>> 1. Analysis of stockholders' equity
>> Star Corporation issued both common and preferred stock during 20X6. The stockholders' equity sections of the company's balance sheets at the end of 20X6 and 20X5 follow:
>>
>>
>>
>> 20X6
>>
>> 20X5
>> Preferred stock, $100 par value, 10%
>>
>> $580,000
>>
>> $500,000
>> Common stock, $10 par value
>>
>> 2,350,000
>>
>> 1,750,000
>>
>> Paid-in capital in excess of par value
>>
>> Preferred
>>
>> 24,000
>>
>> —
>> Common
>>
>> 4,620,000
>>
>> 3,600,000
>> Retained earnings
>>
>> 8,470,000
>>
>> 6,920,000
>> Total stockholders' equity
>>
>> $16,044,000
>>
>> $12,770,000
>>
>> a. Compute the number of preferred shares that were issued during 20X6.
>> b. Calculate the average issue price of the common stock sold in 20X6.
>> c. By what amount did the company's paid-in capital increase during 20X6?
>> d. Did Star's total legal capital increase or decrease during 20X6? By what amount?
>>
>>
>>
>> 2. Bond computations: Straight-line amortization
>> Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow.
>> · Case A—The bonds are issued at 100.
>> · Case B—The bonds are issued at 96.
>> · Case C—The bonds are issued at 105.
>>
>> Southlake uses the straight-line method of amortization.
>>
>> Instructions:
>> Complete the following table:
>>
>>
>> Case A
>>
>> Case B
>>
>> Case C
>>
>> Cash inflow on the issuance date
>>
>>
>> _______
>>
>> _______
>>
>> _______
>>
>> Total cash outflow through maturity
>>
>>
>> _______
>>
>> _______
>>
>> _______
>>
>> Total borrowing cost over the life of the bond issue
>>
>>
>> _______
>>
>> _______
>>
>> _______
>>
>> Interest expense for the year ended December 31, 20X1
>>
>>
>> _______
>>
>> _______
>>
>> _______
>>
>> Amortization for the year ended December 31, 20X1
>>
>>
>> _______
>>
>> _______
>>
>> _______
>>
>> Unamortized premium as of December 31, 20X1
>>
>>
>> _______
>>
>> _______
>>
>> _______
>>
>> Unamortized discount as of December 31, 20X1
>>
>>
>> _______
>>
>> _______
>>
>> _______
>>
>> Bond carrying value as of December 31, 20X1
>>
>>
>> _______
>>
>> _______
>>
>> _______
>>
>>
>>
>>
>> 3. Definitions of manufacturing concepts
>> Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:
>> Materials and supplies used
>> Brass $75,000
>> Repair parts 16,000
>> Machine lubricants 9,000
>> Wages and salaries Machine operators 128,000
>> Production supervisors 64,000
>> Maintenance personnel 41,000
>> Other factory overhead Variable 35,000
>> Fixed 46,000
>> Sales commissions 20,000
>>
>> Compute:
>> a. Total direct materials consumed
>> b. Total direct labor
>> c. Total prime cost
>> d. Total conversion cost
>>
>>
>>
>>
>>
>> 4. Schedule of cost of goods manufactured, income statement
>> The following information was taken from the ledger of Jefferson Industries, Inc.:
>> Direct labor
>>
>> $85,000
>>
>> Administrative expenses
>>
>> $59,000
>> Selling expenses
>>
>> 34,000
>>
>> Work in. process:
>>
>> Sales
>>
>> 300,000
>>
>> Jan. 1
>>
>> 29,000
>> Finished goods
>>
>> Dec. 31
>>
>> 21,000
>> Jan. 1
>>
>> 115,000
>>
>> Direct material purchases
>>
>> 88,000
>> Dec. 31
>>
>> 131,000
>>
>> Depreciation: factory
>>
>> 18,000
>> Raw (direct) materials on hand
>>
>> Indirect materials used
>>
>> 10,000
>> Jan. 1
>>
>> 31,000
>>
>> Indirect labor
>>
>> 24,000
>> Dec. 31
>>
>> 40,000
>>
>> Factory taxes
>>
>> 8,000
>>
>> Factory utilities
>>
>> 11,000
>> Prepare the following:
>> a. A schedule of cost of goods manufactured for the year ended December 31.
>> b. An income statement for the year ended December 31.
>>
>>
>> 5. Manufacturing statements and cost behavior
>> Tampa Foundry began operations during the current year, manufacturing various products for industrial use. One such product is light-gauge aluminum, which the company sells for $36 per roll. Cost information for the year just ended follows.
>> Per Unit
>>
>> Variable Cost
>>
>> Fixed Cost
>> Direct materials
>>
>> $4.50
>>
>> $ —
>> Direct labor
>>
>> 6.5
>>
>> —
>> Factory overhead
>>
>> 9
>>
>> 50,000
>> Selling
>>
>> —
>>
>> 70,000
>> Administrative
>>
>> —
>>
>> 135,000
>>
>>
>>
>>
>>
>>
>>
>>
>> Production and sales totaled 20,000 rolls and 17,000 rolls, respectively There is no work in process. Tampa carries its finished goods inventory at the average unit cost of production.
>> Instructions:
>> a. Determine the cost of the finished goods inventory of light-gauge aluminum.
>> b. Prepare an income statement for the current year ended December 31
>> c. On the basis of the information presented:
>> 1. Does it appear that the company pays commissions to its sales staff? Explain.
>> 2. What is the likely effect on the $4.50 unit cost of direct materials if next year's production increases? Why?
Answer will be sent by email as attachment.
