*Brief Exercise Compute the unit costs for materials and conversion costs. (Round answers to 2 decimal places, e.g ) Unit conversion cost

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*Brief Exercise 21-7 Production costs chargeable to the Finishing Department in June in Cascio Company are materials $16,000, labor $29,500, overhead $18,000.

1 *Brief Exercise 21-7 Production costs chargeable to the Finishing Department in June in Cascio Company are materials $16,000, labor $29,500, overhead $18,000. Equivalent units of production are materials 20,000 and conversion costs 19,000. Compute the unit costs for materials and conversion costs. (Round answers to 2 decimal places, e.g ) Unit conversion cost

Production records show that there were 400 units in the beginning inventory, 30 complete, 1,400 units started, and 1,500 units transferred out.

2 *Exercise 21-3 (Part Level Submission) The ledger of Custer Company has the following work in process account. 5/1 Balance 3,590 5/31 Transferred out? 5/31 Materials 5,160 5/31 Labor 2,740 5/31 Overhead 1,380 5/31 Balance? Production records show that there were 400 units in the beginning inventory, 30 complete, 1,400 units started, and 1,500 units transferred out. The beginning work in process had materials cost of $2,040 and conversion costs of $1,550. The units in ending inventory were 40 complete. Materials are entered at the beginning of the painting process. *(a) How many units are in process at May 31? Units in process at May 31 *(b) *(c) *(d) *(e)

*Exercise 21-6 (Part Level Submission) The Cutting Department of Cassel Company has the following production and cost data for July. Production 1. Transferred out 12,000 units.

Costs Beginning work in process Materials Labor Manufacturing overhead $ -0-45,000 16,200 18,300 Materials are entered at the beginning of the process.

3 *Exercise 21-6 (Part Level Submission) The Cutting Department of Cassel Company has the following production and cost data for July. Production 1. Transferred out 12,000 units. 2. Started 3,000 units that are 60 complete as to conversion costs and 100 complete as to materials at July 31. Costs Beginning work in process Materials Labor Manufacturing overhead $ -0-45,000 16,200 18,300 Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. *(a) Determine the equivalent units of production for (1) materials and (2) conversion costs. (1) Equivalent units of production for materials (2) Equivalent units of production for conversion costs *(b1) *(b2)

concerning a mixed cost, using units produced as the activity level.

4 *Do It! Review 22-2 (Part Level Submission) Westerville Company accumulates the following data concerning a mixed cost, using units produced as the activity level. Units Produced Total Cost March 10,000 $18,000 April 9,000 16,650 May 10,500 18,580 June 8,800 16,200 July 9,500 17,100 *(a) Compute the variable and fixed cost elements using the high-low method. Fixed cost *(b)

5 *Do It! Review 22-3 (Part Level Submission) Larissa Company has a un it selling price of $250, variable costs per unit of $170, and fixed costs of $140,000. *(a) Compute the break-even point in units using the mathematical equation. The break-even point L l units *(b)

each. For the coming year, management expects fixed costs to total $220,000 and

6 *Do It! Review 22-4 (Part Level Submission) Presto Company makes radios that sell for $30 each. For the coming year, management expects fixed costs to total $220,000 and variable costs to be $18 per unit. *(a) Compute the break-even point in dollars using the contribution margin (CM) ratio. Break-even Point in Dollars $L J *(b) *(c)

*Exercise 22-12 (Part Level Submission) Cannes Company has the following information available for September 2014.

and (b) Compute the contribution margin per unit.

7 *Exercise (Part Level Submission) Cannes Company has the following information available for September Unit selling price of video game consoles Un it variable costs Total fixed costs Units sold $400 $275 $52, *(a) and (b) Compute the contribution margin per unit. Contribution Margin $~ ~per units Prepare a CVP income statement that shows both total and per unit amounts. CANNES COMPANY CVP Income Statement For the Month Ended September 30, 2014 *(c) *(d)

*Exercise 22-13 (Part Level Submission) Naylor Company had $210,000 of net income in 2013 when the selling price per unit was $150,

Management expects per unit data and total fixed costs to remain the same in 2014.

8 *Exercise (Part Level Submission) Naylor Company had $210,000 of net income in 2013 when the selling price per unit was $150, the variable costs per unit were $90, and the fixed costs were $570,000. Management expects per unit data and total fixed costs to remain the same in The president of Naylor Company is under pressure from stockholders to increase net income by $52,000 in *(a) Compute the number of units sold in (Round answers to 0 decimal places, e.g. 5,275.) The Number of Units Sold units *(b) *(c)

*Exercise 22-14 Cottonwood Company reports the following operating results for the month of August: Sales $400,000 (units 5,000); variable costs $210,000; and fixed costs $90,000.

9 *Exercise Cottonwood Company reports the following operating results for the month of August: Sales $400,000 (units 5,000); variable costs $210,000; and fixed costs $90,000. Management is considering the following independent courses of action to increase net income. 1. Increase selling price by 10 with no change in total variable costs or units sold. 2. Reduce variable costs to 45 of sales. Compute the net income to be earned under each alternative. (Round all answers to 0 decimal places, e.g. 5,275.) 1. Net income $.. 2. Net income $.. Which course of action will produce the highest net income?

I I Question 1 Heidebrecht Design acquired 30 of the outstanding common stock of Quayle Company on January 1, 2014, by paying $836,400 for the 49,200 shares. Quayle declared and paid $0.

At December 31, 2014, the market price of Quayle common stock was $25 per share.

10 I I Question 1 Heidebrecht Design acquired 30 of the outstanding common stock of Quayle Company on January 1, 2014, by paying $836,400 for the 49,200 shares. Quayle declared and paid $0.50 per share cash dividends on March 15, June 15, September 15, and December 15, Quayle reported net income of $315,700 for the year. At December 31, 2014, the market price of Quayle common stock was $25 per share. Prepare the journal entries for Heidebrecht Design for 2014 assuming Heidebrecht Design cannot exercise significant influence over Quayle. (Use the cost method and assume that Quayle common stock should be classified as a trading security.) (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Prepare the journal entries for Heidebrecht Design for 2014, assuming Heidebrecht Design can exercise significant influence over Quayle. Use the equity method. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit

Stock Investments Unrealized gain-income Dividend revenue

11 Indicate the balance sheet and income statement account balances at December 31, 2014, under each method of accounting. Stock Investments Unrealized gain-income Dividend revenue Revenue from stock investments Cost Method $L ~ Equity Method

$106,660 2013 $17,630 22,020 15,800 69,820 (10,080 ) $115,190 Accounts payable $14,440 Bonds payable 10,020 Common stock 50,140 Retained earnings 32,060 Total $106,660 $11,140 30,140 44,670 29,240

12 Question 2 Rodriquez Corporation's comparative balance sheets are presented below. RODRIQUEZ CORPORATION Comparative Balance Sheets December Cash $15,430 Accounts receivable 25,190 Investments 19,770 Equipment 60,190 Accu mu Ia ted depreciation-equipment (13,920) Total $106, $17,630 22,020 15,800 69,820 (10,080 ) $115,190 Accounts payable $14,440 Bonds payable 10,020 Common stock 50,140 Retained earnings 32,060 Total $106,660 $11,140 30,140 44,670 29,240 $115,190 Additional information: 1. Net income was $18,740. Dividends declared and paid were $15, Equipment which cost $9,630 and had accumulated depreciation of $1,040 was sold for $3, All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. Prepare a statement of cash flows for 2014 using the indirect method. (Show amounts that decrease cash flow with either a- sign e.g. -15,000, or in parenthesis e.g. (15,000).) RODRIQUEZ CORPORATION Statement of Cash Flows For the Year Ended December 31, 2014 Adjustments to reconcile net income to $L ~ $L ~

13 $L ~ Compute free cash flow. Free cash flow $L,,

and stockholders' equity Current liabilities $ 43,210 Long-term liabilities 144,960 Stockholders' equity 13,160 Total liabilities and stockholders' equity $201,330 2014 $ 78,700 90,280 40,870

14 Question 3 The comparative condensed balance sheets of Gurley Corporation are presented below. Assets GURLEY CORPORATION Comparative Condensed Balance Sheets December Current assets $ 74,870 Property, plant, and equipment (net) 97,900 Intangibles 28,560 Total assets $201,330 Liabilities and stockholders' equity Current liabilities $ 43,210 Long-term liabilities 144,960 Stockholders' equity 13,160 Total liabilities and stockholders' equity $201, $ 78,700 90,280 40,870 $209,850 $ 46, ,920 13,290 $209,850 Prepare a horizontal analysis of the balance sheet data for Gurley Corporation using 2014 as a base. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45 or parentheses e.g. (45), (45). Round percentages to 1 de cim a l place, e.g ) GURLEY CORPORATION Condensed Balance Sheets December Increase (Decrease) Percentage Change from 2014 Assets Current Assets $74,870 $78,700 $ Property, Plant & Equipment (net) 97,900 90,280 Intangibles 28,560 40,870 0 /o Total assets $201,330 po9l850 $ 0 /o Liabilities and Stockholders' Equity

Current Liabilities $43,210 $46,640 $ 0 /o Long-term Liabilities 144,960 149,920 Stockholders' Equity 13,160 13,290 0 /o Total liabilities and $ po1l33o $209 850 stockholders'

) Assets GURLEY CORPORATION Condensed Balance Sheet December 31, 2015 Amount Percent Current Assets Property, Plant, and Equipment Intangibles Total assets Liabilities and

15 Current Liabilities $43,210 $46,640 $ 0 /o Long-term Liabilities 144, ,920 Stockholders' Equity 13,160 13,290 0 /o Total liabilities and $ po1l33o $ stockholders' equity Prepare a vertical analysis of the balance sheet data for Gurley Corporation in columnar form for (Round percentages to 1 decimal place, e.g ) Assets GURLEY CORPORATION Condensed Balance Sheet December 31, 2015 Amount Percent Current Assets Property, Plant, and Equipment Intangibles Total assets Liabilities and Stockholders' Equity $74,870 97, $ /o I 0 /o Current Liabilities $43,210 Long-term Liabilities 144,960 Stockholders' Equity Total liabilities and stockholders' equity $ I Ofo

$ 52,880 2014 $501,520 420,610 80,910 45,550 $ 35,360 Prepare a horizontal analysis of the income statement data for Emley Corporation using 2014 as a base. (Round percentages to 1 decimal place, e.g. 12.

16 , Question 4 The comparative condensed income statements of Emley Corporation are shown below. EMLEY CORPORATION Comparative Condensed Income Statements For the Years Ended December 31 Net sales Cost of goods sold Gross profit Operating expenses Net income 2015 $596, , ,810 56,930 $ 52, $501, ,610 80,910 45,550 $ 35,360 Prepare a horizontal analysis of the income statement data for Emley Corporation using 2014 as a base. (Round percentages to 1 decimal place, e.g ) 2015 Net sales $596,800 Cost of goods sold 486,990 Gross profit 109,810 Operating expenses 56,930 EMLEY CORPORATION Condensed Income Statements For the Years Ended December 31 Increase or (Decrease) During Amount Percentage $501,520 $L ~ 420,610 80,910 45,550 Net income $52,880 $35,360 $ Prepare a vertical analysis of the income statement data for Emley Corporation in columnar form for both years. (Round percentages to 1 decimal place, e.g ) Amount EMLEY CORPORATION Condensed Income Statements For the Years Ended December Percent Amount 2014 Percent Net sales $596,800 L ~o/0 $501,520 L,

Cost of goods sold 486,990 420,610 Gross profit 109,810

17 Cost of goods sold 486, ,610 Gross profit 109,810 80,910 Operating expenses 56,930 45,550 Net income $52,880 $ 35,360

Answer all questions: show calculations for partial credit- 5 Questions Question 1: Lucky Strike Inc. acquired 10 of the 443,900 shares of common stock of Camel Inc.

18 For all questions, assume no other transactions or activities have taken place during the period except as noted. Prepare and present calculations for partial credits for questions with calculations and presentations. Answer all questions: show calculations for partial credit- 5 Questions Question 1: Lucky Strike Inc. acquired 10 of the 443,900 shares of common stock of Camel Inc. at a total cost of $11 per share on January 1, On September 1, Camel declared and paid a $116,800 dividend. Camel reported net income of $587,700 for the year ended December 31, Required: Journalize each transaction for 2014 for Lucky Strike Inc. Question 2: Concrete Inc. obtained significant influence over Sands Inc. by purchasing 30 of Sands' 101,300 outstanding shares of common stock at a cost of $17 per share on January 1, On July 1, Sands declared and paid a cash dividend of $197,000. Sands reported net income of $295,800 for the year ended December 31, Required: Journalize each transaction for 2014 for Concrete Inc. Question 3: Mosaic Company's comparative balance sheets are presented below. Mosaic Company Comparative Balance Sheets December 31 Cash Accounts receivable $14,530 21,010 19,680 Land Buildings 69,730 Accumulated depreciation-buildings (15,130) Total $109,820 Accounts payable $12,750 Common stock 74,990 Retained earnings 22,080 Total $109,820 $10,830 23,630 25,610 69,730 (10,510) $119,290 $31,230 68,020 20,040 $119,290 Additional information: 1. Net income was $22,124. Dividends declared and paid were $20, All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $4,700. Required: Prepare a statement of cash flows for the year ended December 31, 2014 using the indirect method.

112,500 Retained earnings 133,800 157,070 Required: Prepare a schedule showing a horizontal analysis for 2015 using 2014 as the base year.

19 Question 4: Financial information for Mark III Company is presented below. December 31 Current assets $123,830 $103,320 Plant assets (net) 394, ,480 Current liabilities 86,170 74,920 Long-term liabilities 132,400 88,310 Common stock, $1 par 166, ,500 Retained earnings 133, ,070 Required: Prepare a schedule showing a horizontal analysis for 2015 using 2014 as the base year. Question 5: Operating data for Ivy Craft Company are presented below Net sales $745,870 $596,850 Cost of goods sold 462, ,690 Selling expenses 119,460 73,520 Administrative expenses 57,780 49,450 Income tax expense 34,210 23,390 Net income 71,480 64,800 Required: Prepare a schedule showing a vertical analysis for 2015 and 2014.

*Brief Exercise PERINE COMPANY Direct Materials Budget For the Month Ending January 31, 2014

*Brief Exercise PERINE COMPANY Direct Materials Budget For the Month Ending January 31, 2014 *Brief Exercise 23-4 Perine Company has 2,000 pounds of raw materials in its December 31, 2013, ending inventory. Required production for January and February of 2014 are 4,000 and 5,000 units, respectively.