ACG 2 Final

McKay Company sells merchandise with a one-year warranty. In Year 1, sales consisted of 1,200 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in Year 1 and 70% in Year 2. In year 1 income statement, McKay should show warranty expense of

$12,000

Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,000. If the issuing corporation redeems the bonds at 98.5, what is the amount of gain or loss on the redemption.

$500 loss

Carla and Eliza share income equally. During the current year the partnership net income was $40,000. Carla made withdrawals of $12,000 and Eliza made withdrawals of $17,000. At the beginning of the year, the capital account balances were: Carla capital, $42,000; Eliza capital, $55,000. Eliza's capital account balance at the end of the year is

$58,000

On June 8, Williams Company issued an $80,000, 5%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note.

$81,333

David and Thompson have earnings of $850 each. The social security tax rate id 6% and the Medicare tax rate is 1.5%. Assuming that the payroll will be paid on December 29, what will be the employer's total FICA tax for this payroll period

127.50

Advantages to issuing bonds over stock

?

Id the market rate of interest is greater than the contract rate of interest, the bonds will

?

SUTA FUTA Social Security, go on Payroll Tax?

?

Common measure of liquidity

Accounts Receivable Turnover

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in

The Cash flows form operating activities section

Which of the following statements is NOT true about 2-for-1 split?

Total contributed capital increases

If one company owns more than 50% of the common stock of another company

a parent-subsidary relationship

Current liabilities are due

and payable with one year

Any partnership cash remaining after paying liabilities and liquidation expenses is

distributed to the individual partners on the basis of their respective capital balances

If there is no written partnership agreement, partnership profits are

divided equally/split

An advantage of the partnership form of business organizations is

ease of formation

A balance sheet that displays only component percentages is

Common-Sized balance sheet

Purchased $400,000 of ABC Co. 5% bonds at 100 plus accrues interest of $4,500. Sold $250,000 of the bonds at 97. The journal entry for the purchase would include

Debit to Interest Receivable for $4,500

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

Defined Contribution

A ten-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under

Financing activities

Which of the following is a characteristic of a Corporation

Limited Liability of stockholders

Yankton Company began the year without an investment portfolio. During the year they purchased investments classified as trading securities at a cost of $13,000. At the end of the year, the market value of the securities was $11,000. The Yankton Company's financial statements for the current year should show

No loss on income statement, available for sale investments of $11,000 and an unrealized loss of $2,000 as a stockholders' equity adjustment on the balance sheet.

Treasury Stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the re-issuance would include a credit to

Paid-In capital from treasury stock for 2,900

If Dakota Company issues 1,500 shares of $6 par common stock for $75,000

Paid-in capital in Excess or Par will be credited for $66,000

When is cash dividend paid

Pain on declaration