Ashford ACC 206 Fall 2013,Week Two Assignment

ACC
206 Week Two Assignment.0001pt 36pt; text-align: center;”>Please
complete the following exercises below in either Excel or a word document (but
must be single document). You must show your work where appropriate (leaving
the calculations within Excel cells is acceptable). Save the document, and
submit it in theappropriate
week using the Assignment Submission button.1. Analysis of stockholders’ equity Star
Corporation issued both common and preferred stock during 20X6. The
stockholders’ equity sections of the company’s balance sheets at the end of
20X6 and 20X5 follow:

20X6

20X5

Preferred
stock, $100 par value, 10%

$580,000

$500,000

Common
stock, $10 par value

2,350,000

1,750,000

Paid-in
capital in excess of par value

Preferred

24,000

—

Common

4,620,000

3,600,000

Retained
earnings

8,470,000

6,920,000

Total
stockholders’ equity

$16,044,000

$12,770,000

a.
Compute the number of preferred shares
that were issued during 20X6. b.
Calculate the average issue price
of the common stock sold in 20X6. c.
By what amount did the company’s
paid-in capital increase during 20X6? Did Star’s total legal
capital increase or decrease during 20X6? By what amount? 2. Bond
computations: Straight-line amortizationSouthlake Corporation issued $900,000
of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1
and mature in 10 years. Assume the independent cases that follow. ·
Case A—The bonds are issued at 100. ·
Case B—The bonds are issued at 96. ·
Case C—The bonds are issued at 105. Southlake uses the straight-line
method of amortization. Instructions:

Complete the following table:

Case A

Case B

Case C

Cash inflow on the issuance date

Total cash outflow through
maturity

Total borrowing cost over
the life of the bond issue

Interest expense for the
year ended December 31, 20X1

Amortization for the year
ended December 31, 20X1

Unamortized premium as of
December 31, 20X1

Unamortized discount as of
December 31, 20X1

Bond carrying value as of
December 31, 20X1

3. Definitions of manufacturing concepts
Interstate Manufacturing produces brass fasteners and incurred the following
costs for the year just ended:Materials
and supplies used Brass $75,000
Repair
parts 16,000
Machine
lubricants 9,000
Wages and
salaries Machine operators 128,000Production
supervisors 64,000
Maintenance
personnel 41,000
Other
factory overhead Variable 35,000 Fixed 46,000
Sales
commissions 20,000
Compute:a.
Total direct materials consumed: b.
Total direct labor c.
Total prime cost d.
Total conversion cost 4.
Scheduleof
cost of goods manufactured, income statement The following information was
taken from the ledger of Jefferson Industries, Inc.:

Direct labor

$85,000

Administrative
expenses

$59,000

Selling
expenses

34,000

Work in.
process:

Sales

300,000

Jan. 1

29,000

Finished
goods

Dec. 31

21,000

Jan. 1

115,000

Direct
material purchases

88,000

Dec. 31

131,000

Depreciation:
factory

18,000

Raw
(direct) materials on hand

Indirect
materials used

10,000

Jan. 1

31,000

Indirect
labor

24,000

Dec. 31

40,000

Factory
taxes

8,000

Factory
utilities

11,000

Prepare the following: a.
A schedule of cost of goods manufactured for
the year ended December 31. b.
An income statement for the year ended
December 31..5px;”>
5. Manufacturing statements and cost
behaviorTampa Foundry began operations during the
current year, manufacturing various products for industrial use. One such
product is light-gauge aluminum, which the company sells for $36 per roll. Cost
information for the year just ended follows.

Per Unit

Variable
Cost

Fixed
Cost

Direct materials

$4.50

$ —

Direct labor

6.5

—

Factory overhead

9

50,000

Selling

—

70,000

Administrative

—

135,000

Production and sales totaled 20,000 rolls and
17,000 rolls, respectively There is no work in process. Tampa carries its
finished goods inventory at the average unit cost of production. Instructions:a.
Determine the cost of the finished goods
inventory of light-gauge aluminum. b.
Prepare an income statement for the current
year ended December 31 c.
On the basis of the information presented: 1.
Does it appear that the company pays
commissions to its sales staff? Explain. 2.
What is the likely effect on the $4.50 unit
cost of direct materials if next year’s production increases? Why?