Accounting Managerial Solution Chapter 2A

15. Agua Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year:

Driver’s Cost = (% of wage overtime x budgeted hours x 1.5 x base wage rate) + (% regular pay x budgeted hours x base wage rate)

As the Accountant II, I will create and modify plans, schedule individual and team meetings, organize training sessions, assist in preparing the accountants and technicians for the next level in their job and continue communication with the Supervisor and Manager. In my current position, I worked with the accountant and the technician to improve their accrual worksheet. The process included tracking the year-end accrual reversal journal entries and the revenue received. Also, I work with the Revenue and Finance staff and other departmental personnel to provide Oracle, CAFR-Online, and basic accounting training. I continuously communicate with my Supervisor and Manager to improve the accounting

NOTE: This solution is only one possibility. Students may use alternative or average base amounts.

CF is the new controller for the consumer division of ABC company. In the past five years, ABC’s earnings have grown by at least 15% annually, with the consumer division’s earnings growing by over 20% annually over the same time-period. In the 4th quarter of the current year, however, it is projected that consumer’s income will grow by 8% and ABC’s will grow by 10%. ML, consumer division’s president, wants CF to take some of the following “end of the year” actions in order to improve consumer’s reported earnings. Under the previous controller, these types of actions were more or less taken as acceptable practices.

Accounting was created thousand years ago. Many companies use accounting system to record, maintain and report, and analyze business financial transactions. Because managers and investors make their business decisions based on Financial Statement, information obtained from Financial Statement must be concise and reliable. Budgets and performance reports provide decision support, planning and control business operations; therefore, Financial Statements must be accurately to represent a true and fair view of companies. To evaluate results of information from Financial

Joint projects being conducted with the IASB: Joint projects involve the sharing of staff resources, and every effort is make to keep joint projects on a similar time schedule at each board.

Ex. 118 A comparative balance sheet for Joseph Corporation is presented below: JOSEPH CORPORATION Comparative Balance Sheet 2002 2001 Assets Cash $ 51,000 $ 31,000 Accounts receivable (net) 75,000 60,000 Prepaid insurance 22,000 17,000 Land 22,000 40,000 Equipment 70,000 60,000 Accumulated depreciation (20,000) (13,000) Total Assets $220,000 $195,000 Liabilities and Stockholders ' Equity Accounts payable $ 13,000 $ 6,000 Bonds payable 30,000 19,000 Common stock 140,000 115,000

| AssemblyAssembly HoursJY – 63 – 6,000RX – 67 – 5,500($433,962 x 1.06) / (6,000 + 5500)=$40.00/hour

The public is demanding for a higher level of transparency within operations of firms. Basically, companies are required to inform stakeholders regarding the operations of the business of its accountability to the social contract. Nike was caught in a big controversy of obscene wages paid to workers working in inhumane working conditions and therefore took actions in upgrading its operation’s transparency (Deegan, 2009). Now, Nike has a section in their financial report titled Sustainable Business and Innovation. Their focus will now be more seamlessly integrated across the company’s business strategies in developing a more sustainable approach which aims at providing greater returns to their business, communities, factory workers, consumers and also the planet (Nike, 2009).

According to the above definition Employee Apple is not considered as assets, Apple is neither tangible or non-tangible asset we can not convert apple to cash, although Apple has contribution to future economic benefit, Apple future benefit contribution to the business cannot be measure , Apple cannot purchase by the company (Apple does not have a value), Apple cannot be sold.

A dividend is a distribution of earnings to the shareholders of a corporation. Earnings are accumulated in a corporation’s retained earnings account so when earnings are distributed, the retained earnings account is decreased. Since a dividend decreases the amount a shareholder has invested in the corporation (by distributing assets of the corporation to shareholders), a debit must be made to retained earnings (owners’ equity) to reduce the amount by which the owners’ investment has decreased (which is the amount of the dividend). A dividend is not an expense and is not reported on the income statement.

Problem 5-37 (1) Machine setups 5 setups x $2,000 = $10,000 Raw materials 10,000 pounds x $2.00 = 20,000 Hazardous materials 2,000 pounds x $5.00= 10,000 Inspections 10 inspections x $75.00= 750 Machine hours 500 machine hours x $10= 5,000 Total $45,750 (2) Overhead cost per box $45,750/1,000 = $45.75 (3) Single predetermined rate $625,000/20,000 = $31.25 (4a) Raw material 10,000 pounds x $2 = $20,000

CHAPTER 2 Accounting Under Ideal Conditions 2.1 2.2 Overview The Present Value Model Under Certainty 2.2.1 Summary 2.3 The Present Value Model Under Uncertainty 2.3.1 Summary 2.4 Reserve Recognition Accounting (RRA) 2.4.1 An Example of RRA 2.4.2 Summary 2.4.3 Critique of RRA 2.4.4 Summary 2.5 Historical Cost Accounting Revisited 2.5.1 Comparison of Different Measurement Bases 2.5.2 Accruals 2.5.3 Summary 2.6 2.7 The Non-Existence of True Net Income Conclusion to Accounting Under Ideal Conditions

“Management Accounting is the utilization of proper strategies and ideas in preparing chronicled and anticipated financial information of a substance to help administration in setting up arrangements for sensible monetary goals really taking shape of judicious choices with a view towards these destinations."