounting policies is important to the financial statements when determining (Points : 5) whether or not the accounting policies are consistently applied from year to year. the value of obsolete items included in ending inventory. whether or not the working capital position is adequate for future operations. net income for the year. 6. (TCO G) Adventure, Inc is a company that operates in four different divisions. The following information relating to each segment is available for 2013. Sales revenue Operating profit (loss) Identifiable assets A $102,000 $37,200 $67,200 B $126,000 $(19,200) $98,400 C $300,000 $134,400 $768,000 D $24,000 $4,800 $42,000 Required: For which of the segments would information have to be disclosed in accordance with professional pronouncements? (Points : 5) Segments A, B, C, and D Segments A, B, and C Segments A and B Segments A and D ------------------------------------------------------------------------------------------------------------------------------------------ 1. (TCO B) Buffy, Inc. qualifies to use the installment-sales method for tax purposes and sold an investment on an installment basis. The total gain of $750,000 was reported for financial reporting purposes in the period of sale. The installment period is 3 years; one third of the sale price is collected in 2012 and the rest in 2013. The tax rate was 40% in 2012, 35% in 2013, and 35% in 2014. The accounting and tax data is shown below. Financial Accounting Tax Return 2012 Income before temporary difference $1,800,000 $1,800,000 Temporary difference $750,000 $250,000 Income $2,550,000 $2,050,000 2013 Income before temporary difference $1,500,000 $1,500,000 Temporary difference $- $250,000 Income $1,500,000 $1,750,000 2014 Income before temporary difference $1,250,000 $1,250,000 Temporary difference $- $250,000 Income $1,250,000 $1,500,000 Required: 1) Prepare the journal entries to record the income tax expense, deferred income taxes, and the income taxes payable for 2012, 2013, and 2014. No deferred income taxes existed at the beginning of 2012. 2) Explain how the deferred taxes will appear on the balance sheet at the end of each year. (Assume Installment Accounts Receivable is classified as a current asset.) 3) Show the income tax expense section of the income statement for each year, beginning with ?Income before income taxes.? (Points : 40) 2. (TCO D) Bing Leasing, Inc. agrees to lease equipment to Boyd, Inc. on January 1, 2012. They agree on the following terms: 1) The normal selling price of the equipment is $1,500,000 and the cost of the asset to Bing Leasing, Inc. was $135,000. 2) The lease is noncancelable with no renewal option. The lease term is 10 years (the same as the estimated economic life). 3) The lease begins on January 1, 2012 and payments will be in equal annual installments. 4) At the end of the lease, the equipment will revert to Bing Leasing, Inc. and have an unguaranteed residual value of $150,000. Their implicit interest rate is 10%. 5) Boyd will pay all maintenance, insurance, and tax costs directly and annual payments of $160,000 on January 1 of each year. 6) Bing Leasing, Inc. incurred costs of $10,600 in negotiating and closing the lease. There are no uncertainties regarding additional costs yet to be incurred and the collectability of the lease payments is reasonably predictable. Required: a) Determine what type of lease this would be for the lessor and calculate the following (show all work). Lease Receivable Sales Price Cost of Sales b) Prepare Bing's amortization schedule for the lease terms. c) Prepare all the journal entries for Kingdom for 2012. Assume a calendar year fiscal year. (Points : 40) 3. (TCO F) Financial data of Beautiful Beadwork Company for 2013 and 2012 are presented below. Beautiful Beadwork Company COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2013 AND 2012 2013 2012 Cash $ 364,000 $ 322,000 Receivables $ 218,400 $ 168,000 Inventory $ 252,000 $ 308,000 Plant assets $ 224,000 $ 189,000 Accumulated depreciation $ (112,000) $ (106,400) Long-term investments (held-to-maturity) $ 112,000 $ 130,200 $ 1,058,400 $ 1,010,800 Accounts payable $ 189,000 $ 170,800 Accrued liabilities $ 42,000 $ 46,340 Bonds payable $ 189,000 $ 232,400 Common stock $ 252,000 $ 231,000 Retained earnings $ 386,400 $ 330,260 $ 1,058,400 $ 1,010,800 Beautiful Beadwork Company INCOME STATEMENT For the year ended December 31, 2013 Sales 1,050,000 Cost of Goods Sold 742,000 Gross Margin 308,000 Selling and administrative expenses 148,400 Income from Operations 159,600 Other revenues and gains Gain on sale of investments 9,800 Income before tax 169,400 Income tax expense 67,760 Net Income 101,640 Additional information: During the year, $12,600 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $45,500. Required: Prepare a statement of cash flows using the indirect method. (Points : 40)
Question 5
ACCT 411 - Final Tax Return ? 30 Points Due: Date of Final FACTS: Susan and James Bunker are married and live at 1231 N. Broad St., Mankato, MN 56001. James is 65 and Susan is 60. James is semi-retired; he continues to work at a part-time job. Susan is a sole-proprietor of a printing shop. Table A lists information on James? wages, taxes withheld, estimated tax payments made by the couple and their respective social security numbers. James also received $9,000 in social security payments and $21,000 from a fully taxable pension. Information for Susan?s print shop is listed in Table B. Table A Wages $12,000 Fed Inc Tax Withheld $2,000 St Inc Tax Withheld $1,000 Susan 432-34-3456 James 432-56-7687 Estimated Tax Pmts-Fed $14,000 Estimated Tax Pmts-State $6,000 Table B Sole Proprietorship Sales $160,000 Supplies expense 72,000 Insurance 750 Acct. Fees 1,800 Wages** 27,000 Payroll Tax** 2,800 Utilities 3,600 Rent Expense 8,000 Auto Miles 3,000 miles Depreciation Note 1 ** Wages and payroll taxes were for part-time employees. Note 1: Susan?s older printing equipment has been fully depreciated. On 5/24/10, Susan bought a new high-speed copier for $30,000. The copier qualified for first year bonus depreciation (50% in this case) and any remaining depreciation would be regular MACRS, double declining balance, for 5 years. The taxpayers owned a rental property but it was sold during the year. The apartment house was bought in December 12th, 1999 for $120,000. $20,000 of the purchase price was allocable to the land. Other rental figures allocable to the property for the current year are shown in Table C. The apartment house was sold on 9/1/10 year for $145,000. The house was sold by Susan and James to Joe Williams on the installment basis. The buyer paid a $15,000 down payment and was required to make monthly payments of $1,024 over 20 years. For 2010, the partial amortization schedule for the installment contract was: Payment Interest Princ. September $15,000 $0 $15,000 October $1,024 $780 $244 November $1,024 $779 $245 December $1,024 $777 $246 Susan and James made some sales of other investment assets this year. Susan sold some shares received from her father as a gift a decade ago. Susan received 1,000 shares of US Package, Inc. inherited from her father on 10/22/02. The father?s basis in the stock was $6.50 per share and the fair market value of the date of his death was $9 per share. James purchased 1,000 shares of Robo, Inc. for $30.50 per share on 11/9/07 and sold them in 2010. The sale information on these securities is listed below. Other investment income items are listed in Table D. Security Sales Basis; Date Acquired Sale Price; Date Sold Robo see above $28,500; 3/1/10 US Package see above $13,800; 3/12/10 James inherited a painting from his father on 4/15/98 that he donated to a St. Louis County art museum on 5/20/10. His father paid $500 for the painting on 6/15/71 but the painting was appraised at $2,500 on his death. When James donated the painting to the museum, the museum?s appraiser estimated the value of the painting at $3,250. Other expenditures, which may or may not be deductible are listed in Table E. Table C Apartment Table D Rents $8,000 Interest- Wells Fargo Bank $2,000 Interest 7,000 Municipal Bond Interest from Muni Mutual Fund 1,500 Property Taxes 2,000 Insurance 800 Dividend ? Robo 1,100 Misc Rent Exp. 1,000 Dividend ? Ariba Mutual Fd. 450 Depreciation expense See above Table E Political Contributions 500 Cash to various charities 3,300 Real Estate Taxes (Residence) 2,700 Home Mortgage Interest 6,400 Tax Prep Fee 600 Auto loan interest 350 Misc. Investment Expenses 1,500 Prepare the couple?s 2010 tax return using TaxAct. When you print the return, use the PRINT RETURN OPTION (not print form) under the FILE menu. For those who missed the class where we covered installment sales, those are reported on Form 6251. The information is easy to enter once you locate the form in the program (don?t forget that this installment sale has gain taxed at potentially two rates). List the interest income from the contract separately on Schedule B. Estimated Taxes: Assume that the taxpayers? withholding and estimated tax payments were based on 100% of last year?s tax and they shouldn?t have any penalty for underpayment of estimated tax (you will have to see how to suppress that if a penalty is calculated).,This is a accounting class, tax..thank you
