devry acct301 all weeks homework assignment [ all week 7 ]

| June 14, 2016

Question
Devry ACCT301 all assignments

week 1-7

ACCT301

Week 2 Homework

1. In two to three paragraphs, describe the Sarbanes-Oxley Act and why it is important to the accounting profession. (15 points)

2. Name and briefly describe the five components of COSO’s internal control framework. (10 points)

3. Describe the relationship between the Sarbanes-Oxley Act and COSO. (10 points)

4. Tom Jackson is a CPA who really likes to go to Las Vegas, play poker, and bet on football games. Tom knows that the accounting profession disapproves of gambling, but because he spends a lot of time studying sports facts and how to win at poker, he feels that he is simply making educated decisions based on facts. He says that this is no different from using accounting information to buy stocks. Use the fraud triangle as a basis to comment on Tom’s gambling activities. (15 points)

Week 1

Problem 1

Required: Identify the financial statement on which each of the following items appears by making an X in the appropriate column. The first one is done for you.

(15 points total, 1 point each)

Income Balance Statement of

Item Statement Sheet Cash Flows

Accounts Payable X

Accounts Receivable

Advertising Expense

Common Stock

Dividends

Equipment

Financing Activities

Investing Activities

Land

Operating Activities

Rent Expense

Retained Earnings

Revenue

Salaries Payable

Utility Expense

Problem 2

Problem 2

Required: Show the effects on the financial statements using a horizontal statement model as outlined below. The first one is done for you.

(35 points total, 5 points each)

1 Sold $30,000 in merchandise for cash

2 Paid $5,000 for rent with cash

3 Paid $10,000 in salaries to employees with cash

4 Sold $25,000 in merchandise and customer paid on credit

5 Collected $10,000 cash for transaction #4

6 Purchased a building for $100,000 and took out a loan for the money

7 Paid the $1,200 telephone bill with cash

Week 3

Problem 1

Required: Express each income statement component as a percentage of sales, and comment on the trends in each line from 2013 to 2014.

(25 points)

2014 % Sales 2013 % Sales

Sales $10,00,000 $12,00,000

Cost of goods sold $4,50,000 $6,00,000

Gross margin $5,50,000 $6,00,000

Operating expenses $6,00,000 $4,50,000

Net income $(50,000) $1,50,000

Problem 2

Required: Compute (1) accounts receivable turnover for 2014, (2) the inventory turnover for 2014, and (3) the net margin for 2014.

(25 points)

2014 2013

Balance sheet items

Accounts receivable $3,80,000.00 $3,76,000.00

Allowance for doubtful accounts $(20,000.00) $(16,000.00)

Net accounts receivable $3,60,000.00 $3,60,000.00

Inventory $4,80,000.00 $4,40,000.00

Income statement items

Sales $34,00,000.00 $30,80,000.00

Cost of goods sold $16,00,000.00 $14,40,000.00

Operating expenses $7,80,000.00 $6,80,000.00

Week 4

Problem 1

Required: Use the following information to complete the below schedule of cost of goods manufactured.

(25 points)

Purchases of raw materials $1,20,000.00

Raw materials available for use $1,48,000.00

Cost of direct raw materials used $1,24,000.00

Manufacturing overhead $24,000.00

Total manufacturing costs $3,10,000.00

Ending work-in-process inventory $(46,000.00)

Cost of goods manufactured $3,06,000.00

Schedule of Cost of Goods Manufactured

Beginning inventory, raw materials

Plus: Purchases of raw materials

Raw materials available for use $-

Less: Ending raw materials inventory

Cost of direct raw materials used $-

Direct labor

Manufacturing overhead

Total manufacturing costs $-

Plus: Beginning work-in-process inventory

Total work in process $-

Less: Ending work-in-process inventory

Cost of goods manufactured $-

Problem 2

Required: JZ is a musician who is considering whether to independently produce and sell a CD. JZ estimates fixed costs of $10,000 and variable costs of $4.00 per unit. The expected selling price is $12 per CD. What is JZ’s break-even point in units and dollars?

(25 points)

Break-even point in units Fixed Costs

Contribution margin per unit

Week 5

Problem 1

Required:Identify each of the following as either a direct or indirect cost.

(20 points)

Direct or Indirect?

Material used in production

Salary of manufacturing supervisor

Wages of manufacturing worker

Telephone costs

Rent

Problem 2

Required: GH Company is trying to decide whether to replace a current piece of machinery with a new machine. Using the below data, determine the relevant costs of the old machine and the new machine. Should GH Company purchase the new machine?

(30 points)

Old Machine New machine

Original cost 1,00,000

Accumulated depreciation (50,000)

Book value 50,000

Market value (now) 25,000 30,000

Salvage value (in 5 years) 5,000 8,000

Annual depreciation expense 11,000

Operating expenses

Per year 9,000 4,500

Times number of years 4 4

Total operating expenses 36,000 18,000

Week 6

Problem 1

Required:In the space below, describe the advantages of budgeting.

(10 points)

Problem 2

Required: Compute the ROI for each division below to two decimal places. (30 points)
Which division has the best performance? (10 points)

(40 points total)

Division A

Division B

Division C

Operating income

2,45,000

1,25,000

3,50,000

Operating assets

12,00,000

7,75,000

15,00,000

Week 7

Problem 1

Required: In the space below, describe the net present value method of capital budgeting.

(10 points)

Problem 2

Required:Compute the average annual cash inflows. (20 points)
Compute the payback period using the accumulation method. (20 points)

(40 points total)

2013

2014

2015

2016

2017

Incremental revenue

6,000

2,000

4,000

2,000

1,000

Cost of new machine

12,000

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