Answers for EXAM I
Part B: Problem 1 (24 points):
Answers for Questions on Final Review Notes
2. Company should make instead of buy the product.
15. Thurston Company sells its product for $42 per unit. The companys unit product cost
CHAPTER 21 Budgeting
Prob. 212A (FIN MAN); Prob 6~2A (MAN)
1. GOURMET GRELL COMPANY
For the Month Ending July 3, 2016
Unit Saies Unit Sailing
Product and Area Volume Price Total Sales
klau: m own rm
can nanny-aunt: uI-JU
Prob. 263A (FIN MAN); Prob. 113A (MAN)
1. Production department rates:
Factory overhead .
+ Direct labor hours .
Production department rate .
Cutting Department .
Finishing Department .
Total factory overhead .
+ Number of units .
CHAPTER 27' Lean Principles, Lean Accounting, and Activity Analysis
Prob. 274A (FIN MAN); Prob. 12~1A (MAN)
Soft Giows purchasing policy is very short-sighted. It does not involve developing
partnerships with suppliers. Soft Glow should con
CHAPTER 23 Performance Evaioation for Decentralized Operations
Prob. 232A (FIN MAN); Prob. 8-2A (MAN)
TRAXDNIA RAILROAD INC.
Divisional Income Statements
For the Quarter Ended December 31, 2016
lncome from operations before
Prob. 222A (FIN MAN); Prob. 72A (MAN)
Performance Evaiuation Using Variances from Standard Costs
Direct Materials Variance Cocoa
Actual price . 55 7-33
Standard price . MmZ-EE
Variance . $ 0.08
x Actual quant
On January 1, 2013, Pride Co. purchased 90 percent of the outstanding voting shares of Star Inc. for
$540,000 cash. The acquisition-date fair value of the noncontrolling interest was $60,000. At January 1,
2013, Stars net assets had a total carrying amoun
[The following information applies to the questions displayed below.]
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $40 fair
value in exchange for all
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2012. On that date, Paars
equipment (10-year life) has a book value of $477,500 but a fair value of $602,500. Kimmel has
equipment (10-year life) with a book value of $253,000 but a fair v
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2012. On that date, Paars equipment
(10-year life) has a book value of $420,000 but a fair value of $520,000. Kimmel has equipment (10-year life)
with a book value of $272,000 but a fair v
Dosmann, Inc., bought all outstanding shares of Lizzi Corporation on January 1, 2013, for $700,000 in
cash. This portion of the consideration transferred results in a fair-value allocation of $35,000 to
equipment and goodwill of $88,000. At the acquisitio
Kaplan Corporation acquired Star, Inc., on January 1, 2014, by issuing 13,000 shares of common stock
with a $10 per share par value and a $23 market value. This transaction resulted in recognizing $62,000
of goodwill. Kaplan also agreed to compensate Star
Herbert, Inc., acquired all of Rambis Companys outstanding stock on January 1, 2014, for $574,000 in
cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover,
Herbert reported retained earnings of $400,000, an
Chapter 5 International Accounting
E&P 1-20, 39
23 February 2016
1. B. Prior to December 31, Year 1, that gives the company until January 1, Year 1 to
rectify the debt covenant violation.
2. D. 200,000 + 1,000,000 = 1,200,000
3. C. 600,000
Chapter 1 HW: AQ; E&P 3, 6; C 1
1. International trade (imports and exports) constitutes a significant portion of the world
economy. In 2011, companies worldwide exported more than $18.3 trillion worth of
merchandise. Although international trade has exis
Chapter 2 HW: AQ; E&P 4; C 2
1. Companies in North America commonly present assets in order of liquidity, beginning
with cash. Companies in Europe commonly present assets in reverse order of liquidity,
beginning with fixed assets. (p.43)
2. There are two
Chapter 3 HW: AQ; E&P 5; C 1
1. Harmonization refers to the reduction of alternative accounting practices in different
countries. Convergence refers to the process of developing a set of high quality financial
reporting standards for use internationally.
Chapter 4 HW: E&P 1-20; 39
1. B. (100,000-10,000)+60,000+30,000+25,000= $205,000
2. C. 50,000 vs. 45,000= $45,000
3. A. When an asset is revalued, the entire class of property, plant, and equipment to which
that asset belongs must be revalued.
4. D. Motor
Chapter 6 HW: AQ; C1
1. The liberalization of accounting and auditing services will open up international
investment opportunities for national investors. In turn, national firms will have strong
incentives to provide internationally sound and comparable
Exercises and Problems
1. B (PG 180)
2. D (PG 180)
3. C (PG 182) (500,000+700,000)/2=600,000
4. B (PG 183)
5. A (PG 187)
6. C (PG 189)
7. A (PG 191)
8. C (PG 194)
9. D (PG 197)
10. B (PG 215)
11. D. (PG 210)
12. C. (213)
Chapter 1 HW (1-16;1-21)
a. (p.12 Figure 1-3)
Audit services: A report by a professional CPA expressing his or her opinion as to whether or
not a financial statement audited by him/her is both true and fair regarding the state of affairs of
Chapter 2 HW (2-16, 2-21)
a. Which of the following best describes what is meant by U.S. auditing standards?
1) Acts to be performed by the auditor.
2) Measures of the quality of the auditors performance.
3) Procedures to be used to gather evidence
Discuss the four primary purposes of analytical procedures performed during the planning phase
of an audit:
Accept client and perform initial audit planning
Understand the clients business and industry
Assess client business risk
Perform preliminary analy