Ratios for the two types of inventories

Assignment Help Accounting Basics
Reference no: EM13120140

The following calendar year-end information is taken from the December 31, 2005, adjusted trial balance and other records of Plaza Company.

Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . $ 30,750
Depreciation expense-Office equipment . . . . . . . . . 9,250
Depreciation expense-Selling equipment . . . . . . . . . 10,600
Depreciation expense-Factory equipment . . . . . . . . 35,550
Factory supervision . . . . . . . . . . . . . . . . . . . . . . . . . 104,600
Factory supplies used . . . . . . . . . . . . . . . . . . . . . . . 9,350
Factory utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000
Inventories
Raw materials, December 31, 2004 . . . . . . . . . . . . 168,850
Raw materials, December 31, 2005 . . . . . . . . . . . . 184,000
Goods in process, December 31, 2004 . . . . . . . . . 17,700
Goods in process, December 31, 2005 . . . . . . . . . 21,380
Finished goods, December 31, 2004 . . . . . . . . . . . 169,350
Finished goods, December 31, 2005 . . . . . . . . . . . 138,490
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677,480
Income taxes expense . . . . . . . . . . . . . . . . . . . . . . . 235,725
Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,875
Miscellaneous production costs . . . . . . . . . . . . . . . . 10,425
Office salaries expense . . . . . . . . . . . . . . . . . . . . . . 65,000
Raw materials purchases . . . . . . . . . . . . . . . . . . . . . 927,000
Rent expense-Office space . . . . . . . . . . . . . . . . . . 24,000
Rent expense-Selling space . . . . . . . . . . . . . . . . . . 28,100
Rent expense-Factory building . . . . . . . . . . . . . . . 78,800
Maintenance expense-Factory equipment . . . . . . . . 37,400
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,527,000
Sales discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,500
Sales salaries expense . . . . . . . . . . . . . . . . . . . . . . . 394,560

1. Prepare the company's 2005 manufacturing statement.

2. Prepare the company's 2005 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.

3. Compute the (a) inventory turnover, defined as cost of goods sold divided by average inventory, and (b) days' sales in inventory, defined as 365 times ending inventory divided by cost of goods sold, for both its raw materials inventory and its finished goods inventory. (To compute turnover and days' sales in inventory for raw materials, use raw materials used rather than cost of goods sold.) Discuss some possible reasons for differences between these ratios for the two types of inventories. Round answers to one decimal place.

Reference no: EM13120140

Questions Cloud

Why do you think that they have made this change : For the longest time, companies offered the employees who stayed with the company for many years a defined pension plan for to help them retire when it was time. That time has since passed and companies now offer a defined contribution plan instea..
Determining algebra-revenue-demand equation : In this problem, we will analyze the profit found for sales of decorative tiles. A demand equation (sometimes called a demand curve) shows how much money people would pay for a product
Find probability that return for common stocks is greater : Assume that these distributions are distributed as normal random variables with the means and standard deviations given previously. Find the probability that the return for common stocks will be greater than 8%.
Solving compound inequality : The number of senior citizens (65 and older) in the US in millions n years after 1990 can be estimated using the formula
Ratios for the two types of inventories : Discuss some possible reasons for differences between these ratios for the two types of inventories. Round answers to one decimal place.
Create confidence interval of true proportion of boys : It was found that in a sample of 215 teenage boys, 59% of them have received speeding tickets. What is the 95% confidence interval of the true proportion of teenage boys who have received speeding tickets?
Graph the inequality between hip and waist sizes : A study concluded that waist to hip ratios are a better predictor of 5-year survival than more traditional height-to-weight ratios.
Gravel path of equal width : A rectangular garden has dimensions of 25 feet by 19 feet . A gravel path of equal width is to be built around the garden. How wide can the path be if there is enough gravel for 672 square feet?
What is the final temperature of the water-iron mixture : A 26.1 g sample of pure iron at 77°C is dropped into 93 g of water at 17°C. What is the final temperature of the water-iron mixture.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Journal entries for foundation formal letter

Prepare the journal entries that should be made to record the expenditure of $100,000 on activities related to the legal assistance program. Prepare the journal entries that should be made upon receipt of the $100,000 check, assuming that it was r..

  Connection with consolidation of assest

What worksheet entries are needed in connection with the consolidation of this asset? Assume that the parent applies the partial equity method.

  Communicating effectively

Describe situations where you have effectively demonstrated each of the forms of communication mentioned. What did you do to help you communicate effectively?

  Compute any passive investment income tax penalty

In 2012 Sweetwater's excess net passive income is $42,000. Sweetwater holds $31,000 of accumulated earnings and profits from a C corporation year.

  Rediscounted note

Discuss how to calculate how much Marbury Bank loaned to the maker of the note and how must Marbury would receive when the note was rediscounted.

  Larsen company budgete production of widgets

Larsen Company makes and sells a single product, widgets. Three pounds of clay are needed to make one widget-How much clay should be purchased in September?

  Compensating nonprofit board members

Often Board and other committee volunteers for nonprofit organizaations are compensated for expenses during travel and meetings. Some think that this attracts volunteers for the wrong reasons.

  Accounting techniques as related to the profession

Discuss accounting techniques in general as they relate to the profession. Some things to discuss are the different accounting roles and positions that are out there and how you see yourself fitting into those roles based on what you have learned ..

  Indirect labour hour calculations

In the past, TTTH Inc. allocated indirect manufacturing costs based on direct labor hours. Recently, management has decided to pilot a system of time-driven activity-based costing (TDABC) to allocate these costs. Determine the indirect labor suppor..

  Management of financial institutions questions

Identify two financial intermediaries. What are their respective functions? What are their major roles in the economy? What are the money markets and what are the capital markets? How do they differ? What are their respective activities?

  Find the standard price per kilogram for raw material

The material price variance was 1370 favorable and find the standard price per kilogram for raw material?

  Journal entries to record payment

At the end of 2011, Tatum Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $28,000. On January 24, 2012, it is learned that the company's receivable from Novinger Inc-Make the journal entries to record the payment.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd