ACA Mid Term Exam 2024

1. No.1 - 20 points - The company is producing 4 products: A (1,500 units), B (2,500 units), C (4,300 units), and D (3,000 units). The selling price of A is $4/unit, which is the same as D. The selling price of A is 2/3 of the selling price of B. The selling price of C is half of that of A. Assuming no option for selling at split-off, the joint cost is $10,680, and the costs after split-off are $2,000 for A, $4,100 for B, $1,500 for C, and $1,000 for D.

a. Under the physical method, which product contributes the highest gross margin? Which product contributes the lowest gross margin?

b. Under the NRV method, which product contributes the highest gross margin? Which product contributes the lowest gross margin?

Answer in short by writing the answer, and also attach the picture of computation.

You are a new accounting manager at PT Kreasi Kayu Nusantara. You found that the wood chips by-products produced as a normal residual from the operation are valuable to be sold at 10% of the total fine lumber raw materials, which is quite a material amount. The company journalizes it simply when sold. As this is the beginning of the year, the company agreed to follow your suggestion. The company processed 10 tons of lumber at Rp.40.000,- per kg. The company sold 50% of it by cash to PT Brillio Sejahtera.

a. Suggest the journal treatments during the month.

b. How much is the ending inventory if, after computing the by-product stock, there are still 800 kg of previous year wood chips added to this year’s stock?

(Upload your computation too)

Explain your understanding of the journal to recognize goodwill and goodwill impairment?

When the by-product amount is immaterial, there are several journal options that the company can implement. Please mention them!

The company plans to replace machine X with machine Y. The historical cost of machine X is $18.000,- and has been used for 75% of the 8 yeas usage period. Machine X selling value at this point of time is Rp. $3.000. Machine Y cost is $15.000, usage period of 8 years. However, it needs to be regulerly maintained and the cost is approximately $220. Based on the cost per year of each, as the basis, which machinery will you recommend?

Your department recognize a spoilage amounted at Rp. 6.000.000,- due to equipment error. The revenue from this order is around Rp. 10 million.  The consumers are willing to accept the damage stock if they are reworked. The cost to rework: Rp.500.000 direct labour, Rp.100.000 Factory overhead, and Rp. 600.000 raw materials. How much the gross margin of this order?

If the book value of an asset is $78,000, while the fair value is $90,000, and PT Mapuasari purchased the asset for $88,000, is there any goodwill recognition? If so, by how much?

How do you differentiate scrap from by-products? If the scrap is found and sold before production is finished, how would you journalize the transactions?