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Accounting Quiz Solution - INTRODUCTION TO BUSINESS M...

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Unformatted text preview: INTRODUCTION TO BUSINESS M ACCOUNTiNG QUIZ ADMiN. 11005130?) WINTER 2010 PROF; Peter Koppel Quiz Dumiion: 1 ham 20 minutes instructions: 1.) Answer each questien in {he space providad. 2.) Show ail of your werk. 3.) Use of a calculator i3 permitmd; memory must be erased. QUESTION #1 QUESTION #2 QUESTION #3 QUESTION #4 QUESTION #5 TOTAL {K LAST NAME: (1316386 prim) Em EEEEEEEEE EEMEEEEEEEEE FERST NAME: {13182133 prim} STUBENT NLEEfiBER: Questian I: Breakeven W631: Anaiygis Yau are gixsen the faiigwing data: Mammy lease expefise 589808.80 Seiling price per unit $18130 Wages per 11:11? pmduced $3.50 Annual saiaries 31253388136 Annuai rent expanse $14,400.08 Gverhead cos? per unit praduced $5.50 Raw materials cast pfif unit produced $4.69 a) How many units need {0 be preduced to at least breakeven? (I 0 marks) 3?: 53 g i, W _. W 2': gig @335”? , , , , if} 35%; fi§§gfi g; éégw 3»: Q iyg: {33%; €3,va W W émwgfijiw ”:1 §a§§€ {22% a £63 5 @3333 3%; 33a: 3 M” ”g“; a $23“? “3 {5 A29 in? 1&5;:; QM“ i“ ”a”; C A W {W 51‘?“ W A g , W m; W3? 3 66:3.ng gig, as 5::ng 3%{323 2% i733,» {gas “BEE-4?» :1 6%: 5:53 S Li“? €13??an ail—E‘s; 2&5: 5% b) Using Q16 above inforrnati0n2 draw a breakeven diagram and properly lab€1 all appropriate points. (5 marks) @245? uésg O 0 V, 3 " gag E fig" g fig. 7 S? (:3, L%%$}%s§ CE} v iémm @fima% i3 agfi %% c} If variabie aegis increase £3}; 26% anti the seiiing prise increases by 43%, whai are {he campany’s annuai fixed C0313? {3 marks} w 9 Hi “L ,V «W M ,, A“ %?€25§fi 2””; Aiékééw €232 vflw ”$9 $235 %“£§§W§ _ W E f3 , 4, gm}; ( < i 9p ‘W a x r > , 'A 6%” WW}! éyé’aé Question 2: Economic Order Quantity You are given tha fellewing data far the ABC Cmporatian: Cost per unit: $180.00 Ammal demand far good: ’iSGfiGf} units Cost $0 glass an order: $43.00 Ariana} cosi ti} carry inventory: 18% a) Giwn the abeve data, what is the Economic Qrder Quantity? (4 marks} b) If ABC Cameratien decides to order in 10 equal insiailments instead of using the E.O.Q., what would be the annual costs to the company? (8 marks) Mg; fli‘awfs” ME mfgffgggzi iii”, % j§§a§g {Ag/5:; Kr} g E W Lfif‘ngjg 5’ g; wéé" 3%; mg% 33”": “£5, 3: $53), Egg; KW}. f , ,2; c) If ABC 1:13:33 the Eccnomic Ordar Quantity, whatr weuld be the annual costs to the campany‘? {8 marks) ”9% A, A, My “dd/W” MM Questicm 3: Balance Sh€€i Prepare 2: 66161166 sheet far DE}? Corporatier: as 6? December 31 3 2666? using 616 ibilewing apprapriaie informaiian. {26 marks) W W V C216}: 61512 506 V Retained Eamingg $249 {366 bfiJsefuI Life of buildiug 10 yams V Imes‘imems 61 1:21:99 508 6/13r666i6 6x13613366 $131,660 , , - r V Gamma Stock 610051100 V Land 61 436 666 V Taxes E’ayable 6450 066 V Goodwill $246,060 WWW V Accennts payabie $160,096 V Baildings 616 600 606 V WageS payabie 61 468 (366 VNotes receivabie 6122 666 VMarketabie securities 61 112. 606 V {mentanes _ 61 986 066 V Notes payable $65 666 A ,, : . , E , ~ A Vm if?” :vVUsefui life of equipment 10 years V86666 Payable 6830 000 V News payable (due In 2016) 7 451) 600 V Accounts r66§i§i§§>j§ww $566 000 V Interest Payabie $50 606 Equipnmiéfg $1 000 006 \3 “MW. “WWW"; V Age of equipment as of Dec 31/ {)6 6 yéars sf Age of buildings as of Dec 31/66 3 years a ' a“ E L :- f6 61' , 2: I‘ V 6V”: 3‘64: 2 22525:; 32:: €33 36,, 66:66 3:66.: 1 “i 6;: 666;: 27:? 666 ggzifl & : 3 :61 666.1% 666:; Mu) * . m. 336% :1 {6; 6:36: 6:; {35% : :6 :63: :66 £33362} VT} £33 1“? 6 s {663; g 6,: 6M, , 6} :3 :63 6 :36 1g 3 V» 6362;: : §§3 V631}? ”3&3; WK £ A ' 3525/11» , 53“} V 36:6 62:66:" 6%» 3:63:73 3 :6 2259: “”6666 623:6- Vg: 6.666 6&6 «am/V «3 C 66:» flgQV/E 6; £46 :1} £6661“ memo» ngiig’ai 2 C366 66 {6:66 MW WWW (6%; 1} 6‘3} 6:5: a}? g} ; g " ‘ " f , n a i g : “1"" y :M”: ’ : ”WM ~ : :5: “W ~::::::’ «WV 6666/5 Questien 4: Income Statement Yen are given the feliewiflg data. Prepare an Inc-eme Siatement for XYZ Corpereiion fer the year eniied December 31, 2005. (20 marks} ,. Tax rate 25% Viaurchases $400 000 555533155 returns $1 we {:05} MWWW WWW 555W V Grass Sales $20, 000, 000 V5 Deliver} Expense $15, 000 V :Mjan 1, 2005 inventory $1 4,75, 000 V AdVeflising Expense $220 000 V; Other Expense: $300, 000 WWWWW ’ ' ' " ~ ~ ~ V Dec. 31, 2005 InVentflry $300 000 VSalaries expense $5,000,000 mg "‘ ’ s"gCe‘n‘lmissim‘is $1,400,000 55051355 Inceme 20700 000 V" Lease Expense $220,000 gr??? 4-5505»? EVE‘QX‘fi £3,533 339%,{3 («Egg/:3 , 3 5' WV _:’§ Cmém %~$5$553§V5$;§:§ g £55,”! 5:515; V‘é/Q’V {yfizeg i551; 2.251555 ’3: is 2:“; 50$? 5: egg _ C 0 , ,, M » V x. , «e; , i”? 3‘2»: : tn”; {yw,k% é’X‘gifiézfi’fs £1,235? , g ,3 E, 5, a 3 5 2w Vé/Vare: {WMQ’VKEWWW éifigfx «55’ M¥a3~§x‘ if; @5353} $35,735:; ,, 3 3 ,5 "W K, s . 33 Vw’f $53ij Questien 5: Accounting Raties Given the {chewing data, prepare the ratios as required as 0f December 31, 2803. Please 5110931318 formuia fer each ratie as part ofyeur answer (20 marks} Taxes Payable 700,000 Aeets. PayabIe 500,090 Aeceents reeeivabie 3,086,000 Mk3. Securities 700,000 Sales 28,000,880 Common Sieek 8,00G,GGD Retained Earnings 1,500,000 Net income 4,608,000 Notes ?ayable 3,000,008 Inventory (Dec.31,"05) 5,800,800 Inventery (3311,}, ’Gfi) 2,000,000 Purchases 10,009,000 Sales Expense 450,090 Cash 2,009,080 Prepaid expenses 540,900 31) Inventory Turnover 3X133 f3 i: {3&5 3333335 3 3 3333313 3‘ 3 » 3/ , , f / W» W m' 3' ’ (333% 3 >3 E; 5 3 339 - » 3» , _ ,33 3 :3 b) Acid Test (Quick) Ratio 333,33 *3 . 1,3 W333? 3&3; 533333 i313§§3§333 “:3; £3 3:323" 3:“ 3:3 3 3 . MM}; 1“. 3:3.) .3 , V 33 “’33 333333333§333 35"”?m 3:33:33 1.133 c) Average Collection Peried (AIR Turnover) 3/33 “”33, 3%; MW 3 31353313 , 3:333 33 K ”1%” E31353333; 3&33ix M33333? K3333; 33 3:333 33:33 {jgéeiig jffl:>::wi‘3 5 3335" 3 ‘3 3:33;; 33 33:3 313% 933 33:33 3.333 ...
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