Exercise 3-13. Costing Units Completed and Ending Work in Process: [LO 2,3,4] At the start of November, Penco Refinery had Work in Process inventory consisting of 4,000 units that were 90 percent complete with respect to materials and 50 percent complete with respect to conversion costs. The cost of the units was $43,000 ($30,000 of material cost and $13,000 of labor and overhead). During November, the company started 44,000 units and incurred $421,990 of material cost and $394,880 of labor and overhead. The company completed 45,000 units during the month, and 3,000 units were in process at the end of November.
A: 40,500/10=4050 B: 33,600/9=3733 C: 36,000/8=4500 D: 19,000/7=2714 E: 23,500/6=3916 Total Straight-line depreciation = $18,913 Total Cost = $152,600 Depreciation Rate = 18,913/152,600 = 12.4% (b) Prepare the adjusting entry necessary at the end of the year to record depreciation for the year. Depreciation – Plant Assets 18,913
One of the items was sold during the year. Required: Based on this information, how much product cost would be allocated to cost of goods sold and ending inventory, assuming use of: a. LIFO b. FIFO c. Weighted average (total cost/total number) | |Cost of goods sold |Ending inventory | |LIFO |700 |800 | |FIFO |800 |700 | |Weighted Average |750 |750 | Problem 2. Teague Company purchased a new machine on January 1, 2012, at a cost of $150,000. The machine is expected to have an eight-year life and a $15,000 salvage value. The machine is expected to produce 675,000 finished products during its eight-year life.
They use the percentage of completion revenue recognition method. | | | | Contract for new administration building | | | Total contract amount | $ 60,000,000 | | Contract grant date | August 14, 2012 | | Construction began | September 1, 2012 | | | | | Estimated cost to complete at beginning of contract | $ 52,000,000 | | Estimated time to complete project | 2 years | | | | As of Dec 31, 2012 | | | Construction costs incurred to date | $ 14,140,000 | | Billings to date | $ 19,500,000 | | Expected costs to complete | $ 36,360,000 | | |
$ | | Beginning inventory(jan1, year1) | 3,000,000 | 0.215 | 645,000 | | Purchases(year 2) | 7,250,000 | 0.175 | 1,268,750 | | Ending inventory(4qt,year2) | (4,250,000) | 0.16 | (680,000) | | Cost of goods sold | 6,000,000 | | 1,233,750 | | | | | | | 1-2-. Equipment | | | PLN | USD/PLN | U.S. $ | | Old Equipment - at January 1, Year 1 | 10,000,000 | 0.25 | 2,500,000 | | New Equipment-acquired January 3, Year 2 | 2,500,000 | 0.18 | 450,000 | | Total | 12,500,000 | | 2,950,000 | | | | | | | Acc. Depreciation -Old Equipment | 4,000,000 | 0.25 | 1,000,000 | | Acc. Depreciation -New Equipment | 250,000 | 0.18 | 45,000 | | Total | 4,250,000 | | 1,045,000 | | | | | | | Depreciation Expense - Old Equip. | 1,000,000 | 0.25 | 250,000 | | Depreciation Expense - New Equip.
"Working Capital Management" Please respond to the following: Examine the key reasons why a business may not want to hold too much or too little working capital. Provide two (2) examples that illustrate the consequences of either situation. The right level of working capital depends on the industry and the particular circumstances of the business. For example, businesses that only sell services, and do not need to pay cash for inventory need a lower level of working capital. Businesses that take a substantial amount of time to make of sell a product will need a higher level of working capital.
Home Depot reported its AS&RE liability in fiscal year 2010 ending at $1,263,000 dollars and OAE liability ending fiscal year reported $1,589,000. The subsequent year AS&RE fiscal year ending reported $1,290,000 and the OAE listed it fiscal year endings at $$1,515,000. The AS&RE liability increased by $27,000 from 2010 to 2011 this is a direct reflection of Home Depot’s employment of over 300,000 associates worldwide. (Home Depot, 2011). Total Liabilities Home Depot reported its total liabilities for the ending fiscal year 2010 at $21,484,000, and the following year 2011 reported a fiscal year ending total of $21,236,000.
– 133 2013 net sales / base year 2011 net sales = 800,000 / 600,000 = 1.33 1.33 x 100% = 133% 5. In analyzing financial statements, horizontal analysis is a- tool 6. Comparative balance sheets - are usually prepared for at least two years 7. Assume the following cost of goods sold data for a company: 2013 $1,500,000 2012 1,200,000 2011 1,000,000 If 2011 is the base year, what is the percentage increase in cost of goods sold from 2011 to 2013? – 50% = New - Old Old 100 8.
Why do we need Universal Product Code (UPC) numbers? Why do we need Universal Product Code (UPC) numbers? Because when each company uses only its own part number for the same product as it moves through the supply chain, what results is confusion and inefficiency. Historically, companies have assigned their own part numbers to the items that they buy and sell. This worked well enough in a slower time when supply chains were less complex and when products themselves were less complex.
They typically use this method because it requires fewer journal entries for closing an accounting period and creating financial statements. I feel this method only gives the owner or company a view on the cash coming in and out but does not give the company a long term view on the overhead cost and revenue for services in order to show the company where improvements can be made or where costs