BYP 9-6 BYP9-6 Ethics Case Ruiz Co

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
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Ethics Case BYP 9-6 The controller of Ruiz Co. believes that the yearly allowance for doubtful accounts for Ruiz. co. should be 2% of net credit sales. The presdident of Ruiz Co., nervous that the stockholders might expect the company to sustain its 10% growth rate, suggests that the controller increase the allowance for doubtful accounts to 4%. The president thinks that the lower net income, which refects a 6% growth rate, will be a more sustainable rate for Ruiz Co.

Instructions:
a) Who are the stakeholders in this case?
b) Does the president's request pose an ethical dilemma for the controller?
c) Should the controller be concerned with Ruiz co.'s growth rate? Explain your answer.

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BYP 7-1 BYP7-1 Financial Reporting Problem Bluma Co

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
Help in ACC 280
Help in XACC 280

Financial Reporting Problem - Mini Case

BYP 7-1 Bluma Co. uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Bluma are indicated in the working papers. Presented below are a series of transactions for Bluma Co. for the month of January.

AND SO ON

Hint: Trial Balance Totals are $202,900, Adjusted Trial Balance Totals are $203,075, Net Income is $20,755, Total Assets are $143,505 and Post Closing Trial Balance Totals are $145,130.

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BYP9-6 BYP 9-6 Ruiz Co BYP9-6 BYP 9-6 Ruiz Co BYP9-6 BYP 9-6 Ruiz Co BYP9-6 BYP 9-6 Ruiz Co BYP9-6 BYP 9-6 Ruiz Co

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
Help in ACC 280
Help in XACC 280

Ethics Case BYP 9-6 The controller of Ruiz Co. believes that the yearly allowance for doubtful accounts for Ruiz. co. should be 2% of net credit sales. The presdident of Ruiz Co., nervous that the stockholders might expect the company to sustain its 10% growth rate, suggests that the controller increase the allowance for doubtful accounts to 4%. The president thinks that the lower net income, which refects a 6% growth rate, will be a more sustainable rate for Ruiz Co.

Instructions:
a) Who are the stakeholders in this case?
b) Does the president's request pose an ethical dilemma for the controller?
c) Should the controller be concerned with Ruiz co.'s growth rate? Explain your answer.

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QS 2-5 Identify whether the normal balances

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

Quick Study 2-5 (QS 2-5) Identify whether the normal balances (in parentheses) assigned to the following accounts are correct or incorrect:
a. To increase Store Equipment f. To decrease Unearned Revenue
b. To increase Owner Withdrawals g. To decrease Prepaid Insurance
c. To decrease Cash h. To increase Notes Payable
d. To increase Utilities Expense i. To decrease Accounts Receivable
e. To increase Fees Earned j. To increase Owner Capital

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QS 2-4 Identify whether a debit or credit yields the indicated change for each of the following accounts

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

Quick Study 2-4 (QS 2-4) Identify whether a debit or credit yields the indicated change for each of the following accounts:
a. To increase Store Equipment f. To decrease Unearned Revenue
b. To increase Owner Withdrawals g. To decrease Prepaid Insurance
c. To decrease Cash h. To increase Notes Payable
d. To increase Utilities Expense i. To decrease Accounts Receivable
e. To increase Fees Earned j. To increase Owner Capital

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QS 2-3 Indicate whether a debit or credit decreases the normal balance of each of the following accounts

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

Quick Study 2-3 (QS 2-3) Indicate whether a debit or credit decreases the normal balance of each of the following accounts:
a. Office Supplies e. Salaries Expense i. Interest Revenue
b. Repair Services Revenue f. Owner Capital j. Owner Withdrawals
c. Interest Payable g. Prepaid Insurance k. Unearned Revenue
d. Accounts Receivable h. Buildings l. Accounts Payable

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On January 1, 2006: January 1, 2006 Solomon Company purchased the following two machines for use in its production process

ACC 363

Axia College of University of Phoenix (UoP)

Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

Problem 10-3A (P10-3A) On January 1, 2006, Solomon Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,500. Related expenditures included: sales tax $2,200, shipping costs $175, insurance during shipping $75, installation and testing costs $50, and $90 of oil and lubricants to be used with the machinery during its first year of operation. Solomon estimates that the useful life of the machine is 4 years with a $5,000 salvage value remaining at the end of that time period.
Machine B: The recorded cost of this machine was $100,000. Solomon estimates that the useful life of the machine is 4 years with a $8,000 salvage value remaining at the end of that time period.

Instructions
(a) Prepare the following for Machine A. (1) The journal entry to record its purchase on January 1, 2006. (2) The journal entry to record annual depreciation at December 31, 2006, assuming the straight-line method of depreciation is used.
(b) Calculate the amount of depreciation expense that Solomon should record for machine B each year of its useful life under the following assumption. (1) Solomon uses the straight-line method of depreciation. (2) Solomon uses the declining-balance method.The rate used is twice the straight-line rate. (3) Solomon uses the units-of-activity method and estimates the useful life of the machine is 25,000 units. Actual usage is as follows: 2006, 6,500 units; 2007, 7,500 units; 2008, 6,000 units; 2009, 5,000 units.
(c) Which method used to calculate depreciation on machine B reports the lowest amount of depreciation expense in year 1 (2006)? The lowest amount in year 4 (2009)? The lowest total amount over the 4-year period?

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BE 11-1 Cardinal Company Cardinal Company Cardinal Company has the following obligations at December 31

ACC 363

Axia College of University of Phoenix (UoP)

Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

Brief Exercise 11-1 (BE 11-1) Cardinal Company has the following obligations at December 31: (a) a note payable for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts payable of $60,000. For each obligation, indicate whether it should be classified as a current liability.(Assume an operating cycle of less than one year.)

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P10-3A: Solomon Company: Solomon Company purchased the following two machines

ACC 363

Axia College of University of Phoenix (UoP)

Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

Problem 10-3A (P10-3A) On January 1, 2006, Solomon Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,500. Related expenditures included: sales tax $2,200, shipping costs $175, insurance during shipping $75, installation and testing costs $50, and $90 of oil and lubricants to be used with the machinery during its first year of operation. Solomon estimates that the useful life of the machine is 4 years with a $5,000 salvage value remaining at the end of that time period.
Machine B: The recorded cost of this machine was $100,000. Solomon estimates that the useful life of the machine is 4 years with a $8,000 salvage value remaining at the end of that time period.

Instructions
(a) Prepare the following for Machine A. (1) The journal entry to record its purchase on January 1, 2006. (2) The journal entry to record annual depreciation at December 31, 2006, assuming the straight-line method of depreciation is used.
(b) Calculate the amount of depreciation expense that Solomon should record for machine B each year of its useful life under the following assumption. (1) Solomon uses the straight-line method of depreciation. (2) Solomon uses the declining-balance method.The rate used is twice the straight-line rate. (3) Solomon uses the units-of-activity method and estimates the useful life of the machine is 25,000 units. Actual usage is as follows: 2006, 6,500 units; 2007, 7,500 units; 2008, 6,000 units; 2009, 5,000 units.
(c) Which method used to calculate depreciation on machine B reports the lowest amount of depreciation expense in year 1 (2006)? The lowest amount in year 4 (2009)? The lowest total amount over the 4-year period?

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BE 11-1 Cardinal Company Cardinal Company has the following obligations

ACC 363

Axia College of University of Phoenix (UoP)

Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

Brief Exercise 11-1 (BE 11-1) Cardinal Company has the following obligations at December 31: (a) a note payable for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts payable of $60,000. For each obligation, indicate whether it should be classified as a current liability.(Assume an operating cycle of less than one year.)

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P10-3A On January 1, 2006, Solomon Company Solomon Company Solomon Company purchased the following two machines for use

ACC 363

Axia College of University of Phoenix (UoP)

Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

Problem 10-3A (P10-3A) On January 1, 2006, Solomon Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,500. Related expenditures included: sales tax $2,200, shipping costs $175, insurance during shipping $75, installation and testing costs $50, and $90 of oil and lubricants to be used with the machinery during its first year of operation. Solomon estimates that the useful life of the machine is 4 years with a $5,000 salvage value remaining at the end of that time period.
Machine B: The recorded cost of this machine was $100,000. Solomon estimates that the useful life of the machine is 4 years with a $8,000 salvage value remaining at the end of that time period.

Instructions
(a) Prepare the following for Machine A. (1) The journal entry to record its purchase on January 1, 2006. (2) The journal entry to record annual depreciation at December 31, 2006, assuming the straight-line method of depreciation is used.
(b) Calculate the amount of depreciation expense that Solomon should record for machine B each year of its useful life under the following assumption. (1) Solomon uses the straight-line method of depreciation. (2) Solomon uses the declining-balance method.The rate used is twice the straight-line rate. (3) Solomon uses the units-of-activity method and estimates the useful life of the machine is 25,000 units. Actual usage is as follows: 2006, 6,500 units; 2007, 7,500 units; 2008, 6,000 units; 2009, 5,000 units.
(c) Which method used to calculate depreciation on machine B reports the lowest amount of depreciation expense in year 1 (2006)? The lowest amount in year 4 (2009)? The lowest total amount over the 4-year period?

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E10-8: Yosuke Corporation: The following are selected 2006 transactions of Yosuke Corporation

ACC 363

Axia College of University of Phoenix (UoP)

Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

Exercise 10-8 (E10-8) The following are selected 2006 transactions of Yosuke Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. May 1 Purchased for $60,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.
Instructions
Prepare necessary adjusting entries at December 31 to record amortization required by the events above.

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P9-7A On January 1, 2006, Bettendorf Company had Accounts Receivable $56,900

ACC 363

Axia College of University of Phoenix (UoP)

Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

Problem 9-7A (P9-7A) On January 1, 2006, Bettendorf Company had Accounts Receivable $56,900 and Allowance for Doubtful Accounts $4,700. Bettendorf Company prepares financial statements annually. During the year the following selected transactions occurred.

Jan. 5 Sold $6,900 of merchandise to John Yockey Company, terms n/30.
Feb. 2 Accepted a $6,900, 4-month, 10% promissory note from John Yockey Company for the balance due.
Feb.12 Sold $7,800 of merchandise to Skosey Company and accepted Skosey's $7,800, 2-month, 10% note for the balance due.
Feb. 26 Sold $3,000 of merchandise to Platz Co., terms n/10.
Apr. 5 Accepted a $3,000, 3-month, 8% note from Platz Co. for the balance due.
Apr.12 Collected the Skosey Company note in full.
June 2 Collected the John Yockey Company note in full.
July 5 Platz Co. dishonors its note of April 5. It is expected that Platz will eventually pay the amount owed.
July 15 Sold $7,000 of merchandise to King Co. and accepted King's $7,000, 3-month, 12% note for the amount due.
Oct.15 King Co.'s note was dishonored. King Co. is bankrupt, and there is no hope of future settlement.
Journalize the transactions.

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21. The Rogers Corporation has a gross profit of $880,000 and $360,000 in depreciation expense.

FIN 200

Axia College of University of Phoenix (UoP)

Foundations of Financial Management
Block Hirt Danielsen

Introduction to Finance: Harvesting the Money Tree

Fin 200 Week One (Week 1) Solution

Assignment: Cash Flow Preparation
Chapter 2
21. The Rogers Corporation has a gross profit of $880,000 and $360,000 in depreciation expense. The Evans Corporation also has $880,000 in gross profit, with $60,000 in depreciation expense. Selling and administrative expense is $120,000 for each company .
Given that the tax rate is 40 percent, compute the cash flow for both companies. Explain the difference in cash flow between the two firms.

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20. Nova Electrics anticipated cash flow from operating activities of $6 million in 2008. It will need to spend $1.2 million on capital investments

FIN 200

Axia College of University of Phoenix (UoP)

Foundations of Financial Management
Block Hirt Danielsen

Introduction to Finance: Harvesting the Money Tree

Fin 200 Week One (Week 1) Solution

Assignment: Cash Flow Preparation
Chapter 2
20. Nova Electrics anticipated cash flow from operating activities of $6 million in 2008. It will need to spend $1.2 million on capital investments in order to remain competitive within the industry. Common stock dividends are projected at $.4 million and preferred stock dividends at $.55 million.
a. What is the firm’s projected free cash flow for the year 2008?
b. What does the concept of free cash flow represent?

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Complete Problems 20, 21 in Chapter 2 of Foundations of Financial Management

FIN 200

Axia College of University of Phoenix (UoP)

Foundations of Financial Management
Block Hirt Danielsen

Introduction to Finance: Harvesting the Money Tree

Fin 200 Week One (Week 1) Solution

Assignment: Cash Flow Preparation

* Resource: Ch. 2 of Foundations of Financial Management
* Due Date: Day 7 [post to the Individual forum]
* Complete Problems 20, 21 in Chapter 2 of Foundations of Financial Management.

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25. Carter Paint Company has plants in nine midwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar

FIN 200

Axia College of University of Phoenix (UoP)

Foundations of Financial Management
Block Hirt Danielsen

Introduction to Finance: Harvesting the Money Tree

Fin 200 Week 3 Solution

Assignment: Pro Forma Statements

Chapter 4

25. Carter Paint Company has plants in nine midwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales.

BALANCE SHEET
(in $ millions)
Assets Liabilities and Stockholders’ Equity
Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 5 Accounts payable . . . . . . . . . . . . . . $15
Accounts receivable. . . . . . . . . . . . . 15 Accrued wages . . . . . . . . . . . . . . . . 6
Inventory . . . . . . . . . . . . . . . . . . . . . 30 Accrued taxes . . . . . . . . . . . . . . . . . 4
Current assets . . . . . . . . . . . . . . . 50 Current liabilities . . . . . . . . . . . . . 25
Fixed assets . . . . . . . . . . . . . . . . . . 40 Notes payable . . . . . . . . . . . . . . . . . 30
Common stock . . . . . . . . . . . . . . . . . 15
Retained earnings . . . . . . . . . . . . . . 20
Total assets . . . . . . . . . . . . . . . . . . . $90 Total liabilities and
stockholders’ equity . . . . . . . . . . . $90

Carter Paint has an aftertax profit margin of 5 percent and a dividend payout ratio of 30 percent.
If sales grow by 10 percent next year, determine how many dollars of new funds are needed to finance the expansion. (Assume Carter Paint is already using assets at full capacity and that plant must be added.)

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16. J. Lo’s Clothiers has forecast credit sales for the fourth quarter of the year as

FIN 200

Axia College of University of Phoenix (UoP)

Foundations of Financial Management
Block Hirt Danielsen

Introduction to Finance: Harvesting the Money Tree

Fin 200 Week 3 Solution

Assignment: Pro Forma Statements

Chapter 4

16. J. Lo’s Clothiers has forecast credit sales for the fourth quarter of the year as:
September (actual) . . . . . . . . . . . . . $70,000
Fourth Quarter
October . . . . . . . . . . . . . . . . . . . . . . $60,000
November . . . . . . . . . . . . . . . . . . . . 55,000
December . . . . . . . . . . . . . . . . . . . . 80,000
Experience has shown that 30 percent of sales are collected in the month of sale, 60 percent in the following month, and 10 percent are never collected. Prepare a schedule of cash receipts for J. Lo’s Clothiers covering the fourth quarter (October through December).

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ACC 280 / XACC 280 : E1-12 Determine the missing amount

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
Help in ACC 280
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Exercise 1-12 (E1-12) Determine the missing amount:
The following information relates to Linda Stanley Co. for the year 2008. Retained earnings, January 1, 2008 $ 48,000 Advertising expense $ 1,800 Dividends during 2008 6,000 Rent expense 10,400 Service revenue 62,500 Utilities expense 3,100 Salaries expense 30,000

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ACC 280 / XACC 280 : E1-5 Meredith Cleaners has the following

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
Help in ACC 280
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Exercise 1-5 (E1-5) Meredith Cleaners has the following balance sheet items.
Accounts payable Accounts receivable
Cash
Notes payable
Cleaning equipment
Salaries payable
Cleaning supplies
Common stock

Instructions
Classify each item as an asset, liability, or stockholders’ equity.

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