Question

1)

Landmark buys $310,000 of Schroeter Company's 9%, 5-year bonds payable at par value on September 1. Interest payments are made semiannually on March 1 and September 1. The journal entry Landmark should record to accrue interest earned at year-end December 31 is (Do not round your intermediate calculations):

Multiple Choice
Debit Interest Receivable $13,950, credit Interest Revenue $13,950.
Debit Interest Receivable $9,300, credit Interest Revenue $9,300.
Debit Interest Revenue $9,300, credit Interest Receivable $9,300.
Debit Cash $13,950, credit Interest Revenue $13,950.
Debit Cash $9,300, credit Interest Revenue $9,300.

2)

A company provided the following direct materials cost information. Compute the direct materials price variance.

Standard costs assigned:
Direct materials standard cost (424,000 units @ $3.60/unit)	$	1,526,400
Actual costs:
Direct Materials costs incurred (421,500 units @ $3.70/unit)	$	1,559,550

Multiple Choice
$42,150 Favorable.
$1,526,400 Favorable.
$1,526,400 Unfavorable.
$42,400 Favorable.
$42,150 Unfavorable.

3)

A company has net income of $425,000, net sales of $9,200,000, and average total assets of $4,802,500. Its return on total assets equals:

Multiple Choice
1,130.0%.
52.2%.
8.8%.
18.3%.
4.6%.

4)

Use the following data to compute total manufacturing costs for the month:

Sales commissions	$	11,700
Direct labor		40,500
Indirect materials		16,100
Factory manager salaries		8,100
Factory supplies		9,900
Indirect labor		7,200
Depreciation—office equipment		5,900
Direct materials		41,400
Corporate office salaries		43,400
Depreciation—factory equipment		8,400

Multiple Choice
$90,200.
$49,700.
$131,600.
$149,200.

5)

Use the following data to compute total factory overhead costs for the month:

Sales commissions	$	12,800
Direct labor		41,600
Indirect materials		17,200
Factory manager salaries		9,200
Factory supplies		11,000
Indirect labor		8,300
Depreciation—office equipment		7,000
Direct materials		42,500
Corporate office salaries		44,500
Depreciation—factory equipment		9,500

Multiple Choice

$96,800.
$64,300.
$159,100.
$55,200.
$139,300.

Answer 1

1)

Interest receivable = $310,000 * 9% * 4 / 12 = $9,300

The answer is Debit Interest Receivable $9,300, credit Interest Revenue $9,300

2)

Direct materials price variance = Actual quantity * (Actual price - Standard price)

= 421,500 * ($3.7 - $3.6)

= $42,150 Unfavorable

3)

Return on total assets = Net income / Average total assets

= $425,000 / $4,802,500

= 8.5%

4)

Total manufacturing costs = Direct labor + Indirect materials + Factory manager salaries + Factory supplies + Indirect labor + Direct materials + Depreciation-factory equipment

= $40,500 + $16,100 + 8,100 + $9,900 + $7,200 + $41,400 + $8,400

= $131,600

5)

Total factory overhead costs = Indirect materials + Factory manager salaries + Factory supplies + Indirect labor + Depreciation-factory equipment

= $17,200 + $9,200 + $11,000 + $8,300 + $9,500

= $55,200