# ACC 206 Week 2 Assignment: Chapter Two and Three Problems

Question # 00000794 Posted By: neil2103 Updated on: 09/07/2013 04:30 PM Due on: 09/11/2013
Subject Accounting Topic Accounting Tutorials:
Question
ACC 206 Week 2 Assignment: Chapter Two and Three Problems

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 the appropriate week using the Assignment Submission button.

Chapter 2 Exercise 3
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?
d. Did Star's total legal capital increase or decrease during 20X6? By what amount?

Chapter 2 Problem 1
2. Bond computations: Straight-line amortization
Southlake 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
a. Cash inflow on the issuance date _______ _______ _______
b. Total cash outflow through maturity _______ _______ _______
c. Total borrowing cost over the life of the bond issue _______ _______ _______
d. Interest expense for the year ended December 31, 20X1 _______ _______ _______
e. Amortization for the year ended December 31, 20X1 _______ _______ _______
f. Unamortized premium as of December 31, 20X1 _______ _______ _______
g. Unamortized discount as of December 31, 20X1 _______ _______ _______
h. Bond carrying value as of December 31, 20X1 _______ _______ _______

Chapter 3 Exercise 2
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 128,000
Production supervisors 64,000
Maintenance personnel 41,000
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

Chapter 3 Exercise 5
4. Schedule of 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.

Chapter 3 Problem 3
5. Manufacturing statements and cost behavior
Tampa 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 —
Selling — 70,000

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?

Tutorials for this Question
1. ## Solution: ACC 206 Week 2 Assignment

Tutorial # 00000654 Posted By: neil2103 Posted on: 09/07/2013 04:32 PM
Puchased By: 2
Tutorial Preview
The solution of ACC 206 Week 2 Assignment...
Attachments
acc_206_week_2_assignment.xlsx (78.96 KB)

Great! We have found the solution of this question!