Questions and Answers of Managerial Accounting Tools For Business Decision Making 9th

You are a loan officer for Second State Bank of Port Washington. Ted Worth, president of T. Worth Corporation, has just left your office. He is interested in an 8-year loan to expand the company's
The use of railroad transportation has changed dramatically around the world.Attitudes about railroads and railroad usage differ across countries. In England, the rail- roads were run by the
L. R. Stanton is the chief executive officer of Hi-Tech Electronics. Stanton is an expert engineer but a novice in accounting. Stanton asks you, as an accounting major, to explain(a) the bases for
The chapter stresses the importance of comparing an individual company's financial ratios to industry norms. Robert Morris Associates (RMA), a national association of bank loan and credit officers,
Vern Fairly, president of Fairly Industries, wishes to issue a press release to bolster his company's image and maybe even its stock price, which has been gradually falling. As controller, you have
Waite Corporation issued a $50,000, 10%, 10-year installment note payable on January 1, 2025. Payments of $8,137 are made each January 1, beginning January 1, 2026.Instructionsa. What amounts should
Soriano Manufacturing Company uses a standard cost accounting system to account for the manufacturing of exhaust fans. In July 2022, it accumulates the following data for 1,500 units started and
Lovitz Company is planning to produce 2,000 units of a product in 2022. Each unit requires 3 kg of materials at $5 per kilogram and a half hour of labour at $15 per hour. The overhead rate is 70% of
Crede Manufacturing Company uses a standard cost accounting system. In 2022, 28,000 units were produced. Each unit took several kilograms of direct materials and 1.6 standard hours of direct labour
Kohler Clothiers manufactures women’s business suits. The company uses a standard cost accounting system. In March 2022, 15,700 suits were made. The following standard and actual cost data applied
Finley Manufacturing Corporation accumulates the following data for jobs started and finished during the month of June 2022: Overhead is applied based on standard machine hours. Three hours of
Parsons Company is planning to produce 2,000 units of product in 2025. Each unit requires 3 pounds of materials at $5 per pound and a half-hour of labor at $16 per hour. The overhead rate is 70% of
During March 2025, Toby Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data.Analysis reveals that Job A257 was a repeat job. Job A258 was a
Fisk Company uses a standard cost accounting system. During January, the company reported the following manufacturing variances.In addition, 8,000 units of product were sold at $8 per unit. Each unit
Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2025 is available for Second Chance.The company desires a $30 profit margin per hour of labor and a
The accounting equation is Assets = Liabilities + Stockholders’ Equity. Appendix A reproduces Apple’s financial statements. Replacing words in the equation with dollar amounts, what is Apple’s
DeWitt Industries has adopted the following production budget for the first 4 months of 2025.Each unit requires 2 pounds of raw materials costing $3 per pound. On December 31, 2024, the ending raw
M. Bot Corporation has 10,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2025. No dividends were declared in 2023 or 2024. If M. Bot wants to pay $375,000 of
Wells Fargo & Company, headquartered in San Francisco, is one of the nation’s largest financial institutions. Suppose it reported the following selected accounts (in millions) as of December
The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Ryder Corporation at December 31, 2025.InstructionsPrepare the stockholders’ equity section of the
The following accounts appear in the ledger of Paisan Inc. after the books are closed at December 31, 2025.InstructionsPrepare the stockholders’ equity section at December 31, assuming $100,000 of
Suppose the following financial information is available for Walgreens.InstructionsCalculate the payout ratio and return on common stockholders’ equity for 2025 and 2024. Comment on your findings.
Kojak Corporation decided to issue common stock and used the $300,000 proceeds to redeem all of its outstanding bonds on January 1, 2025. The following information is available for the company for
On January 1, 2025, Lenne Corporation had $1,200,000 of common stock outstanding that was issued at par and retained earnings of $750,000. The company issued 30,000 shares of common stockat par on
What was the cost of Apple’s treasury stock acquired in fiscal year 2020?
Each of these items must be considered in preparing a statement of cash flows for Irvin Co. for the year ended December 31, 2025. For each item, state how it should be shown in the statement of cash
Kiley Corporation had these transactions during 2025.a. Purchased a machine for $30,000, giving a long-term note in exchange.b. Issued $50,000 par value common stock for cash.c. Issued $200,000 par
Miguel, Inc. reported net income of $2.5 million in 2025. Depreciation for the year was $160,000, accounts receivable decreased $350,000, and accounts payable decreased $280,000. Compute net cash
The following information is available for Stamos Corporation for the year ended December 31, 2025.InstructionsPrepare a statement of cash flows using the indirect method. Beginning cash
The current sections of Sunn Inc.’s balance sheets at December 31, 2024 and 2025, are presented here. Sunn’s net income for 2025 was $153,000. Depreciation expense was $27,000.InstructionsPrepare
The following three accounts appear in the general ledger of Beiber Corp. during 2025.InstructionsFrom the postings in the accounts, indicate how the information is reported by preparing a partial
The T-accounts for Equipment and the related Accumulated Depreciation—Equipment for Goldstone Company at the end of 2025 are shown here.In addition, Goldstone’s income statement reported a loss
Sosa Company reported net income of $190,000 for 2025. Sosa also reported depreciation expense of $35,000 and a loss of $5,000 on the disposal of plant assets. The comparative balance sheets show an
The net income for Mongan Co. for 2025 was $280,000. For 2025, depreciation on plant assets was $70,000, and the company incurred a loss on disposal of plant assets of $28,000. Compute net cash
Zimmer Company completed its first year of operations on December 31, 2025. Its initial income statement showed that Zimmer had sales revenue of $198,000 and operating expenses of $83,000. Accounts
Suppose that during 2025 Cypress Semiconductor Corporation reported net cash provided by operating activities of $89,303,000, cash used in investing of $43,126,000, and cash used in financing of
Suppose Shaw Communications reported net cash used by operating activities of $104,539,000 and sales revenue of $2,867,459,000 during 2025. Cash spent on plant asset additions during the year was
Suppose Columbia Sportswear Company had accounts receivable of $299,585,000 at January 1, 2025, and $226,548,000 at December 31, 2025. Assume sales revenue was $1,244,023,000 for the year 2025. What
Suppose the 2025 income statement for McDonald’s Corporation shows cost of goods sold $5,178.0 million and operating expenses (including depreciation expense of $1,216.2 million) $10,725.7 million.
The 2025 accounting records of Megan Transport provide the following information.InstructionsPrepare the cash flows from operating activities section using the direct method. Payment of interest Cash
Hoffman Corporation reported income taxes of $370,000,000 on its 2025 income statement. Its balance sheet reported income taxes payable of $277,000,000 at December 31, 2024, and $528,000,000 at
For its fiscal year ending October 31, 2025, Haas Corporation reports the following partial data.The loss on discontinued operations was comprised of a $50,000 loss from operations and a $70,000 loss
The following information is taken from the 2025 general ledger of Preminger Company.InstructionsIn each case, compute the amount that should be reported in the operating activities section of the
Here is financial information for Glitter Inc.InstructionsPrepare a schedule showing a horizontal analysis for 2025, using 2024 as the base year. Current assets Plant assets (net) Current
Pietr Corporation reports operating expenses of $90,000, excluding depreciation expense of $15,000, for 2025. During the year, prepaid expenses decreased $7,200 and accrued expenses payable increased
Trayer Corporation has income from continuing operations of $290,000 for the year ended December 31, 2025. It also has the following items (before considering income taxes).1. An unrealized loss of
Using these data from the comparative balance sheets of Rollaird Company, perform a horizontal analysis. Accounts receivable (net) Inventory Total assets December 31, 2025 $
Operating data for Joshua Corporation are presented as follows.InstructionsPrepare a schedule showing a vertical analysis for 2025 and 2024. Net sales Cost of goods sold Selling
Hypothetical comparative condensed balance sheets of Nike, Inc. are presented here.Instructionsa. Prepare a horizontal analysis of the balance sheet data for Nike, using 2024 as a base. (Show the
Hogan Inc. reported 2024 earnings per share of $3.26 and had no discontinued operations. In 2025, earnings per share on income from continuing operations was $2.99, and earnings per share on net
On January 1, 2025, Bryce Inc. changed from the LIFO method of inventory costing to the FIFO method. Explain how this change in accounting principle should be treated in the company’s financial
What amount did Apple report as “Other comprehensive earnings” in its consolidated statement of comprehensive income ending September 26, 2020? By what percentage did Apple’s “Comprehensive
Here are the comparative condensed income statements of Delaney Corporation.Instructionsa. Prepare a horizontal analysis of the income statement data for Delaney Corporation, using 2024 as a base.
Using these data from the comparative balance sheets of Rollaird Company, perform a vertical analysis. Accounts receivable (net) Inventory Total assets December 31, 2025 $
Net income was $500,000 in 2023, $485,000 in 2024, and $518,400 in 2025. What is the percentage of change (a) From 2023 to 2024(b) From 2024 to 2025? Is the change an increase or a decrease?
Nordstrom, Inc. operates department stores in numerous states. Selected hypothetical financial statement data (in millions) for 2025 are presented below.For the year, net credit sales were $8,258
Suppose these selected condensed data are taken from recent balance sheets of Bob Evans Farms (in thousands).Compute the current ratio for each year and comment on your results. Cash Accounts
Vertical analysis (common-size) percentages for Palau Company’s net sales, cost of goods sold, and expenses are listed here.Did Palau’s net income as a percent of net sales increase, decrease, or
Gwynn Incorporated had the following transactions involving current assets and current liabilities during February 2025.Additional information:As of February 1, 2025, current assets were $120,000 and
Horizontal analysis (trend analysis) percentages for Phoenix Company’s sales revenue, cost of goods sold, and expenses are listed here.Explain whether Phoenix’s net income increased, decreased,
If Coho Company had net income of $382,800 in 2025 and it experienced a 16% increase in net income over 2024, what was its 2024 net income?
a. If Erin Company had net income of $300,000 in 2024 and it experienced a 24.5% increase in net income for 2025, what is its net income for 2025?b. If 6 cents of every dollar of Erin’s revenue
Vern Thoms is puzzled. His company had a profit margin of 10% in 2025. He feels that this is an indication that the company is doing well. Tina Amos, his accountant, says that more information is
Billings Company has the following information available for September 2025.Instructionsa. Compute the unit contribution margin.b. Prepare a CVP income statement. Include columns for per unit and
All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.All That Blooms charges $60 per treatment for the average single-family lawn. For
The Welding Department of Majestic Company has the following production and manufacturing cost data for February 2025. All materials are added at the beginning of the process, and conversion costs
Cepeda Corporation has the following cost records for June 2025.Instructionsa. Prepare a cost of goods manufactured schedule for June 2025.b. Prepare an income statement through gross profit for June
In Shady Company, materials are entered at the beginning of each process, and conversion costs are incurred uniformly throughout the process. Work in process inventories, with the percentage of work
The Welding Department of Healthy Company has the following production and manufacturing cost data for February 2025. All materials are added at the beginning of the process.InstructionsBeginning
An analysis of the accounts of Roberts Company reveals the following manufacturing cost data for the month ended June 30, 2025.Costs incurred: raw materials purchases $54,000, direct labor $47,000,
Russell Inc. had sales of $2,200,000 for the first quarter of 2025 (it sold 220,000 units). In making the sales, the company incurred the following costs and expenses.Prepare a CVP income statement
Incomplete manufacturing cost data for Horizon Company for 2025 are presented as follows for these four independent situations.Instructionsa. Determine the missing amount for each letter.b. Prepare a
Lopez Corporation incurred the following costs during 2025.Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $45,600
In 2024, Manhoff Company had a break-even point of $350,000 based on a unit selling price of $5 and fixed costs of $112,000. In 2025, the unit selling price and the unit variable costs did not
The condensed financial statements of Ness Company for the years 2024 and 2025 are as follows.Compute the following ratios for 2025 and 2024.a. Current ratio.b. Inventory turnover. (Inventory on
At May 31, 2025, the accounts of Lopez Company show the following.1. May 1 inventories—finished goods $12,600, work in process $14,700, and raw materials $8,200.2. May 31 inventories—finished
The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2025, the first month of operation.Production: 7,000 units completed and
National Express reports the following costs and expenses in June 2025 for its delivery service.InstructionsDetermine the total amount of (a) Delivery service (product) costs (b) Period costs
In alphabetical order, here are current asset items for Roland Company’s balance sheet at December 31, 2025. Prepare the current assets section (including a complete heading). Accounts
The following data were taken from the financial records of Mydorf Company.Compute for each year (a) The inventory turnover (b) Days in inventoryWhat conclusions concerning the management of the
Staples, Inc. is one of the largest suppliers of office products in the United States. Suppose it had net income of $738.7 million and net sales of $24,275.5 million in 2025. Its total assets were
Risky Corporation had sales of $3,000,000 for the year ended December 31, 2025. The unit selling price was $15. In making the sales, the company incurred the following costs and
Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2025, the company incurred the following costs.Siren Company sells the fishing lures for $25.
Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2024:Instructionsa. What is the contribution margin ratio?b. What is the break-even point in sales dollars?c. What is the
Crate Express Co. produces wooden crates used for shipping products by ocean liner. In 2025, Crate Express incurred the following costs.Assume Crate Express used an average 500 kilowatt-hours each
Naylor Company had $210,000 of net income in 2024 when the unit selling price was $140, the unit variable costs were $90, and the fixed costs were $570,000. Management expects per unit data and total
Carey Company had sales in 2024 of $1,500,000 on 60,000 units. Variable costs totaled $900,000, and fixed costs totaled $500,000.A new raw material is available that will decrease the unit variable
The GAAP income statement for Pace Company for the year ended December 31, 2025, shows sales $900,000, cost of goods sold $600,000, and operating expenses $200,000. Assuming all costs and expenses
Moonbeam Company manufactures toasters. For the first 8 months of 2025, the company reported the following operating results while operating at 75% of plant capacity:Cost of goods sold was 70%
In the Assembly Department of Hannon Company, budgeted and actual manufacturing overhead costs for the month of April 2025 were as follows.All costs are controllable by the department manager.
Torres Company accumulates the following summary data for the year ending December 31, 2025, for its Water Division, which it operates as a profit center: sales—$2,000,000 budget, $2,080,000
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2025. All that remains in
The controller of Trenshaw Company wants to improve the company’s control system by preparing a month-by-month cash budget. The following information is for the month ending July 31, 2025.Trenshaw
Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2025.Lowell has a labor
For the year ending December 31, 2025, Cobb Company accumulates the following data for the Plastics Division, which it operates as an investment center: contribution margin—$700,000 budget,
In Rooney Company, direct labor is $20 per hour. The company expects to operate at 10,000 direct labor hours each month. In January 2025, direct labor totaling $206,000 is incurred in working 10,400
Gundy Company expects to produce 1,200,000 units of Product XX in 2025. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are direct
Gundy Company expects to produce 1,200,000 units of Product XX in 2025. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are direct
In May 2025, the budget committee of Grand Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June.1. Expected sales: June $500,000, July
Rensing Ltd. estimates sales for the second quarter of 2025 will be as follows.The target ending inventory of finished products is as follows.Two units of materials are required for each unit of

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