ACCOUNTING 2 MOD 6

ACCOUNTING 2

MOD 6

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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):

 2011 2012 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 Zabrinsky then 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!”

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).

Figure 11

Figure 12

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.

Figure 13

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:

Figure 14

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