
Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 1.4Q
Describe the business functions in the value chain.
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19
FAST Jetski Corp. has sold motorized watercraft for a number of years. FAST Jetski includes a three-year warranty on each watercraft they sell. Management estimates that the cost of providing the warranty coverage is 2% of sales in the first year and 3% of sales in each of years two and three. Other facts follow:
• FAST Jetski reported a $270,000 provision for warranty payable on its December 31, 2025 balance sheet.• FAST Jetski's sales for 2026 totalled $6,000,000 spread evenly through the year.• The cost to FAST Jetski of meeting their warranty claims in 2026 was $480,000; $300,000 for parts and $180,000 for labour.• FAST Jetski's sales for 2027 totalled $6,200,000 spread evenly through the year.• The cost to FAST Jetski of meeting their warranty claims in 2027 was $468,000; $280,800 for parts and $187,200 for labour. Based on recent claims history, FAST Jetski revises their 2027 warranty provision to 9% of sales.
Required1. Prepare summary journal entries to…
10
Which method must be used under ASPE to account for employee stock options?
Question 10 options:
Time value of options.
Market value of the shares.
Fair value of the options.
Intrinsic value of options.
12
Calculate the share effect on the incremental EPS for the following instrument:
Convertible bonds outstanding, yield of 5% and coupon rate of 5%
$2,000,000
Issue date
January 1, 2026
Maturity date
December 31, 2033
Conversion rate for each $1,000 bond
40 ordinary shares
Income tax rate
25%
Question 12 options:
0.63
0.94
75,000
80,000
Chapter 1 Solutions
Cost Accounting (15th Edition)
Ch. 1 - How does management accounting differ from...Ch. 1 - Management accounting should not fit the...Ch. 1 - How can a management accountant help formulate...Ch. 1 - Describe the business functions in the value...Ch. 1 - Explain the term supply chain and its importance...Ch. 1 - Management accounting deals only with costs. Do...Ch. 1 - How can management accountants help improve...Ch. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - What three guidelines help management accountants...
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Prob. 1.15QCh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.20ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.22ECh. 1 - Prob. 1.23ECh. 1 - Prob. 1.24ECh. 1 - Prob. 1.25ECh. 1 - Prob. 1.26ECh. 1 - Prob. 1.27PCh. 1 - Prob. 1.28PCh. 1 - Prob. 1.29PCh. 1 - Management accounting guidelines. For each of the...Ch. 1 - Prob. 1.31PCh. 1 - Prob. 1.32PCh. 1 - Prob. 1.33PCh. 1 - Professional ethics and end-of-year actions. Linda...Ch. 1 - Prob. 1.35PCh. 1 - Prob. 1.36P
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- 9 Assume that on January 15, 2025, Ariel agrees to purchase US$500,000 for C$550,000 for delivery on January 15, 2026. The exchange rate at its December 31 year-end is US$1 = C$0.95 and on January 15, 2026, the exchange rate is US$1 = C$0.97. What is the foreign exchange gain or loss recognized on January 15, 2025? Question 9 options: 0 $75,000 gain. $75,000 loss. $65,000 loss.arrow_forward18 Stranger Things Inc. (STI) had 80,000 ordinary shares outstanding on January 1, 2026. Transactions throughout 2026 affecting its shareholdings follow. • February 1: STI issued 200,000, $10, cumulative 10% preferred shares.• March 1: STI issued 40,000 ordinary shares.• April l: STI declared and issued an 8% stock dividend on the ordinary shares.• July 1: STI repurchased and cancelled 30,000 ordinary shares.• October 1: STI declared and issued a 3-for-l stock split on the ordinary shares.• December 31: STI declared $99,600 in dividends on the ordinary shares.• Net income for the year ended December 31, 2026, was $600,000. Its tax rate was 40%.Required1. What was weighted average number of ordinary shares outstanding in 2026?2. What was basic EPS in 2026?arrow_forward16 Which of the following best describes a "defined benefit plan"? Question 16 options: A pension plan that specifies how much funds the employee needs to contribute. A plan that requires the employer to contribute $10 per hour worked by an employee. A plan that specifies how much in pension payments employees will receive in their retirement. High returns in the pension plan result in higher benefit payments to the employees in the future.arrow_forward
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