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Galilee College

Accounting Principles II

Course No. ACC 112

Supplementary Questions

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Galilee College Course Outline

COURSE NUMBER: ACC 112 COURSE TITLE: Principles of

Accounting II DEPARTMENT: Accounting CREDIT VALUE: 3.0 COURSE DURATION: 1 SEMESTER DATE PREPARED: July 2013 PREREQUISITES ACC 111, Accounting Principles I PROGRAM COORDINATOR _________________________________ REQUIRED TEXTS: FUNDAMENTAL ACCOUNTING PRINCIPLES Dr. W. L. Johnson, Galilee College

SUPPLEMENTAL MATERIALS Fundamental Accounting Principles Volume 2 Chapters 13-26 (Hardcover) / 0-07-366127-9 COURSE DESCRIPTION

The study of financial accounting is continued from ACC 231. Corporation accounting, cost accounting, and analysis of financial statements are the areas emphasized. An introduction to managerial uses of accounting is included.

COURSE OBJECTIVES The objective of this course is to continue a study of the accounting principles, concepts, procedures, and techniques underlying financial accounting and reporting with emphasis on the corporate structure, corporate financing, and reporting and interpreting corporate financial statements. Additionally, this course provides an introduction to managerial accounting, accounting for manufacturing costs, and controlling business operations.

Program Context: This course is a first year core component of all Accounting and Business and

Public Administration Programs Course Learning Outcomes: Learning outcomes identify the knowledge, skills and attitudes that successful students will have developed and reliably demonstrated as a result of the learning experiences and evaluations during this course.

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Evaluation Strategies and Grading: Class Attendance Full participation and attendance is expected for this course. Students who miss a class are responsible for any information discussed, assigned or distributed in that class period. FINAL EXAM 30% CLASS TESTS 60% ASSIGNMENTS 10%

100% Note that violation of academic honesty can affect the course grade. "Cheating" on an exam (i.e., the giving or receiving of aid) will result in a course grade of "F." Note that classroom behavior (for example, talking to other students during lecture) can negatively affect course grades by as much as three letter grades, e.g., an "A" can become a "D."

GRADING SYSTEM: A 94% - 100% Excellent 4.00 D 68% - 74% Passed 1.00 B 87% - 93% Good 3.00 F 0% - 67% Failed 0.00 C 75% - 86% Average 2.00

COVERAGE Part Four Accounting for Partnerships and Corporations CHAPTER 13 Partnerships and Corporations CHAPTER 14 Corporate Financial Reporting CHAPTER 15 Notes Payable and Bonds CHAPTER 16 Long-Term Investments and International Accounting Part Five Analysis of Accounting Information CHAPTER 17 Reporting and Analyzing Cash Flows CHAPTER 18 Analyzing Financial Statements Part Six Management Accounting and Product Costing CHAPTER 19 Managerial Accounting Concepts and Principles CHAPTER 20 Manufacturing and Job Order Cost Accounting CHAPTER 21 Process Cost Accounting CHAPTER 22 Cost Allocation and Performance Measurement Part Seven Cost Planning and Control CHAPTER 23 Cost-Volume-Profit Analysis CHAPTER 24 Master Budgets and Planning CHAPTER 25 Flexible Budgets and Standard Costs Part Eight Strategic Analysis in Managerial and Cost Accounting CHAPTER 26 Capital Budgeting and Managerial Decisions

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Supplementary Chapters Chapter 1 Partnership Accounting Chapter 2 Corporations Chapter 3 Corporations (Financial Statements) Chapter 4 Long-term Liabilities Chapter 5 Investments and International Operations Chapter 6 Statement of Cash Flows Chapter 7 Financial Statements Analysis Chapter 8 Introduction to Management Accounting Additional Information: 1. MISSED TESTS WILL RESULT IN A ZERO GRADE; SEE YOUR INSTRUCTOR TO

DISCUSS THIS. 2. Texts, working papers and calculators are to be brought to every class. 3. Some details of your course schedule may vary by section/teacher or change as a

result of unforeseen circumstances, such as weather, cancellations, College and student activities and class timetabling.

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Galilee College www.gcresources.hereweb.com Accounting Principles II Chapter 1 - Partnership Accounting PROFIT & LOSS SHARING CLASS 1 Quit Quitty and Blit Blitty formed a partnership in 2013. They contributed capital as follows: QQ $200,000 and BB $250,000. The agreement was that they receive the following:- a. Salaries of $30,000 and $20,000 respectively b. Interest on capital balances of 10% Instructions: Show the profit/loss sharing under each of the following condition assuming the income was $100,000 1. The Profit sharing ratio is 40:60 2. There is no agreement as to profit sharing, and the income was $50,000 HOME 1 Grit Gritty and Flit Flitty formed a partnerhship in 2013 They contributed capital as follows: GG $300,000 and FF $350,000. The agreement was that they receive the following:- a. Salaries of $40,000 and $60,000 respectively b. Interest on capital balances of 10% Instructions: Show the profit/loss sharing under each of the following condition assuming the income was $90,000 1. The Profit sharing ratio is 30:70 2. There is no agreement as to profit sharing, and the income was $75,000 LIQUIDATION CLASS 2 Pled Pleddy and Cled Cleddy had capital balances of $100,000 and $150,000 and share profit and losses in the ratio of 40:60. Accounts Payable balance was $50,000. Cash was valued $130,000 and Other Assets totaled $170,000. In liquidating the partnership, other assets were sold for $100,000. Instruction: Complete the liquidation process HOME 2 Fled Fleddy and Bled Bleddy had capital balances of $150,000 and $250,000 and share profit and losses in the ratio of 30:70. Accounts Payable balance was $100,000. Cash was valued $200,000 and Other Assets totaled $300,000. In liquidating the partnership, other assets were sold for $200,000. Instruction: Complete the liquidation process

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BONUS QUESTION Adopted Galilee CPA Review -Task Based Simulation: Partnership Profit Sharing-Bonus Presented below is the condensed balance sheet of the partnership of Kane, Clark, and Lane, who share profits and losses in the ratio of 6:3:1, respectively:

Cash $ 85,000 Other assets 415,000 $500,000

Liabilities $ 80,000 Kane, capital 252,000 Clark, capital 126,000

Lane, capital 42,000 $500,000 Assume that the partners agree to sell to Bayer 20% of their respective capital and

profit and loss interests for a total payment of $90,000. The payment by Bayer is to be made directly to the individual partners. The partners agree that implied goodwill is to be recorded prior to the acquisition by

Bayer. Requirement Prepare a schedule to show the new capital balances after the acquisition by Bayer.

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Galilee College © 2013 Accounting Principles II – Chapter 2 Corporations Terminology

1. board of directors 9. no-par-value stock 2. articles of incorporation 10. stated value stock 3. charter 11. subscribing for capital stock 4. common stock 12. organization costs 5. preferred stock 13. intangible assets 6. stock certificate 14. declaring a dividend 7. par value 15. date of declaration 8. par-value stock 16. date of record

17. date of payment

Class Work 1 - Journalizing transactions for starting a corporation Chad Chaddy Corporation received its charter on January 4 of the 2004. The corporation is authorized to issue 200,000 shares of $10.00 stated-value common stock and 50,000 shares of 12%, $100.00 par-value stock.. Instructions: 1. Journalize the following transactions. Use page 1 of a cash receipts journal, a cash payments journal, and a general journal. Source documents are abbreviated as follows: check, C; memorandum, M; receipts, R. Jan. 4. Received cash from three incorporators for 48,000 shares of $10.00 stated-value Common stock, $480,000.00. RT-3. Jan 4. Paid cash to Myles Camp as reimbursement for organization costs, $2,000.00. C1. Jan 5. Received a subscription from Mary Nettles for 2,000 shares of $10.00 stated- Value, common stock, $20,000.00. M1. Jan 16. Received a subscription from Kenneth Bryant for 10,000 shares of $10.00 stated value common stock, $100,000.00. M2. Feb 1. Received cash from Mary Nettles in payment of stock subscription, $20,000.00. C1. Feb 1. Issued Stock certificate No. 4 to Mary Nettles for 2,000 share of $10.00 stated- value common stock, $20,000.00. M3 Feb 8. Received cash from Kenneth Bryant in partial payment of stock subscription, $50,000.00. R5. Feb 15. Received a subscription from Leigh Brooks for 300 shares of $10.00 stated-value common stock, $3,000.00. M4. Mar 1. Received cash from Kenneth Bryant in final payment of stock subscription, $50,000.00. R6. Mar 1. Issued Stock Certificate No. 5 to Kenneth Bryant for 10,000 shares of $10.00 stated-value common stock, $100,000. M5.

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Home Work – 1 Journalizing transactions for starting a corporation Nap Nappy, Inc., received its charter on August 1 of the current year. The corporation is authorized to issue 150,000 shares of $50.00 stated-value common stock and 50,00 shares of 10%, $100.00 par-value preferred stock. Instructions: 1. Journalize the following transactions. Use page 1 of a cash receipts journal, a cash payments journal, and a general journal. Source documents are abbreviated as follows: check C; memorandum, M; receipt, R. Aug 4. Received cash from ten incorporators for 50,000 shares of $50.00 stated-value Common stock,$250,000.00. R1-10. Aug 4. Paid cash to Paul Kerwin as reimbursement for organization costs, $6,500.00. C1. Aug 6. Received a subscription from Deborah Andrews for 500 shares of $5.00stated- value common stock, $2,500.00. M1. Aug 21. Received a subscription from Kevin Clark for 3,000 shares of $5.00 stated- value common, $15,000.00. M2. Sept 16. Received cash from Deborah Andrews in payment of stock subscription, $2,500.00. R11. Sept 16. Issued stock Certificate No. 11 to Deborah Andrews for 500 shares of $5.00 stated value common stock, $2,500.00.M3. Oct 1. Received cash from Kevin Clark in partial payment of stock subscription, $7,500.000 R12. Oct 15. Received a subscription from George Bagwell for 6,000 shares of $5.00 stated- value common

stock, $30,000. M4 Nov 1. Received cash from Kevin Clark in final payment of stock subscription, $7,500. R13. Nov 1. Issued Stock Certificate No. 12 to Kevin Clark for 3,000 shares of $5.00 stated-value common

stock, $15,000.00. M5

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Class 2 – Dividends On December 31, 2013. Div Divey declared and paid $250,000 of dividends. No dividends were declared in 2004. Preferred Stock: 10,000, Par Value $10.00, 10%. Common Stock: 200,000, $2.00 Par Value. Prepared a schedules to distribute dividend assuming the following: P/S i. (non cumulative and non participating, ii. (cumulative and non participating and iii. (cumulative and participating). HOME 2 – Dividends On December 31, 2013. Pink Pinky declared and paid $400,000 of dividends. No dividends were declared in 2004 and 2003. Preferred Stock: 20,000, Par Value $9.00, 8%. Common Stock: 300,000, $3.00 Par Value. Prepared a schedules to distribute dividend assuming the following: P/S i. (non cumulative and non participating, ii. (cumulative and non participating and iii. (cumulative and participating). BONUS QUESTION Adopted Galilee CPA Review -Task Based Simulation 77: Equity On February 1, 2010, Flap Flappy Corp., a newly formed company, had the following stock issued and outstanding: • Common stock, no par, $1 stated value, 10,000 shares originally issued for $15 per share • Preferred stock, $10 par value, 3,000 shares originally issued for $25 per share At February 1, 2010, how much should Flap Flappy’s Statement of Equity report for

a. Common Stock b. Preferred Stock c. Additional Paid-in Capital

a. Use Journal entries and T accounts to support your answer

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Chapter 3 - Corporations (Financial Statements) Class Work 3- Corporation (Financial Statements) Complete the Financial Statements for Cox Coxey

a. Income Statement b. Retained Earnings Statement c. Balance Sheet

i. Cox Coxey Class Work (Appendix C3-C)

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Home Work 3- Corporation (Financial Statements) Complete the Financial Statements for Mox Moxey

d. Income Statement e. Retained Earnings Statement f. Balance Sheet

i. Mox Moxey Home Work (Appendix C3-H)

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Galilee College Accounting Principles II Chapter 4: Long-term Liabilities Class: 1 Assume Jet Jetty Corp. is authorized to issue $500,000 of 7%, ten-year bonds payable. On January 2, when the market interest rate is 8%, the company issues $300,000 of the bonds and receives cash of $279,615. Jet Jetty Corp measures interest expense by the effective-interest method. Required: 1. Prepare an amortization table for the first four semiannual interest periods. 2. Record the first semiannual interest payment on June 30 and the second payment on December31. Home Work: 1 On January 1, 2002, the market interest rate is 7%. Sharp Sharpy, Inc., issues $200,000 of 8%, 20-year bonds payable at 110. The bonds pay interest on June 30 and December 31. Sharp Sharpy measures interest expense by the effective-interest method. Required: 1. Prepare an amortization table for the first four semiannual interest periods. 2. Record the first semiannual interest payment on June 30 and the second payment on

December 31.

A B C D E F G H H B-C C x MR B x CR E - F C -/+ G

Date Face V. Beg. BV Dist./Prem. Int. Exp. Int. Pay. Amort. End. BV

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BONUS QUESTION Adopted Galilee CPA Review -Task Based Simulation 16: Bonds Payable

Instructions:-

1. Prepare an analysis showing how much Welling paid for the bonds.

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Galilee College Chapter 5: Investments and International Operations SECURITIES - Class Work On January 1, 2012 Saint Sainty purchased some Securities for $20,000 each. At December 31, 2012 and 2014, the securities were valued at $10,000 and $30,000 respectively. What are the entries to record purchase and values at the end of each year under each situation:-

A. Trading Securities C. Held to Maturity B. Available For Sale Securities

SECURITIES -Home Work On January 1, 2012 Jake Jakey purchased some Securities for $50,000. At December 31, 2012 and 2013, the securities were valued at $60,000 and $55,000 respectively. What are the entries to record purchase and values at the end of each year under each situation:-

C. Trading Securities D. Available For Sale Securities E. Held to Maturity

INVESTMENTS (EQUITY MEHTOD) Class Work On January 1, 2013 Smith Smithy purchased 20% of the shares of ABC Co for $500,000. At December 31, 2013 ABC Co. has earnings of $200,000 and paid dividends of $80,000. Instructions: On the Books of Smith Smithy, Record the following entries:-

a. January 1, 2013 b. December 31, 2013 c. Prepare a T Account to show the balance in the investment account at Dec. 31, 2013

INVESTMENTS (EQUITY METHOD ome Work On January 1, 2013 Yard Yardy purchase 25% of the shares of DEF Co for $300,000. At December 31, 2013 DEF Co. has earnings of $100,000 and paid dividends of $50,000. On the Books of Yard Yardy, Record the following entries:-

a. January 1, 2013 b. December 31, 2013c. Prepare a T Account to show the balance in the investment account at Dec. 31, 13

INVESTMENTS (COST METHOD) Class Work On January 1, 2013 Benn Benny purchased 10% of the shares of ABC Co for $500,000. At December 31, 2013 ABC Co. has earnings of $200,000 and paid dividends of $80,000. Instructions: On the Books of Benn Benny, Record the following entries:-

b. January 1, 2013 b. December 31, 2013 c. Prepare a T Account to show the balance in the investment account at Dec. 31, 2013

INVESTMENTS (COST METHOD) - Home Work On January 1, 2013 Will Willy purchase 15% of the shares of DEF Co for $300,000. At December 31, 2013 DEF Co. has earnings of $100,000 and paid dividends of $50,000. On the Books of Will Willy, Record the following entries:-

b. January 1, 2013 b. December 31, 2013 c. Prepare a T Account to show the balance in the investment account at Dec. 31, 13

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BONUS QUESTION Adopted Galilee CPA Review -Task Based Simulation 26: Equity and Cost Method The Following information relates to Crip Crippy investment of the HIJ Corporation. 1. Purchase the investment for $1,000,000 on January 1, 2009 2. HiJ Corporation had earnings of $600,000 at December 31, 2009 and declared

dividends of $400,000 3. The dividends were paid on January 2, 2010. 4. On July 1, 2010 Crip Crippy sold fifty percent of its interest for $400,000 5. At June 30, 2010, HIJ had reported earnings of $300,000 6. At December 31, 2010, HIJ had earnings of $600,000 for the year and paid

dividends of $200,000 for shares outstanding as at November 30, 2010. Requirements

1. Record all entries from January 1, 2009 to December 31, 2010 using the following scenarios:-

a. Crip Crippy purchased 40% of HIJ Corporation b. Crip Crippy purchased 18% of HIJ Corporation

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Galilee College © 2013 Chapter 6 – Statement of Cash Flows A. General Changes in cash and cash equivalents during the period are to be explained in a statement of cash flows. Primary Purpose:-

i. Provide information about receipts and payments of a during a period. It also helps a. Investors, creditors, and other users to assess ability to generate cash inflows

Cash Equivalents: Short-term, highly liquid investments, no risk of change in value because maturity date is so near. I. Ordinarily include only investments with original maturities to the holder of 3 months or less. II. Cash Equivalents has no effect on statement of cash flows.

SFAS 95 states – Do not report cash flow per share (because it might imply that C/F is alternative to N/I as a measurement performance.) Disclose:

i. Information about transactions that do not directly affect cash flow for the period ii. E.g. a. Converting debt to equity (disclose as supplemental info. In C/F Statement)

b. Obtaining assets by assuming liabilities or capital lease c. Obtaining building or investment asset by receiving a gift d. Exchanging noncash asset or liability for another

B. Operating, Investing, Financial

Activities Cash inflows and Cash outflows

ordinarily are not netted i. These should be

reported separately at gross amounts

Operating activities may be reported in the statement of cash

flows using the direct or indirect method. (SFAS 95 encourages the use of the direct method.)

C. Direct vs Indirect Presentation Statement of cash flows may be reported using:- a. Direct Presentation (SFAS 95 Encourages)

Following classes of gross operating cash receipts and payment (minimum) i. Cash collected form customers iv. Interest paid ii. Interest and dividends received v. Income taxes paid iii. Cash paid wages, supplies and services

b. Indirect Presentation c. (Reconciles net income or change in net assets of a non-for-profit organization to net operating cash flow.

- Remove from net income or change in net assets, the effects of 1. All past deferrals of operating cash receipts and payments

e.g. changes in: Inventory, deferred income, amortization of premium or discount on bonds, and prepaid expenses.

2. All accruals of expected future operating cash receipts and payments 3. Items whose cash effects are investing or financing cash flows.

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Galilee College © 2013 Chapter 6 – Statement of Cash Flows

Quick Quicky (December 31, 2013) CLASS

Cash at beginning of year 26,000

Cash from sale of common stock 48,000

Cash from sale of land 72,000

Cash paid for dividends 24,000

Cash paid for purchase of building 60,000

Cash paid to purchase land 15,000

Cash paid to retire bonds payable 50,000

Cash payment for income taxes 83,500

Cash payment for interest 8,000

Cash Payments for Merchandise 785,200

Cash payments for operating expenses

193,800

Cash received from customers 1,171,000

Prepare a statement of cash flow (Direct Method)

Pick Picky (December 31, 2013) HOMEWORK Cash at beginning of year 35,000 Cash from sale of common stock 72,000 Cash from sale of land 50,000 Cash paid for dividends 19,000 Cash paid for mortgage loan 15,000 Cash paid for purchase of land 35,000 Cash paid for supplies 23,000 Cash paid for treasury stock 10,000 Cash paid to purchase land 30,000 Cash paid to retire bonds payable 45,999 Cash payment for income taxes 3,800 Cash payment for interest 6,500 Cash Payments for Merchandise 340,000 Cash payments for operating expenses 142,000 Cash received from customers 900,140 Prepare a statement of cash flow (Direct Method)

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BONUS QUESTION Adopted Galilee CPA Review -Task Based Simulation 2 Cash Flows

There were no disposals of plant assets during the year. Instruction: You are asked to analyzed certain information in the statement of cash flows, by preparing a schedule that shows the net increase in cash.

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BONUS QUESTION Adopted Galilee CPA Review -Task Based Simulation 47 - Ratios

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Galilee College Principles of Accounting II Chapter 8: Introduction to Management Accounting The following information relates to Poke Pokey Corp. and Rope Ropey Corp. in 2013. Poke Pokey Corp. (2013) Rope Ropey Corp. (2013) Beg. Year End. Year Beg. Year End. Year Materials inventory $ 22,000 $ 28,000 $ 27,500 $ 35,000 Work in process inventory $ 42,000 $ 30,000 $ 52,500 $ 37,500 Finished goods inventory $ 18,000 $ 25,000 $ 22,500 $ 31,250 Purchases of raw materials $ 78,000 $ 97,500 Direct labor $ 82,000 $ 102,500 Factory Overhead Indirect labor $ 15,000 $ 18,750 Insurance on plant $ 9,000 $ 11,250 Depreciation of plant building & equipment $ 16,000 $ 20,000 Repairs and maintenance expense $ 4,000 $ 5,000 Selling Expenses $ 77,000 $ 96,250 General and administrative expenses $ 29,000 $ 36,250 Units Produce 50,000 60,000 Units of Product Sold 28,000 40,000 Unit Selling Price $20 $30 Income Tax Rate 30% 30%

Class Work – Poke Pokey Corp.

Poke Pokey Corp. produces Bicycle Tires Required:

1. Complete the Cost of Goods Manufactured Statement for Poke Pokey Corp. 2. What is the cost to produce one unit 3. Complete the Cost of Goods Sold Statement for Poke Pokey Corp. 4. Prepare an Income Statement for Poke Pokey Corp.

Home Work – Rope Ropey Corp.

Rope Ropey Corp. produces Bicycle Chains Required:

1. Complete the Cost of Goods Manufactured Statement for Rope Ropey Corp. 2. What is the cost to produce one unit 3. Complete the Cost of Goods Sold Statement for Rope Ropey Corp. 4. Prepare an Income Statement for Rope Ropey Corp.

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BONUS QUESTION 1 Adopted Galilee CPA Review -Task Based Simulation 47 - Ratios The following information relates to Greg Greggy Corp:- Greg Greggy Corp. (2014) Beg. Year End. Year Materials inventory $ 60,000 $ 90,000 Work in process inventory $ 50,000 $ 75,000 Finished goods inventory $ 70,000 $ 85,000 Purchases of raw materials $ 120,000 Direct labor $ 100,000 Factory Overhead 90000 Selling Expenses $ 60,000 General and administrative expenses $ 85,000 Units Produce 60,000 Units of Product Sold 80,000 Unit Selling Price $50 Income Tax Rate 30%

Greg Greggy Corp. Required: for Droke Drokey Corp. that produces Tires:-

5. Complete the Cost of Goods Manufactured Statement for Greg Greggy Corp. 6. What is the cost to produce one unit 7. How much of the production is Prime cost? 8. How much of the production is Conversion cost?

a. Record all information on Page 1 of the General Journal b. Post all journal entries to the T Accounts

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BONUS QUESTION 2

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Grade Distribution Part 1 - Partnerships Part 2 – Dividend Distribution Part 3 – Treasury Stock Part 4 - Long-term Liabilities Part 5 - Financial Statement Analysis Part 6 - Introduction to Management Accounting Part 7 – Statement of Cash Flows (Please Email to galilee.wlj@gmail.com This package is due in its complete form no later than Monday, April 6, 2011 6:15 p.m. There is a 5% penalty per day for late returns. __________________________________________________________________

1. Please follow all instruction 2. Remember to label each page that you use properly: Part 2. Name

3. Please work alone 4. All work must be computerized and placed in a folder with a clear plastic covering addressed as follows:-

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Galilee College Nassau, Bahamas

Accounting Principles II Final Project

___________Semester 20__ Dr. Willis L. Johnson, Professor

Your Name_______________________ Date____________________________

Additional Note: Your final project will not be accepted without a CD or Flashdrive with all work in Excel or Word where applicable. Galilee College - Accounting Principles II Final Project ___________Semester 20__ Part 1 – Partnerships Tick Ticky and Blick Blicky formed a partnership in 2006. They contributed capital as follows: TT $375,000 and BB $425,000. The agreement was that they receive the following:- a. Salaries of $40,000 and $50,000 respectively b. Interest on capital balances of 10% Instructions: Complete the distribution schedule, General Journal page 7 and T Accounts to Show the profit/loss sharing assuming the income was $200,000 Part 2- Dividend Distribution A. Beaut Beauty had the following in its portfolio * Common Stock (300,000 $2.00 par value) * Preferred Stock (100,000 $10 par value 10%) Dividends were not declared in 2003 and 2004. On December 31, 2005 $500,000 in dividends were declared. Prepare schedules to show the value of dividends that should be given to the share holders under each of the following conditions:- 1. P/S were noncumulative and nonparticipating 2. P/S were cumulative and nonparticipating 3. P/S were cumulative and participating PART 3 – Treasury Stock Transactions The following transactions took place during 2005 (these did not impact the answers to the above question). Jan 4, 2005 Issued 50,000 Common Stock at $5.00 per share Jan 9, 2005 Re-Purchased 10,000 shares of common stock at $7.00 per share (held in the treasury)

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Jan 12, 2005 Re-issued the 10,000 share of treasury stock at $9.00 per share Instructions:- Show all entries to record treasury stock under both the Cost Method and Par Value Methods. PART 4 - Long-term Liabilities Cave Cavey Corp. is authorized to issue and issues $100,000 of 5%, ten-year bonds payable. On January 1, 2001 when the market interest rate is 8%, the company receives cash of $ 79,614.51. Cave Cavey measures interest expense by the effective-interest method. Instruction:

1. Prepare a computerized amortization table for five years, bearing in mind that the interest is payable semiannually.

2. Show the entry to record the first and last interest payable. Part 5- Financial Statement Analysis The financial statements of Gist Gisty Inc. include the following items: 2006 2005

Balance sheet data: $ $ Required:

Cash 75,000 60,000 Compute the following ratios for the current year:

Short-term investments 50,000 60,000 (a) current ratio Accounts Receivables 150,000 130,000 (b) Working Capital Inventory 205,000 180,000 (c) acid-test ratio Prepaid expenses 25,000 20,000 (d) Inventory turnover, Total current assets 505,000 450,000 (e) Number of days in inventory Total current liabilities 224,444 225,000 (f)accounts receivable turnover, (g) number of days in accounts receivable Income statement data: (h) No of days in operating cycle Net credit sales $975,000 Cost of goods sold 400,000

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Part 6- Introduction to Management Accounting The following information relates to Mike Mikey Corp. in 2005. Mike Mikey produces the Lilk Lilky Pain Killers. Mike Mikey Corp. (2005) Beg. Year End. Year Materials inventory $ 30,000 $ 35,000 Work in process inventory $ 40,000 $ 48,000 Finished goods inventory $ 25,000 $ 32,000 Purchases of raw materials $ 80,000 Direct labor $ 85,000 Factory Overhead $ 25,000 General Administrative Expenses $ 15,000 Selling Expenses $ 17,000 Income tax expense 30% Units Produced Units of Product Sold

60,000 45,000

Unit Selling Price Income Tax

$30 30%

Required:

9. Journalize all transactions 10. Post all journal entries to the various T Account 11. Complete the Cost of Goods Manufactured Statement 12. What is the cost to produce one unit 13. Prepare an Income Statement 14. How much is the prime cost? 15. How much is the conversion cost? 16. Prepare an analysis of ending inventories 17. List 10 items that could be included in Factory Overhead 18.

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Part 7- Statement of Cash Flows Denty Denty (2005 Cash Information) Cash at beginning of year 65,000 Cash from sale of Preferred Stock 72,000 Cash paid to purchase Treasury Stock 100,000 Cash from bond issue 300,000 Cash Loan for Real Estate 200,000 Cash from sale of land 20,000 Cash Received for Dividends 45,000 Cash paid for purchase of Equipment 65,000 Cash paid to purchase Building 190,000 Cash paid for bond interest 28,000 Cash Payment of Taxes 63,000 Cash payment for interest 12,000 Cash Payments for Merchandise 920,000 Cash payments for operating expenses 156,000 Cash received from customers 1,279,000 Prepare a statement of cash flow (Direct Method)