Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
ACCT 221 Final Exam (the latest version)
1. Buy here:
http://homework.plus/products.php?product=ACCT-221-
Final-Exam-%28the-latest-version%29
Question 1 (15 points) Statement of Cash Flows
The following is selected information from Aztec Company for the fiscal years ended
December 31, 2015: Aztec Company had net income of $500,000. Depreciation was
$50,000, purchases of plant assets were $ 250,000, and disposals of plant assets for
$500,000 resulted in a $20,000 gain. Stock was issued in exchange for an outstanding note
payable of $925,000. Accounts receivable decreased by $25,000. Accounts payable
decreased by $10,000. Dividends of $200,000 were paid to shareholders. Aztec Company
had interest expense of $5,000. Cash balance on January 1, 2015 was $250,000.
Requirements: Prepare Aztec Company's statement of cash flows for the year ended
December 31, 2015 using the indirect method.
Hint (recall the 3 sections)
Question 2 (10 points)
On January 1, 2015, Aztec Company purchased 10,000 shares of the stock of Baker, Inc.,
and did obtain significant influence. The investment is intended as a long-term investment.
The stock was purchased for $80,000, and represents a 30% ownership stake. Baker made
$40,000 of net income in 2015, and paid dividends of $10,000. The price of Baker’s stock
increased from $20 per share at the beginning of the year, to $22 per share at the end of the
year.
2. Requirements:
Prepare the January 1 and December 31 general journal entries for Aztec Company.
How much should the Aztec Company report on the balance sheet for the investment in
Aztec at the end of 2015?
Question 3 (10 Points)
The following events occurred during 2016 for Titus Corporation and have not been recorded
1/10/2016 – Issued 200,000 shares of stock at $16 per share.
1/25/2016 – The law firm that helped the company incorporate and file all forms for the stock
issue accepts 1,000 shares of newly issued stock in lieu of cash for its legal bill rendered.
The amount of the legal bill was $20,000.
6/10/2016 – Titus Corporation declares a 50 cent per share dividend payable July 15 to
shareholders of record as of June 30, 2016.
6/30/2016 – The record date for the dividend declared on June 10.
7/15/2016 – The dividend declared on June 10 is paid.
9/15/2016 – Titus Corporation declares a 10% stock dividend payable on September 30 to
shareholders of record as of September 20. The market value of the stock was $15
immediately prior to the declaration of the stock dividend.
9/30/2016 – The stock dividend declared on September 15 is paid.
3. 10/15/2016 – Titus Corporation buys 5,000 shares of its own stock on the open market for
$18 per share.
12/18/2016 – Titus Corporation resells 2,000 shares of the treasury stock for $20 per share.
Requirements:
Prepare journal entries in good form for the transactions listed above
Question 4 (14 points)
4A. January 1, 2016, Brandon Company issued $100,000 of 5 year 9% bonds when the
market rate of interest was 10%. Brandon received $96,149 for the bond issue. The bonds
pay interest on July 1 and January 1.
4B. January 1,2016 ABC Company issues $100,000 of 5 year 9% bonds to yield $104,100
when the market rate of interest is 8%.The bonds pay interest on July 1 and January 1.
.
4. Requirements: Prepare all general journal entries for the 2 bonds issued and any interest
accruals and payments for the fiscal year 2016. What is the carrying amount on the
December 31, 2016 Balance Sheet for 4A. and 4B?
Question 5 (12 Points)
John Webb recently graduated from mortuary school. He is considering opening his own
funeral home. A funeral home is a high-fixed cost business, as it requires considerable
expenditures for facilities, labor, and equipment, no matter how many families are served.
Assume the annual fixed cost of operations is $800,000. Further assume that the only
significant variable cost relates to burial containers like urns and caskets. An average casket
costs $1,200. John’s banker has asked a variety of questions in contemplation of providing a
loan for this business.
Required: Provide the solution to each of the following questions.
● If the average family is charged $6,000 for services and a burial container, how
many families must be served to clear the break-even point?
● If the banker believes John will only serve 100 families during the first year in
business, how much will the business lose during its first year of operation?
● If John believes his profits will be at least $100,000 during the first year, how
much is he anticipating for total revenue?
5. ● The banker has suggested that John can reduce his fixed costs by $150,000 if he
will not buy any vehicles. John can instead rent vehicles as needed. The variable
cost of renting is $700 per family served. Will this suggestion help John reach the
break-even point sooner?
Hint: Think CVP
Question 6 (9 points)
Rosie’s manufactures silk flowers. ABC Company has approached Rosie’s with a proposal
to buy 2,000 silk flowers for $4.00 each. Regular customers are charged $4.25 for each
flower. Rosie’s has the necessary capacity. The following costs are associated annually with
silk flowers with the company's normal production and sales of 10,000 flowers:
Direct material $21,00
0
Direct labor 13,000
Manufacturing
overhead
9,000
6. Total $43,00
0
Forty percent of the manufacturing overhead is variable. All fixed overhead is allocated
equally to all products produced.
Requirements: Prepare an incremental analysis schedule to demonstrate what amount
operating income would increase or decrease as a result of accepting the special order.
Hint: think differences between accepting the order or not.
Question 7 (10 points)
ABC Company manufactures 10,000 units of wheel sets for use in its annual production.
Costs are as follows: direct materials are $20,000; direct labor is $55,000; variable overhead
is $45,000; and fixed overhead is $70,000. Murphy Company has offered to sell ABC 10,000
units of wheel sets for $18 per unit. If RSW accepts the offer, some of the facilities presently
used to manufacture wheel sets could be rented to a third party at an annual rental of
$15,000. Additionally, $4 per unit of the fixed overhead applied to wheel sets would be totally
eliminated.
7. Requirements: Prepare an incremental analysis schedule to demonstrate if ABC should
accept Murphy's offer.
Hint: Set up 2 columns and show differences in income and costs for each column.