Calculation of Issue Price of the Bond & Issue P

Issue Price of a Bond is Equals to Sum of (Pre

a. Issue Price of the Bond:

b.
culation of Issue Price of the Bond & Issue Price as a Percentage :

ue Price of a Bond is Equals to Sum of (Present Value of Interest Payments during life of Bond + Present Value of Matured Pr

ssue Price of the Bond:

Principal Amount $800,000.00
Coupon Rate 6%
Interest Payment Semi annual (6%x1/2) $24,000.00
Number of Periods (10 x 2times per year) 20

1. Present Value of Interest Payments Calculation :

Market Rate of Interest (8% x 1/2) 4.00%
Present Value of Annuity Factor for 4% for 20 periods

PVAF (r% , n) =

in above formula, r = Market Rate = 4% and n=20

from above formula, PVAF = 13.59
Present Value of Interest Payments = $24000*13.59 $326,160.00

2. Present Value of Matured Proceeds of the Bond:

Formula for Present Value Factor is as follows:

Present Value Factor at 8% for 10 periods (1/(1.08)^10) = 0.46

Present Value of Maturity proceeds ($800000*0.46) $368,000.00

Issue Price (1+2) $694,160.00

Issue Price as a Percentage:
Issue Price/Face VALUE x100%
$694160/$800000 X 100% 86.77%
nt Value of Matured Proceeds)
 Journal Entries

Date Account Title and Explaination Post.

Ref.
a
Jan.1 Cash
2020 Bonds Payable
(To record Bonds issued at face value)

b
Jul.1 Bond Interest Expense ($250,000 x 9% x 6/12)
2020 Cash

(To record payment of first semi annual interest )

c
Dec.31 Bond Interest Expense ($250,000 x 9%x6/12)
2020 Bond Interest Payable

(To record accrued semi annual interest )

4
Bonds Payable
Cash

(To record payment Bond Payable )

 So Option 4 is Correct.

Step 1: Book Value of Equity Calculation:

Common Stock $274.30

Retained Earnings $22.30
Additional Paid In Capital $99.30
Total $395.90

Stock Dividend is 20%. So it is Small Stock Dividend.

So Amount to be transferred from Retained Earnings = 20% x 395.90 Millions = $79.18

Preparation of Stockholders' Equity Section:

Balance Sheet
 At the End of This Year

Stockholders' Equity:
Contributed Capital:
Common Stock $0.00
Additional Paid In Capital - Common Stock $0.00
Total Contributed Capital $0.00
Less: Treasury Stock $ -
Total Stockholders' Equity $0.00

c. Determination of Amounts after issue of Stock dividends and closing entries:

1. Total Paid In Capital:

Common Stock (issued 7140 share of $50 par value per share) $350,000.00
Paid In Capital in Excess of Par - Common Stock #REF!
Total Paid In Capital #REF!

2. Total Retained Earnings:

Beginning Balance $ 4,200,000.00
Less: Stock Dividend #REF!
Ending Balance #REF!

3. Total Stockholders' Equity:

Total Paid In Capital #REF!

Total Retained Earnings #REF!
Total Stockholders' Equity #REF!

31500
15750
1. Computation of Predetermined Overhead Rate:
For Molding Department:
Molding
Machine Hours 85,000

Total Overhead Cost = $204000

 Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Machine hrs
=$204,000/85,000 M.hrs
= $2.40
For Painting Department:
Painting
Direct Labor Hours 32,000

Total Overhead Cost = $466,200

Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total D L hrs
=$466,200/32,000 D L .hrs
= $14.57

2. Total Overhead Costs applied to Job 205:

Overheads:
Molding Dept (300 M.Hr.@$2.40) $720.00
Painting Dept (130 DLHr @$14.57) $1,893.94
Total Overheads Cost $2,613.94

3A. Total Manufacturing Cost For Job 205:

Molding
Direct Materials $936.00
Direct Labor $700.00
Overheads (See Point 2) $720.00
Total Cost $2,356.00

3B. Calculation of Unit Product Cost:

Total Manufacturing Cost

Number of Units
Unit Product Cost
Computation of Unit Product Cost:
Delux
Direct Material $58.00
Direct Labor $16.00
Manufacturing Overheads $1.68
($7.09 x 0.70; 1.40)
Total Unit Product Cost $75.68

Under ABC System:

Activity Rate = Cost Pool / Cost Driver
Cost Pool (a)
Scheduling & Travel $100,500.00
Setup Time $119,000.00
Supervision $120,000.00

Assignment to Each type of Product Line:

Commercial
Scheduling & Travel (750 x $67; 750 x $67) $50,250.00
Set up Time Cost ($170 x 450; 250) $76,500.00
Supervision (0.30 x $140,000; $260,000) $42,000.00
Total Overhead Cost (A) $168,750.00

Computation of Unit Product Cost:

Delux
Direct Material $58.00
Direct Labor $16.00
Manufacturing Overheads #REF!
Total Unit Product Cost #REF!

A . Assigning Purchase Department Costs to the individual Cost Pools

Step 1
Employees Responsible for Ordering 1.00
Employees Responsible for Inspecting 4.00
Employees in Department 5.00
Step 2
Costs Assigned to Order Cost Pool ($80,000 x 20%)
Costs Assigned to Inspection Cost Pool ($80,000 x 80%)
 Total Costs Assigned to Cost Pools

B. Allocation of the Order Cost Pool to the Individual Product lines:

Step 1
Purchase Orders for Amithol 2000.00
Purchase Orders for Bitrite 8000.00
Total Purchase Orders 10000.00
Step 2
Costs Assigned to Amithol ($16,000 x 20%)
Costs Assigned to Bitrite ($16,000 x 80%)
Total Order Costs allocated to products

C. Allocation of the Inspection Cost Pool to the Individual Product lines:

Step 1
Inspections for Amithol 1800.00
Inspections for Bitrite 600.00
Total Inspections 2400.00
Step 2
Costs Assigned to Amithol ($64,000 x 75%)
Costs Assigned to Bitrite ($64,000 x 25%)
Total Inspection Costs allocated to products

Allocation to Each type of Decoder:

Decoder P
Direct Labor Hours (a) 6,000
Overhead Rate per DLhr (b) $2.40
Amount To be Allocated (a) x (b) $14,400.00
b. Calculation of Cost Per Unit for Overhead when using Direct Labor hours as Allocation Basis:
Decoder P
Direct Labor Hours (a) 6,000
 Overhead Rate per DLhr (b) $2.40
Amount To be Allocated C = (a) x (b) $14,400.00
Number of Units D 16500
Overhead Cost Per Unit C/D $0.87

b. Computation of Total Manufacturing Cost Assigned to Job D-70 and Job C-200:
For Job D - 70:
Molding
Direct Materials Cost $375,000.00
Direct Labor Cost $200,000.00
Manufacturing Overheads (14000M.hrsx$18.2,
6000Mhrsx$18.2) $254,800.00
Total Manufacturing Cost $829,800.00

For Job C - 200:

Molding
Direct Materials Cost $300,000.00
Direct Labor Cost $175,000.00
Manufacturing Overheads (6000M.hrsx$18.2,
24000Mhrsx$18.2) $109,200.00
Total Manufacturing Cost $584,200.00

c. Computation of Bid Price for Job D-70 and Job C-200:

Job D - 70
Total Manufacturing Cost (a) $1,379,200.00
Bid Price in Percentage of Manufacturing Cost (b) 150.00%
Bid Price (a) x (b) $2,068,800.00
d. Computation of Cost of Goods Sold for Job D-70 and Job C-200:
Job D - 70
Total Manufacturing Cost (a) $1,379,200.00
Add: Beginning Finished Goods Inventory 0
Total Cost of Units Available for Sale $1,379,200.00
Less: Ending Finished Goods Inventory 0
Cost of Goods Sold $1,379,200.00

This Can be calculated by using following Formula:

Cost Of Goods Sold = Sales - Gross Profit Margin

2. Unit Product Costs under Activity Based Costing System:

 Mercon
Number of Units (a) 5000
Direct Labor hrs per Unit (b) 0.3
Direct Labour hours required (a) x (b) 1500

a. Overhead Cost = $210,000 210000

Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Direct Labor hrs
=$210,000/14000 hrs
= $15.00
a. Overhead Cost = $210,000 210000
Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Engineering Design hrs
=$210,000/4000 hrs
= $52.50
Calculation of Unit Product Cost
Mercon
Direct Materials $13.00
Direct Labor $10.00
Manufacturing Overheads
a. Direct Labor based allocation (0.3 hrsx$15, 1.25hrsx$15) $4.50
b. Engineering Hours based allocation @$52.50 per
Engineering hr (5000units/2000hrs; 10000units/2000hrs) $21.00
Unit Product Cost $27.50

Principal Amount $46,000.00

Interest Rate 8%
Date of statring April 1, 2018
Reporting Date December 31, 2018
Period of Accrual of Interest Expense (from april1,2018 to
December 31, 2018) 9 months
Accrued Interest = $46,000 x 8% x 9months/12 months $2,760.00

So Option 1 is Correct.

Chart of Accounts:
Code Account Name
1 Capital - Tom Jones
2 Drawings - Tom Jones
3 Sales Revenue
 4 Accounts Receivable
5 Cash
6 Bank
7 Petty Cash
8 Prepaid Rent
9 Prepaid Insurance
10 Rent Expense
11 Insurance Expense
12 Land
13 Building
14 Furniture and Fixtures
15 Computer Equipment
16 Notes Receivable
17 Interest Revenue/Interest Income
18 Interest Receivable
19 Wages Expense
20 Wages payable
21 Inventory or Merchandise Inventory

Interest Expense under Effective Interest Method:

Issue Price $3,100,000.00

Face Amount $4,000,000.00
Discount on Bonds Payable = Face Value - Issue Price $900,000.00
Market Rate of Interest 8%
Face interest Rate 10%

Interest Expense = Market Rate X Issue Price

8% x $3,100,000 $248,000.00
Interest Pai Face Value x Face Rate
$4,000,000 x 10% $400,000.00
Discount to be amortized = Interest Expense - Interest paid -152000

Journal Entries
 Date Account Title and Explaination Post.
Ref.

Dec.31 Supplies Expense ($1500 - $600)

Adj. (a) Office Supplies

(To record Adjusting Entry For Consumption of Supplies)

Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
May.1 Cash
Accumulated Depreciation
Machinery
Gain On Disposal of Asset

(To record Disposal of Machinery)

Cost $800,000.00
Salvage Value $50,000.00
Depreciable Value (Cost-Salvage Value) $750,000.00

Method Of Depreciation ---Straight Line Method

Useful Life 5 years

Annual Depreciation = Depreciable Value/useful Life $150,000.00

For year Ended 31, Dec.2014 $150,000.00

For year Ended 31, Dec.2015 $150,000.00
For year Ended 31, Dec.2016 $150,000.00
For year Ended 31, Dec.2017 $150,000.00
For period from 1,Jan.2017 to 1,May.2017(4 Months) $50,000.00
Total Accumulated Depreciation $650,000.00
a. Purchase and resale of shares assuming shares are Retired:
Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
Feb.15 Common Stock
Paid in Capital-Shares repurchase
Cash
(To record repurchase of own stock)

2018
Feb.17 Common Stock
Paid in Capital-Shares repurchase
Cash
(To record repurchase of own stock)

2020
Nov.9 Cash
Common Stock
Paid in Capital-Shares repurchase

(To record sale of common stock)

a. Purchase and resale of shares assuming as Treasury stock:

Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
Feb.15 Treasury Stock
Cash
(To record repurchase of own stock)

2018
Feb.17 Treasury Stock
Cash
(To record repurchase of own stock)
 2020
Nov.9 Cash
Paid in Capital- Treasury Stock
Treasury Stock

(To record sale of treasury stock)

a. Shares Retired Assumption

Shareholders' Equity $
Common Stock , 9 million shares issued of $1 par value per share $9,000,000.00
Paid In capital in Excess of Par $63,000,000.00
Paid In capital in Shares repurchase -$4,000,000.00
Total Paid In Capital $68,000,000.00
Retained Earnings $92,500,000.00
Net Income
2018 $16,000,000.00
2019 $18,000,000.00
2020 $20,000,000.00
Total Shareholders' Equity $214,500,000.00

a. Shares Treasury Stock Assumption

Shareholders' Equity $
Common Stock , 9 million shares issued of $1 par value per share $9,000,000.00
Paid In capital in Excess of Par $63,000,000.00
Paid In capital - Treasury Stock -$275,000.00
Total Paid In Capital $71,725,000.00
Retained Earnings $92,500,000.00
Net Income
2018 $16,000,000.00
2019 $18,000,000.00
2020 $20,000,000.00
Less:Treasury Stock -$4,250,000.00
Total Shareholders' Equity $213,975,000.00
T - Accounts:

Sep.1
Sep.8

Totals

Accou
Sep.8

Totals

Totals

Advert
Sep.12

Totals

Repairs and M
Sep.20
Totals

Sep.5
Totals

Preparation of T account for

Manufact

Depreciation on
Manufacturing
Equipment
Property Taxes
on Plant
Plant Janitor
Wages

Totals

Balance of $261500 represents

Com

Totals
 Re

Sep.2
Totals

Incom

Sep.27
Totals

D
Sep.30

Totals

Cash
Totals

Supp
Beg.Balance

Cash
Totals

Deprec
Beg.Balance
Accumulated
Depreciation
Totals

Retai
 Net Loss from
Income Summary
Totals

Capitalization cost of Asset:

All costs incurred to make asset is available to use shall be capitalized.
Purchase Pr $55,000.00
Sales tax $500.00
transportati $1,000.00
Installation $2,000.00
Capitalizati $58,500.00

Cost Assigned to Building:

Proportionate Value of Price Shall be assigned to each component of asset.
Total Value $120,000.00
Contribution 49.60%
Cost Assigned to building = 49.6% x $120000
$59,520.00

Journal Entry to record Purchase of Asset:

Journal Entries

Date Account Title and Explaination Post.

Ref.

Equipment
Notes Payable
Cash
(To record purchase of Equipment)

Carrying Value/ Book Value:

Book Value = Acquisition Cost - Accumulated Depreciation

=
Determination of ending balances: Debit
Cash 2100
Supplies 810
Land 34000
Equipment 4000
Accounts Payable 900-290
Notes Payable 8500+23000
Common Stock

Business have cash balance of $2100 at the end of period.

They owe total liabilities of 610+31500 =$32110 at rhe end of the period.

Journal Entries

Date Account Title and Explaination Post.

Ref.
1
Bank Charges
 Cash
(To record Bank Charges)

2
Accounts Receivables
Cash
(To record NSF check)
 Debit Credit
($ ) ($ )

$ 250,000.00
$ 250,000.00

$ 11,250.00
$ 11,250.00

$ 11,250.00
$ 11,250.00

#REF!
#REF!
Millions
Millions
Millions
Millions

79.18

Ending Inventory = (150+220+100)-(140+90) = 240 Units

Under LIFO Method;

So Option c is Correct.
Per M Hr

Per D L Hr

Painting Total
$1,200.00 $2,136.00
$990.00 $1,690.00
$1,893.94 $2,613.94
$4,083.94 $6,439.94

$6,439.94
31
$207.74
Standard
$46.00
$13.20
$3.36

$62.56

Cost Driver (b) Activity Rate (a/b)

1500 $67.00
700 $170.00
400000 0.30

Residential
$50,250.00
$42,500.00
$78,000.00
$170,750.00

Standard
$46.00
$13.20
#REF!
#REF!

% of Total
20.00%
80.00%
100.00%

$16,000.00
$64,000.00
 $80,000.00

% of Total
20.00%
80.00%
100.00%

$3,200.00
$12,800.00
$16,000.00

% of Total
75.00%
25.00%
100.00%

$48,000.00
$16,000.00
$64,000.00

Decoder Q
14,000
$2.40
$33,600.00

Decoder Q
14,000
 $2.40
$33,600.00
38500
$0.87

Fabrication Total
$375,000.00 $750,000.00
$160,000.00 $360,000.00

$14,400.00 $269,200.00
$549,400.00 $1,379,200.00

Fabrication Total
$250,000.00 $550,000.00
$225,000.00 $400,000.00

$57,600.00 $166,800.00
$532,600.00 $1,116,800.00

Job C - 200
$1,116,800.00
150.00%
$1,675,200.00

Job C - 200
$1,116,800.00
0
$1,116,800.00
0
$1,116,800.00
 Wurcon Total
10000
1.25
12500 14000

Per Direct Labor Hr

Per Engineering Design Hr

Wurcon
$11.00
$13.00

$18.75

$10.50
$42.75

ber 31, 2018

Debit Credit
($) ($)

$900.00
$900.00

Debit Credit
($) ($)

165,000
650,000
800,000
15,000

Carrying Value on Date of Sale

Gain on Sale
Cash Received
 Debit Credit
($ Millions) ($ Millions)

$400,000.00
$3,600,000.00
$4,000,000.00

$400,000.00
$2,600,000.00
$3,000,000.00

$2,475,000.00
$275,000.00
$2,200,000.00

Debit Credit
($ Millions) ($ Millions)

$4,000,000.00
$4,000,000.00

$3,000,000.00
$3,000,000.00
$2,475,000.00
$275,000.00
$2,750,000.00
 Cash
$18,000.00 Sep.2
$1,000.00 Sep.5
Sep.20
Sep.25
Sep.27
Sep.30
$19,000.00 Totals

Accounts Receivable
$6,600.00

$6,600.00 Totals

Revenue

Sep.8

$0.00 Totals

Advertising Expenses
$500.00

$500.00 Totals

Repairs and Maintenance Expenses

$2,700.00
 $2,700.00 Totals

Equipment

$10,100.00
$10,100.00 Totals

ation of T account for Manufacturing Overheads:

Manufacturing Overheads

Applied
Manufacturing
$580,000.00 Overheads

$36,500.00

$22,000.00

$638,500.00 Totals
Balance
e of $261500 represents overapplication of Manufacturing Overheads

Common Stock

Sep.1
$0.00 Totals
 Rent Expense

#REF!
#REF! Totals

Income Tax Expense

$1,000.00
$1,000.00 Totals

Dividend
$600.00

$600.00 Totals

Income
45700 Summary
#REF! Totals

Supplies Expense
0
Income
5600 Summary
#REF! Totals

Depreciation Expense
0
Income
10200 Summary
#REF! Totals

Retained Earnings
Jan.1, 2015
 €0.00
$ - Totals
Jan.1, 2016

Debit Credit
($) ($)

$30,000.00
$28,000.00
$2,000.00
Credit

610
31500
8800

Debit Credit
($) ($)

$45.00
 $45.00

$1,680.00
$1,680.00
 Journal Entries

Date Account Title and Explaination Post.

Ref.
a
Jan.1 Cash
Bonds Payable
(To record Bonds issued at Par value)

Jul.1 Bond Interest Expense ($200,000 x 4% x 6/12)

Cash ($7,600,000 x 9%x6/12)

(To record payment of first semi annual interest )

b
Jan.1 Cash
Discount on Bonds Payable
Bonds Payable

(To record issue of Bonds at Discount )

Bond Interest Expense

Jul.1 Cash ($200,000x4%x6/12)
Discount on Bonds Payable ($70,000/15yrs)x1/2
(To record payment of first semi annual interest )

c
Jan.1 Cash
Premium on Bonds Payable
Bonds Payable

(To record issue of Bonds at Premium )

Bond Interest Expense

Jul.1 Premium on Bonds Payable ($50,000/15yrs)x1/2
Cash ($200,000x4%x6/12)
(To record payment of first semi annual interest )
 So Option 4 is Correct.

Step 1: Book Value of Equity Calculation:

Common Stock $274.30

Retained Earnings $22.30
Additional Paid In Capital $99.30
Total $395.90

Stock Dividend is 20%. So it is Small Stock Dividend.

So Amount to be transferred from Retained Earnings = 20% x 395.90 Millions = $79.18

Preparation of Stockholders' Equity Section:

Balance Sheet
 At the End of This Year

Stockholders' Equity:
Contributed Capital:
Common Stock $4,000.00
Additional Paid In Capital - Common Stock $0.00
Total Contributed Capital $4,000.00
Less: Treasury Stock $ -
Total Stockholders' Equity $4,000.00

c. Determination of Amounts after issue of Stock dividends and closing entries:

1. Total Paid In Capital:

Common Stock (issued 7140 share of $50 par value per share) $350,000.00
Paid In Capital in Excess of Par - Common Stock #REF!
Total Paid In Capital #REF!

2. Total Retained Earnings:

Beginning Balance $ 4,200,000.00
Less: Stock Dividend #REF!
Ending Balance #REF!

3. Total Stockholders' Equity:

Total Paid In Capital #REF!

Total Retained Earnings #REF!
Total Stockholders' Equity #REF!

31500
15750
1. Computation of Predetermined Overhead Rate:
For Molding Department:
Molding
Machine Hours 85,000

Total Overhead Cost = $204000

 Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Machine hrs
=$204,000/85,000 M.hrs
= $2.40
For Painting Department:
Painting
Direct Labor Hours 32,000

Total Overhead Cost = $466,200

Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total D L hrs
=$466,200/32,000 D L .hrs
= $14.57

2. Total Overhead Costs applied to Job 205:

Overheads:
Molding Dept (300 M.Hr.@$2.40) $720.00
Painting Dept (130 DLHr @$14.57) $1,893.94
Total Overheads Cost $2,613.94

3A. Total Manufacturing Cost For Job 205:

Molding
Direct Materials $936.00
Direct Labor $700.00
Overheads (See Point 2) $720.00
Total Cost $2,356.00

3B. Calculation of Unit Product Cost:

Total Manufacturing Cost

Number of Units
Unit Product Cost
Computation of Unit Product Cost:
Delux
Direct Material $58.00
Direct Labor $16.00
Manufacturing Overheads $1.68
($7.09 x 0.70; 1.40)
Total Unit Product Cost $75.68

Under ABC System:

Activity Rate = Cost Pool / Cost Driver
Cost Pool (a)
Scheduling & Travel $100,500.00
Setup Time $119,000.00
Supervision $120,000.00

Assignment to Each type of Product Line:

Commercial
Scheduling & Travel (750 x $67; 750 x $67) $50,250.00
Set up Time Cost ($170 x 450; 250) $76,500.00
Supervision (0.30 x $140,000; $260,000) $42,000.00
Total Overhead Cost (A) $168,750.00

Computation of Unit Product Cost:

Delux
Direct Material $58.00
Direct Labor $16.00
Manufacturing Overheads #REF!
Total Unit Product Cost #REF!

A . Assigning Purchase Department Costs to the individual Cost Pools

Step 1
Employees Responsible for Ordering 1.00
Employees Responsible for Inspecting 4.00
Employees in Department 5.00
Step 2
Costs Assigned to Order Cost Pool ($80,000 x 20%)
Costs Assigned to Inspection Cost Pool ($80,000 x 80%)
 Total Costs Assigned to Cost Pools

B. Allocation of the Order Cost Pool to the Individual Product lines:

Step 1
Purchase Orders for Amithol 2000.00
Purchase Orders for Bitrite 8000.00
Total Purchase Orders 10000.00
Step 2
Costs Assigned to Amithol ($16,000 x 20%)
Costs Assigned to Bitrite ($16,000 x 80%)
Total Order Costs allocated to products

C. Allocation of the Inspection Cost Pool to the Individual Product lines:

Step 1
Inspections for Amithol 1800.00
Inspections for Bitrite 600.00
Total Inspections 2400.00
Step 2
Costs Assigned to Amithol ($64,000 x 75%)
Costs Assigned to Bitrite ($64,000 x 25%)
Total Inspection Costs allocated to products

Allocation to Each type of Decoder:

Decoder P
Direct Labor Hours (a) 6,000
Overhead Rate per DLhr (b) $2.40
Amount To be Allocated (a) x (b) $14,400.00
b. Calculation of Cost Per Unit for Overhead when using Direct Labor hours as Allocation Basis:
Decoder P
Direct Labor Hours (a) 6,000
 Overhead Rate per DLhr (b) $2.40
Amount To be Allocated C = (a) x (b) $14,400.00
Number of Units D 16500
Overhead Cost Per Unit C/D $0.87

b. Computation of Total Manufacturing Cost Assigned to Job D-70 and Job C-200:
For Job D - 70:
Molding
Direct Materials Cost $375,000.00
Direct Labor Cost $200,000.00
Manufacturing Overheads (14000M.hrsx$18.2,
6000Mhrsx$18.2) $254,800.00
Total Manufacturing Cost $829,800.00

For Job C - 200:

Molding
Direct Materials Cost $300,000.00
Direct Labor Cost $175,000.00
Manufacturing Overheads (6000M.hrsx$18.2,
24000Mhrsx$18.2) $109,200.00
Total Manufacturing Cost $584,200.00

c. Computation of Bid Price for Job D-70 and Job C-200:

Job D - 70
Total Manufacturing Cost (a) $1,379,200.00
Bid Price in Percentage of Manufacturing Cost (b) 150.00%
Bid Price (a) x (b) $2,068,800.00
d. Computation of Cost of Goods Sold for Job D-70 and Job C-200:
Job D - 70
Total Manufacturing Cost (a) $1,379,200.00
Add: Beginning Finished Goods Inventory 0
Total Cost of Units Available for Sale $1,379,200.00
Less: Ending Finished Goods Inventory 0
Cost of Goods Sold $1,379,200.00

This Can be calculated by using following Formula:

Cost Of Goods Sold = Sales - Gross Profit Margin

2. Unit Product Costs under Activity Based Costing System:

 Mercon
Number of Units (a) 5000
Direct Labor hrs per Unit (b) 0.3
Direct Labour hours required (a) x (b) 1500

a. Overhead Cost = $210,000 210000

Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Direct Labor hrs
=$210,000/14000 hrs
= $15.00
a. Overhead Cost = $210,000 210000
Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Engineering Design hrs
=$210,000/4000 hrs
= $52.50
Calculation of Unit Product Cost
Mercon
Direct Materials $13.00
Direct Labor $10.00
Manufacturing Overheads
a. Direct Labor based allocation (0.3 hrsx$15, 1.25hrsx$15) $4.50
b. Engineering Hours based allocation @$52.50 per
Engineering hr (5000units/2000hrs; 10000units/2000hrs) $21.00
Unit Product Cost $27.50

Principal Amount $46,000.00

Interest Rate 8%
Date of statring April 1, 2018
Reporting Date December 31, 2018
Period of Accrual of Interest Expense (from april1,2018 to
December 31, 2018) 9 months
Accrued Interest = $46,000 x 8% x 9months/12 months $2,760.00

So Option 1 is Correct.

Chart of Accounts:
Code Account Name
1 Capital - Tom Jones
2 Drawings - Tom Jones
3 Sales Revenue
 4 Accounts Receivable
5 Cash
6 Bank
7 Petty Cash
8 Prepaid Rent
9 Prepaid Insurance
10 Rent Expense
11 Insurance Expense
12 Land
13 Building
14 Furniture and Fixtures
15 Computer Equipment
16 Notes Receivable
17 Interest Revenue/Interest Income
18 Interest Receivable
19 Wages Expense
20 Wages payable
21 Inventory or Merchandise Inventory

Interest Expense under Effective Interest Method:

Issue Price $3,100,000.00

Face Amount $4,000,000.00
Discount on Bonds Payable = Face Value - Issue Price $900,000.00
Market Rate of Interest 8%
Face interest Rate 10%

Interest Expense = Market Rate X Issue Price

8% x $3,100,000 $248,000.00
Interest Pai Face Value x Face Rate
$4,000,000 x 10% $400,000.00
Discount to be amortized = Interest Expense - Interest paid -152000

Journal Entries
 Date Account Title and Explaination Post.
Ref.

Dec.31 Supplies Expense ($1500 - $600)

Adj. (a) Office Supplies

(To record Adjusting Entry For Consumption of Supplies)

Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
May.1 Cash
Accumulated Depreciation
Machinery
Gain On Disposal of Asset

(To record Disposal of Machinery)

Cost $800,000.00
Salvage Value $50,000.00
Depreciable Value (Cost-Salvage Value) $750,000.00

Method Of Depreciation ---Straight Line Method

Useful Life 5 years

Annual Depreciation = Depreciable Value/useful Life $150,000.00

For year Ended 31, Dec.2014 $150,000.00

For year Ended 31, Dec.2015 $150,000.00
For year Ended 31, Dec.2016 $150,000.00
For year Ended 31, Dec.2017 $150,000.00
For period from 1,Jan.2017 to 1,May.2017(4 Months) $50,000.00
Total Accumulated Depreciation $650,000.00
a. Purchase and resale of shares assuming shares are Retired:
Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
Feb.15 Common Stock
Paid in Capital-Shares repurchase
Cash
(To record repurchase of own stock)

2018
Feb.17 Common Stock
Paid in Capital-Shares repurchase
Cash
(To record repurchase of own stock)

2020
Nov.9 Cash
Common Stock
Paid in Capital-Shares repurchase

(To record sale of common stock)

a. Purchase and resale of shares assuming as Treasury stock:

Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
Feb.15 Treasury Stock
Cash
(To record repurchase of own stock)

2018
Feb.17 Treasury Stock
Cash
(To record repurchase of own stock)
 2020
Nov.9 Cash
Paid in Capital- Treasury Stock
Treasury Stock

(To record sale of treasury stock)

a. Shares Retired Assumption

Shareholders' Equity $
Common Stock , 9 million shares issued of $1 par value per share $9,000,000.00
Paid In capital in Excess of Par $63,000,000.00
Paid In capital in Shares repurchase -$4,000,000.00
Total Paid In Capital $68,000,000.00
Retained Earnings $92,500,000.00
Net Income
2018 $16,000,000.00
2019 $18,000,000.00
2020 $20,000,000.00
Total Shareholders' Equity $214,500,000.00

a. Shares Treasury Stock Assumption

Shareholders' Equity $
Common Stock , 9 million shares issued of $1 par value per share $9,000,000.00
Paid In capital in Excess of Par $63,000,000.00
Paid In capital - Treasury Stock -$275,000.00
Total Paid In Capital $71,725,000.00
Retained Earnings $92,500,000.00
Net Income
2018 $16,000,000.00
2019 $18,000,000.00
2020 $20,000,000.00
Less:Treasury Stock -$4,250,000.00
Total Shareholders' Equity $213,975,000.00
T - Accounts:

Sep.1
Sep.8

Totals

Acco
Sep.8

Totals

Totals

Adver
Sep.12

Totals

Repairs and
Sep.20
Totals

Sep.5
Totals

Preparation of T account for

Manufac

Depreciation on
Manufacturing
Equipment
Property Taxes
on Plant
Plant Janitor
Wages

Totals

Balance of $261500 represents

Co

Totals
 R

Sep.2
Totals

Incom

Sep.27
Totals

Sep.30

Totals

Cash
Totals

Sup
Beg.Balance

Cash
Totals

Depre
Beg.Balance
Accumulated
Depreciation
Totals

Reta
 Net Loss from
Income Summary
Totals

Capitalization cost of Asset:

All costs incurred to make asset is available to use shall be capitalized.
Purchase Pr $55,000.00
Sales tax $500.00
transportati $1,000.00
Installation $2,000.00
Capitalizati $58,500.00

Cost Assigned to Building:

Proportionate Value of Price Shall be assigned to each component of asset.
Total Value $120,000.00
Contribution 49.60%
Cost Assigned to building = 49.6% x $120000
$59,520.00

Journal Entry to record Purchase of Asset:

Journal Entries

Date Account Title and Explaination Post.

Ref.

Equipment
Notes Payable
Cash
(To record purchase of Equipment)

Carrying Value/ Book Value:

Book Value = Acquisition Cost - Accumulated Depreciation

=
Determination of ending balances: Debit
Cash 2100
Supplies 810
Land 34000
Equipment 4000
Accounts Payable 900-290
Notes Payable 8500+23000
Common Stock

Business have cash balance of $2100 at the end of period.

They owe total liabilities of 610+31500 =$32110 at rhe end of the period.

Journal Entries

Date Account Title and Explaination Post.

Ref.
1
Bank Charges
 Cash
(To record Bank Charges)

2
Accounts Receivables
Cash
(To record NSF check)
 Debit Credit
($ ) ($ )

$ 200,000.00
$ 200,000.00

$ 4,000.00
$ 4,000.00

$ 130,000.00
$ 70,000.00
$ 200,000.00

$ 6,333.33
$ 4,000.00
$ 2,333.33

$ 250,000.00
$ 50,000.00
$ 200,000.00

$ 2,333.33
$ 1,666.67
$ 4,000.00
Millions
Millions
Millions
Millions

79.18

Ending Inventory = (150+220+100)-(140+90) = 240 Units

Under LIFO Method;

So Option c is Correct.
Per M Hr

Per D L Hr

Painting Total
$1,200.00 $2,136.00
$990.00 $1,690.00
$1,893.94 $2,613.94
$4,083.94 $6,439.94

$6,439.94
31
$207.74
Standard
$46.00
$13.20
$3.36

$62.56

Cost Driver (b) Activity Rate (a/b)

1500 $67.00
700 $170.00
400000 0.30

Residential
$50,250.00
$42,500.00
$78,000.00
$170,750.00

Standard
$46.00
$13.20
#REF!
#REF!

% of Total
20.00%
80.00%
100.00%

$16,000.00
$64,000.00
 $80,000.00

% of Total
20.00%
80.00%
100.00%

$3,200.00
$12,800.00
$16,000.00

% of Total
75.00%
25.00%
100.00%

$48,000.00
$16,000.00
$64,000.00

Decoder Q
14,000
$2.40
$33,600.00

Decoder Q
14,000
 $2.40
$33,600.00
38500
$0.87

Fabrication Total
$375,000.00 $750,000.00
$160,000.00 $360,000.00

$14,400.00 $269,200.00
$549,400.00 $1,379,200.00

Fabrication Total
$250,000.00 $550,000.00
$225,000.00 $400,000.00

$57,600.00 $166,800.00
$532,600.00 $1,116,800.00

Job C - 200
$1,116,800.00
150.00%
$1,675,200.00

Job C - 200
$1,116,800.00
0
$1,116,800.00
0
$1,116,800.00
 Wurcon Total
10000
1.25
12500 14000

Per Direct Labor Hr

Per Engineering Design Hr

Wurcon
$11.00
$13.00

$18.75

$10.50
$42.75

ber 31, 2018

Debit Credit
($) ($)

$900.00
$900.00

Debit Credit
($) ($)

165,000
650,000
800,000
15,000

Carrying Value on Date of Sale

Gain on Sale
Cash Received
 Debit Credit
($ Millions) ($ Millions)

$400,000.00
$3,600,000.00
$4,000,000.00

$400,000.00
$2,600,000.00
$3,000,000.00

$2,475,000.00
$275,000.00
$2,200,000.00

Debit Credit
($ Millions) ($ Millions)

$4,000,000.00
$4,000,000.00

$3,000,000.00
$3,000,000.00
$2,475,000.00
$275,000.00
$2,750,000.00
 Cash
$18,000.00 Sep.2
$1,000.00 Sep.5
Sep.20
Sep.25
Sep.27
Sep.30
$19,000.00 Totals

Accounts Receivable
$6,600.00

$6,600.00 Totals

Revenue

Sep.8

$0.00 Totals

Advertising Expenses
$500.00

$500.00 Totals

Repairs and Maintenance Expenses

$2,700.00
 $2,700.00 Totals

Equipment

$10,100.00
$10,100.00 Totals

ation of T account for Manufacturing Overheads:

Manufacturing Overheads

Applied
Manufacturing
$580,000.00 Overheads

$36,500.00

$22,000.00

$638,500.00 Totals
Balance
e of $261500 represents overapplication of Manufacturing Overheads

Common Stock

Sep.1
$0.00 Totals
 Rent Expense

#REF!
#REF! Totals

Income Tax Expense

$1,000.00
$1,000.00 Totals

Dividend
$600.00

$600.00 Totals

Income
45700 Summary
#REF! Totals

Supplies Expense
0
Income
5600 Summary
#REF! Totals

Depreciation Expense
0
Income
10200 Summary
#REF! Totals

Retained Earnings
Jan.1, 2015
 €0.00
$ - Totals
Jan.1, 2016

Debit Credit
($) ($)

$30,000.00
$28,000.00
$2,000.00
Credit

610
31500
8800

Debit Credit
($) ($)

$45.00
 $45.00

$1,680.00
$1,680.00
Net Realizable Value of Accounts Receivables after the W

Balance of Accounts Receivables

Less: Allowance for Uncollectibles $ 36,500.00
Less: Bad Debts Written Off $(32,800.00)

Net Realizable Value After Write Off

So Option 1 is Correct.
eivables after the Write Off Entry:

$ 406,000.00

$ (3,700.00)

$402,300.00
 Journal Entries

Date Account Title and Explaination Post.

Ref.
1
Cash
Discount on Bonds Payable
Bonds Payable
(To record Bonds issued at face value)

2
Bond Interest Expense
Discount on Bonds Payable
Cash

(To record payment of first semi annual interest )

3
Bond Interest Expense
Discount on Bonds Payable
Bond Interest Payable

(To record payment of first semi annual interest )

Bonds Payable
Cash

(To record payment Bonds Payable )

 So Option 4 is Correct.

Step 1: Book Value of Equity Calculation:

Common Stock $274.30

Retained Earnings $22.30
Additional Paid In Capital $99.30
Total $395.90

Stock Dividend is 20%. So it is Small Stock Dividend.

So Amount to be transferred from Retained Earnings = 20% x 395.90 Millions = $79.18

Preparation of Stockholders' Equity Section:

 Balance Sheet
At the End of This Year

Stockholders' Equity:
Contributed Capital:
Common Stock $0.00
Additional Paid In Capital - Common Stock $0.00
Total Contributed Capital $0.00
Less: Treasury Stock $ -
Total Stockholders' Equity $0.00

c. Determination of Amounts after issue of Stock dividends and closing entries:

1. Total Paid In Capital:

Common Stock (issued 7140 share of $50 par value per share) $350,000.00
Paid In Capital in Excess of Par - Common Stock #REF!
Total Paid In Capital #REF!

2. Total Retained Earnings:

Beginning Balance $ 4,200,000.00
Less: Stock Dividend #REF!
Ending Balance #REF!

3. Total Stockholders' Equity:

Total Paid In Capital #REF!

Total Retained Earnings #REF!
Total Stockholders' Equity #REF!

31500
15750
1. Computation of Predetermined Overhead Rate:
For Molding Department:
Molding
Machine Hours 85,000
 Total Overhead Cost = $204000
Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Machine hrs
=$204,000/85,000 M.hrs
= $2.40
For Painting Department:
Painting
Direct Labor Hours 32,000

Total Overhead Cost = $466,200

Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total D L hrs
=$466,200/32,000 D L .hrs
= $14.57

2. Total Overhead Costs applied to Job 205:

Overheads:
Molding Dept (300 M.Hr.@$2.40) $720.00
Painting Dept (130 DLHr @$14.57) $1,893.94
Total Overheads Cost $2,613.94

3A. Total Manufacturing Cost For Job 205:

Molding
Direct Materials $936.00
Direct Labor $700.00
Overheads (See Point 2) $720.00
Total Cost $2,356.00

3B. Calculation of Unit Product Cost:

Total Manufacturing Cost

Number of Units
Unit Product Cost
Computation of Unit Product Cost:
Delux
Direct Material $58.00
Direct Labor $16.00
Manufacturing Overheads $1.68
($7.09 x 0.70; 1.40)
Total Unit Product Cost $75.68

Under ABC System:

Activity Rate = Cost Pool / Cost Driver
Cost Pool (a)
Scheduling & Travel $100,500.00
Setup Time $119,000.00
Supervision $120,000.00

Assignment to Each type of Product Line:

Commercial
Scheduling & Travel (750 x $67; 750 x $67) $50,250.00
Set up Time Cost ($170 x 450; 250) $76,500.00
Supervision (0.30 x $140,000; $260,000) $42,000.00
Total Overhead Cost (A) $168,750.00

Computation of Unit Product Cost:

Delux
Direct Material $58.00
Direct Labor $16.00
Manufacturing Overheads #REF!
Total Unit Product Cost #REF!

A . Assigning Purchase Department Costs to the individual Cost Pools

Step 1
Employees Responsible for Ordering 1.00
Employees Responsible for Inspecting 4.00
Employees in Department 5.00
Step 2
 Costs Assigned to Order Cost Pool ($80,000 x 20%)
Costs Assigned to Inspection Cost Pool ($80,000 x 80%)
Total Costs Assigned to Cost Pools

B. Allocation of the Order Cost Pool to the Individual Product lines:

Step 1
Purchase Orders for Amithol 2000.00
Purchase Orders for Bitrite 8000.00
Total Purchase Orders 10000.00
Step 2
Costs Assigned to Amithol ($16,000 x 20%)
Costs Assigned to Bitrite ($16,000 x 80%)
Total Order Costs allocated to products

C. Allocation of the Inspection Cost Pool to the Individual Product lines:

Step 1
Inspections for Amithol 1800.00
Inspections for Bitrite 600.00
Total Inspections 2400.00
Step 2
Costs Assigned to Amithol ($64,000 x 75%)
Costs Assigned to Bitrite ($64,000 x 25%)
Total Inspection Costs allocated to products

Allocation to Each type of Decoder:

Decoder P
Direct Labor Hours (a) 6,000
Overhead Rate per DLhr (b) $2.40
Amount To be Allocated (a) x (b) $14,400.00
b. Calculation of Cost Per Unit for Overhead when using Direct Labor hours as Allocation Basis:
 Decoder P
Direct Labor Hours (a) 6,000
Overhead Rate per DLhr (b) $2.40
Amount To be Allocated C = (a) x (b) $14,400.00
Number of Units D 16500
Overhead Cost Per Unit C/D $0.87

b. Computation of Total Manufacturing Cost Assigned to Job D-70 and Job C-200:
For Job D - 70:
Molding
Direct Materials Cost $375,000.00
Direct Labor Cost $200,000.00
Manufacturing Overheads (14000M.hrsx$18.2,
6000Mhrsx$18.2) $254,800.00
Total Manufacturing Cost $829,800.00

For Job C - 200:

Molding
Direct Materials Cost $300,000.00
Direct Labor Cost $175,000.00
Manufacturing Overheads (6000M.hrsx$18.2,
24000Mhrsx$18.2) $109,200.00
Total Manufacturing Cost $584,200.00

c. Computation of Bid Price for Job D-70 and Job C-200:

Job D - 70
Total Manufacturing Cost (a) $1,379,200.00
Bid Price in Percentage of Manufacturing Cost (b) 150.00%
Bid Price (a) x (b) $2,068,800.00
d. Computation of Cost of Goods Sold for Job D-70 and Job C-200:
Job D - 70
Total Manufacturing Cost (a) $1,379,200.00
Add: Beginning Finished Goods Inventory 0
Total Cost of Units Available for Sale $1,379,200.00
Less: Ending Finished Goods Inventory 0
Cost of Goods Sold $1,379,200.00

This Can be calculated by using following Formula:

Cost Of Goods Sold = Sales - Gross Profit Margin
2. Unit Product Costs under Activity Based Costing System:

Mercon
Number of Units (a) 5000
Direct Labor hrs per Unit (b) 0.3
Direct Labour hours required (a) x (b) 1500

a. Overhead Cost = $210,000 210000

Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Direct Labor hrs
=$210,000/14000 hrs
= $15.00
a. Overhead Cost = $210,000 210000
Predetermined Overhead Rate = Overhead Cost/Allocation Base
=Overhead Cost/Total Engineering Design hrs
=$210,000/4000 hrs
= $52.50
Calculation of Unit Product Cost
Mercon
Direct Materials $13.00
Direct Labor $10.00
Manufacturing Overheads
a. Direct Labor based allocation (0.3 hrsx$15, 1.25hrsx$15) $4.50
b. Engineering Hours based allocation @$52.50 per
Engineering hr (5000units/2000hrs; 10000units/2000hrs) $21.00
Unit Product Cost $27.50

Principal Amount $46,000.00

Interest Rate 8%
Date of statring April 1, 2018
Reporting Date December 31, 2018
Period of Accrual of Interest Expense (from april1,2018 to
December 31, 2018) 9 months
Accrued Interest = $46,000 x 8% x 9months/12 months $2,760.00

So Option 1 is Correct.

Chart of Accounts:
Code Account Name
1 Capital - Tom Jones
 2 Drawings - Tom Jones
3 Sales Revenue
4 Accounts Receivable
5 Cash
6 Bank
7 Petty Cash
8 Prepaid Rent
9 Prepaid Insurance
10 Rent Expense
11 Insurance Expense
12 Land
13 Building
14 Furniture and Fixtures
15 Computer Equipment
16 Notes Receivable
17 Interest Revenue/Interest Income
18 Interest Receivable
19 Wages Expense
20 Wages payable
21 Inventory or Merchandise Inventory

Interest Expense under Effective Interest Method:

Issue Price $3,100,000.00

Face Amount $4,000,000.00
Discount on Bonds Payable = Face Value - Issue Price $900,000.00
Market Rate of Interest 8%
Face interest Rate 10%

Interest Expense = Market Rate X Issue Price

8% x $3,100,000 $248,000.00
Interest Pai Face Value x Face Rate
$4,000,000 x 10% $400,000.00
Discount to be amortized = Interest Expense - Interest paid -152000
 Journal Entries

Date Account Title and Explaination Post.

Ref.

Dec.31 Supplies Expense ($1500 - $600)

Adj. (a) Office Supplies

(To record Adjusting Entry For Consumption of Supplies)

Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
May.1 Cash
Accumulated Depreciation
Machinery
Gain On Disposal of Asset

(To record Disposal of Machinery)

Cost $800,000.00
Salvage Value $50,000.00
Depreciable Value (Cost-Salvage Value) $750,000.00

Method Of Depreciation ---Straight Line Method

Useful Life 5 years

Annual Depreciation = Depreciable Value/useful Life $150,000.00

For year Ended 31, Dec.2014 $150,000.00

For year Ended 31, Dec.2015 $150,000.00
For year Ended 31, Dec.2016 $150,000.00
For year Ended 31, Dec.2017 $150,000.00
For period from 1,Jan.2017 to 1,May.2017(4 Months) $50,000.00
Total Accumulated Depreciation $650,000.00
a. Purchase and resale of shares assuming shares are Retired:
Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
Feb.15 Common Stock
Paid in Capital-Shares repurchase
Cash
(To record repurchase of own stock)

2018
Feb.17 Common Stock
Paid in Capital-Shares repurchase
Cash
(To record repurchase of own stock)

2020
Nov.9 Cash
Common Stock
Paid in Capital-Shares repurchase

(To record sale of common stock)

a. Purchase and resale of shares assuming as Treasury stock:

Journal Entries

Date Account Title and Explaination Post.

Ref.
2018
Feb.15 Treasury Stock
Cash
(To record repurchase of own stock)

2018
Feb.17 Treasury Stock
Cash
 (To record repurchase of own stock)

2020
Nov.9 Cash
Paid in Capital- Treasury Stock
Treasury Stock

(To record sale of treasury stock)

a. Shares Retired Assumption

Shareholders' Equity $
Common Stock , 9 million shares issued of $1 par value per share $9,000,000.00
Paid In capital in Excess of Par $63,000,000.00
Paid In capital in Shares repurchase -$4,000,000.00
Total Paid In Capital $68,000,000.00
Retained Earnings $92,500,000.00
Net Income
2018 $16,000,000.00
2019 $18,000,000.00
2020 $20,000,000.00
Total Shareholders' Equity $214,500,000.00

a. Shares Treasury Stock Assumption

Shareholders' Equity $
Common Stock , 9 million shares issued of $1 par value per share $9,000,000.00
Paid In capital in Excess of Par $63,000,000.00
Paid In capital - Treasury Stock -$275,000.00
Total Paid In Capital $71,725,000.00
Retained Earnings $92,500,000.00
Net Income
2018 $16,000,000.00
2019 $18,000,000.00
2020 $20,000,000.00
Less:Treasury Stock -$4,250,000.00
Total Shareholders' Equity $213,975,000.00
T - Accounts:

Sep.1
Sep.8

Totals

Accou
Sep.8

Totals

Totals

Advert
Sep.12

Totals

Repairs and M
Sep.20
Totals

Sep.5
Totals

Preparation of T account for

Manufact

Depreciation on
Manufacturing
Equipment
Property Taxes
on Plant
Plant Janitor
Wages

Totals

Balance of $261500 represents

Com
Totals

Re

Sep.2
Totals

Incom

Sep.27
Totals

D
Sep.30

Totals

Cash
Totals

Supp
Beg.Balance

Cash
Totals

Deprec
Beg.Balance
Accumulated
Depreciation
Totals

Retai
 Net Loss from
Income Summary
Totals

Capitalization cost of Asset:

All costs incurred to make asset is available to use shall be capitalized.
Purchase Pr $55,000.00
Sales tax $500.00
transportati $1,000.00
Installation $2,000.00
Capitalizati $58,500.00

Cost Assigned to Building:

Proportionate Value of Price Shall be assigned to each component of asset.
Total Value $120,000.00
Contribution 49.60%
Cost Assigned to building = 49.6% x $120000
$59,520.00

Journal Entry to record Purchase of Asset:

Journal Entries

Date Account Title and Explaination Post.

Ref.

Equipment
Notes Payable
Cash
(To record purchase of Equipment)

Carrying Value/ Book Value:

Book Value = Acquisition Cost - Accumulated Depreciation

=
Determination of ending balances: Debit
Cash 2100
Supplies 810
Land 34000
Equipment 4000
Accounts Payable 900-290
Notes Payable 8500+23000
Common Stock

Business have cash balance of $2100 at the end of period.

They owe total liabilities of 610+31500 =$32110 at rhe end of the period.

Journal Entries

Date Account Title and Explaination Post.

Ref.
1
 Bank Charges
Cash
(To record Bank Charges)

2
Accounts Receivables
Cash
(To record NSF check)
 Debit Credit
($ ) ($ )

$ 21,000.00
$ -
$ 21,000.00

#REF!

#REF!

#REF!

#REF!

#REF!
#REF!
Millions
Millions
Millions
Millions

79.18

Ending Inventory = (150+220+100)-(140+90) = 240 Units

Under LIFO Method;

So Option c is Correct.
Per M Hr

Per D L Hr

Painting Total
$1,200.00 $2,136.00
$990.00 $1,690.00
$1,893.94 $2,613.94
$4,083.94 $6,439.94

$6,439.94
31
$207.74
Standard
$46.00
$13.20
$3.36

$62.56

Cost Driver (b) Activity Rate (a/b)

1500 $67.00
700 $170.00
400000 0.30

Residential
$50,250.00
$42,500.00
$78,000.00
$170,750.00

Standard
$46.00
$13.20
#REF!
#REF!

% of Total
20.00%
80.00%
100.00%
 $16,000.00
$64,000.00
$80,000.00

% of Total
20.00%
80.00%
100.00%

$3,200.00
$12,800.00
$16,000.00

% of Total
75.00%
25.00%
100.00%

$48,000.00
$16,000.00
$64,000.00

Decoder Q
14,000
$2.40
$33,600.00
Decoder Q
14,000
$2.40
$33,600.00
38500
$0.87

Fabrication Total
$375,000.00 $750,000.00
$160,000.00 $360,000.00

$14,400.00 $269,200.00
$549,400.00 $1,379,200.00

Fabrication Total
$250,000.00 $550,000.00
$225,000.00 $400,000.00

$57,600.00 $166,800.00
$532,600.00 $1,116,800.00

Job C - 200
$1,116,800.00
150.00%
$1,675,200.00

Job C - 200
$1,116,800.00
0
$1,116,800.00
0
$1,116,800.00
 Wurcon Total
10000
1.25
12500 14000

Per Direct Labor Hr

Per Engineering Design Hr

Wurcon
$11.00
$13.00

$18.75

$10.50
$42.75

ber 31, 2018

Debit Credit
($) ($)

$900.00
$900.00

Debit Credit
($) ($)

165,000
650,000
800,000
15,000

Carrying Value on Date of Sale

Gain on Sale
Cash Received
 Debit Credit
($ Millions) ($ Millions)

$400,000.00
$3,600,000.00
$4,000,000.00

$400,000.00
$2,600,000.00
$3,000,000.00

$2,475,000.00
$275,000.00
$2,200,000.00

Debit Credit
($ Millions) ($ Millions)

$4,000,000.00
$4,000,000.00

$3,000,000.00
$3,000,000.00
$2,475,000.00
$275,000.00
$2,750,000.00
 Cash
$18,000.00 Sep.2
$1,000.00 Sep.5
Sep.20
Sep.25
Sep.27
Sep.30
$19,000.00 Totals

Accounts Receivable
$6,600.00

$6,600.00 Totals

Revenue

Sep.8

$0.00 Totals

Advertising Expenses
$500.00

$500.00 Totals

Repairs and Maintenance Expenses

$2,700.00
 $2,700.00 Totals

Equipment

$10,100.00
$10,100.00 Totals

ation of T account for Manufacturing Overheads:

Manufacturing Overheads

Applied
Manufacturing
$580,000.00 Overheads

$36,500.00

$22,000.00

$638,500.00 Totals
Balance
e of $261500 represents overapplication of Manufacturing Overheads

Common Stock
 Sep.1
$0.00 Totals

Rent Expense

#REF!
#REF! Totals

Income Tax Expense

$1,000.00
$1,000.00 Totals

Dividend
$600.00

$600.00 Totals

Income
45700 Summary
#REF! Totals

Supplies Expense
0
Income
5600 Summary
#REF! Totals

Depreciation Expense
0
Income
10200 Summary
#REF! Totals

Retained Earnings
 Jan.1, 2015

€0.00
$ - Totals
Jan.1, 2016

Debit Credit
($) ($)

$30,000.00
$28,000.00
$2,000.00
Credit

610
31500
8800

Debit Credit
($) ($)
 $45.00
$45.00

$1,680.00
$1,680.00
In this case, we have to use Present Value of $1 at Compound Interest Table.
Period = 4 Years
Amount to be received after four years = Future Value =

Present Value of $1 after period of 4 Years at 10% =

(from the Present Value of $1 compounded interest Table given in
the question)

So, Present Value = $16,268 x 0.683 =

So Option d is Correct Answer.

Note:
Formula for Present Value :
Present Value = Future Value x (Present Value of $1 for 'Period = n' , 'Rate r' )

Premium on Issue of Bonds = Issue Price - Face Value of Bond =

=
Method of Amortization: Effective Interest Method

Under this method, Interest expense = Issue Price of Bond x Market Rate of Interest
=
=

So , Interst Expense = $3,745.84

Interst Payment = Face Value of Bond x Coupon Rate of Interest

=
=

Premium Amortized = Interest Paid - Interest Expense =

=

Carrying Amount As on December 31, Yr1:

Bonds Payable, 8% FV
Add: Premium on Bonds
Less: Amortization for yr1
Bonds Payable As on Dec.31, YR1
d Interest Table.

$16,268

0.683

$11,111.04

or 'Period = n' , 'Rate r' )

$4,256,910-$4,239,000
$17,910
nd x Market Rate of Interest
$53,512 x 7%
$ 3,745.84

$50,000 x 8%
$ 4,000.00

$4,000 - $3,745.84
$ 254.16

$ 50,000.00
$ 17,910.00
$ (254.16) $ 17,655.84
$ 67,655.84
Issue of Bonds for Cash is Cash Inflow from Financing Activity.
Payment of Interest on Bonds is Cash Out Flow from Financing Activity.

$ in Millions
Cash Inflow From Financing Activities (Issuance of Bonds) $ 1,670.00
Cash Out Flow From Financing Activities (Payment of Interest) $ (75.60)
($1,680 Million x 9% x 6months/12months)