FINAL EXAM REVIEW ACCOUNTING BRANNON
Which of the following is true of internal control? 7.1-6
One of the major purposes of internal control is to ensure that the assets are safeguarded.
Which of the following transactions will affect the balance of Retained Earnings? 1.5-17
Paid rent expense for the month.
An account that is not closed at the end of the period is called a(n)_______. 4.3-27
Permanent Account
When a bond is issued at a price higher than the face value, the difference is known as a_________. 12.2-23
Premium
Get Away Vacations signed a 10%, 10−year note for $166,000. The company paid an installment of $2,200 for the first month. What portion of the first monthly payment is interest expense? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) 12.1-15a
$1,383
Routing Solutions paid $210,000 to acquire Tabletz, Inc., an electronic gadgetminus−advertising website. At the time of the acquisition, Tabletz's balance sheet reported total assets of $210,000 and liabilities of $105,000. The fair market value of Tabletz's assets was $210,000. The fair market value of its liabilities was $105,000. How much goodwill did Routing Solutions purchase as part of the acquisition of Tabletz? 9.5-25a
$105,00 answer is the number associated with liabilities
The face value is $98,000, the stated rate is 10%, and the term of the bond is eight years. The bond pays interest semiannually. At the time of issue, the market rate is 8%. What is the present value of the bond at the issue date? 12.7-15a
$109,427
Anderson Corporation has purchased a group of assets for $20,200. The assets and their relative market values are listed below. Land: $7,100 Equipment: 2,500 Building: 3,300 Which of the following amounts would be debited to the Land account? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) 9.1-33a
$11,110
The following information is from the records of Mountainview Camera Shop: Accounts Receivable, December 31, 2018: $81,000 (debit) Net Credit Sales for 2018: 161,000 Accounts written off as uncollectible during 2018: 15,000 Cash sales during 2018: 44,000 The company uses the direct-write off method for bad debts. What is the amount of bad debts expense? 8.2-6a
$15,000 ***the answer to this question is whatever "Accounts written off as uncollectible during 2018" says
Ten years ago a corporation purchased a building for $150,000. At that time, the corporation felt that the building was worth $175,000. The current market value of the building is $500,000. The building has been assessed at $475,000 for property tax purposes. At which amount should the corporation record the building in its accounting records? 1.2-53a
$150,000
The Accounts Payable account of Waterford, Inc. has the following postings: Accounts Payable 17,000 | 28,000 6,000 | 12,000 Calculate the ending balance of the account. 2.2-46a
$17,000 CREDIT ***add each side up and find the difference
Jameson, Inc. had the following balances and transactions during 2019: Beginning Merchandise Inventory as of January 1, 2019: 180 units at $72 March 10: sold 60 units June 10: Purchased 175 units at $78 October 30: sold 175 units What would be reported for Cost of Goods Sold on the income statement for the year ending December 31, 2019 if the perpetual inventory system and the last-in, first-out inventory costing method are used? 6.2-45a
$17,970
The cost of an asset is $1,090,000, and its residual value is $250,000. Estimated useful life of the asset is five years. Calculate depreciation for the second year using the double−declining−balance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) 9.2-26a
$174,400
The following information is needed to reconcile the cash balance for Gourmet Catering Services. *A deposit of $5,600 is in transit. *Outstanding checks total $1,000. *The book balance is $6,200 at February 28, 2019. *The bookkeeper recorded a $1,800 check as $17,100 in payment of the current month's rent. *The bank balance at February 28, 2019 was $18,220. *A deposit of $500 was credited by the bank for $5,000 *A customer's check for $3,100 was returned for non sufficient funds. *The bank service charge is $80. What was the adjusted book balance? 7.6-51a
$18,320
Baldwin, Inc. had the following balances and transactions during 2019: Beginning Merchandise Inventory as of January 1, 2019: 125 units at $80 March 10: Sold 50 units June 10: Purchased 200 units at$84 October 30: Sold 175 units What would be reported as Cost of Goods Sold on the Income Statement for the year ending December 31, 2019 if the perpetual inventory system and the first-in, first-out inventory costing method are used? 6.2-20a
$18,400
On October 1, 2018, Northern Inc. purchased a patent for $208,000 cash. Although the patent gives legal protection for 20 years, the patent is expected to be used for only 10 years. The patent has no residual value. What will be the balance in the patent account on September 30, 2019? 9.5-31a
$187,200
Colorful, Inc. was incorporated on January 1, 2016. Colorful issued 6,000 shares of common stock and 600 shares of preferred stock on that date. The preferred stock is cumulative, $100.00 par, with a 12% dividend rate. Colorful has not paid any dividends yet. In 2019, Colorful had its first profitable year, and on November 1, 2019, Colorful declared a total dividend of $48,000. What is the total amount that will be paid to common stockholders? 13.4-32a
$19,200
If bonds with a face value of $207,000 are issued at 93, the amount of cash proceeds is________. 12.2-20a
$192,510 FORMULA: 207,000 X 93% = 192,510
Everyday Wear Retail had the following balances and transactions during 2018: Beginning Inventory: 15 units at $71 June 10: Purchased 40 units at $84 December 30: Sold 20 units December 31: Replacement cost $66 The company maintains its records of inventory on a perpetual basis using the first-in, first out inventory costing method. Calculate the amount of ending Merchandise Inventory on December 31, 2018 using the lower-of-cost-or-market rule. 6.4-15a
$2,310
Diamond, Inc. had the following transactions during June: Performed services for $2,000 on account; received cash on account, $5,000; paid $600 for repair expense; paid $1,800 to a supplier that it owed from the previous month. What is the combined effect on Cash of these June transactions? 1.4-25a
$2,600 increase Formula: $5,000 - $600 - $ - $1,800 = $2,600
Johnson Waterworks Corporation provides plumbing services. Transactions during the first year of operations are provided below: a) Received $10,000 cash and issued common stock to Mitchell Johnson. b) Paid $1,800 for equipment to be used for plumbing repairs. c) Borrowed $12,000 from a local bank and deposited the money in the checking account d) Paid $200 in rent for the year e) Paid $400 for plumbing supplies to be used on various jobs next year. f) Completed a plumbing repair for a law firm and received $2,900. Calculate the amount of total assets at the end of the first year. Assume the plumbing supplies of $400 are left at the end of the year. 1.4-36a
$24,700 ADD : cash, borrowed, completed repair. SUBTRACT: rent
Danube Corp. purchased a used machine for $22,000. The machine required installation costs of $2,000 and insurance while in transit of $1,900. At which of the following amounts would the machine be recorded? 9.1-26a
$25,900 (22,000+2,000+1,900= 25,900)
Accounts Receivable has a balance of $30,000, and the Allowance for Bad Debts has a credit balance of $3,300. The allowance method is used. What is the net realizable value of Accounts Receivable before and after a $2,300 account receivable is written off? 8.3-14a
$26,700; $26,700 (30,000-3,300=26,700)
Global Enterprises, Inc. signed a one-year $45,000 note payable at 9% interest on April 1, 2018. If Global only adjusts its accounts once a year at year-end, how much interest expense was accused on December 31, 2018. (round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.) 3.3-77a
$3,038 FORMULA: 45,000 X 9% = 4,050 4,050/12= 337.5 337.5 X 9 = 3,037.5 Rounds up to 3,038
On January 1, 2019, Commercial Equipment Sales issued $40,000 in bonds for $21,700. These are six−year bonds with a stated interest rate of 10%, and pay semiannual interest on June 30 and December 31. Commercial Equipment Sales uses the straightminus−line method to amortize the Bond Discount. What amount is debited to Interest Expense on June 30, 2019? 12.3-16a
$3,525
Weston Jewelers uses the perpetual inventory system. On April 2, Weston sold merchandise with a cost of $2,134 for $3,735 to a customer on account with the terms of 3/15, n/30. Weston paid $150 for delivery of the merchandise. Calculate the amount of net sales revenue. (Round any intermediary calculations and your final answer the nearest dollar) 5.5-25a
$3,623 FORMULA: 3,735 X .03 = 112.05 3,735 - 112.05= 3,622.95 Round up to 3,623
The following are selected current month's balances for Allbright Enterprises. Accounts Payable: $9,000 Revenue: 12,000 Cash: 6,000 Expenses: 1,500 Furniture: 11,000 Accounts Receivable: 16,000 Common Stock: 7,250 Notes Payable: 6,250 Based on this information, calculate is the total amount of debits for the trial balance? 2.4-15a
$34,500 CASH+EXPENSES+FURNITURE+A/R (6,000+1,500+11,000+16,000)
A Plus Appliance sells dishwashers with a four-year warranty. In 2019, sales revenue for dishwashers is $89,000. The company estimates warranty expense at 4.5% of revenues. What is the total estimated warranty payable of A Plus Appliances as of December 31, 2019? A Plus Appliances began operating in 2019. (Round your final answer to the nearest dollar.) 11.3-24a
$4,005 FORMULA: 89,000 X 4.5% = 4,005
The following information is from the 2019 records of Uptown Antique Shop: Accounts receivable, December 31, 2019: $45,000 (debit) Allowance for Bad Debts, December 31, 2019 prior to adjustment: 1,300 (debit) Net credit sales for 2019: 180,000 Accounts written off as uncollectible during 2019: 14,000 Cash sales during 2019: 25,000 Bad debts expense is estimated by the percent−of−sales method. Management estimates that 3% of net credit sales will be uncollectible. The ending balance of the Allowance for Bad Debts account after adjustment will be ________. 8.3-50a
$4,100
A $47,000, three−month, 11% note payable was issued on December 1, 2018. What is the amount of accrued interest on December 31, 2018? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) 11.1-38a
$431
On June 30, 2018, Clooney Printers purchased a printer for $53,000. It expects the printer to last for four years and have a residual value of $7,000. Compute the depreciation expense on the printer for the year ended December 31, 2018, using the straightminus−line method. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) 9.2-42a
$5,750
Carpenters, Inc., a manufacturing company, acquired equipment on January 1, 2017 for $540,000. Estimated useful life of the equipment was seven years and the estimated residual value was $11,000. On January 1, 2020, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight−line method of depreciation. Calculate depreciation expense for 2020. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) 9.2-48a
$50,381
On July 7, University Bank lent $560,000 to Jazz Music Shop on a 60 day, 9% note. What is the maturity value of the note? (Use a 360-day year and round answers to the nearest dollar.) 8.4-19a
$568,400
The following information is from the 2019 records of Fast Lane Racing Gear: Accounts receivable, December 31, 2019: $44,000 (debit) Allowance for Bad Debts, December 31, 2019 prior to adjustment: 1,500 (debit) Net credit sales for 2019: 177,000 Accounts written off as uncollectible during 2019: 15,000 Cash sales during 2019: 29,000 Bad debts expense is estimated by the aging−of−receivables method. Management estimates that $6,000 of accounts receivable will be uncollectible. Calculate the ending balance of Allowance for Bad Debts, after the adjustment for bad debts expense, at December 31, 2019. 8.3-51a
$6,000 pretty sure the answer is what ever number is in the last paragraph... whatever "Management Estimates how much accounts receivable will be uncollectible"
The balance in the Bonds Payable account is a credit of $65,000. The balance in the discount on bonds payable account is a debit of $3,800. What is the bond's carrying amount? 12.3-14a
$61,200 FORMULA: 65,000-3,800= 61,200
On January 1, 2018, Sanderson, Inc. acquired a machine for $1,070,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $58,000. What is the book value of the machine at the end of 2019 if the company uses the straight−line method of depreciation? 9.2-22a
$665,200
The following information is from the 2019 records of Albert Book Shop: Accounts receivable, December 31, 2019: $43,000 (debit) Allowance for Bad Debts, December 31, 2019 prior to adjustment: 1,800 (debit) Net credit sales for 2019 178,000 Accounts written off as uncollectible during 2017 19,000 Cash sales during 2019 29,500 Bad debts expense is estimated by the aging−of−receivables method. Management estimates that $5,500 of accounts receivable will be uncollectible. Calculate the amount of bad debts expense for 2019. 8.3-49a
$7,300
The following information is from the 2020 records of R & S Commercial Plumbing Company: Accounts receivable, December 31, 2020: $43,000 (debit) Allowance for Bad Debts, December 31, 2020 prior to adjustment: 1,100 (debit) Net credit sales for 2020: 175,000 Accounts written off as uncollectible during 2017: 16,000 Cash sales during 2020: 29,000 Bad debts expense is estimated by the percent−of−sales method. Management estimates that 5% of net credit sales will be uncollectible. Calculate the amount of bad debts expense for 2020. 8.3-48a
$8,750
Valley, Inc. has 9,000 shares of preferred stock outstanding. The preferred stock has a $100.00 par value, a 9% dividend rate, and is noncumulative. If Valley has sufficient funds to pay dividends, what is the total amount of dividends that will be paid out to preferred stockholders? 13.4-25a
$81,000
Hudson Landscaping Service bought equipment for $10,200 on January 1, 2019. It has an estimated useful life of five years and zero residual value. Hudson uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2019, the book value of this equipment shown on its balance sheet will be________. 3.3-47a
$9,180
From the following details of a merchandiser, calculate the cost of goods sold. (Assume the merchandiser uses the periodic inventory system) 5.8-36a
112,350
The following is the adjusted trial balance for Baker Services: Cash: 38,100 Accounts Receivable: 30,00 BLA BAH BLAH 4.3-46a
140,200 RETAINED EARNINGS DOWN
Assume the following information for Western Sales Inc.: Common Stock Paid - In capital in Excess of Par
218,000 ISSUED, 187,000 OUTSTANDING
Pioneers adjusted trial balance as of December 31, 2018 is given below: 4.6-15a
3.18 FORMULA: ADD: Cash through Office Supplies ADD: Accounts Payable through Interest Payable DIVIDE: first amount by second amount
Which of the following describes a secured bond? 12.2-11
A bond that is backed by issuer's specific assets.
Which of the following described a serial bond? 12.2-10
A bond that matures in installments at regular intervals
Treasury Stock is_______. 13.3-10
A contra equity account
A company purchased inventory for $4,00 from a vendor on account, FOB shipping point, with terms of 3/15, n/30. The Company paid $100 cash for freight in. The entry to record the payment of the invoice within 15 days of the invoice date by the purchaser would include___________. (Assume a perpetual inventory system.) 5.2-51a
A debit to accounts payable for $4,000, a CREDIT to Merchandise Inventory for $120, and a credit to Cash for $3,880.
In a perpetual inventory system, the physical count of inventory_____. 5.1-34
ALL OF THE ABOVE - Establishes the correct amount of ending inventory for the financial statements - Captures transactions that are not recorded by the electronic system -Serves as a check of the perpetual records
The adjusted trial balance shows_________. 3.4-4
Account balances AFTER adjustments
A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $8,000 and paid $950 for the freight−in. The company sold the whole lot to a supermarket chain for $13,000 on account. Which of the following entries correctly records the sale? 6.2-25a
Accounts Receivable 13,000 Sales Revenue 13,000 Cost of Goods Sold 8,950 Merchandise Inventory 8,950
Adams, Inc. recorded the following entry on March 2, 2018. Cash: 10,500 Unearned Revenue: 10,500 From the journal entry above, identify the transaction on March 2, 2018. 2.3-38a
Adams received $10,500 for services to be performed in a later period.
Which of the following is a requirement of the Sarbanes-Oxley Act? 7.1-18
An outside auditor must evaluate the client's internal controls and report on the internal controls as part of the audit report.
A stream of equal cash payments made at equal time intervals is called a(n)________. 12.7-6
Annuity
Uptown, Inc. has determined that an account receivable of $125 is uncollectible. The company uses the direct write-off method. Which of the following entries is required to record the write-off? 8.2-10
Bad Debts Expense: 125 Accounts Receivable: 125
The gain or loss on the sale of a plant asset is determined by comparing the market value of assets received with the ________ of asset sold. 9.3-19
Book Value
If goods are sold on terms FOB shipping point, the ________. 5.2-45
Buyer normally pays the transportation costs
On December 2, 2018, Eshares, Inc. purchases land. In payment for the land, Eshares, Inc. issues 8 comma 5,000 shares of common stock with $10 par value. The land has been appraised at a market value of $440,000. Which of the following is included in the journal entry to record this transaction? 13.2-27a
CREDIT Common Stock- $10 Par Value for $50,000 and credit Paid- In Capital in Excess of Par- Common $390,000
A corporation declares a dividend of $0.50 per share on 18,000 shares of common stock. Which of the following is included in the entry to record the declaration? 13.4-14
Cash Dividends is DEBITED for $9,000
A business purchases equipment by paying $7,133 in cash and issuing a note payable of $16,774. Which of the following occurs? 2.3-57a
Cash is CREDITED for $7,133, Equipment is DEBITED for $23,907, and Notes Payable is CREDITED for $16,774.
Bentley Corporation received cash from issuing 14,000 shares of common stock at par on January 1, 2018. The stock has a par value of $0.05 per share. Which is the correct journal entry to record this transaction? 13.2-6a
Cash is DEBITED for $700, and Common Stock- $0.05 Par Value is credited for $700
Complete Electronics Inc. sells a point−of−sale computer with a two−year service contract. Complete collects $1,500 cash for the selling price of the computer and $480 for the two−year service contract. How is revenue recognized? 5.7-6a
Complete will record Sales Revenue of $1,500 when the computer is delivered and Service Revenue of $20 per month for 24 months.
Which of the following states that the business should use the same accounting methods from period to period? 6.1-12
Consistency Principle
The ending Merchandise Inventory for the current accounting period is understated by $2,700. What effect will this error have on Cost of Goods Sold and Net Income for the current accounting period? 6.5-8
Cost of Goods Sold: OVERstated Net Income: UNDERstated
April, Inc. issued 6,000 shares of preferred stock for $378,000. The stock has a par value of $63 per share. The journal entry to record this transaction would ________. 13.2-37a
DEBIT Cash $378,000 and CREDIT Preferred Stock-- $63 Par Value $378,000
On December 1, 2019, Murphy, Inc. had 41,000 shares of $7.00 par value common stock issued and outstanding. The next day it declared a 50% stock dividend. The market value of the stock on that date was $9.00 per share. Which of the following is the correct journal entry to record this transaction? 13.4-60a
DEBIT Stock Dividends $143,500, and credit Common Stock Dividends Distributable $143,500
On January 1, 2018, Brazos Company purchased equipment and signed a six−year mortgage note for $97,000 at 15%. The note will be paid in equal annual installments of $25,631, beginning January 1, 2019. On January 1, 2019, the journal entry to record the first installment payment will include a ________. (Round your answer to the nearest whole number.) 12.1-29a
DEBIT to INTEREST EXPENSE for $14,550 FORMULA: 97,000 X 15% = 14,550
Treasury Stock______. 13.3-9
DECREASES the number of shares OUTSTANDING
On August 31, 2018, Allright Services received $3,500 in advance of performing the service. Which journal entry is needed to record the receipt of cash? 11.1-28
Debit Cash $3,500, and CREDIT Unearned Revenue $3,500
Rosiland, Inc. purchases 9,000 shares of its previously issued $4.00 par value common stock for $160.00 per share. Which of the following is the correct journal entry to record this transaction? 13.3-17a
Debit TREASURY STOCK- Common $1,440,000, and CREDIT Cash $1,440,000
On the___________, cash dividends becomes a liability of a corporation. 13.4-15
Declaration Date
The date on which the principal amount is repaid to the bondholder is known as the______. 12.2-4
Maturity Date
An oil well cost $1,782,500 and is calculated to hold 170,000 barrels of oil. There is no residual value. Which journal entry is needed to record the expense for the extraction of 38,000 barrels of oil during the year? All 38,000 barrels were sold during the year. (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) 9.4-7a
Depletion Expense- Oil Reserve: 398,620 Accumulated Depletion- Oil Reserve: 398,620
The terms of an invoice are 3/10, n/25. This means that a _________ if the invoice date. 5.2-22
Discount of 3% is allowed if the invoice is paid within 10 days after the invoice date
Which of the following is true of dividends? 13.4-3
Dividends are a distribution of cash, stock, or other property to stockholders.
Masterpiece Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2019, the company had $610,000 in sales. In the same year, Masterpiece Sales replaced defective goods with goods that had a cost of $12,500. Which of the following is the entry needed to record the replacement of the defective goods? 11.3-32a
Estimated Warranty Payable: 12,500 Merchandise Inventory: 12,500
It is mandatory for both the employer and employee to pay___________. 11.2-67
FICA
Which of the following is the correct order of preparation of financial statements? 1.5-3
Income Statement : Statement of retained earnings : Balance sheet : Statement of Cash flows
Revenues and expenses may be transferred to the ________ account before their final transfer into the Retained Earnings account. 4.3-29
Income Summary
On January 1, 2019, Agree Company issued $76,000 of five-year, 8% bonds the the market interest rate was 12%. The issue price of the bonds was $65,401. Agree uses the effective-interest method of amortization for bond discount. Semiannual interest payments are made on June 30 and December 31 of each year. Which of the following is the correct journal entry to record the first interest payment? (Round all amounts to the nearest whole dollar.) 12.8-12a
Interest Expense: (debit) 3,924 Discount on Bonds Payable: (credit) 884 Cash: (credit) 3,040
Which of the following accounts will be included in a post-closing trial balance? 4.4-8
Interest Payable
When a business records accrued interest expense on a note payable________. 11.1-36
Interest Payable is CREDITED
Which of the following is a characteristic of a current liability? 11.1-4
It creates a present obligation for future payment of cash or services.
Which of the following is true of a contingent liability? 11.4-3
It is a potential liability that depends on a future event.
Equipment was acquired for $260,000 and has accumulated depreciation of $193,000. The business exchanges this equipment for new equipment. The new equipment has a market value of $200,000 and the business pays $156,000 cash. Assume the exchange has commercial substance. The exchange results in ________. 9.7-11a
LOSS $23,000 FORMULA: (260,000-193,000= 67,000) (200,000-156,000=44,000) 67,000-44,00= 23,000
The interest rate that investors demand to earn for loaning their money is known as the_______. 12.2-45
Market interest Rate
When determining how businesses record or do not record contingent liabilities, which is not one of the three likelihoods that that are considered? 11.4-4
Reasonably Probable
The expected value of an asset at the end of its useful life is known as__________. 9.2-10
Residual Value
Which of the following are temporary accounts that are close at the end of the year? 4.3-29
Revenues, Expenses, and Dividends
Which of the following is assessed using the debt ratio? 2.5-10
Risk of Default
The amount of cash interest the borrower pays each year is based on the_______. 12.2-33
Stated Interest Rate
A company originally issued 10,000 shares of $9.00 par value common stock at $10.00 per share. The board of directors declares a 15% stock dividend when the market price of the stock is $19.00 a share. Which of the following is included in the entry to record the declaration of a stock dividend? 13.4-54a
Stock Dividends is DEBITED for $28,500
Which of the following is a basic right of stockholders? 13.1-29
Stockholders may receive dividends from corporate earnings.
At the maturity of a note payable, a borrower will pay________. 11.1-45
The Principal PLUS interest
Refer to the following information for Tolan Corporation: If total resold 1,900 shares of treasury stock for $22.00 per share, which of the following statements would be true? 13.3-24a
The Treasury Stock Account would DECREASE by $43,700
Atlantis Corporation has 17,000 shares of 12%,$75.00 par noncumulative preferred stock outstanding and 26,000 shares of no−par common stock outstanding. At the end of the current year, the corporation declares a dividend of $184,000. How is the dividend allocated between preferred and common stockholders? 13.4-20a
The dividend is allocated $153,000 to preferred stockholders and $31,000 to common stockholders
The accountant for Barnes Auto Repair, Inc. failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is an effect of this omission? 3.5-8
The net income will be OVERstated.
Which of the following occurs when the board of directors declares a 3−for−1 stock split on 19,000 outstanding shares of $16.00 par common stock? 13.4-79a
The number of outstanding shares increases to 57,000
Which of the following occurs when the board of directors declares a 3-for-1 stock split on 20,000 outstanding shares of $25 par common stock? 13.4-79
The number of outstanding shares increases to 60,000.
A restaurant is being sued because a customer claims to have found a bug in her chili. The company's lawyers believe there is only a remote possibility that the lawsuit will result in an actual liability. Which of the following actions should be taken by the company's management? 11.4-8
The possible liability should not be shown in the financial statements. ****READ THIS QUESTION CAREFULLY AND MAKE SURE ITS THE RIGHT ANSWER, theres another similar question
A corporation has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit. The company's lawyers believe it is more than remote, but less than probable, that the lawsuit will result in an actual liability. Which of the following actions should be taken by the company's management? 11.4-14
The situation should be described in a note to the financial statements. READ QUESTION CAREFULLY, another similar question with the same answer options
The accountant of Newton Legal Services failed to make an adjusting entry for supplies that had been used for the year. Assume the supplies were initially recorded as an asset. Which of the following statements is true? 3.5-14
The total assets will be OVERstated
The accountant for Eagle Financial Services, Inc. failed to make an adjusting entry to record $3,000 of telephone expenses for the last two months of the year. Which of the following statements is true? 3.5-12
The total liabilities will be UNDERstated
Which of the following represents the correct flow of accounting data? 2.3-5
Transactions Occur : Source Documents are prepared : Transactions are Analyzed : Transactions are journalized and Posted
A corporation originally issued $14.00 par value common stock for $15.00 per share. Which of the following is included in the entry to record the purchase of 1,200 shares of treasury stock for $17.00 per share? 13.3-15a
Treasury Stock- Common is DEBITED for $20,400
Which of the following liabilities is created when a company receives cash for services to be provided in the future? 11.1-26
Unearned Revenue
Classic Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 4% of sales revenue. In 2018, the company had $610,000 of sales. In the same year, it paid out $15,000 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? 11.3-31a
Warranty Expense: 24,400 Estimated Warranty Payable: 24,400 FORMULA: 610,000 X 4% = 24,400
If a company is using accrual basis accounting, when should it record revenue? 3.1-10
When services are performed, even though cash may be received at a later date
The market rate of interest_________. 12.2-35
Works with the stated rate of interest to set the price of a bond
The Merchandise Inventory account balance is $57,000. A physical count of inventory reveals that the actual inventory balance is $38,000. Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system) 5.4-9a
a $19,000 CREDIT TO MERCHANDISE INVENTORY (57,000-38,000) = 19,000
Sales Revenue for a sporting goods store amounted to $545,000 for the current period. All sales are on account and are subject to a sales tax of 13%. Which of the following would be included in the journal entry to record the sales transaction? 11.1-11a
a DEBIT to ACCOUNTS RECIEVABLE for $615,850 FORMULA: 545,000 X 13% = 70,850 70,850 + 545,000 = $615,850
Rambler, Inc. reported sales revenue for 2019 of $917,000. The products were sold with a nine−month warranty. Members of Rambler's management estimate that the cost of the warranty will be equal to 7% of sales revenue. Which of the following will be included in the entry to record the actual amounts paid out as a result of warranty claims? 11.3-28a
a DEBIT to Estimated Warranty Payable for the actual amount of payments
A $44,000, four−month, 9.5% note payable was issued on October 1, 2018. Which of the following would be included in the journal entry required on the note's maturity date by the borrower? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) 11.1-40a
a DEBIT to Interest EXPENSE for $348
Which of the following would be included in the entry by the payee to record a dishonored note receivable? 8.4-51
a Debit to Accounts Receviable
A company purchased inventory for $4,000 from a vendor on account, FOB shipping point, with terms of 3/10, n/30. The company paid $200 cash for freight in. The entry to record the payment of the invoice within 1010 days of the invoice date by the purchaser would include ________. (Assume a perpetual inventory system.) 5.2-51a
a debit to Accounts Payable for $4,000, a credit to Merchandise Inventory for $120, and a credit to Cash for $ 3880
A merchandiser purchased inventory on account for $12,000. In a periodic inventory system, the journal entry to record the purchase would include_______. 5.8-10a
a debit to PURCHASES for $12,000 and a credit to Accounts Payable for $12,000
A check was written by a business for $507 but was recorded in the journal as $705. How would this error be included on the bank reconciliation? 7.6-33
an addition on the book side
Outstanding stock represents shares of stock that_________. 13.1-28
are held by the stockholders
Newton Corporation settles a liability by making a payment in cash. How does paying this liability affect the accounting equation of the business? 1.4-30
assets and liabilities DECREASE
Country Homes Corporation just recorded a transaction in its books. If this transaction increased the total liabilities by $4,000, then________. 1.4-34a
assets must increase, or equity must decrease by $4,000
Equity of a corporation is broken out into two components. Which of the following are the two components of the equity of a corporation? 1.3-38
contributed capital and retained earnings
Which of the following would be included in the journal to record an NSG check? 7.6-69
debit to Accounts Receivable and a credit to Cash
A petty cash fund was established with a $600 balance. It currently has cash of $18 and petty cash tickets as shown below: Travel expense $101 Office supplies expense 280 Equipment rental expense 78 Which of the following would be included in the journal entry to replenish the Petty Cash fund? 7.4-22a
debit to Cash Short & Over for $123
Landings Glassware Company issues $1,087,000 of 8%, 10−year bonds at 94 on February 28, 2019. The bonds pay interest on February 28 and August 31. The journal entry to record the issuance includes a ________. 12.3-21a
debit to Cash for $1,021,780 FORMULA: 1,087,000 X 94% = 1,021,780
The Golden Company issues $515,000 of 9%, 10−year bonds at 107 on March 31, 2019. The bonds pay interest on March 31 and September 30. Assume that the company uses the straight−line method for amortization. The journal entry to record the issuance includes a ________. 12.3-41a
debit to Cash for $551,050
The Great Lakes Company issues $525,000 of 6%, 10−year bonds at 103 on March 31, 2018. The bond pays interest on March 31 and September 30. Assume that the company uses the straight−line method for amortization. The journal entry to record the first interest payment on September 30, 2018 includes a ________. (Round your intermediate answers to the nearest dollar.) 12.3-42a
debit to Interest Expense for $14,962
Motor Sales sold its old office furniture for $6,000. The original cost was $18,000, and at the time of sale, accumulated depreciation was $14,000. What is the effect of this transaction? 9.3-20a
gain of $2,000 ****formula: 14,000+6,000=20,000 20,000-18,000= 2,000
In the event of a corporate liquidation, preferred stockholders_________. 13.1-39
have first claim on remaining corporate assets after debts are paid
Some random question where the formula is: Sales revenue- Cost of Goods Sold 5.5-21a
idk !! (266,000) Trial Balance-Gross Profit
Expenses that fall outside the regular operations of a business are___________. 5.5-29
included under the other income and expenses section of the income statement
A bond issued at a discount when a bond's stated interest rate is_________. 12.2-36
less than the market interest rate
Jason Ford has been the sole owner of a bicycle sales and repair shop for several years. Which of the following business types would limit Jason's personal liability exposure to the entity's debts? 1.2-36
limited-liability company
Westin Delivery Service, Inc. owns a delivery truck. Which of the following costs, associated with the truck, will be treated as a revenue expenditure? 9.1-43
oil change and lubrication
The two basic sources of stockholders' equity are________. 13.1-32
paid-in capital and retained earnings
At the time the transaction occurred, which of the following would result in an increase in net income under the accrual basis of accounting, but would not result in an increase in net income under cash basis accounting? 3.1-16
performance of service on account
Liquidity is a measure of how_______. 4.1-46
quickly an asset may be converted into cash
Preferred stockholders_______. 13.1-37
receive a dividend preference over common stockholders
The Sales Discounts Forfeited account______________. 5.3-16
represents the discount lost when a customer does not pay within the discount period
Preferred stock is stock________. 13.1-35
that gives its owners certain advantages over common stockholders
When bonds are retired at maturity__________. 12.4-3
the carrying value always equals the face value NOTHING AFTER THAT
Which of the following is the correct description of dividends in arrears? 13.4-30
the cumulative amount of dividends that were not paid in previous years NOT PAID IN PREVIOUS YEARS
Journal entries are required for the reconciling items on the book side because_________. 7.6-72
those transactions have not yet been recorded on the company's books
Which of the following is a reason for a company to announce a stock split? 13.4-78
to decrease the market price at which the stock is trading
When using the allowance method, after a company has previously written off an account,___________. 8.3-32
when a customer pays on an account that has been written off, the company needs to reverse the write-off to the Allowance for Bad Debts account and then record the receipt of cash
