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

What title does Apple use for gross profit? By how much did its total gross profit change, and in what direction, for the year ended September 26, 2020?
A new accountant at Wyne Inc. is trying to identify which of the amounts shown below should be reported as the current asset “Cash and cash equivalents” in the year-end balance sheet, as of April
Suppose the following information was taken from the 2025 financial statements of FedEx Corporation, a major global transportation/delivery company.InstructionsAnswer each of the following
At the end of 2024, Safer Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2025, it is learned that the company’s receivable from Madonna
On January 1, 2025, Budd Corporation started the year with a balance in Accounts Receivable of $145,000 and a credit balance in Allowance for Doubtful Accounts of $7,950. During 2025, the company had
Fennick Company reports net income of $92,000 in 2025. However, ending inventory was understated by $7,000. What is the correct net income for 2025? What effect, if any, will this error have on total
Kelly Machines reported the following information about two of its machines as of December 31, 2023.Instructionsa. Calculate the annual depreciation for each asset using the straight-line method.b.
Albert Company discovers in 2025 that its ending inventory at December 31, 2024, was $5,000 understated. What effect will this error have on (a) 2024 net income(b) 2025 net income(c) The
Victor Mineli, the new controller of Santorini Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2025. Here are his findings:All
On December 31, 2024, when its Allowance for Doubtful Accounts had a debit balance of $1,400, Dallas Co. estimates that 9% of its accounts receivable balance of $90,000 will become uncollectibleand
On July 1, 2022, April Company purchased new equipment for $80,000. Its estimated useful life was 7 years with a $10,000 salvage value. On January 1, 2025, the company estimated that the
What was Apple’s balance in cash and cash equivalents at September 26, 2020? Did it report any restricted cash? How did Apple define cash equivalents?
Linton Company purchased a delivery truck for $34,000 on July 1, 2025. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of
On January 10, 2025, Masterson Co. sold merchandise on account to Tompkins for $8,000, terms n/30. On February 9, Tompkins gave Masterson Co. a 7% promissory note in settlement of this account.
Suppose the 2025 financial statements of 3M Company report net sales of $23.1 billion. Accounts receivable (net) are $3.2 billion at the beginning of the year and $3.25 billion at the end of the
The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2025.1. Paid $7,000 of accrued taxes at the time the plant site was acquired.2. Paid $200
On March 1, 2025, Boyd Company acquired real estate, on which it planned to construct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of
Ivy Company purchased land and a building on January 1, 2025. Management’s best estimate of the value of the land was $100,000 and of the building $250,000. However, management told the accounting
On January 1, 2025, the Hermann Company general ledger shows Equipment $36,000 and Accumulated Depreciation $13,600. The depreciation resulted from using the straight-line method with a useful life
Gordon Chemicals Company acquires a delivery truck at a cost of $31,000 on January 1, 2025. The truck is expected to have a salvage value of $4,000 at the end of its 4-year useful life. Compute
Hohnberger Enterprises purchased equipment on March 15, 2025, for $75,000. The company also paid the following amounts: $500 for freight charges, $200 for insurance while the equipment was in
Gotham Company purchased a new machine on October 1, 2025, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 70,000
Antone Company sells office equipment on July 31, 2025, for $21,000 cash. The office equipment originally cost $72,000 and as of January 1, 2025, had accumulated depreciation of $42,000. Depreciation
Here are selected 2025 transactions of Akron Corporation.Jan. 1 Retired a piece of machinery that was purchased on January 1, 2015. The machine cost $62,000 and had a useful life of 10 years with no
Abner Company purchases a patent for $156,000 on January 2, 2025. Its estimated useful life is 6 years.a. Prepare the journal entry to record amortization expense for the first year.b. Show how this
Pryce Company owns equipment that cost $65,000 when purchased on January 1, 2022. It has been depreciated using the straight-line method based on an estimated salvage value of $5,000 and an estimated
Suppose in its 2025 annual report that McDonald’s Corporation reports beginning total assets of $28.46 billion, ending total assets of $30.22 billion, net sales of $22.74 billion, and net income of
Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2025 (in millions): other plant assets $965.8, land $221.6, patents and trademarks (at cost)
Kwik Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 150,000 miles. Taxi 10 cost $27,500 and is expected to have a salvage
These are selected 2025 transactions for Wyle Corporation:Jan. 1 Purchased a copyright for $120,000. The copyright has a useful life of 6 years and a remaining legal life of 30 years.Mar. 1 Purchased
Suppose during 2025 that Federal Express reported the following information (in millions): net sales of $35,497 and net income of $98. Its balance sheet also showed total assets at the beginning of
Suppose in 2025 that Campbell Soup Company reported average total assets of $6,265 million, net sales of $7,586 million, and net income of $736 million. What was Campbell Soup’s return on assets?
Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2025, at a cost of $100,000. Over its 4-year useful life, the bus is expected to be
The following information pertains to Lance Company.1. Cash balance per bank, July 31, $8,732.2. July bank service charge not recorded by the depositor $45.3. Cash balance per books, July 31,
Alcore Company estimates that 240,000 direct labour hours will be worked in the assembly department during 2022. Based on that, the following budgeted manufacturing overhead data are calculated:It is
Laesecke Company uses budgets to control costs. The May 2022 budget report for the company’s packaging department is as follows:The monthly budget amounts in the report were based on an expected
The service division of Retro Industries reported the following results for 2022. Management is considering the following independent courses of action in 2023 in order to maximize the return on
Sublette Company’s manufacturing overhead budget for the first quarter of 2022 contained the following data:Actual variable costs were as follows: indirect materials $13,900; indirect labour
Alosio Manufacturing Company manufactures a variety of tools and industrial equipment. The company operates three divisions. Each division is an investment centre. Operating data for the home
In the assembly department of Osaka Company, budgeted and actual manufacturing overhead costs for the month of April 2022 were as follows: The department manager can control all costs. Prepare a
Oakley Company estimates that 360,000 direct labour hours will be worked in the packaging department during 2022. Based on that, it has calculated the following budgeted manufacturing overhead cost
Chudzik Manufacturing Company makes garden and lawn equipment. The company operates through three divisions. Each division is an investment centre. Operating data for the lawn mower division for the
In Hinsdale Company, direct labour is $20 per hour. The company expects to operate at 10,000 direct labour hours each month. In January 2022, the company incurs direct labour totalling $204,000 in
The sports equipment division of Brandon McCarthy Company is operated as a profit centre. Sales for the division were budgeted for 2022 at $900,000. The only variable costs budgeted for the division
For the quarter ended March 31, 2022, Westphal Company accumulates the following sales data for its product, Garden-Tools: $350,000 budgeted; $335,000 actual. Prepare a static budget report for the
Korene Manufacturing Inc. operates the home appliance division as a profit centre. Operating data for this division for the year ended December 31, 2022, are shown in the following table: In
Henning Manufacturing Ltd. operates its patio furniture division as a profit centre. Operating data for this division for the year ended December 31, 2022, are as follows: In addition, Henning
Dukane Company expects to produce 1.2 million units of product XX in 2022. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are as
Advent Manufacturing Company accumulates the following summary data for the year ended December 31, 2022, for its water division. The division operates as a profit centre: sales—$2 million
For the year ended December 31, 2022, Sanjay Company accumulated the following data for the plastics division, which it operates as an investment centre: contribution margin—$700,000 budgeted,
Greish Inc. is preparing its annual budgets for the year ending December 31, 2022. Accounting assistants have provided the following data:An accounting assistant has prepared the detailed
Quinn Ltd. is preparing its annual budgets for the year ending December 31, 2022. Accounting assistants provide the following data: An accounting assistant has prepared the detailed manufacturing
Tilger Farm Supply Company manufactures and sells a fertilizer called Snare. The following data are available for preparing budgets for Snare for the first two quarters of 2022.1. Sales: Quarter 1,
Good-Buy Electronics Inc. produces and sells two models of pocket calculators, Deluxe and Standard. The calculators sell for $8 and $5, respectively. Because of the intense competition GoodBuy faces,
For Tracey Company, units to be produced are 5,000 in quarter 1 and 6,000 in quarter 2. It takes 1.6 hours to make a finished unit, and the expected hourly wage rate is $15. Prepare a direct labour
Pisani Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the budget for the first two quarters of 2022. Only the cash budget remains
Kurian Industries’ balance sheet at December 31, 2021, follows.Budgeted data for the year 2022 include the following: To meet sales requirements and to have 3,000 units of finished goods on hand
Choo-Foo Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2022: Choo-Foo has a
Wayans Company produces and sells automobile batteries, including the heavyduty HD-240. The 2022 sales budget is as follows: The January 1, 2022, inventory of HD-240 is 1,500 units. Management wants
Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2023 are as follows:All sales are on account. Lorch expects collections to be 50% in the month of sale, 40% in
Colt Industries had sales in 2021 of $5.6 million and gross profit of $1.1 million. Management is considering two alternative budget plans to increase its gross profit in 2022. Plan A would
The budget committee of Ridder Company collects the following data for its Westwood Store in preparing budgeted income statements for July and August 2022: 1. The store expects sales for July to be
The controller of Harrington Company estimates sales and production for the first four months of 2022 as follows: Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the
The budget committee of Urbina Company has collected the following data for its Eastwood Store in preparing budgeted income statements for July and August 2022. 1. Expected sales: July $400,000,
Wahlen Farm Supply Company manufactures and sells a pesticide called Basic II. The following data are available for preparing budgets for Basic II for the first two quarters of 2022. 1. Sales:
Savage Ltd. expects variable manufacturing overhead costs to be $20,000 in the first quarter of 2022, with $4,000 increments in each of the remaining three quarters. It estimates fixed overhead costs
Kirkland Ltd. estimates sales for the second quarter of 2022 will be as follows: Two units of material are required for each unit of finished product. Production for July is estimated at 2,700 units
Rado Company classifies its selling and administrative expenses budget into variable and fixed components. It expects variable expenses to be $25,000 in the first quarter, and expects $5,000
In May 2022, the budget committee of Big Jim Stores assembles the following data for preparing the merchandise purchases budget for the month of June: 1. Expected sales: June $500,000; July
Nigh Company prepares monthly cash budgets. Relevant data from operating budgets for 2023 are as follows: All sales are on account. The company expects collections to be 60% in the month of sale,
Keyser Company is preparing its manufacturing overhead budget for 2022. Relevant data are as follows: 1. Units to be produced (by quarters): 10,000, 12,000, 15,000, 18,000 2. Direct labour:
Raddington Inc. makes and sells chairs. The controller is responsible for preparing the master budget and has accumulated the following information for 2022: Raddington Inc. has a labour contract
Wu Equipment Company manufactures and distributes industrial air compressors. The following data are available for the year ended December 31, 2022. The company had no beginning inventory. In 2022,
Xantra Corp. is a manufacturer of specialty in-line skates. The operating results for 2022 are as follows: There was no beginning finished goods inventory. Instructions a. Prepare an
Blue Mountain Products manufactures and sells a variety of camping goods. Recently, the company opened a new factory to manufacture a lightweight, self-standing tent. Cost and sales data for the
Boat Refit Inc. produces and sells custom parts for powerboats. The company uses a costing system based on actual costs. Selected accounting and production information for fiscal 2022 is as
Asian Windows manufactures a hand-painted bamboo window shade for standard-size windows. Production and sales data for 2022 are as follows:Instructions a. Prepare an income statement using
Hardwood Inc. produces mostly wooden crates used for shipping products by ocean freighter. In 2022, Hardwood incurred the following costs:Assume Hardwood used an average of 500 kilowatt hours of
Bob’s Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2022, the company incurred the following costs: Bob’s Company sells the fishing lures for
Sun Company, a wholly owned subsidiary of Guardian Inc., produces and sells three main product lines. At the beginning of 2022, the president of Sun Company presented the budget to the parent company
During 2022, Rafael Corp. produced 40,000 units and sold 40,000 for $15 per unit. Variable manufacturing costs were $6 per unit. Annual fixed manufacturing overhead was $80,000 ($2 per unit).
Lemond Bike Repair Shop has budgeted the following time and material for 2022: Lemond budgets 2,500 hours of repair time in 2022. It will bill a profit of $5 per labour hour along with a 15% profit
The welding department of Hirohama Manufacturing Company has the following production and manufacturing cost data for February 2022. All direct materials are added at the beginning of the process,
Red Fire Inc. produces fire trucks. The company uses a normal job-order costing system to calculate its cost of goods manufactured. The company’s policy is to price its job at cost plus 30% markup.
On November 30, 2022, there was a fire in the factory of Able Manufacturing Limited, where you work as the controller. The work in process inventory was completely destroyed, but both the materials
Stellar Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, handrails) permit installation of stairways of
YUX Corporation sells a single product for $50. Its management estimates the following revenues and costs for the year 2022:Instructions a. Assuming fixed costs and net sales are spread evenly
Enos Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fibreglass, and lumber, depending on customer preference. On June 1, 2022, the
Giovanni Lofaro is a contractor specializing in custom-built Jacuzzis. On May 1, 2022, his ledger contains the following data: The Manufacturing Overhead account has debit totals of $12,500 and
Nicole Limited is a company that produces machinery to customer orders, using a normal job-order cost system. It applies manufacturing overhead to production using a predetermined rate. This overhead
For the year ended December 31, 2022, the job cost sheets of DeVoe Company contained the following data: Other data: 1. Raw materials inventory totalled $15,000 on January 1. During the year,
For the year ended December 31, 2022, the job cost sheets of Mazzone Company contained the following data:Other data: 1. Raw materials inventory totalled $20,000 on January 1. During the year,
Agassi Company uses a job-order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department D, direct labour
Meetha Corporation is in the candy manufacturing business. Products go through two production departments (A first, then B). Data from those departments for September 2022 are presented
Tel Corp. has the following estimated costs for 2022:Other data: Tel Corp. estimates that 40,000 machine hours will be required and 20,000 direct labour hours will be worked during the year. Assume
Jacobson Electronics manufactures two HD television models: the Royale, which sells for $1,400, and a new model, the Majestic, which sells for $1,100. The production costs calculated per unit under
Price-Gordon Architectural Consultants Ltd. uses a modified job-order costing system to keep track of project costs. During October 2022, the firm worked on four projects. The following table
Toronto Timers Inc.’s costing system uses two cost categories: direct materials and conversion costs. Each of its products must go through the assembly department and the testing department. Direct
The welding department of Balogh Manufacturing Company has the following production and manufacturing cost data for February 2022. All direct materials are added at the beginning of the
Computer Parts Inc., a manufacturer of computer chips, employs activity-based costing. The following budgeted data for each of the activity cost pools are provided for the year 2022. For 2022, the

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