Question 1. From the given data, calculate the following ratios for the Logan Corporation for 20X6.
a) current ratio
b) quick ratio
c) debt ratio
d) rate of return on net sales
Accounts payable $ 60,000
Accounts receivable 75,000
Cash 125,000
Merchandise inventory 90,000
Short-term investments 50,000
Accrued liabilities 30,000
Notes payable (due in 20X9) 50,000
Total assets 350,000
Total liabilities 180,000
Net sales revenue 225,000
Net income 22,500
Question 2. Prepare journal entries for the following transactions for Lamplighter Company:
a) Materials purchased on account, $50,500.
b) Materials requisitioned for use in production: direct materials, $30,600; indirect materials,
$5,400.
c) Manufacturing labor incurred, $26,000.
d) Manufacturing labor allocation: 90% direct labor, 10% indirect labor.
e) Depreciation on factory equipment, $5,000.
f) Prepaid expenses expired relating to the manufacturing operations, $6,100.
g) Other miscellaneous factory costs incurred, $12,000 (credit accounts payable).
h) Manufacturing overhead is allocated at 120% of direct labor cost.
i) Cost of jobs completed, $80,000.
j) Jobs sold to customers on account: cost of jobs, $70,000; sales price, $125,000.
Question 3. Total costs to account for in the Shaping Department for the month of November are given below
a) Direct materials added during November, $58,000.
b) Manufacturing labor incurred in November, $40,000.
c) Manufacturing labor allocated as follows: 80% direct labor, 20% indirect labor.
d) Manufacturing overhead allocated during November, $36,000.
e) Goods completed and transferred to finished goods inventory during November amounted to
$90,000.
Prepare summary journal entries for the use of direct materials, direct labor and manufacturing overhead, and for the transfer of goods completed.
Question 4. Pullian Company makes a variety of chemicals. Its Mixing Department reports the following information for May of the current year:
Units:
Started and completed 8,000
Unfinished units* 2,500
*100% complete for direct materials and 30% complete for conversion
Costs incurred during the current period
Direct materials $110,040
Direct labor $55,000
Manufacturing overhead $79,750
Compute the cost per equivalent unit for direct materials and conversion.