1. Users are internal
2. Not as strict FASB guidelines
3. Reports are prepared for specific interests

Define Manufacturing Overhead and give some examples.

Manufacturing Overhead are costs that are indirectly associated with the finished product.

Some examples include:

• indirect materials and labor
• depreciation on buildings and machines
• insurance
• taxes
• maintenance

Beginning Work-in Process inventory + Total manufacturing costs=Total Work-in Process

Total Work-in Process-Ending Work-in Process inventory= Cost of Goods Manufactured.

What is Job Order Cost Accounting?

1. Materials
2. Labor
3. Manufacturing Overhead

Raw Materials Inventory 15K

                     Accounts Payable 15K

Factory Labor

               Factory Wages Payable

               Payroll taxes payable

Manufacturing Overhead

                         Accounts Payable, Acc. Dep. Exp

What journal entry do you use to assign different job costs?

Work-in Process Inventory

                       Raw materials inventory

Work-in Process Inventory

Manufacturing OH (indirect)

                          Factory Labor

Work-in Process Inventory

                        Manufacturing OH (use   predetermined OH rate and multiply direct labor)

The journal entries may or may not have a debit to manufacturing overhead depending on whether indirect labor or materials are provided.

Finished Goods Inventory

                         Work-in Process Inventory

Accounts Receivable

                        Sales

COGS

      Finished Goods Inventory

True or False

Underapplied Overhead is a debit balance.

What three activities are present on a statement of cash flows?

1. Operating Activities
2. Investing Activities
3. Financing Activities

What are investing activities?

1. Depreciation Expense
2. Gain on sale of investment
3. Accounts Receivable
4. Prepaid rent
5. inventory
6. Accounts Payable
7. Salaries Payable
8. unearned revenue
9. income tax payable
10. loss on sale of equipment

(non-current assets)

1. sale of investment
2. purchase of PPE
3. collections on principals on loans
4. making loans

(non-current liabilities)

1. sale of common stock
2. issuance of bonds and notes
3. payment of dividends
4. redeem longterm debt
5. reacquire capital stock (treasury stock)
6. payment on notes payable

Comparative Balance Sheet

Income Statement

Additional Information

Step 1. calculate the change in each account

Step 2. indentify the different activities on balance sheet

Step 3. convert net income from accrual to cash basis (3 adjustments...add back non-cash expenses, deduct/add gains/losses, deduct/add gains/losses that occured from investing/financing activities.

Step 4. Analyze changes in operating activities.

Step 5. repeat for investing and financing activities

Step 6. compare net change in cash on the statement of cash flows with the chnage in the cash account on the balance sheet.

1. horiontal--evaluates data over a period of time
2. vertical--expresses each item as a percentage of a base amount (common-size)
3. ratio--expresses the relationship among data.

What are the three types of ratios?

1. Liquidity--measures short term debt paying ability
2. Profitability--measures efficiency of asset management
3. Solvency--long term debt paying ability

1. current ratio
2. acid-test
3. receivables turnover
4. inventory turnover

1. profit margin
2. asset turnover
3. return on assets
4. return on stockholders equity
5. earnings per share
6. price-earnings
7. Payout ratio

debt to total assets

times interest earned

Payout Ratio