Name:

Question 1: 30% points

a. General Journal Entries:

Date

Account

Debit

Credit

Answer.Sheet.Page.1.of.6.Sp.15 Final-Exam

b. Partial Classified Balance Sheet:

Floozy Corporation

Balance Sheet (partial)

December 31, 2014

Question 2: 5% points

a. General Journal Entries:

Date

Account

Debit

Credit

b. Stock Investments Accounts Balance 12/31/14:

Answer.Sheet.Page.2.of.6.Sp.15 Final-Exam

Question 3: 10% points:

Floozy Corporation

Statement of Cash Flows

For the Year Ended December 31, 2014

Answer.Sheet.Page.3.of.6.Sp.15 Final-Exam

Question 4: 15% points:

Date

Account

Debit

Credit

Answer.Sheet.Page.4.of.6.Sp.15 Final-Exam

Question 5: 10% points:

a.1.

Breakeven Sales Dollars

a.2.

Breakeven Units

b.1.

Breakeven Sales Dollars

b.2.

Breakeven Units

c.

Operating Income

Question 6: 5% points:

Flip Enterprises

Incremental Analysis

Special Order

Question 7: 6% points:

Flop Inc.

Incremental Analysis

To Produce or Buy

Produce

Buy

Answer.Sheet.Page.5.of.6.Sp.15 Final-Exam

Multiple choice questions allocated 1% point each: Make your selection by indicating the letter corresponding to your answer.

Question Number

Answer

Question Number

Answer

8:

18:

9:

19:

10:

20:

11:

21:

12:

22:

13:

23:

14:

24:

15:

25:

16:

26:

17:

27:

Answer.Sheet.Page.6.of.6.Sp.15 Final-Exam

SAMPLE

MSL 6670

Final Paper

Change Plan: Going Paperless

When implementing or even creating a change plan a manager needs to follow

a strict process. Big parts of project management are the quantitative techniques

that can positively help with any change plan or technique.

Before going through the different steps and stages needed to build and

implement my change plan I want to first give a brief summary of my

organization and how we function as a group. I currently work with a local

bank within the Wholesale Lending Division. My current position is Operations

Manager. The Wholesale Lending Division consists of three different business

lines, Sales, Operations and Underwriting. My position is to oversea the

Operations Department. I currently have four managers and 29 indirect reports.

While the Wholesale Lending Division has three different business lines the

Operations group controls 2/3’s of the entire process. The Sales group is

responsible for obtaining business for the division and Underwriting deals with

the risk/qualification of each borrower.

Problem Statement & Description of Problem:

Many mortgage operation departments’ today work within a paperless

environment. Unfortunately my department is in the flintstone ages and still

work with paper files. Working within a paperless environment has a lot of

advantages that can help many companies be successful. Below are some

advantages

Reduces overall everyday costs

Quicker access to information

More space

Document security

Can handle additional growth

The main issue I see with paper files is the un-organization between the

different business lines. It absolutely weakens customer satisfaction and makes

the group inefficient with the process. There are many scenarios where many

issues could have been resolved or elevated if the department was in a

paperless environment. There are many moments when both underwriting and

operations are in need of the file and it delays the process for the customer. In

order to ensure the Wholesale Lending Division sustains continuous business

and growth a change plan to enforce a paperless environment is absolutely

required. It will only create more business for the division and allow us to be

efficient as one division.

Goals

My overall goal is to obviously make the division more efficient and obtain

more business. Going paperless isn’t an easy task and will require many tasks

before even starting to be enforced. I plan to roll different phases of the project

to ensure it is absolutely successful.

Step 1: Research different programs that offer a paperless feature and assess

cost versus allowed budget. Along with senior management and all other

business lines we will determine which program is best to use within the

division.

Step 2: Update all PC equipment’s to be able to handle new software and

programs needed for going paperless.

Step 3: Research a flow process or production flow on how the projected

process can work. Determine the earliest finish and start time to see how long it

would take for a file to reach the office.

Step 4: Perform testing for two weeks with other business lines to determine

any issues with the system. All business lines need to designate at least three

lead experts in the system to help in training the entire staff.

Step 5: Update or program all internal systems including published website for

entire team and brokers.

Step 6: Arrange a training schedule for entire team. Test the system remote

ability to send any documents from website to office.

Step 7: Arrange an official rollout date and implement

Applications used towards goal

Both Senge and Brown gave many tools that anyone can use to

successfully implement any change plan. The four techniques I wish to use for

my Paperless change plan are systems thinking, design thinking, mental

models and shared vision. All these techniques may have different qualities but

if used the right way they can be extremely beneficial to any big project and

work concisely together. Below is how I plan to use each technique.

Systems Thinking:

Systems thinking technique will allow me to find the correlation between

implementing the new process and how it will benefit other important

components. Since many business lines are involved I need to ensure that every

idea is positively correlated. Systems thinking will allow me to explore

interdependencies and patterns. If one component is lacking then like a domino

effect it will hamper the other. One good thing with systems thinking is that

there is not one specific right answer. With systems thinking I’ll be able to use

different flow processes and use the best one. In order to ensure I use systems

thinking correctly I need to ensure I am taking the important components and

completing it completely.

Design Thinking

Design thinking can be thought as the official cognitive model to problem solve.

One important component of design thinking that will absolutely benefit my

change plan is process mapping thinking. Process mapping is very important

since it will allow me to think of different helpful beginning points and using

innovation to have a successful end result. Design thinking will allow me to

create and investigate which tools are best to start a paperless environment.

This will be beneficial when I start my testing period. Testing period can be

very tricky since we are looking for underlying issues that may arise. Design

thinking will allow me to completely map out my process and see which

sequence fits best for the organization.

Mental Models

One important mental mode that I use on a daily basis and wish to use for my

change plan is creating scenarios. Creating scenarios can be thought of as

brainstorming. This technique will allow me to test all different kinds of

outcomes and scenarios. When I start any project I like to list all my options and

determine which is best for my current situation. Creating scenarios will benefit

my plan since I’m not sure which path will work. I need to list different possible

scenarios and choose one underlying one that will fit my team. I think mental

models will be most beneficial for me especially during my first phases of

rolling out my plan. Before I start to implement changes with going paperless I

want to use this mental model technique to determine all possible scenarios.

Shared Vision

While shared vision may not be an actual structural technique but it is just as or

possibly more important since it reflects the importance of the project to my

personal concept. Shared vision will allow me to strive for the best and ensure

this project is completed correctly. By completing this project successfully it will

allow me to show my dedication and vision to my division. I want my division

to succeed and I thank my vision for those aspirations. Being able to

successfully implement this change plan will only allow me to better myself as

an individual and pursue my personal vision.

Approach to Sustainability

In order for a paperless environment to be effective it will require a lot of

testing and tweaking. Since this is a new design it most likely will have a lot of

issues but doing test/trial runs will be crucial. Before officially rolling out to the

complete broker base we would absolutely need to ensure it was 100% effective

and if not we will need to improve the process. Also, in order to ensure my plan

goes successfully I need to do continuous monitoring even after the division

goes paperless. I would like to continuously test and review at least up to three

months after implementation. Another important part to sustainability is team

involvement. The constant feedback from my team will allow the process to be

successful. My team will be the true test of whether my change plan is working

successfully.

Conclusion

Going paperless for my department is the #1 goal on my wish list. I have tried

to stress the importance of this change plan and the success it can have on the

division to senior management. Yes the initial cost may be high but the end

result will have outstanding results for the business line. My superiors keep

pushing my request to the bottom of their list because the cost associated to go

paperless is too high. They know that amount of work that goes into the design

is extremely great. It’s just not as simple as turning off a switch but a matter of

the department being ready and underlying issues. However, even though the

cost can be high the end result is well worth. The amount of profit the company

can attain is never ending and can increase. I hope by creating this change plan

I can show my manager the importance of going paperless and how the

strategic plan I have put together can be successful. I have learned a great deal

with this project and have prepared me to persuade my plan.

University of Maryland University College

Final Examination - Acct221: Principles of Accounting II

For this exam, omit all general journal entry explanations.

Ensure to include correct dollar signs, underlines & double underlines.

Question 1: 30% points:

On December 31, 2014, Floozy Incorporated, had the following balances (all balances are normal):

Accounts

Amount

Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares issued and outstanding)

$1,000,000

Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding)

$1,000,000

Paid-in Capital in Excess of par, Common

150,000

Retained Earnings

700,000

The following events occurred during 2014 and were not recorded:

a. On January 1, Floozy declared a 5% stock dividend on its common stock when the market value of the common stock was $15 per share. Stock dividends were distributed on January 31 to shareholders as of January 25.

b. On February 15, Floozy reacquired 1,000 shares of common stock for $20 each.

c. On March 31, Floozy reissued 250 shares of treasury stock for $25 each.

d. On July 1, Floozy reissued 500 shares of treasury stock for $16 each.

e. On October 1, Floozy declared full year dividends for preferred stock and $1.50 cash dividends for outstanding shares and paid shareholders on October 15.

f. One December 15, Floozy split common stock 2 shares for 1.

g. Net Income for 2014 was $275,000.

Requirements:

a. Prepare journal entries for the transactions listed above.

b. Using the December 31, 2014 stockholder’s equity account balances, determine the effect of the transactions journalized in requirement a. to arrive at ending stockholder’s equity account balances as of December 31, 2014. Prepare a Stockholders' section of a classified balance sheet as of December 31, 2014.

Question 2: 5% points:

On January 1, 2014, Flip Company purchased 10,000 shares of the stock of Floozy, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $90,000, and represents a 30% ownership stake. Floozy made $25,000 of net income in 2014, and paid dividends of $10,000. The price of Floozy's stock increased from $10 per share at the beginning of the year, to $12 per share at the end of the year.

Acct221 Page 1 of 8

Requirements:

a. Prepare the January 1 & December 31 general journal entries for Flip Company.

b. How much should the Flip Company report on the balance sheet for the investment in Floozy as the end of 2014

Question 3: 10% points:

The following is selected information from Floozy Company for the fiscal years ended December 31, 2014: Floozy Company had net income of $1,225,000. Depreciation was $500,000, purchases of plant assets were $1,250,000, and disposals of plant assets for $500,000 resulted in a $50,000 gain. Stock was issued in exchange for an outstanding note payable of $725,000. Accounts receivable decreased by $25,000. Accounts payable decreased by $40,000. Dividends of $300,000 were paid to shareholders. Floozy Company had interest expense of $50,000. Cash balance on January 1, 2014 was $250,000.

Requirements: Prepare Floozy Company's statement of cash flows for the year ended December 31, 2014 using the indirect method.

Question 4: 15% points:

Floozy Corporation had the following bond transactions during the fiscal year 2014:

a. On January 1: issued ten (10), $1,000 bonds at 102. The 5-year bonds, is dated January 1, 2014. The contract interest rate is 6%. Straight-line amortization method is used. Interest is payable semi-annual on January 1 and July 1.

b. On July 1: Floozy Corporation issued $500,000 of 10%, 10-year bonds. The bonds dated January 1, 2014 were issued at 88.5, and pay interest on July 1 and January 1. Effective interest rate method is used for these bonds is 12%.

c. On October 1: issued 10-year bonds $10,000 face value bonds, for $10,853 cash. The bonds have a stated rate of 8%, but an effective rate of 6%. Effective-interest method is used. Interest is payable on October 1 and April 1.

Requirements: Prepare all general journal entries for the three bonds issued (bond issuance and 2014 interest payments). (Round all calculations to nearest whole dollar.)

Question 5: 5% points:

Flip had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The company did not maintain any inventories, so total cost of goods sold was $4,400. Selling expenses totaled $1,600 ($600 variable and $1,000 fixed), and administrative expenses totaled $1,500 ($500 variable and $1,000 fixed). Operating income was $2,500. Round all final answers to nearest dollar or whole number.

Acct221 Page 2 of 8

Requirements:

a. What is the breakeven point in sales dollars and in units if the fixed factory overhead increased by $1,700?

b. What is the breakeven point in sales dollars and in units if costs remain as originally projected?

c. What would be the operating income be if sales units increased by 25%

Question 6: 5% points:

Flip manufactures footballs. The forecasted income statement for the year before any special orders included sales of $4,000,000 (sales price is $10 per unit.) Manufacturing cost of goods sold is anticipated to be $3,200,000. Selling expenses are expected to be $300,000, and operating income is projected at $500,000. Fixed costs included in these forecasted amounts are $1,200,000 for manufacturing cost of goods sold and $100,000 for selling expenses. Floozy is offering a special order to buy 50,000 footballs for $7.50 each. There will be no additional selling expenses, and sufficient capacity exists to manufacture the extra footballs.

Requirements: Prepare an incremental analysis schedule to demonstrate by what amount would operating income be increased or decreased as a result of accepting the special order.

Question 7: 5% points:

Flop Company manufactures 10,000 units of widgets for use in its annual production. Costs are direct materials $20,000, direct labor $55,000, variable overhead $45,000, and fixed overhead $70,000. Floozy Company has offered to sell Flop 10,000 units of widgets for $18 per unit. If Flop accepts the offer, some of the facilities presently used to manufacture widgets could be rented to a third party at an annual rental of $15,000. Additionally, $4 per unit of the fixed overhead applied to widgets would be totally eliminated.

Requirements: Prepare an incremental analysis schedule to demonstrate if Flop should accept Floozy's offer.

Acct221 Page 3 of 8

Multiple choice questions allocated 1% point each. Make your selection by recording the letter in the answer box provided.

Question 8:

Anticipated unit sales are January, 5,000; February, 4,000; and March 8,000. Finished goods are consistently maintained at 80% of the following month's sales. If units cost $10 each to produce, how much is February's total cost of production?

a. $0

b. $40,000

c. $72,000

d. $80,000

e. None of these.

Question 9:

Total production of 1,000 units of finished goods required 3,900 actual hours at $12 per hour. The standard is 4 hours per unit of finished goods, at a standard rate of $11 per hour. Which of the following statements is true?

a. The labor rate variance is $3,900 favorable.

b. The labor rate variance is $4,000 unfavorable.

c. The labor efficiency variance is $1,100 favorable.

d. The labor efficiency variance is $1,100 unfavorable.

e. None of these.

Question 10:

If beginning work in process was 600 units, 1,400 additional units were put into production, and ending work in process was 500 units, how many units were completed?

a. 500

b. 900

c. 1,400

d. 2,000

e. None of these.

Question 11:

Frick Company had no beginning inventory and adds all materials at the very beginning of its only process. Assume 10,000 units were started, and 5,000 units completed. Ending work in process is 60% complete. The cost per equivalent unit of material is:

a. $1.00 if total material cost is $3,000.

b. $1.00 if total material cost is $5,000.

c. $1.00 if total material cost is $8,000.

d. $1.00 if total material cost is $10,000.

e. None of these.

Acct221 Page 4 of 8

Question 12:

Assume that actual overhead consisted of $30,000 for indirect labor, $20,000 for indirect material, and $10,000 for depreciation of factory equipment. Based on the preset rates, $65,000 of overhead was applied to work in process.

a. Overhead is underapplied.

b. This is viewed as an unfavorable situation.

c. There will be a $5,000 debit balance in Factory Overhead.

d. All of the above.

e. None of these

Question 13:

The contract interest rate for bonds:

A. must equal the effective interest rate.

B. is greater than the effective interest rate when bonds are issued at a premium.

C. has no relation to the cash flow associated with a particular bond.

D. will fluctuate over the life of a bond.

E. None of these.

Question 14:

Frick Corporation issued $100,000 of 7%, 15-year bonds on June 1, 2014 (dated April 1 2014) at 101 plus accrued interest, which is paid on April 1 and October 1. The proper entry to record issuance of the bonds includes a debit to Cash for:

a. $100,000.

b. $101,000.

c. $101,167.

d. $102,167.

e. None of these.

Question 15:

Which of the following statements about treasury stock is true?

a. Excess of the sales price over cost should be credited to retained earnings.

b. Gains are not recorded on treasury stock transactions but losses are.

c. Losses on treasury stock transactions are recorded in income.

d. Reacquiring treasury stock causes stockholders equity to decrease.

e. None of these.

Acct221 Page 5 of 8

Question 16:

Frick Company has 100,000 shares of common stock outstanding. On April 15, the board declared a $.30 dividend to be paid to stockholders of record on May 4. The dividend was distributed on May 15. The proper journal entry for Frick Company on May 15 does not include:

a. a credit to Dividends Payable for $30,000.

b. a debit to Dividends for $30,000.

c. a credit to Cash for $30,000.

d. Both A and B, above.

e. None of these.

Question 17:

In an effort to concentrate its resources in more profitable areas, Frick Corporation recently sold its family pizza restaurant segment. The disposal constitutes:

a. an extraodinary item.

b. a discontinued operation which should be treated as a prior period adjustment.

c. a discontinued operation which should be disclosed net-of-tax effects.

d. a portion of income from continuing operations.

e. None of these.

Question 18:

Frick Corporation has 100,000, 5%, $100 par preferred shares outstanding. The stock is callable at 102, but was originally issued at 99. The current dividend has been fully paid. Total stockholders' equity is $20,000,000. The residual common equity is:

a. $20,000,000

b. $10,100,000

c. $10,000,000

d. $9,800,000

e. None of these.

Question 19:

Frick Company's balance sheet included cash ($4,000,000), accounts receivable ($16,000,000), inventories ($10,000,000), prepaid expenses ($2,000,000), accounts payable ($9,000,000), and accrued expenses ($7,000,000). These are the only current items.

a. The quick ratio is 2:1.

b. The quick ratio is 1.25:1.

c. The current ratio is 1.875:1.

d. Both A and C.

e. None of these.

Acct221 Page 6 of 8

Question 20:

Selected information for 2014 is: cost of goods sold, $5,400,000; average inventory, $1,800,000; net sales, $7,200,000; average receivables, $960,000; and net income, $720,000. Assuming a 360-day year, what was the inventory turnover ratio for 2014?

a. 333

b. 3

c. 7.5

d. 20

e. None of these.

Question 21:

On the schedule of cost of goods manufactured:

a. beginning work-in-process plus direct materials used equals manufacturing costs.

b. cost of goods manufactured is the same thing as total manufacturing costs.

c. work-in-process will necessarily increase if total manufacturing costs increase.

d. factory overhead plus beginning work-in-process equals manufacturing costs.

e. None of these.

Question 22:

Which costing method seems ideally suited to the production of homogenous products in continuous throughput?

a. Activity-based costing.

b. Job order costing.

c. Process costing.

d. Absorption costing.

e. None of these.

Question 23:

Frick Company uses a job order cost system and applies overhead based on estimated rates. The overhead application rate is based on total estimated overhead costs of $200,000 and direct labor hours of 50,000. For job 836, direct labor hours were 800.

a. Factory Overhead should be debited for $3,200.

b. Factory Overhead should be credited for $3,200.

c. Overhead Expense should be debited for $3,200.

d. Overhead Expense should be credited for $3,200.

e. None of these.

Acct221 Page 7 of 8

Question 24:

For job 1838, there were 1,000 direct labor hours, and actual overhead was $500 for depreciation and $1,400 for indirect labor. Overhead is applied at $2 per direct labor hour. Which account should be debited for $1,900?

a. Work in Process.

b. Cost of Goods Sold.

c. Factory Overhead.

d. Cost of Goods Manufactured.

e. None of these.

Question 25:

Frick Company had no beginning inventory and adds all materials at the very beginning of its only process. Assume 100,000 units were started, and 80% complete at month's end. Total costs were $24,000 for material and $16,000 for conversion.

a. The cost per equivalent unit of conversion is $0.16.

b. The cost per equivalent unit of conversion is $0.20.

c. The cost per equivalent unit of conversion is $0.36.

d. The cost per equivalent unit of conversion is $0.40.

e. None of these.

Question 26:

Frick Company had no beginning inventory and adds all materials at the very beginning of its only process. Assume 10,000 units were started, and 5,000 units completed. Ending work in process is 60% complete. The cost per equivalent unit of conversion is:

a. $1.00 if total conversion cost is $3,000.

b. $1.00 if total conversion cost is $5,000.

c. $1.00 if total conversion cost is $8,000.

d. $1.00 if total conversion cost is $10,000.

e. None of these.

Question 27:

Frick Company makes units that each requires 2 pounds of material at $3 per pound. 500 and 700 units will be built in May and June, respectively. Frick keeps material on hand at 20% of the next month's production needs. How much is the material cost for May's output?

a. $2,400

b. $3,000

c. $3,240

d. $4,200

e. None of these.

Acct221 Page 8 of 8

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