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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Question:Calculating cost of goods sold for merchandising and manufacturing companies
Below are data for two companies:
Company A Company B
Beginning balances:
Merchandise Inventory \( 10,600
Finished Goods Inventory \) 15,000
Ending balances:
Merchandise Inventory 13,100
Finished Goods Inventory 11,700
Net Purchases 154,500
Cost of Goods Manufactured 214,500
Requirements
1. Define the three business types: service, merchandising, and manufacturing.
2. Based on the data given for the two companies, determine the business type of each one.
3. Calculate the cost of goods sold for each company
Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
e. Cost of chemicals to treat the paper.
Give five examples of manufacturing overhead.
Selected data for three companies are given below. All inventory amounts are ending balances and all amounts are in millions.
Company A Company B Company C
Cash \( 6 Wages Expense \) 12 Administrative Expenses $ 4
Net Sales Revenue 48 Equipment 32 Cash 25
Finished Goods Inventory 10 Accounts Receivable 8 Net Sales Revenue 75
Cost of Goods Sold 23 Service Revenue 65 Selling Expenses 8
Selling Expenses 4 Cash 34 Merchandise Inventory 12
Equipment 67 Rent Expense 12 Equipment 55
Work-in-Process Inventory 9 Accounts Receivable 19
Accounts Receivable 14 Cost of Goods Sold 25
Cost of Goods Manufactured 23
Administrative Expenses 7
Raw Materials Inventory 6
Using the data on the previous page, calculate total current assets for each company
The Institute of Management Accountants’ Statement of Ethical Professional Practice requires managerial accountants to meet standards regarding competence, confidentiality, integrity, and credibility. Consider the following situations. Which standard(s) is(are) violated in each situation?
e. You do not provide top management with the detailed job descriptions they requested because you fear they may use this information to cut a position in your department.
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