ACC 206 Week Two Assignment ACC 206 Week Two Assignment
ACC
206 Week Two Assignment
Please
complete the following exercises below in either Excel or a word document (but
must be single document). You must show your work where appropriate (leaving
the calculations within Excel cells is acceptable). Save the document, and
submit it in the appropriate
week using the Assignment Submission button.
1. Analysis of
stockholders' equity
Star
Corporation issued both common and preferred stock during 20X6. The
stockholders' equity sections of the company's balance sheets at the end of
20X6 and 20X5 follow:
20X6
20X5
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
Compute the number of preferred shares
that were issued during 20X6. Calculate the average issue price
of the common stock sold in 20X6. By what amount did the company's
paid-in capital increase during 20X6? Did Star's total legal capital
increase or decrease during 20X6? By what amount? 2. Bond
computations: Straight-line amortizationSouthlake Corporation issued $900,000
of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1
and mature in 10 years. Assume 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 uses the straight-line
method of amortization. Instructions:
Complete the following table:
Case A
Case B
Case C
Cash inflow on the issuance date
_______
_______
_______
Total
cash outflow through maturity
_______
_______
_______
Total
borrowing cost over the life of the bond issue
_______
_______
_______
Interest
expense for the year ended December 31, 20X1
_______
_______
_______
Amortization
for the year ended December 31, 20X1
_______
_______
_______
Unamortized
premium as of December 31, 20X1
_______
_______
_______
Unamortized
discount as of December 31, 20X1
_______
_______
_______
Bond
carrying value as of December 31, 20X1
_______
_______
_______
3.
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
Compute:
Total
direct materials consumedTotal
direct laborTotal prime
costTotal conversion cost4. Schedule of cost of goods manufactured, income statement The
following information was taken from the 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
schedule of cost of goods manufactured for the year ended December 31. An
income statement for the year ended December 31.
5. Manufacturing statements and cost
behavior Tampa Foundry began operations during the
current year, manufacturing various products for industrial use. One such
product is light-gauge aluminum, which 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:
Determine
the cost of the finished goods inventory of light-gauge aluminum. Prepare
an income statement for the current year ended December 31 On
the basis of the information presented:
Does
it appear that the company pays commissions to its sales staff? Explain. What is the likely effect on the $4.50 unit
cost of direct materials if next year's production increases? Why?