ASSIGNMENT 08 A03 Principles of Accounting II
ASSIGNMENT 08
A03 Principles of Accounting II
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Part A (5 points each for a possible total of 15 points)
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The following information is given for Tripp Company, which uses the indirect method.
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Net income $20,000
Depreciation expense 3,000
Increase in accounts receivable 2,000
Payment of dividends 2,000
Proceeds from sale of equipment 6,000
Increase in accounts payable 4,000
Decrease in inventory 3,000
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From the information provided, answer the following questions:
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(1) The cash flow from operating activities is ________.
(2) The cash flow from investing activities is ________.
(3) The cash flow from financing activities is ________.
Part B (5 points each for a possible total of 25 points)
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Selected data for Stick's Design are given as of December 31, Year 1 and Year 2 (rounded to the nearest hundredth).
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Year 2 Year 1
Net Credit Sales $25,000 $30,000
Cost of Goods Sold 16,000 18,000
Net Income 2,000 2,800
Cash 5,000 900
Accounts Receivable 3,000 2,000
Inventory 2,000 3,600
Current Liabilities 6,000 5,000
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Compute the following:
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(1) Current ratio for Year 2.
(2) Acid-test ratio for Year 2.
(3) Accounts receivable turnover for Year 2.
(4) Average collection period for Year 2.
(5) Inventory turnover for Year 2.
Part C (30 points)
Prepare an income statement showing departmental contribution margin based on the following:
Dept. X Dept. Y Rent Expense
Space (square feet) 17,500 35,000
Net Sales $60,000 $40,000
Cost of Goods Sold 18,000 16,000
Rent Expense (allocated based on square feet) $2,700
Part D (5 points each for a possible total of 30 points)
From the following transactions, prepare the appropriate general journal entries for the month of April.
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(1) Raw materials costing $60,000 were issued from the storeroom.
(2) Direct labor of $53,000 was charged to production.
(3) Indirect labor costs of $17,000 were incurred.
(4) Overhead was applied at the rate of 40% of direct labor dollars.
(5) Completed products costing $42,000 were transferred to finished goods.
(6) Products costing $32,000 were sold.
Answers
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Posted 02 Jun 2017 09:06 AM
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