Accounting

Which of the following might be classified as a cash equivalent?

30-day treasury bill

The times interest earned ratio is:

7.0 times

On April 1, Keder, Inc. factored $90,000 of its accounts receivable without recourse. The factor retained 8% of the accounts receivable as an allowance for sales returns and charged a 4% commission on the gross amount of the factored receivables. What amount of cash did Keder receive from the factored receivables?

79,200

The Stibbe Construction Company switched from the completed contract method to the percentage-of-completion method of accounting for its long-term construction contracts. This is an example of:

A change in accounting principle

In addition to accounts receivable, what would appear in the 2018 balance sheet related to the construction accounts?

A current asset of $1,900,000

The journal entry to record the borrowing of cash and the signing of a note payable involves:

A debit to cash and a credit to note payable

The replenishment of a petty cash fund might include which of the following?

A debit to office supplies expense

Information not generally disclosed in the summary of significant accounting policies is:

A related-party transaction

Which of the following is most likely to be considered revenue, according to the Financial Accounting Standards Board's definition?

A web streaming company fulfills a 12-month service term paid by customers in advance.

When the allowance method of recognizing uncollectible accounts is used, which of the following statements is true regarding the impact a collection of an account previously written off would have on Accounts Receivable and Allowance for Doubtful Accounts balances?

Accounts Receivable would not change and Allowance for Doubtful Accounts would increase.

Which of the following adjusting entries causes an increase in liabilities?

Accruing unrecorded interest expense

In a bank reconciliation, deposits outstanding are:

Added to the bank balance

GAAP includes which of the following pronouncements:

All of the above

Which of the following is consistent with goods and services being distinct for purposes of identifying separate performance obligations?

All of the above

Which of the following statements is true regarding earnings per share (EPS) disclosures under GAAP?

All public companies are required to report EPS amounts related to income from continuing operations, income from discontinued operations, and net income.

Which of the following is a separate performance obligation?

An extended warranty

During 2017, customers purchased gift cards from LatteBucks, all of which expire on December 31, 2019. At the end of 2018, some of the gift cards still have not been redeemed. How should the unredeemed gift cards be reported on LatteBucks's 2018 year-end financial statements?

As a current liability on the balance sheet

The accumulated depreciation account is a contra (valuation) account to:

Asset account

If the required adjusting entry for depreciation expense is omitted:

Assets will be overstated and income overstated

An internal control system is designed to do all but which of the following?

Assure the promotion of the most qualified employees

Which of the following is not an indicator that the seller may need to constrain recognition of variable consideration?

Based on much experience with the customer, the seller anticipates a more-than-remote chance that the receivable will prove uncollectible.

An item not generally classified as a current liability is:

Bonds payable

Peer Inc. is a publicly-traded enterprise and therefore must disclose information regarding its operating segments. Which of the following should be disclosed for each of Peer's reportable operating segments?

Both profit and loss and total assets must be reported.

On April 1, 2018, Lenzner Company sold an item of inventory to a customer at a price resulting in gross profit to Lenzner. Which of the following statements is true regarding the effect of this transaction on the company's current ratio and quick ratio?

Both the current ratio and the quick ratio increase.

Which of the following is not an indicator that control of a good has passed from the seller to the buyer?

Buyer has scheduled delivery

Estimate the total transaction price of the contract based on the sum of the stand-alone selling prices of the goods and services in the contract.

Collectibility of the receivable is considered when determining whether revenue can be recognized.

Alpha Co. reports inventory on its balance sheet using the same generally accepted methods as applied by Beta Co. These facts relate most closely to which of the following qualitative characteristics of financial reporting?

Comparability

Gray Co. is concerned that it may not have enough employees to ensure proper separation of duties regarding cash disbursements. Which of the following may be performed by the same individual?

Comparing vendor invoices with associated purchase orders and verifying physical receipt of orders with receiving department.

According to the FASB Conceptual Framework, financial information is considered faithfully represented if it is

Complete, neutral, and free from error

Relevance requires that information possess predictive and/or:

Confirmatory value

When accounting for a long-term construction contract for which revenue is recognized over time according to the percentage of completion, gross profit is recognized in any year is debited to:

Construction in progress

An entity has two long-term construction contracts, one of which qualifies for revenue recognition over time and the other which does not (and so requires revenue recognition upon completion of the contract). For either of these two contracts, what account would be debited when preparing the journal entry to record billings?

Construction receivable Construction receivable

Which of the following is considered a practical constraint on the qualitative characteristics?

Cost effectivness

For a manufacturing company, each of the following items would be considered nonoperating income for income statement purposes except:

Cost of goods sold

In a classified balance sheet, supplies would be classified among:

Current assets

Which ratio most directly indicates the extent of the company's reliance on financial leverage?

Debt to equity

The main objective of the IASB is to:

Develop a single set of global accounting standards

In a statement of cash flows, International Financial Reporting Standards allow companies to report interest paid as:

Either an operating or financing cash flow

Which of the following is not one of the steps for recognizing revenue?

Estimate the total transaction price of the contract based on the sum of the stand-alone selling prices of the goods and services in the contract.

What two primary qualitative characteristics make accounting information useful?

Faithful representation and relevance.

Financial statements generally include all of the following except:

Federal Income tax return

The type of financial information to external decision makers is referred to as:

Financial Accounting

In a statement of cash flows, cash received from the issuance of common stock would be classified as a:

Financing activity

The underlying assumption that presumes a company will continue indefinitely is:

Going concern

In general, revenue is recognized when the earnings process is virtually complete and:

Goods or services are transferred to the customer

Conceptually, interim financial statements can be described as emphasizing which of the following? I. Timeliness II. Relevance III. Verifiability

I and II only.

When preparing interim financial statements, an enterprise should: I. Use the same accounting principles followed in preparing its latest annual financial statements. II. Allocate expenses among all interim periods benefited, if the expenses are expected to benefit not only the period of occurrence but also additional period(s) in the same fiscal year. III. Allocate revenues and expenses evenly over the quarters, regardless of when they actually occurred.

I and II only.

Under accounting principles generally accepted in the United States, in order for an item to qualify for recognition in the financial statements of a company, the item must I. Be measurable in monetary terms II. Reflect the consensus expectations of investors III. Meet the definition of an element of the financial statements

I and III only.

Information is considered material to the financial statements if I. It falls within industry-specific quantitative guidelines published by the Financial Accounting Standards Board. II. Its omission could make a difference in the decisions made by a user relying on the financial statements. III. Its misstatement could make a difference in the decisions made by a user relying on the financial statement.

II and III only.

Which of the following is NOT true about accounting for a troubled debt restructuring?

If a receivable is continued, but with modified terms, no loss is typically recorded.

Assume a prepayment is made six months in advance of delivery of a product. The seller is likely to do which of the following with respect to the time value of money over the life of the contract?

Ignore the time value of money

Long-lived assets used in the operations of the business refer to property, plant, and equipment, and:

Intangible assets

Which of the following is most likely an accrued liability?

Interest

The acid-test ratio excludes which of the following elements from the numerator?

Inventories

Allocation of the transaction price to performance obligations:

Is based on relative stand alone selling price

Which of the following is an advantage of cash basis accounting vs. accrual basis accounting?

It provides a more accurate representation of cash generated in a specific period.

The SEC exerts a continuing influence on the establishment of accounting standards. It does so primarily by:

Monitoring the development of GAAP within the accounting profession and using its stature to influence that development.

Which of the following is an acceptable way to estimate uncertain consideration?

Most likely amount to be received and expected value of the amount to be received.

Which of the following characteristics does not describe a liability?

Must be legally enforceable

Bad debts:

Must be recognized as an expense

During the year, Carter Co. wrote off a customer's account receivable using the allowance method for uncollectible accounts. Which statement is true about the impact the write-off had on Carter's net income and total assets?

Net income did not change and net assets did not change.

Included in the category of current liabilities would be:

Obligations expected to require the creation of other current liabilities

Which of the following statements is true regarding the FASB Accounting Standards Codification (ASC)?

Only the FASB and the SEC may issue pronouncements which lead to changes in the ASC.

Earnings per share should be reported for each of the following income statement captions except:

Operating income

The application of intraperiod income taxes requires that income taxes be apportioned to each of the following items except:

Operating income

Which of the following captions would more likely be found in a multiple-step income statement?

Operating income

The gross profit on installment sales for 2018 should be:

Option a

For profitable long-term contracts, income is recognized in each year when revenue is recognized:

Option d

Which of the following is true about cash reporting under IFRS?

Overdrafts in one cash account can typically be offset against positive balance in other cash accounts.

A prepaid expense is an expense:

Paid but not yet incurred

An item not generally classified as a current asset is:

Patent

The underlying assumption that assumes that the life of a company can be divided into artificial time periods is:

Periodicity

Consistency and feedback relate most closely to which two of the following accounting concepts, respectively?

Predictive value and confirmatory value

The Sanchez Company purchased a delivery truck on February 1, 2018. The purchase agreement required Sanchez to pay the total amount due of $15,000 on February 1, 2019. Assuming an 8% rate of interest, the calculation of the price of the truck would involve multiplying $15,000 by the:

Present value of $1

The Jamison Corporation agrees to pay an employee $10,000 a year for five years beginning three years from today and decides to fund the payments by depositing one lump sum in a savings account today. The company should use which present value concept to determine the required deposit?

Present value of a deferred annuity

On March 31, 2018, the Freeman Company leased a machine. The lease agreement requires Freeman to pay 10 annual payments of $6,000 on each March 31, with the first payment due on March 31, 2018. Assuming an interest rate of 10% and that this lease is treated as an installment sale, Freeman will initially value the machine by multiplying $6,000 by which of the following factors?

Present value of an annuity due of $1 at 10% for 10 periods.

Sandra wants to calculate how much money she needs to deposit today into a savings account which earns 5% in order to be able to withdraw $3,000 at the end of each of the next 6 years. She should use which present value concept?

Present value of an ordinary annuity of $1 for 6 periods

Red Co. has a long-term construction contract that qualifies for revenue to be recognized over time. When Red is determining the amount of income to recognize for year two, which of the following items would Red not use in this calculation?

Progress billings to date

Which of the following items would not be included as a cash flow from operating activities in a statement of cash flows?

Purchase of equipment

Which of the following is not one of the characteristics of a contract for purposes of revenue recognition?

Reasonable profit margin

Allister Company does not use the allowance method to account for bad debts and instead any bad debts that do arise are written off as bad debt expense. What problem might this create if bad debts are material?

Receivables likely will be overstated

The primary objective of matching is to:

Recognize expenses in the same period as the related revenue

Which of the following adjusting entries causes a decrease in assets?

Recording depreciation expense

Comparability, understandability, timeliness, and verifiability are enhancing qualitative characteristics that contribute to:

Relevance and faithful representation

The two primary decision-specific qualities that make accounting information useful are:

Relevance and faithful representation

Balance sheets prepared using International Financial Reporting Standards often:

Reporting long-term assets and liabilities before current assets and liabilities

The qualitative characteristic that means there is agreement between a measure and a real-world phenomenon is:

Representational faithfulness

Which of the following characteristics does not describe an asset?

Requires the receipt of cash

An item typically included in the income from continuing operations section of the income statement is:

Restructuring cost

When IFRS uses the cost recovery method to account for a long-term contract,

Revenue equal to costs are typically recognized early in the life of the contract.

A company uses the gross method to account for cash discounts offered to its customers. If payment is made before the discount period expires, which of the following is correct?

Sales discounts is debited for the amount of discounts taken by customers.

The documents that set forth fundamental concepts on which financial accounting and reporting standards will be based are:

Statements of financial accounting concepts

In a bank reconciliation, NSF checks are:

Subtracted from the book balance

The primary objective of financial reporting is to provide information:

That is useful in decision making

Which of the following is not a characteristic of the balance sheet?

The balance sheet reports the change in financial position

Select the statement below which correctly describes a characteristic of the conceptual framework.

The conceptual framework provides guidance useful to the FASB as it develops accounting standards.

When accounting for a long-term construction contract under IFRS, if the percentage-of-completion method is not appropriate, the seller should account for revenue using:

The cost recovery method

Under the realization principle, revenue is recognized as earned when there is reasonable certainty as to the collectibility of the asset to be received and:

The earnings process is virtually complete

The compensation of directors and top executives is disclosed in:

The proxy statement

For a firm with a current ratio of 2.0, which of the following transactions would most likely cause the ratio to decrease?

The purchase of inventory on account

Gil is a Baxley Co. salesman desperate to make quota by the end of 2018. On the afternoon of December 31, 2018, he convinces a longtime customer with excellent credit to sign a contract to accept delivery of Baxley Co.'s Widgetron Deluxe. Gil promises the customer a deep discount off the list price that they can 'hash out later' if the customer is 100% happy with the product. Gil does not tell the customer that the company's policy in such cases is to offer the maximum discount of 30%. The customer states he will have to consult an astrologer and a groundhog to determine if he is happy with the product. Gil oversees the delivery that evening of the Widgetron Deluxe. Should the revenue from this sale be recognized in 2018? Why or why not?

The revenue should not be recognized because the seller lacks sufficient information to estimate returns, so the constraint on recognition of variable consideration applies.

Under IFRS, revenue for the sale of goods is recognized when the seller has transferred to the buyer:

The risks and rewards of ownership

Which of the following is not an indicator that revenue for a service can be recognized over time?

The seller has significant experience with the customer and anticipates fulfillment of the contract.

Which of the following is an indicator that revenue for a service can be recognized over time?

The seller is enhancing an asset that the buyer controls as the service is performed.

Given a set of present value tables, an annual interest rate, the dollar amount of equal payments made, and the number of semiannual payments, what other information is necessary to calculate the present value of the series of payments?

The timing of the payments (whether they are at the beginning or end of the period).

Niwot Co. sells products and service plans both separately and bundled together. Willy Loman, a Niwot Co. salesman, sold a Widgetron in 2018 for $1,000, its normal price, and told the customer he'd 'throw in the 3-year service plan for free', which the company normally sells for an additional $150. The product shipped, the customer paid, and $1,000 in revenue was recognized in 2018. Is this correct? Why or why not?

This is incorrect because the service revenue must be treated as a separate performance obligation, allocated a portion of the $1,000 sales price, and have revenue for it recognized over the three years of the service plan.

The closing process involves:

Transferring revenue and expense balances to retained earnings

The basis used to classify assets as current or long-term is:

Usually one year, because the operating cycle typically is less than one year

Which of the following is true regarding accounting for transfers of receivables under IFRS?

Whether the risks and rewards of ownership have been transferred is sometimes the key factor for determining how to account for a transfer of receivables.

If revenues exceed expenses for the accounting period, the income summary account:

Will have a credit balance prior to closing

Current assets minus current liabilities equals:

Working capital

Choose the correct statement(s) below regarding the direct write-off method for calculating bad debt expense. 1 It is not normally consistent with GAAP and accrual accounting. 2 Its use tends to result in an overstatement of accounts receivable on the balance sheet. 3 Under this method, bad debt expense is recognized when a specific account is determined to be uncollectible.

all 3

During the year ended December 31, 2018, Dalgliesh Co. had sales of $1,500, cost of goods sold of $800, and sales, general and administrative expenses of $200. In addition, Dalgiesh is involved in a restructuring process expected to last several years, and incurred restructuring costs in 2018 of $125. During the year the company also sold various investments for a net pre-tax gain of $125, and received $40 in dividends from investments. The effective tax rate is 40%. What amount of operating and nonoperating income will Dalgiesh present in its 2018 income statement?

c. $375 $165

When the allowance method of recognizing bad debt expense is used, the following transactions would have the following effect on the allowance account:

option b

Which of the following statements is least likely to be found as part of an entity's financial statement note disclosures?

"Historically, the Company has found that only 56% of such coupons are redeemed; this historical redemption percentage is used in estimating the remaining coupon-related liability at the balance sheet date."

The correct amount of prepaid insurance shown on a company's December 31, 2018, balance sheet was $900. On July 1, 2019, the company paid an additional insurance premium of $600. In the December 31, 2019, balance sheet, the amount of prepaid insurance was correctly shown as $500. The amount of insurance expense that should appear in the company's 2019 income statement is:

$1,000

The Strug Company purchased office furniture and equipment for $8,600 and agreed to pay for the purchase by making five annual installment payments beginning immediately. The installment payments include interest at 8%. What is the required annual installment payment? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

$1,994

For the 2020 year, Hollywood should have recognized gross profit on this contract of:

$100,000

What was Capstone's net income for 2018?

$100,000

Ignoring income taxes, what amount should the company report as comprehensive income as of December 31st?

$115,000

What was Capstone's comprehensive income for 2018?

$115,000

Roster Co. adjusts its Allowance for Doubtful Accounts at year end. The general ledger balances for the Accounts Receivable and the related allowance account before adjustment were $1,500,000 and $45,000, respectively. Roaster estimates its necessary balance in its Allowance for Doubtful Accounts as 4% of the Accounts Receivable balance. What amount should Roaster record as an adjustment to its Allowance for Doubtful Accounts at year end?

$15,000 increase.

Wellman Company is considering investing in a two-year project. Wellman's required rate of return is 10%. The present value of $1 for one period at 10% is 0.909 and for two periods at 10% is 0.826. The project is expected to create cash flows, net of taxes, of $80,000 in the first year, and $100,000 in the second year. Wellman should invest in the project if the project's cost is less than or equal to:

$155,320

Enchill Company accrues bad debt expense during the year at an amount equal to 3% of credit sales. At the end of the year, a journal entry adjusts the allowance for uncollectible accounts to a desired amount based on an aging of accounts receivable. At the beginning of 2018, the allowance account had a credit balance of $18,000. During 2018, credit sales totaled $480,000 and receivables of $14,000 were written off. The year-end aging indicated that a $21,000 allowance for uncollectible accounts was required. Enchill's bad debt expense for 2018 would be:

$17,000

The Compton Press Company reported income before taxes of $250,000. This amount included a $50,000 loss on discontinued operation. The amount reported as income from continuing operations, assuming a tax rate of 40%, is:

$180,000

The Strug Company purchased office furniture and equipment for $8,600 and agreed to pay for the purchase by making five annual installment payments beginning one year from today. The installment payments include interest at 8%. What is the required annual installment payment? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

$2,154

Winchell wrote a contract that involves two separate performance obligations. Winchell cannot estimate the stand-alone selling price of product A. Product B has a stand-alone selling price of $100. The price for the combined product is $120. How much of the transaction price would be allocated to the performance obligation for delivering product A?

$20

On February 1, Pinn Corp., paid $40,000 in advertising expenses for ads that will run in a periodical for the entire calendar year. On July 3, Pinn paid $430,000 for anticipated major repairs to their machinery used for business. The repairs will benefit operations for the remainder of the calendar year. Assuming Pinn is a calendar year corporation, what amount of these expenses should Pinn include in its third quarter interim financial statements?

$225,000

The deferred gross profit that would appear in the 2019 balance sheet is:

$225,000

In its 2018 statement of cash flows, Dunn's should report net cash outflows from investing activities of:

$23,000

The Reingold Hat Company uses the allowance method to account for bad debts. During 2018, the company recorded $800,000 in credit sales. At the end of 2018, account balances were: Accounts receivable, $120,000; Allowance for uncollectible accounts, $3,000 (credit). If bad debt expense is estimated to be 3% of credit sales, the appropriate adjusting entry will include a debit to bad debt expense of:

$24,000

In its 2018 statement of cash flows, Dunn's should report net cash inflows from financing activities of:

$260,000

Case Co.'s balances in Allowance for Doubtful Accounts were $25,000 at the beginning of the current year and $18,000 at year end. During the year, receivables of $10,000 were written off as uncollectible. What amount should Case report as bad debt expense at year end?

$3,000

Red has determined that this contract qualifies for revenue recognition over time (as opposed to upon completion). As a result, Red Builders should have recognized profit at the end of year 1 in the amount of:

$300,000

What is the amount of the required annual deposit?

$325,203

Clement Corp., a pharmaceutical manufacturer, licensed a drug patent to Global Corp. for royalties of 5% of drug sales. Royalties are payable twice yearly on April 15 for sales from July through December of the previous year and on October 15 for January - June same-year sales. In 2018, Global paid royalties of $20,000 and $25,000 on April 15 and October 15, respectively. In response to Global's estimate of July - December sales of the drug, Clement correctly recognized $43,000 in royalty revenue in its financial statements dated December 31, 2018. What was Global's sales estimate for the second half of 2018?

$360,000

Winchell wrote a contract that involves two performance obligations. Product A has a stand-alone selling price of $50, and product B has a stand-alone selling price of $100. The price for the combined product is $120. How much of the transaction price would be allocated to the performance obligation for delivering product A?

$40

On December 31, 2018, Supremo Co., paid in advance for a 3-year insurance policy, covering the years 2019 through 2021. The policy cost was $1,200. If the policy had been purchased on a year-to-year basis, the total cost would have been $1,800 at current rates. Supremo Co.'s normal operating cycle is 9 months long. How will the $1,200 be reported on Supremo's balance sheet dated December 31, 2018?

$400 as a current asset, $800 as a noncurrent asset.

The Esquire Clothing Company borrowed a sum of cash on October 1, 2018, and signed a note payable. The annual interest rate was 12% and the company's year 2018 income statement reported interest expense of $1,260 related to this note. What was the amount borrowed?

$42,000

The Richards Company purchased a machine for $5,000 down and $300 a month payable at the end of each of the next 36 months. How would the cash price of the machine be calculated, assuming the annual interest rate is given?

$5,000 plus the present value of an ordinary annuity of $300 for 36 periods

The Ole Factory, Inc. sells scented beauty products and personal care items. It is currently offering a promotion in conjunction with the launch of its new consulting business: customers can purchase a Deluxe Beauty Kit for $500, which is the normal retail price for this item, plus get one month's free access to an online Beauty Consultant, which normally costs $40 per month. For each Deluxe Beauty Kit sold as part of this promotion, how much revenue and deferred revenue should The Ole Factory recognize at the time of sale and how should it be allocated?

$500 total revenue, allocated $463 to the kit and $37 to the service.

On September 25, 2018 Colson Corp. sold 200,000 widgetrons to Cavanaugh Corp at $5 per unit. Half of the units were delivered on November 15, 2018, and the remaining 100,000 units were delivered on January 20, 2019. At the time of sale Cavanaugh paid 40% of the contract price and agreed to pay the rest in equal installments on the two delivery dates. What amount of revenue should Colson recognize from this sale in 2018?

$500,000

Income tax expense has not yet been accrued. The company's income tax rate is 40%. What amount should be reported in the company's year 2018 income statement as income from continuing operations?

$54,000

At the end of June, the Marquess Company factored $200,000 in accounts receivable with Homemark Finance. The transfer is made without recourse. Homemark charges a fee of 3% of receivables factored. During July, $150,000 of the factored receivables are collected. What amount of loss on sale of receivables would Marquess record in June?

$6,000

Smith Company earns a 12% return on assets. If net income is $720,000, average total assets must be:

$6,000,000

The risk-free interest rate is 5%. What is the estimated present value of the future obligation?

$60.880 million

How much gross profit should Sandlewood have recognized in 2018?

$600,000

Harmon Sporting Goods received a $60,000, 6-month, 10% note from a customer. Four months after receiving the note, it was discounted at a local bank at a 12% discount rate. The cash proceeds received by Harmon were:

$61,740

What should be the corrected cash balance at the end of November?

$7,140

Lewis is selling a product with some of the transaction price depending on the outcome of a future event. There is a 75% chance that the event will result in $100,000 of consideration to Lewis, and a 25% chance that the event will result in $40,000 of consideration to Lewis. Which of the following is not an appropriate estimate of the amount of uncertain consideration for purposes of Lewis estimating the transaction price?

$70,000

Misk, Inc. received from a customer a one year, $750,000 note bearing annual interest of 9%. After holding the note for six months, Misk discounted the note at National Bank at an effective interest rate of 12%. What amount of cash did Mick receive from the bank?

$768,450

In question 10, if the transfer were made with recourse but is still accounted for as a sale, what amount of loss on sale of receivables would the company record in June assuming the estimated recourse liability is $2,000?

$8,000

Assume the same data as in question 8, except that Harry will make the quarterly deposits at the end of the quarter. How much will Harry have accumulated in the savings account at the end of the seven and a half-year period? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

$8,114

Harry Morgan plans to make 30 quarterly deposits of $200 into a savings account. The first deposit will be made immediately. The savings account pays interest at an annual rate of 8%, compounded quarterly. How much will Harry have accumulated in the savings account at the end of the seven and a half-year period? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

$8,276

What is the contract price (total revenue) on this contract?

$8,750,000

On May 31, 2018, the Arlene Corporation adopted a plan to sell its cosmetics line of business, considered a component of the entity. The assets of the component were sold on October 13, 2018, for $1,120,000. The component generated operating income from January 1, 2018, through disposal of $300,000. In its income statement for the year ended December 31, 2018, the company reported before-tax income from operations of a discontinued component of $620,000. What was the book value of the assets of the cosmetics component?

$800,000

How much was recognized as bad debt expense?

$9,000

Jasper Company uses the allowance method to account for bad debts. During 2018, the company recorded bad debt expense of $9,000 and wrote off as uncollectible accounts receivable totaling $5,000. These transactions caused a decrease in working capital (current assets minus current liabilities) of:

$9,000

The Wazoo Times Newspaper Company reported an $11,200 liability in its 2018 balance sheet for subscription revenue received in advance. During 2019, $62,000 was received from customers for subscriptions and the 2019 income statement reported subscription revenue of $63,700. What is the liability amount for deferred subscription revenue that will appear in the 2019 balance sheet?

$9,500

Ignoring income taxes, what amount should the company report as net income as of December 31st?

$90,000

Assuming the contract qualifies for revenue recognition over time, what total amount (excluding cash) should Blue Co. recognize as current assets at year end?

$900,000

Sanchez Corporation Cash $ 20,000 $ 25,000 Accounts receivable (net) 100,000 110,000 Inventories 190,000 155,000 Total current assets 310,000 290,000 Long-term assets 230,000 210,000 Current liabilities 200,000 190,000 Long-term liabilities 40,000 50,000 Shareholders' equity 300,000 260,000 Net income $ 40,000 Interest expense 10,000 Income tax expense 20,000 The acid-test ratio for 2018 is:

0.60

The debt to equity ratio for 2018 is:

0.80

ncome statement: 2018 Sales $ 2,500,000 Cost of goods sold 1,300,000 Net income 200,000 Balance sheets: 2018 2017 Accounts receivable $ 300,000 $ 200,000 Total assets 2,000,000 1,800,000 Total shareholders' equity 900,000 700,000 The asset turnover for 2018 is:

1.32

Randolph Corp. has a debt-to-equity ratio of 1.5, and total assets of $325 million. Randolph is considering another $25 million of debt and another $25 million of equity. What will be Randolph's debt-to-equity ratio after the issuance?

1.4

Cash $ 20,000 $ 25,000 Accounts receivable (net) 100,000 110,000 Inventories 190,000 155,000 Total current assets 310,000 290,000 Long-term assets 230,000 210,000 Current liabilities 200,000 190,000 Long-term liabilities 40,000 50,000 Shareholders' equity 300,000 260,000 Net income $ 40,000 Interest expense 10,000 Income tax expense 20,000 The current ratio for 2018 is:

1.55

The accounts receivable turnover for 2018 is:

10.0

The accounts receivable turnover ratio for the current year is:

10.00

Choose the correct statement(s) below regarding the transfer of financial assets such as receivables: 1 In a transfer of receivables without recourse, the transferee obtains the right to compensation from the transferor for customer accounts that prove to be uncollectible. 2 In a transfer which qualifies as a secured borrowing, the transferor will record a liability for the amount borrowed. 3 Under otherwise identical conditions, a transferor will generally pay a higher commission percentage on a receivable sold with recourse versus one sold without recourse.

2 only

The Esquire Company reported sales of $1,600,000 and cost of goods sold of $1,122,000 for the year ended December 31, 2018. Ending inventory for 2017 and 2018 was $420,000 and $460,000, respectively. Esquire's inventory turnover for 2018 is:

2.55

Unique Aged Cheeses, Inc. specializes in producing two varieties of cheese which require a 1-month setup process to procure and prepare the necessary raw materials, then an 18-month aging process before the products are ready for sale to customers, who typically pay within 30 days. These two cheeses are Unique's only products. For the purpose of classifying assets and liabilities on the balance sheet, what will be the length of the time period used to draw the current vs. noncurrent distinction?

20 months

The return on shareholders' equity for 2018 is:

25%