Chapter 16: Q2RQ (page 859)
Question: What is an annual report? Briefly describe the key parts of the annual report.
Answer
An annual report is all about the financial performance and other activities of an organization in the last preceding years
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Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then determine if the product cost is a prime cost and/or a conversion cost.
8. Property taxes on the factory
Calculating income and cost per service for a service company
Buddy Grooming provides grooming services for pets. In April, the company earned \(16,300 in revenues and incurred the following operating costs to groom 660 dogs:
Wages Expense \) 4,061
Grooming Supplies Expense 1,675
Building Rent Expense 900
Utilities Expense 305
Depreciation Expense—Equipment 55
Requirements 1. What is Buddy’s operating income for April?
Question:Gateway produces electronic calculators. Suppose Gateway’s standard cost per calculator is \(25 for direct materials and \)68 for conversion costs. The following data applyto August activities:
Direct materials purchased (on account) \( 8,300
Conversion costs incurred 20,500
Number of calculators produced 300 calculators
Number of calculators sold (on account, at \)105 each) 295 calculators
Requirements
1. Prepare summary journal entries for August using JIT costing, including the entryto adjust the Conversion Costs account.
2. The beginning balance of Finished Goods Inventory was $1,300. Use a T-accountto find the ending balance of Finished Goods Inventory.
Comparing managerial accounting and financial accounting
Match the following terms to the appropriate statement. Some terms may be used more than once, and some terms may not be used at all.
Directing Managerial
Creditors Managers
Controlling Planning
Financial Stockholders
a. Accounting systems that must follow GAAP.
b. External parties for whom financial accounting reports are prepared.
c. The role managers play when they are monitoring day-to-day operations and keeping the company on track.
d. Internal decision makers.
e. Accounting system that provides information on a company’s past performance.
f. Accounting system not restricted by GAAP.
g. The management function that involves choosing goals and deciding how to achieve them
Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA):
5. Summary reports prepared quarterly or annually.
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