Accounting exercises

hho9e_e15_13_eip_stud.xlsxhho9e_e15_16_eip_stud-1.xlsxhho9e_e16_20_eip_stud.xlsxhho9e_p15_23a_eip_stud.xlsxhho9e_p15_29b_eip_stud.xlsxhho9e_p16_22a_eip_stud.xlsxhho9e_p16_26a_eip_stud.xlsxhho9e_p16_27a_eip_stud.xlsx

E15-13

E15-13

and

2012 2011

s

E15-13

MARINER DESIGNS, INC.
Comparative Income Statement

2012 2011

Net sales revenue $ 431,000 $ 372,350

Expenses:

Cost of goods sold $ 200,000 $ 187,550
Selling and general expense 99,000 91,050
Other expense 8,350 6,850

307,350 285,450

Net income $ 123,650 $ 86,900

Accounting, 9e

Horizontal analysis – income statement

LO 1 [10-15 minutes]

Students please fill-in areas that are shaded

Student Name

Course Name

Student ID:

Date:

Data for Mariner Designs, Inc., follow:

MARINER DESIGNS, INC.

Comparative Income Statement

Year Ended December 31,

2012

2011

Net sales revenue

$ 431,000

$ 372,350

Expenses:

Cost of goods sold

$ 200,000

$ 187,550

Selling and general expense

99,000

91,050

Other expense

8,350

6,850

Total expense

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307,350

$

285,450

Net income

$ 123,650

$ 86,900

Requirements

1.

Prepare a horizontal analysis of the comparative income statement of Mariner

Designs, Inc. Round percentage changes to one decimal place.

2.

Why did 2012 net income increase by a higher percentage than net sales revenue?

Test Your Knowledge

Req. 1

Year Ended December 31, 2012 and 2011

INCREASE (DECREASE)

AMOUNT

PERCENT

Total expenses

Req. 2

good student april

E15-16

E15-16

and

2012 2011

s

E15-16

MARINER DESIGNS, INC.
Comparative Income Statement

2012 2011

Net sales revenue

100.0%

Expenses:

Cost of goods sold

Selling and general expense
Other expense
Net income 100.0% 100.0%

Accounting, 9e

Preparing common-size income statements

LO 3 [10-15 minutes]

Students please fill-in areas that are shaded

Student Name

Course Name

Student ID:

Date:

Consider the data presented in Exercise 15-13.

Data from Exercise 15-13 presented here for your convenience.

MARINER DESIGNS, INC.

Comparative Income Statement

Year Ended December 31,

2012

2011

Net sales revenue

$ 431,000

$ 372,350

Expenses:

Cost of goods sold

$ 200,000

$ 187,550

Selling and general expense

99,000

91,050

Other expense

8,350

6,850

Total expense

$ 307,350

$ 285,450

Net income

$ 123,650

$ 86,900

Requirements

1.

Prepare a comparative common-size income statement for Mariner Designs, Inc.,

using the 2012 and 2011 data. Round percentages to one-tenth percent (three

decimal places).

2.

To an investor, how does 2012 compare with 2011? Explain your reasoning.

Test Your Knowledge

Req. 1

Year Ended December 31, 2012 and 2011

100.0%

46.4%

Total expenses

Req. 2

good student April

E16-20

E16-20

, a lamp manufacturer, provided the following information for the year

8,000

59,000

E16-20
Knight, Corp.

:

$ 56,000

Direct materials used

122,000

Accounting, 9e

Preparing a statement of cost of goods manufactured

LO 6 [15-20 minutes]

Students please fill-in areas that are shaded

Student Name

Course Name

Student ID:

Date:

Knight, Corp.

ended December 31, 2012:

Inventories

Beginning

Ending

Materials

$ 56,000

23,000

Work in process

103,000

63,000

Finished goods

$ 41,000

4

8,000

Other information:

Depreciation: plant building and equipment

$ 16,000

Materials purchases

1

59,000

Insurance on plant

22,000

Sales salaries expense

46,000

Repairs and maintenance–plant

Indirect labor

32,000

Direct labor

122,000

Administrative expenses

Requirements

1.

Prepare a schedule of cost of goods manufactured.

2.

What is the unit product cost if Knight manufactured 2,160 lamps for the year?

Test Your Knowledge

Req. 1

Schedule of Cost of Goods Manufactured

Year Ended December 31, 2012

Beginning work in process inventory

$ 103,000

Direct materials used

Beginning direct materials inventory

Available for use

$ – 0

Manufacturing overhead:

Indirect labor

$ 32,000

Total manufacturing costs

incurred during the year

Total manufacturing costs to account for

Cost of goods manufactured

Req 2

good student April

P15-23A

P15-23A

Department Stores, Inc., chief executive officer (CEO) has asked you

Compared with

McConnell Industry Average

MCCONNELL DEPARTMENT STORES, INC.

Compared with Industry Average

December 31, 2012

McConnell Industry Average

100.0%

$ 480,000 100.0%

P15-23A

MCCONNELL DEPARTMENT STORES, INC.

Income Statement

Net sales revenue $ 778,000 100.0%

Cost of goods sold 522,816
Gross profit $ 255,184
Operating expenses 161,046
Operating income 94,138
Other expenses 4,668
Net income $ 89,470

MCCONNELL DEPARTMENT STORES, INC.

Balance Sheet

December 31, 2012
McConnell Industry Average

Current assets $ 325,440

Fixed assets, net 120,960
Intangible assets, net 8,640
Other assets 24,960
Total assets $ 480,000
Current liabilities $ 222,720
Long-term liabilities 107,520
Stockholders’ equity 149,760
Total liabilities and stockholders’ equity $ 480,000

																																																																																																																																																																																																		Accounting, 9e
Preparing common-size income statements
LO 2 [20-30 minutes]
Students please fill-in areas that are shaded
Student Name
Course Name
Student ID:
Date:
The			McConnell
to compare the company’s profit performance and financial position with the average
for the industry. The CEO has given you the company’s income statement and balance
sheet, as well as the industry average data for retailers.
Data from Exercise 15-13 presented here for your convenience.
			MCCONNELL DEPARTMENT STORES, INC.
	Income Statement			Industry Average
Year Ended		December 31, 2012
	Net sales revenue		$ 778,000				100.0%
	Cost of goods sold		522,816	65.8%
	Gross profit		$ 255,184	34.2%
	Operating expenses		161,046	19.7%
	Operating income		94,138	14.5%
	Other expenses		4,668	0.4%
	Net income		$ 89,470	14.1%
	Balance Sheet
	Current assets		$ 325,440	70.9%
	Fixed assets, net		120,960	23.6%
	Intangible assets, net		8,640	0.8%
	Other assets		24,960	4.7%
	Total assets				$ 480,000
	Current liabilities		$ 222,720	48.1%
	Long-term liabilities		107,520	16.6%
	Stockholders’ equity		149,760	35.3%
	Total liabilities and stockholders’ equity
Requirements
1.	Prepare a vertical analysis for McConnell for both its income statement and balance
sheet.
Test Your Knowledge
Req. 1
Year Ended December 31, 2012
Amount	Percent of Total
67.8%

test april

P15-29B

P15-29B

Department Stores, Inc., chief executive officer (CEO) has asked you

Compared with

Industry Average

SPECIALITY DEPARTMENT STORES, INC.

Compared with Industry Average

December 31, 2012
Specialty Industry Average

100.0%

$ 450,000 100.0%

P15-29B

SPECIALITY DEPARTMENT STORES, INC.

Income Statement

$ 782,000 100.0%

Cost of goods sold 528,632

Gross profit $ 253,368

Operating expenses 163,438

Operating income 89,930

Other expenses 4,692

Net income $ 85,238

Balance Sheet

December 31, 2012

Industry Average

Current assets $ 303,750

Fixed assets, net 117,000

Intangible assets, net 5,850

Other assets 23,400

Total assets $ 450,000 100.0%

Current liabilities $ 208,800

Long-term liabilities 102,600

Stockholders’ equity 138,600

Total liabilities and stockholders’ equity $ 450,000 100.0%

																																																																																																																																																																																																	Accounting, 9e
Vertical analysis
LO 2 [20-30 minutes]
Students please fill-in areas that are shaded
Student Name
Course Name
Student ID:
Date:
The	Specialty
to compare the company’s profit performance and financial position with the average
for the industry. The CEO has given you the company’s income statement and
balance sheet, as well as the industry average data for retailers.
		SPECIALITY DEPARTMENT STORES, INC.
	Income Statement			Industry Average
Year Ended		December 31, 2012
Speciality
Net sales		$ 782,000						100.0%
	Cost of goods sold		528,632	65.8%
	Gross profit		$ 253,368	34.2%
	Operating expenses		163,438	19.7%
	Operating income		89,930	14.5%
	Other expenses		4,692	0.4%
	Net income		$ 85,238	14.1%
	Balance Sheet
	Current assets		$ 303,750	70.9%
	Fixed assets, net		117,000	23.6%
	Intangible assets, net		5,850	0.8%
	Other assets		23,400	4.7%
	Total assets				$ 450,000
	Current liabilities		$ 208,800	48.1%
	Long-term liabilities		102,600	16.6%
	Stockholders’ equity		138,600	35.3%
	Total liabilities and stockholders’ equity
Requirements
1.	Prepare a vertical analysis for Specialty for both its income statement and balance
sheet.
Test Your Knowledge
Req. 1
Year Ended December 31, 2012
Amount	Percent of Total
Net sales revenue
67.6%
32.4%
20.9%
11.5%
0.6%
10.9%
MCCONNELL DEPARTMENT STORES, INC.
McConnell
67.5%
26.0%
1.3%
5.2%
46.4%
22.8%
30.8%

test test

P16-22A

P16-22A

repair chips in car windshields in the company’s home

. . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

P16-22A
The Windshield People
Salaries and wages 9,000
Windshield repair materials 4,900
Depreciation on truck 250

800

Supplies expense 600
Gasoline and utilities 2,130

Answer here

Answer here

Accounting, 9e

Calculating income and unit cost for a service company

LO 1,2, 4 [15-20 minutes]

Students please fill-in areas that are shaded

Student Name

Course Name

Student ID:

Date:

The Windshield People

county. Rocky Chip, the owner, incurred the following operating costs for the

month of February 2012:

Salaries and wages

$

9,000

Windshield repair materials

4,900

Depreciation on truck

250

Depreciation on building and equipment . . . .

800

Supplies expense

600

Gasoline and utilities

2,130

The Windshield People earned $26,000 in revenues for the month of February by

repairing 500 windshields. All costs shown are considered to be directly related to

the repair service.

Requirements

1.

Prepare an income statement for the month of February. Compute the ratio of

total operating expense to total revenue and operating income to total revenue.

2.

Compute the per unit cost of repairing one windshield.

3.

The manager of The Windshield People must keep unit operating cost below

$50 per windshield in order to get his bonus. Did he meet the goal?

4.

What kind of system could The Windshield People use to integrate all its data?

Test Your Knowledge

Req. 1

Income Statement

Month Ended February 29, 2012

Sales revenue

$ 26,000

Depreciation on buildings and equipment

Total operating expenses

$ 17,680

Net operating income

$ 8,320

Req. 2

Answer here

Req. 3

Req. 4

Student. test

P16-26A

P16-26A

Direct _____________

Total_______costs __________

TIOGA MANUFACTURING COMPANY

__________June 30, 2012

:

X

$ X

Cost of goods sold

X

$ X

P16-26A

TIOGA MANUFACTURING COMPANY

__________June 30, 2012
Beginning $ 22,000
Direct _______________:
Beginning direct materials inventory

Purchases of materials 54,000
Available for use $ 80,000
Ending direct materials inventory (23,000)
Direct _____________ $ X
Direct _____________ X
Manufacturing overhead: 43,000
Total_______costs __________ 175,000
Total_______costs __________ $ X
Ending _____________ (29,000)

______________________ $ X

TIOGA MANUFACTURING COMPANY

__________June 30, 2012
Sales revenue $ X

Beginning __________ $ 112,000
_____________ X
Cost of goods ___________ $ X
Ending _________ $ X
Cost of goods sold 217,000
Gross profit $ 283,000
_________expenses:
Marketing expenses $ 94,000
Administrative expenses X 159,000
______income $ X

Accounting, 9e

Preparing financial statements for a manufacturer

LO 6 [25-35 minutes]

Students please fill-in areas that are shaded

Student Name

Course Name

Student ID:

Date:

Certain item descriptions and amounts are missing from the monthly schedule of

cost of goods manufactured and the income statement of Tioga Manufacturing

Company.

TIOGA MANUFACTURING COMPANY

__________June 30, 2012

Beginning

$ 22,000

Direct _______________:

Beginning direct materials inventory

$

X

Purchases of materials

54,000

Available for use

$ 80,000

Ending direct materials inventory

(23,000)

Direct _____________

$

X

X

Manufacturing overhead:

43,000

Total_______costs __________

175,000

$ X

Ending _____________

(29,000)

______________________

$ X

Sales revenue

$ X

Cost of goods sold

Beginning __________

$ 112,000

_____________

Cost of goods ___________

$ X

Ending _________

217,000

Gross profit

$ 283,000

_________expenses:

Marketing expenses

$ 94,000

Administrative expenses

159,000

______income

Requirements

1.

Fill in the missing words (___) and amounts (X).

Test Your Knowledge

Req. 1

Show missing words shown in red. Missing numbers highlighted with darker green.

$ X

*

Cost of goods sold:

* From the Schedule of Cost of Goods Manufactured

Jennie April

P16-27A

P16-27A

. Of this amount, $2,100,000 was direct materials

was direct labor. Beginning balances for the year were

, $

;

, $800,000; and

, $

. At the end of the year, inventory accounts

Direct materials inventory

$ – 0

Work in process inventory 400,000 600,000 400,000
Finished goods inventory 800,000

P16-27A

$ – 0

Finished goods inventory
Beginning inventory

– 0 *

700,000

Less: Ending inventory

700,000

Accounting, 9e
Flow of costs through a manufacturer’s inventory accounts
LO 6 [20-25 minutes]
Students please fill-in areas that are shaded
Student Name
Course Name
Student ID:
Date:
Root Shoe Company makes loafers. During the most recent year, Root incurred total
manufacturing costs of $26,		400,000
used and $19,	800,000
	Direct materials inventory	600,000	Work in process inventory
		Finished goods inventory		700,000
showed these amounts:
Materials	Direct Labor	Manufacturing Overhead
$ 900,000			$	– 0
150,000	40,000
Requirements
1.	Compute Root Shoe Company’s cost of goods manufactured for the year.
2.	Compute Root’s cost of goods sold for the year.
3.	Compute the cost of materials purchased during the year.
Test Your Knowledge
Req. 1
Work in Process inventory
	Beginning inventory	$ 800,000
Plus: Direct materials used
Plus: Direct labor
Plus: Manufacturing overhead
Total manufacturing costs incurred during the year
Total manufacturing costs to account for
	Less: Ending inventory
Cost of goods manufactured		*
$ 700,000
Plus: Cost of goods manufactured
Cost of goods available for sale
Cost of goods sold

good student date