FUNDAMENTALS OF COST ACCOUNTING BUNDLE
6th Edition
ISBN: 9781260858525
Author: LANEN
Publisher: MCG
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Chapter 8, Problem 25E
To determine
Identify the equivalent units that would be used to compute production costs for the month of March.
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During its first month of operation, Peter's Auto Supply Corporation, which specializes the sale of auto equipment and supplies, completed the following transactions.
July Transactions
July 1
Issued Common Stock in exchange for $100,000 cash.
July 1
Paid $4,000 rent for the months of July and August
July 2
Paid the insurance company $2,400 for a one year insurance policy, beginning July 1.
July 5
Purchased inventory on account for $35,000 (Assume that the perpetual inventory system is used.)
July 6
Borrowed $36,500 from a local bank and signed a note. The interest rate is 10%, and principal and interest is due to be repaid in six months.
July 8
Sold inventory on account for $17,000. The cost of the inventory is $7,000.
July 15
Paid employees $6,000 salaries for the first half of the month.
July 18
Sold inventory for $15,000 cash. The cost of the inventory was $6,000.
July 20
Paid $15,000 to suppliers for the inventory purchased on January 5.
July 26…
During its first month of operation, Peter's Auto Supply Corporation, which specializes the sale of auto equipment and supplies, completed the following transactions.
July Transactions
July 1
Issued Common Stock in exchange for $100,000 cash.
July 1
Paid $4,000 rent for the months of July and August
July 2
Paid the insurance company $2,400 for a one year insurance policy, beginning July 1.
July 5
Purchased inventory on account for $35,000 (Assume that the perpetual inventory system is used.)
July 6
Borrowed $36,500 from a local bank and signed a note. The interest rate is 10%, and principal and interest is due to be repaid in six months.
July 8
Sold inventory on account for $17,000. The cost of the inventory is $7,000.
July 15
Paid employees $6,000 salaries for the first half of the month.
July 18
Sold inventory for $15,000 cash. The cost of the inventory was $6,000.
July 20
Paid $15,000 to suppliers for the inventory purchased on January 5.
July 26…
Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies’ balance sheets as of December 31, 20X4, were as follows:
Punch Manufacturing Corporation
Short Retail Stores
Assets
Cash
$ 58,000
$ 38,000
Accounts Receivable
110,000
90,000
Inventory
250,000
125,000
Land
105,000
75,000
Buildings and Equipment
510,000
310,000
Less: Accumulated Depreciation
(230,000)
(140,000)
Investment in Short Retail Stores
140,000
Total Assets
$ 943,000
$ 498,000
Liabilities and Equity
Accounts Payable
$ 113,000
$ 33,000
Bonds Payable
270,000
200,000
Preferred Stock ($10 par value)
200,000
90,000
Common Stock:
$10 par value
150,000
$5 par value
100,000
Retained Earnings
210,000
75,000
Total Liabilities and Equity
$ 943,000
$ 498,000
Short Retail’s 8 percent preferred stock is convertible into 15,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock.…
Chapter 8 Solutions
FUNDAMENTALS OF COST ACCOUNTING BUNDLE
Ch. 8 - What are the characteristics of industries most...Ch. 8 - A manufacturing company has records of its...Ch. 8 - If costs increase from one period to another, will...Ch. 8 - What are the five steps to follow when computing...Ch. 8 - What is the distinction between equivalent units...Ch. 8 - Which method, weighted-average or FIFO, better...Ch. 8 - It has been said that a prior departments costs...Ch. 8 - The more important individual unit costs are for...Ch. 8 - Assume that the number of units transferred out of...Ch. 8 - The management of a liquid cleaning product...
Ch. 8 - We have discussed two methods for process costing,...Ch. 8 - A friend owns and operates a consulting firm that...Ch. 8 - The controller of a local firm that uses a...Ch. 8 - Throughout the chapter, we treated conversion...Ch. 8 - Consider a manufacturing firm with multiple...Ch. 8 - Prob. 16CADQCh. 8 - Would process costing work well for a service...Ch. 8 - Compute Equivalent Units: Weighted-Average Method...Ch. 8 - Compute Equivalent Units: FIFO Method Refer to the...Ch. 8 - Compute Equivalent Units: Weighted-Average Method...Ch. 8 - Compute Equivalent Units: FIFO Method Refer to the...Ch. 8 - Compute Equivalent Units Magic Company adds...Ch. 8 - Equivalent Units: Weighted-Average Process Costing...Ch. 8 - Prob. 24ECh. 8 - Prob. 25ECh. 8 - Compute Equivalent Units: Ethical Issues Aaron...Ch. 8 - Equivalent Units and Cost of Production By...Ch. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Compute the cost per equivalent unit for materials...Ch. 8 - Compute Equivalent Units: FIFO Method Materials...Ch. 8 - Compute Equivalent Units and Cost per Equivalent...Ch. 8 - Cost Per Equivalent Unit: Weighted-Average Method...Ch. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Refer to the data in Exercise 8–33. Compute the...Ch. 8 - Using the data in Exercise 8-33, compute the cost...Ch. 8 - Refer to the data in Exercises 8-33 and 8-35....Ch. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Refer to the data in Exercise 8-37. Compute the...Ch. 8 - Refer to the data in Exercise 8-37. Compute the...Ch. 8 - Prob. 40ECh. 8 - Prepare a Production Cost Report: FIFO Method...Ch. 8 - Prob. 42ECh. 8 - Prepare a Production Cost Report: Weighted-Average...Ch. 8 - Prob. 44ECh. 8 - Cost of Production: Weighted-Average and FIFO...Ch. 8 - Operation Costing: Ethical Issues Brokia...Ch. 8 - Prob. 47ECh. 8 - Prob. 48ECh. 8 - Prob. 49ECh. 8 - Suppose the marketing manager’s suggestion is...Ch. 8 - Prob. 51PCh. 8 - Prob. 52PCh. 8 - Prob. 53PCh. 8 - Prob. 54PCh. 8 - Prepare a production cost report for June for the...Ch. 8 - Prob. 56PCh. 8 - Prob. 57PCh. 8 - Prob. 58PCh. 8 - Prob. 59PCh. 8 - Prob. 60PCh. 8 - Prob. 61PCh. 8 - Prob. 62PCh. 8 - Prob. 63PCh. 8 - Prob. 64PCh. 8 - Prob. 65PCh. 8 - Prob. 66PCh. 8 - Prob. 67PCh. 8 - Process Costing and Ethics: Increasing Production...
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- First Boston Corporation acquired 80 percent of Gulfside Corporation common stock on January 1, 20X5. Gulfside holds 60 percent of the voting shares of Paddock Company, and Paddock owns 10 percent of the stock of First Boston. All acquisitions were made at underlying book value. The fair value of the noncontrolling interest in Gulfside was equal to 20 percent of the book value of Gulfside when acquired by First Boston, and the fair value of the noncontrolling interest in Paddock was equal to 40 percent of its book value when control was acquired by Gulfside. During 20X7, income from the separate operations of First Boston, Gulfside, and Paddock was $48,000, $38,000, and $54,000, respectively, and dividends of $34,000, $24,000, and $14,000, respectively, were paid. The companies use the cost method of accounting for intercorporate investments and, accordingly, record dividends received as other (nonoperating) income. Required: Compute the amount of consolidated net income and the income…arrow_forwardDuring its first month of operation, Peter's Auto Supply Corporation, which specializes the sale of auto equipment and supplies, completed the following transactions. July Transactions July 1 Issued Common Stock in exchange for $100,000 cash. July 1 Paid $4,000 rent for the months of July and August July 2 Paid the insurance company $2,400 for a one year insurance policy, beginning July 1. July 5 Purchased inventory on account for $35,000 (Assume that the perpetual inventory system is used.) July 6 Borrowed $36,500 from a local bank and signed a note. The interest rate is 10%, and principal and interest is due to be repaid in six months. July 8 Sold inventory on account for $17,000. The cost of the inventory is $7,000. July 15 Paid employees $6,000 salaries for the first half of the month. July 18 Sold inventory for $15,000 cash. The cost of the inventory was $6,000. July 20 Paid $15,000 to suppliers for the inventory purchased on January 5. July 26…arrow_forwardDuring its first month of operation, Peter's Auto Supply Corporation, which specializes the sale of auto equipment and supplies, completed the following transactions. July Transactions July 1 Issued Common Stock in exchange for $100,000 cash. July 1 Paid $4,000 rent for the months of July and August July 2 Paid the insurance company $2,400 for a one year insurance policy, beginning July 1. July 5 Purchased inventory on account for $35,000 (Assume that the perpetual inventory system is used.) July 6 Borrowed $36,500 from a local bank and signed a note. The interest rate is 10%, and principal and interest is due to be repaid in six months. July 8 Sold inventory on account for $17,000. The cost of the inventory is $7,000. July 15 Paid employees $6,000 salaries for the first half of the month. July 18 Sold inventory for $15,000 cash. The cost of the inventory was $6,000. July 20 Paid $15,000 to suppliers for the inventory purchased on January 5. July 26…arrow_forward
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