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1. COOOR Show Me How Calculator Adjusting Entries for Accrued Salaries Paradise Realty Co. pays weekly salaries of $35,000 on Friday for a five-day workweek ending on that day. a. Journalize the necessary adjusting entry at the end of the accounting period assuming that the period ends on Monday. b. Journalize the necessary adjusting entry at the end of the accounting period assuming that the period ends on Tuesday.
2. Show Me How Calculator Adjusting Entries for Uneamed Fees The balance in the neared fees account, before adjustment at the end of the year, is $42,745. Journalize the adjusting entry required if the amount of uneared fees at the end of the year is $19,235. If an amount box does not require an entry, la it blank Accounts Payable Accounts Receivable Cash Fees Earned Fees Expense Fees Payable Prepaid Fees Unearned Fees
3.
1. Describe a fixed cost and provide two examples of fixed costs related to production. Note that your examples must be related to production, so stating that the salary of a marketing manager would be incorrect.
2. Describe a variable cost and provide two examples of variable costs related to production. Note that your examples must be related to production, so stating that the hourly wages of an accounting intern would be incorrect.
4. Cliff Company manufactures file cabinets. The following cost information is available for the month of December:
| Beginning work in process | ||
| Direct materials | $ | 42,000 |
| Conversion cost | 53,000 | |
| December costs | ||
| Direct materials | 75,000 | |
| Conversion cost | 113,000 | |
Cliff had 8,600 equivalent units of direct materials and 5,100 equivalent units of conversion cost.
Using the weighted-average method, calculate Cliff’s cost per equivalent unit for materials and conversion during December.
1.
a)
| Particulars | Debit($) | Credit ($) |
| Salaries | 7,000 | - |
| Accrued Salaries | - | 7,000 |
Being salaries accrued for Monday accounted.(35,000/5*1)
b)
| Particulars | Debit($) | Credit ($) |
| Salaries | 14,000 | - |
| Accrued Salaries | - | 14,000 |
Being salaries accrued for Monday & Tuesday accounted (35,000/5*2)
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3. 1.Fixed Costs: fixed costs are those costs that do not change with the volume of production.these Costs are fixed in nature irrespective of level of production.
Examples: depreciation of machinery used in production,
Insurance of machinery, setup costs
2. Variable costs: variable costs are those costs that vary with the volume of production.
4. Weighted Average (Average Cost) Method
Physical Units Count
Under this method the percentage completion done in the Beginning Inventory is ignored while calculating the equivalent completed units during the current period. Beginning Inventory Units are treated as fresh units introduced for production.
Cost Accounted for:
- The cost of opening work-in-progress and cost of the current period are aggregated and the aggregate cost is divided by output in terms of completed equivalent units.
- The units of Beginning Inventory of WIP and their cost are taken in full under this method
Calculation of Cost per Equivalent Units for Materials and Conversion
|
Materials |
Conversion |
|
|
beginning work in process cost |
$42,000 |
$53,000 |
|
Cost added during period |
$75,000 |
$113,000 |
|
Total Costs |
$117,000 |
$166,000 |
|
Divide by: Equivalent Units |
8,600 |
5,100 |
|
Cost per Equivalent Unit |
$13.60 |
$32.55 |
Cost per equivalent unit for materials = $13.60
Cost per equivlanet unit for conversion = $32.55
