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Stanley Furniture Company is a Virginia-based furniture manufacturer. For each of the following firstyear transactions, indicate whether net cash inflows (outflows) from operating activities (NCFO), investing activities (NCFI), or financing activities (NCFF) are affected and whether the effect is an inflow ( + ) or outflow ( − ), or (NE) if the transaction has no effect on cash. ( Hint: Determine the journal entry recorded for the transaction. The transaction affects net cash flows if and only if the account Cash is affected.)
_____ 1. Recorded an adjusting entry to record accrued salaries expense.
_____ 2. Paid cash to purchase new equipment.
_____ 3. Collected payments on account from customers.
_____ 4. Recorded and paid interest on debt to creditors.
_____ 5. Declared and paid cash dividends to shareholders.
_____ 6. Sold used equipment for cash at book value.
_____ 7. Prepaid rent for the following period.
_____ 8. Repaid principal on revolving credit loan from bank.
_____ 9. Purchased raw materials inventory on account.
_____ 10. Made payment to suppliers on account.
Forgetful Corporation (Forgetful) neglected to make various adjusting entries on December 31, the end of its accounting period. Forgetful applies U.S. GAAP, and reports in U.S. dollars. Indicate the effects on assets, liabilities, and shareholders’ equity on December 31, of failing to adjust for the following independent items as appropriate, using the descriptions overstated, understated, and no effect. Also, give the amount of the effect. Ignore income tax implications.
d. Forgetful Corporation paid its annual insurance premium of $1,200 on October 1, the first day of the year of coverage. It debited Prepaid Insurance$900, debited Insurance Expense $300, and credited Cash for$1,200. It made no other entries related to this insurance.
During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.
1. Calculate the number of units transferred to finished goods.
2. Compute the number of equivalent units with respect to both materials used and labor used in the production department for April using the weighted-average method.