Project 1

The following information about Fishplates X has been made available from the accounting records of
payment of Precision Tools Ltd. for the last six months of 2024 (and of only sales for January 2023).

(i) The units to be sold in different months are:

· July: 2,200

·August: 2,200

·September: 3,400

· October:3,800

·November:5,000

·December: 4,600

· January 2025:4,000

(ii) There will be no work-in-progress at the end of any month

(iii) Finished units equal to half the sales for the next month will be in stock at the end of every month
(including June 2024)

(iv) Budgeted production and production costs for the year ending December 2024 are as thus:
· Production units: 44,000

· Direct materials per unit: $10.00

·Direct Wages per unit: $4.00

·Total factory overheads apportioned to the product: $88,000

Required

Prepare:

(a) Production budget for the last six months of 2024

(b) Production cost budget for the same period

Project 2

Accounting In A Job Order Cost Accounting System A clothing manufacturer had the following
transactions in its first month of operations relating to its only job, Job #101.

a) Purchased 500 yards of silk@$8 per yard for cash.

b) Requisitioned 300 yards of silk to produce Job #101.

c) Incurred 50 hours of direct labor to produce Job #101;the average labor rate is $9 per hour.

d) Paid various factory overhead costs, $650.

c) Applied factory overbead at the rate of 150% of direct labor costs to Job #101.

f) Completed Job#101. g) Sold Job#101, receiving cash of $4,400.

INSTRUCTIONS
1.Enter the transactions in the T-accounts below. Assume the opening balance of Cash is $9,000.

2. Determine the ending balance of each account.

3. What was the gross profit eamned on Job#101?

4. What was the gross margin ratio earned on Job#101?

5. If management had expected a gross margin ratio of 20% on Job #101,do you believe the actual
results warrant further investigation by management? Why or why not?

6. Is factory over applied or under applied, and by how much?

PROJECT 4

PROJECT 4
Trial Balance
Debit Credit,
Cash, $ 5,400,
Accounts Receivable ,2,400,
Supplies 2,800,
Prepaid Insurance, 1,300
,Equipment, 60,000,
Notes Payable, $40,000
,Accounts Payable 2,400,
,common stock , 30,000
Drawing, 1,000
Service Revenue 4,900
,Salaries Expense ,3,200
,Utilities Expense, 800
,Advertising Expense 400,
Total $77,300, $77,300,
Additional information
1.Insurance expires at the rate of $200 per month.
2.S1,000 of supplies are on hand at August 31.
3.Monthly depreciation on the equipment is $900.
4.Interest of $500 on the notes payable has accrued during August.

Instructions
(a) Prepare adjusting entries.
(b) Prepare adjusted trial balance.
(c) Prepare balance sheet
(d) Prepare income statement
(e) Prepare closing entry
PROJECT 3

Assume the following are the amounts that have been legally approved as the budget for the general
fund of a curtain governmental unit for the fiscal

Your ending December 31, 2008.

Estimated revenue .

Taxes 882,500

License and Permit _ 195,000

Intergovernmental revenue 200.000

Total 1.277.500

Appropriations

General gov't. 1,150,000

Pbulic Safts 212,000

Total 1362000

Estimated other financin > Uses (Eoru)

Operating transfer out to other funds 274500

Required

Show in general from the entries that would be necessary to record the budget assumes it is legally
approved at the beginning of the year Show the subsidiary ledger as well
ANSWER FOR CODE 4

Project 1: Production and Cost Budgeting

Background:

 Sales forecasts for Jul-Dec 2024 and Jan 2025 are given.
 Ending Finished Goods Inventory policy: 50% of the next month's sales units.
 No Work-in-Progress.
 Costs: DM $10/unit, DL $4/unit, FOH
88,000���44,000�������������(88,000for44,000unitsannually
(

2/unit).

(a) Production Budget (Units) for July - December 2024

The formula for production needs is:

Units to Produce = Budgeted Sales Units + Desired Ending FG Units - Beginning FG Units

+ Desired Ending = Total

Budgeted - Beginning = Units to
Month FG (0.5 * Next Needs
Sales (Units) FG (Units) Produce
Month Sales) (Units)

1,100 (0.5 * 2,200 1,100 (0.5 *

July 2,200 3,300 2,200
Aug) 2,200 Jul)

1,700 (0.5 * 3,400 1,100 (July

August 2,200 3,900 2,800
Sep) End FG)

1,900 (0.5 * 3,800 1,700 (Aug

Sept 3,400 5,300 3,600
Oct) End FG)

2,500 (0.5 * 5,000 1,900 (Sep

October 3,800 6,300 4,400
Nov) End FG)

2,300 (0.5 * 4,600 2,500 (Oct

Nov 5,000 7,300 4,800
Dec) End FG)

2,000 (0.5 * 4,000 2,300 (Nov

Dec 4,600 6,600 4,300
Jan) End FG)

Total 21,200 22,100

(b) Production Cost Budget for July - December 2024

  Variable Costs per unit:
o Direct Materials: $10.00
o Direct Wages: $4.00
 Fixed Cost Allocation per unit (based on annual budget):
o Factory Overheads: $88,000 / 44,000 units = $2.00
 Total Production Cost per Unit: $10.00 + $4.00 + $2.00 = $16.00

Direct Direct Factory Total

Units to
Month Materials Wages Overheads Production
Produce
(@$10) (@$4) (@$2) Cost

July 2,200 $22,000 $8,800 $4,400 $35,200

August 2,800 $28,000 $11,200 $5,600 $44,800

Sept 3,600 $36,000 $14,400 $7,200 $57,600

October 4,400 $44,000 $17,600 $8,800 $70,400

Nov 4,800 $48,000 $19,200 $9,600 $76,800

Dec 4,300 $43,000 $17,200 $8,600 $68,800

Total 22,100 $221,000 $88,400 $44,200 $353,600

Project 2: Job Order Cost Accounting System

1 & 2. T-Accounts and Ending Balances

Cash Raw Materials Inventory

------------------------- -------------------------
Beg Bal | 9,000 | 4,000 (a) (a) 4,000 | 2,400 (b)
(g) | 4,400 | 650 (d) ---------|---------
| | End Bal | 1,600
--------|-------
End Bal | 8,750 |

Work In Process (Job 101) Factory MOH Control

------------------------- -------------------------
(b) DM | 2,400 | 3,525 (f) (d) 650 |
(c) DL | 450 | -------|-------
(e) MOH | 675 | End Bal| 650
| |
--------|-------
End Bal | 0 |

Applied Factory MOH Finished Goods Inventory

------------------------- -------------------------
| 675 (e) (f) 3,525 | 3,525 (g)
--------|------- ---------|---------
| 675 End Bal End Bal | 0

Cost of Goods Sold Sales Revenue

------------------------- -------------------------
(g) 3,525 | | 4,400 (g)
-------|------- -------|-------
End Bal| 3,525 | 4,400 End Bal

Wages Payable*
-------------------------
| 450 (c)
--------|-------
| 450 End Bal
(*Assuming direct labor was credited to Wages Payable and not yet paid)

3. Gross Profit on Job #101

 Gross Profit = Sales Revenue - Cost of Goods Sold
 Gross Profit = $4,400 -
3,525=∗∗3,525=∗∗

875**

4. Gross Margin Ratio on Job #101

 Gross Margin Ratio = Gross Profit / Sales Revenue

 Gross Margin Ratio = $875 / $4,400 = 0.19886... ≈ 19.89%

5. Analysis of Gross Margin Ratio

 The actual gross margin ratio (19.89%) is very close to the expected ratio (20%).
 Conclusion: No, the actual results likely do not warrant further investigation solely based on
this variance. The difference is minimal (0.11%) and could be due to normal minor
 fluctuations in costs or rounding. Management attention is usually focused on more
significant deviations from expectations.

6. Factory Overhead Applied/Underapplied

 Actual MOH (MOH Control) = $650

 Applied MOH = $675
 Since Applied MOH (
675)>���������(675)>ActualMOH(

650), factory overhead is Overapplied.

 Amount Overapplied = $675 -

650=∗∗650=∗∗

25**

PROJECT 4: Adjusting Entries and Financial Statements

(a) Adjusting Entries (August 31)

1. Insurance Expense:
o Dr. Insurance Expense 200
o Cr. Prepaid Insurance 200
o (To record insurance expired during August)
2. Supplies Expense:
o Supplies Used = Beginning Supplies - Supplies on Hand
o Supplies Used = $2,800 - $1,000 = $1,800
o Dr. Supplies Expense 1,800
o Cr. Supplies 1,800
o (To record supplies used during August)
3. Depreciation Expense:
o Dr. Depreciation Expense - Equipment 900
o Cr. Accumulated Depreciation - Equipment 900
o (To record monthly depreciation on equipment)
4. Interest Expense:
o Dr. Interest Expense 500
o Cr. Interest Payable 500
 o (To record interest accrued on notes payable)

(b) Adjusted Trial Balance (August 31)

Account Unadjuste Unadjuste Adjustment Adjustment Adjuste Adjuste

Title d TB Dr d TB Cr s Dr s Cr d TB Dr d TB Cr

Cash 5,400 5,400

Accounts
2,400 2,400
Receivable

Supplies 2,800 1,800 1,000

Prepaid
1,300 200 1,100
Insurance

Equipment 60,000 60,000

Accumulate
d
900 900
Depreciatio
n - Equip.

Notes
40,000 40,000
Payable

Accounts
2,400 2,400
Payable

Interest
500 500
Payable

Common
30,000 30,000
Stock

Drawing 1,000 1,000

Service
4,900 4,900
Revenue

Salaries
3,200 3,200
Expense

Utilities
800 800
Expense

Advertising 400 400

 Expense

Insurance
200 200
Expense

Supplies
1,800 1,800
Expense

Depreciatio
n Expense - 900 900
Equipment

Interest
500 500
Expense

Totals $77,300 $77,300 $3,400 $3,400 $78,700 $78,700

(d) Income Statement

[Company Name]
Income Statement
For the Month Ended August 31

Amount ($)

Revenue

Service Revenue 4,900

Expenses

Salaries Expense 3,200

Supplies Expense 1,800

Depreciation Expense - Equipment 900

Utilities Expense 800

Interest Expense 500

Advertising Expense 400

Insurance Expense 200

Total Expenses 7,800

Net Loss (2,900)

(c) Balance Sheet

[Company Name]
Balance Sheet
August 31

Assets Amount ($) Liabilities & Equity Amount ($)

Current Assets Current Liabilities

Cash 5,400 Accounts Payable 2,400

Accounts Receivable 2,400 Interest Payable 500

Supplies 1,000 Notes Payable (Current)* 40,000

Prepaid Insurance 1,100 Total Current Liabilities 42,900

Total Current Assets 9,900

Non-Current Liabilities

Property, Plant & Equipment Notes Payable (Non-Current)* -

Equipment 60,000 Total Liabilities 42,900

Less: Accumulated Depreciation (900)

Net Property, Plant & Equipment 59,100 Equity

Common Stock 30,000

Retained Earnings** (3,900)

Total Equity 26,100

Total Assets 69,000 Total Liabilities & Equity 69,000

* Notes Payable classified as Current assuming due within one year. Adjust if info differs.
** Retained Earnings = Beginning RE (assume $0) + Net Income/(Loss) - Drawings
RE = 0 + (-2,900) - 1,000 = -3,900

(e) Closing Entries (August 31)

1. Close Revenue to Income Summary:

o Dr. Service Revenue 4,900
o Cr. Income Summary 4,900
2. Close Expenses to Income Summary:
 o Dr. Income Summary 7,800
o Cr. Salaries Expense 3,200
o Cr. Supplies Expense 1,800
o Cr. Depreciation Expense - Equipment 900
o Cr. Utilities Expense 800
o Cr. Interest Expense 500
o Cr. Advertising Expense 400
o Cr. Insurance Expense 200
3. Close Income Summary to Retained Earnings (Net Loss):
o Dr. Retained Earnings 2,900
o Cr. Income Summary 2,900
o (Income Summary balance: 4,900 Cr - 7,800 Dr = 2,900 Dr balance before closing)
4. Close Drawings to Retained Earnings:
o Dr. Retained Earnings 1,000
o Cr. Drawing 1,000

PROJECT 3: Government Budgetary Accounting

Background: Budget approved for General Fund.

 Estimated Revenues: $1,277,500 (Taxes $882.5k, L&P $195k, Intergov $200k)

 Appropriations: $1,362,000 (Gen Gov't $1,150k, Public Safety $212k)
 Estimated Other Financing Uses (EOFU): $274,500 (Op. Transfer Out)

Required: Record the budget in general journal form, including subsidiary ledger detail.

1. Calculate Budgetary Fund Balance:

 Budgetary Fund Balance = Est. Revenues - Appropriations - EOFU

 Budgetary Fund Balance = $1,277,500 - $1,362,000 -
274,500=−274,500=−

359,000 (Budgetary Deficit)

2. General Ledger Entry to Record Budget:

Date Account Title & Explanation Debit Credit

Jan 1* Estimated Revenues Control 1,277,500

 Budgetary Fund Balance 359,000

Appropriations Control 1,362,000

Estimated Other Financing Uses Control 274,500

(To record the legally adopted budget)

Assuming budget adopted at the beginning of the year.

3. Subsidiary Ledger Detail:

 Estimated Revenues Subsidiary Ledger:

o Taxes: Dr. $882,500
o Licenses and Permits: Dr. $195,000
o Intergovernmental Revenue: Dr. $200,000
o (Total Debits = $1,277,500, equals control account debit)
 Appropriations Subsidiary Ledger:
o General Government: Cr. $1,150,000
o Public Safety: Cr. $212,000
o (Total Credits = $1,362,000, equals control account credit)
 Estimated Other Financing Uses Subsidiary Ledger:
o Operating Transfers Out: Cr. $274,500
o (Total Credits = $274,500, equals control account credit)