ACC 310f

Mott Company uses the units-of-activity method in computing depreciation. A new plant asset is purchased for $48,000 that will produce an estimated 100,000 units over its useful life. Estimated salvage value at the end of its useful life is $4,000. What is the depreciation cost per unit? $4.80 $4.40 $.48 $.44

$.44

Carey Company buys land for $50,000 on 12/31/14. As of 3/31/15, the land has appreciated in value to $50,700. On 12/31/15, the land has an appraised value of $51,800. By what amount should the Land account be increased in 2015? $1,100 $1,800 $700 $0

$0

The income statement for the year 2015 of Fugazi Co. contains the following information: Revenues $70,000 Expenses: Salaries and Wages Expense $45,000 Rent Expense 12,000 Advertising Expense 10,000 Supplies Expense 6,000 Utilities Expense 2,500 Insurance Expense 2,000 Total expenses 77,500 Net income (loss) $ (7,500) After all closing entries have been posted, the Income Summary account will have a balance of $77,500 credit. $7,500 debit. $7,500 credit. $0.

$0.

The income statement for the year 2015 of Fugazi Co. contains the following information: Revenues $70,000 Expenses: Salaries and Wages Expense $45,000 Rent Expense 12,000 Advertising Expense 10,000 Supplies Expense 6,000 Utilities Expense 2,500 Insurance Expense 2,000 Total expenses 77,500 Net income (loss) $ (7,500) After all closing entries have been posted, the revenue account will have a balance of $7,500 credit. $70,000 credit. $0. $70,000 debit

$0.

Tiff's Corporation manufactures travel clocks and watches. Overhead costs are currently allocated using direct labor hours. Clocks Watches Total Direct labor hours (unit) 35,000 105,000 140,000 #Units Shipped 75,000 45,000 120,000 Total Overhead Cost $210,000 What is the unit OH cost for travel clocks if the total OH cost is allocated based on labor hours? $2.10 $52,500 $1.17 $3.50 $1.50 $0.7

$0.7

At October 1, Arcade Fire Enterprises reported stockholders' equity of $70,000. During October, no stock was issued and the company earned net income of $18,000. If stockholders' equity at October 31 totals $78,000, what amount of dividends were paid during the month?

$10,000

A company purchased land for $90,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at $107,000. $90,000. $102,000. $70,000.

$102,000.

In the first month of operations for Gallowsbird Industries, the total of the debit entries to the cash account amounted to $36,000 ($16,000 investment by stockholders and revenues of $20,000). The total of the credit entries to the cash account amounted to $22,000 (purchase of equipment $8,000 and payment of expenses $14,000). At the end of the month, the cash account has a(n)

$14,000 debit balance.

A machine with a cost of $480,000 has an estimated salvage value of $30,000 and an estimated useful life of 5 years or 15,000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours? $150,000 $90,000 $130,000 $160,000

$150,000

At October 1, 2015, Padilla Industries had an accounts payable balance of $40,000. During the month, the company made purchases on account of $33,000 and made payments on account of $48,000. At October 31, 2015, the accounts payable balance is

$25,000.

Sargent Corporation bought equipment on January 1, 2015. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. Assuming straight-line deprecation, the book value of the equipment at the beginning of the third year would be $260,000. $100,000. $360,000. $150,000.

$260,000.

Sargent Corporation bought equipment on January 1, 2015. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. The depreciation expense using the straight-line method of depreciation is $70,000. $50,000. None of these answer choices are correct. $72,000.

$50,000.

During 2015, its first year of operations, Neko's Bakery had revenues of $60,000 and expenses of $35,000. The business paid dividends of $20,000. What is the balance of retained earnings at December 31, 2015?

$5000 Credit

Liabilities of a company would not include

cash.

The income statement for the year 2015 of Fugazi Co. contains the following information: Revenues $70,000 Expenses: Salaries and Wages Expense $45,000 Rent Expense 12,000 Advertising Expense 10,000 Supplies Expense 6,000 Utilities Expense 2,500 Insurance Expense 2,000 Total expenses 77,500 Net income (loss) $ (7,500) The entry to close the expense accounts includes a debit to Income Summary for $7,500. credit to Income Summary for $7,500. debit to Utilities Expense for $2,500. debit to Income Summary for $77,500.

debit to Income Summary for $77,500.

Mt. Zion Inc. pays its employees twice a month, on the 7th and the 21st. On June 21, Mt. Zion Inc. paid employee salaries of $5,000. This transaction would:

decrease net income for the month by $5,000.

Under accrual-basis accounting

events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received.

Stockholders' equity is decreased by

expenses.

Revenues are

gross increases in stockholders' equity resulting from business activities.

A credit to a liability account

indicates an increase in the amount owed to creditors.

Many firms do not choose to use the account classification method because:

it is time consuming to implement and is subjective in nature

Dinosaur Junior Corporation purchased a one-year insurance policy in January 2015 for $75,000. The insurance policy is in effect from May 2015 through April 2016. If the company neglects to make the proper year-end adjustment for the expired insurance

net income and assets will be overstated by $50,000.

An income statement

presents the revenues and expenses for a specific period of time.

If unearned revenues are initially recorded in revenue accounts and not all the related services been performed at the end of the accounting period, the failure to make an adjusting entry will cause

revenues to be overstated.

The following transactions took place for Xiu Xiu Company during the month of June: (a) Purchased equipment on account for $9,000. (b) Billed customers $5,000 for services performed (c) Made payment of $2,300 on account for equipment purchased earlier in the month. (d) Collected $2,900 on customer accounts for the services performed earlier in the month. Based on the information given, which of the statements is correct?

stockholders' equity increased by $5,000

n error has occurred in the closing entry process if the balance sheet accounts have zero balances. revenue and expense accounts have zero balances. the dividends account is closed to the retained earnings account. the retained earnings account is credited for the amount of net income.

the balance sheet accounts have zero balances.

The cost of an asset and its fair value are

the same on the date of acquisition.

If an individual asset is increased, then

there must be an equal decrease in another asset.

Which of the following costs are added to work-in-process during the period? A. Raw materials. B. Labor C. Administrative costs. Both A and B. A, B and C

Both A and B.

Which of the following is not one of the four steps in the decision making process?

Separate routine decision problems from non-routine decision problems.

A useful step for estimating controllable costs is:

Separating variable costs from fixed costs

Which part of the four step framework for making decisions is linked directly to the formulation of the decision maker's goals?

Step 1: Specify the decision problem.

Billings Company's plant manager is trying to better understand his plant's inventory workflow. He determined that $10 million was spent on raw materials, $2 million on direct labor and $3 million on manufacturing overhead. If raw materials beginning and ending inventories are $2 million and $1 million, respectively, and work-in-process beginning and ending inventories are $6 million and $4 million respectively, how much is cost of goods manufactured?

$18 million.

The following information is for Bright Eyes Auto Supplies: Bright Eyes Auto Supplies Balance Sheet December 31, 2015 Cash $ 40,000 Accounts Payable $ 130,000 Prepaid Insurance 80,000 Salaries and Wages Payable 50,000 Accounts Receivable 100,000 Mortgage Payable 150,000 Inventory 140,000 Total Liabilities 330,000 Land Held for Investment 180,000 Land 250,000 Buildings $200,000 Common Stock $400,000 Less Accumulated Retained Earnings 340,000 740,000 Depreciation (60,000) 140,000 Trademark 140,000 Total Assets $1,070,000 Total Liabilities and Stockholders' Equity $1,070,000 The total dollar amount of liabilities to be classified as current liabilities is $130,000. $50,000. $330,000. $180,000.

$180,000.

On January 1, 2014, Doolittle Company purchased furniture for $7,560. The company expects to use the furniture for 3 years. The asset has no salvage value. The book value of the furniture at December 31, 2015 is

$2,520

The following information is for Sunny Day Real Estate: Sunny Day Real Estate Balance Sheet December 31, 2015 Cash $ 25,000 Accounts Payable $ 60,000 Prepaid Insurance 30,000 Salaries and Wages Payable 15,000 Accounts Receivable 50,000 Mortgage Payable 85,000 Inventory 70,000 Total Liabilities 160,000 Land Held for Investment 85,000 Land 120,000 Buildings $100,000 Common Stock $120,000 Less Accumulated Retained Earnings 250,000 370,000 Depreciation (20,000) 80,000 Trademark 70,000 Total Assets $530,000 Total Liabilities and Stockholders' Equity $530,000 The total dollar amount of assets to be classified as property, plant, and equipment is $220,000. $285,000. $200,000. $305,000.

$200,000.

If total assets equal $345,000 and total stockholders' equity equal $140,000, then total liabilities must equal

$205,000.

Yanik Company's delivery truck, which originally cost $84,000, was destroyed by fire. At the time of the fire, the balance of the Accumulated Depreciation account amounted to $57,000. The company received $48,000 reimbursement from its insurance company. The gain or loss as a result of the fire was $36,000 loss. $36,000 gain. $21,000 loss. $21,000 gain.

$21,000 gain.

The Clarke Company provided the following information for the month of December: Beginning work-in-process $12,000 Ending work-in-process $9,000 Direct labor/materials used $14,000 Manufacturing overhead $7,000 The company's cost of goods manufactured for December is: $42,000 $33,000 $28,000 $24,000 $26,000

$24,000

Phair and Associates is a financial planning service. The account balances at December 31, 2015 are shown below: Accounts Payable $ 5,000 Accounts Receivable 19,000 Buildings 140,000 Cash 11,700 Common Stock 143,400 Equipment 15,400 Land 42,000 Notes Payable 95,000 Notes Receivable 8,100 Prepaid Insurance 6,400 Supplies 800 What amount are shown as the total debits on its trial balance?

$243,400

Bass Boss Manufacturing Company manufactures two types of bass boats. Bass Boss provides the following data, pertinent to allocating its annual overhead cost of $435,000: Bass Boss Product Boss Boss Hog Bear Units per year 15,000 20,000 Machine hours/unit 3.0 5.0 Materials cost/unit $1,500 $2,000 Labor cost/unit $ 800 $1,000 Determine the allocation rate for assuming the cost driver is machine hours/unit.

$3 per machine hour

A factory machine was purchased for $375,000 on January 1, 2015. It was estimated that it would have a $75,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2015. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2015 would be $37,500. $75,000. $30,000. $60,000.

$30,000.

During the year 2015, Dilego Company earned revenues of $90,000, had expenses of $56,000, purchased assets with a cost of $10,000 and paid dividends of $6,000. Net income for the year is

$34,000.

Spikes Company manufactures 5,000 high-end racing bicycles each period. Spikes has been making all the components for the bikes, but a supplier has approached Spikes with an offer to sell her bicycle seats at a price of $40. The cost per unit of manufacturing one bicycle seat is computed as follows: Direct Material $10 Direct Labor $18 Manufacturing overhead (100% fixed) $10 If the bicycle seats are purchased from the outside supplier, $1 per unit of the fixed manufacturing overhead costs can be avoided. If Spikes purchases the seats, the facility used to manufacture the seats would be rented for $20,000 per period. If Spikes chooses to purchase the bicycle seats, then the change in annual net operating income is an: $5,000 increase. $10,000 increase. $5,000 decrease. $35,000 increase. $35,000 decrease.

$35,000 decrease.

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: Accounts payable $ 18,000 Accounts receivable 11,000 Accumulated depreciation - equipment 28,000 Advertising expense 21,000 Cash 15,000 Common stock 42,000 Dividends 14,000 Depreciation expense 12,000 Insurance expense 3,000 Note payable, due 6/30/16 70,000 Prepaid insurance (12-month policy) 6,000 Rent expense 17,000 Retained earnings (1/1/15) 60,000 Salaries and wages expense 32,000 Service revenue 133,000 Supplies 4,000 Supplies expense 6,000 Equipment 210,000 What are total current assets at December 31, 2015? $42,000 $26,000 $32,000 $36,000

$36,000

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: Accounts payable $ 18,000 Accounts receivable 11,000 Accumulated depreciation - equipment 28,000 Advertising expense 21,000 Cash 15,000 Common stock 42,000 Dividends 14,000 Depreciation expense 12,000 Insurance expense 3,000 Note payable, due 6/30/16 70,000 Prepaid insurance (12-month policy) 6,000 Rent expense 17,000 Retained earnings (1/1/15) 60,000 Salaries and wages expense 32,000 Service revenue 133,000 Supplies 4,000 Supplies expense 6,000 Equipment 210,000 What is the company's net income for the year ending December 31, 2015? $133,000 $12,000 $42,000 $28,000

$42,000

Stahl Consulting started the year with total assets of $60,000 and total liabilities of $15,000. During the year, the business recorded $48,000 in catering revenues and $30,000 in expenses. Stahl issued stock of $9,000 and paid dividends of $15,000 during the year. The stockholders' equity at the end of the year was

$57,000.

Chik Chik Company showed the following balances at the end of its first year: Cash $6,000 Prepaid insurance 9,400 Accounts receivable 7,000 Accounts payable 5,600 Notes payable 8,400 Common stock 2,800 Dividends 1,400 Revenues 44,000 Expenses 35,000 What did Chik Chik Company show as total credits on its trial balance?

$60,800

Engler Company purchases a new delivery truck for $55,000. The sales taxes are $4,000. The logo of the company is painted on the side of the truck for $1,600. The truck license is $160. The truck undergoes safety testing for $290. What does Engler record as the cost of the new truck? $60,600 $61,050 $59,000 $60,890

$60,890

Wesley Hospital installs a new parking lot. The paving cost $40,000 and the lights to illuminate the new parking area cost $25,000. Which of the following statements is true with respect to these additions? $65,000 should be debited to the Land account. $40,000 should be debited to the Land account. $25,000 should be debited to Land Improvements. $65,000 should be debited to Land Improvements.

$65,000 should be debited to Land Improvements.

The following information is for Sunny Day Real Estate: Sunny Day Real Estate Balance Sheet December 31, 2015 Cash $ 25,000 Accounts Payable $ 60,000 Prepaid Insurance 30,000 Salaries and Wages Payable 15,000 Accounts Receivable 50,000 Mortgage Payable 85,000 Inventory 70,000 Total Liabilities 160,000 Land Held for Investment 85,000 Land 120,000 Buildings $100,000 Common Stock $120,000 Less Accumulated Retained Earnings 250,000 370,000 Depreciation (20,000) 80,000 Trademark 70,000 Total Assets $530,000 Total Liabilities and Stockholders' Equity $530,000 The total dollar amount of liabilities to be classified as current liabilities is $160,000. $75,000. $60,000. $15,000.

$75,000.

The Owens Company budgeted sales of 20,000 printers at $90 per unit last year. Variable manufacturing costs were budgeted at $46 per unit, and fixed manufacturing costs at $12 per unit. A special order for 1,000 printers at $72 each was received by Owens in April. There is enough plant capacity to meet these additional units without incurring any additional fixed manufacturing costs; however, the production would have to be done on an overtime basis at an estimated additional cost of $5 per printer. Acceptance of the special order would not affect Owens' normal sales and no selling expenses would be incurred. What would be increase to net operating income if the special order were accepted? $21,000 $9,000 $14,000 $10,000

$9,000

On January 1, 2014, Mudhoney Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $750 per month. At January 31, 2015, the balance in Accumulated Depreciation is

$9,750

Fugazi City College sold season tickets for the 2015 football season for $240,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

$90,000.

These are selected account balances on December 31, 2015. Land (location of the office building) $100,000 Land (held for future use) 150,000 Office Building 700,000 Inventory 200,000 Equipment 450,000 Office Furniture 150,000 Accumulated Depreciation 425,000 What is the total amount of property, plant, and equipment that will appear on the balance sheet? $1,400,000 $1,125,000 $975,000 $1,175,000

$975,000

The CEO of RV USA is trying to estimate sales based on a budgeted target profit before taxes of $150,000. If unit contribution margin is $5,000, total sales in June are estimated at $900,000 and fixed costs are $500,000, how many RVs must be sold to attain the target profit before taxes?

130

The Wingo Company sells a single product for $21 per unit. If variable expenses are 70% of sales and fixed costs are $4,200, the break-even point in dollars will be:

14,000

Mather Company purchased equipment on January 1, 2015 at a total invoice cost of $336,000; additional costs of $6,000 for freight and $30,000 for installation were incurred. The equipment has an estimated salvage value of $12,000 and an estimated useful life of five years. The amount of accumulated depreciation at December 31, 2016 if the straight-line method of depreciation is used is: $148,800 $129,600 146,000 132,000 144,000

144,000

A plant asset was purchased on January 1 for $60,000 with an estimated salvage value of $12,000 at the end of its useful life. The current year's Depreciation Expense is $6,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $30,000. The remaining useful life of the plant asset is 3 years. 5 years. 10 years. 8 years.

3 years.

A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is 5%. 40%. 20%. 25%.

40%.

If selling price is $25, unit contribution margin equals $15 and fixed costs are $12,000, then breakeven volume is:

800 units

The Huffman Tire Company has 3,000 tires in its inventory which are considered obsolete. Each unit originally cost the company $35. Management is considering options to reduce these inventory levels. Units can be sold directly to car dealerships for $30 per tire as opposed to the normal selling price of $45 per tire. The other option is to offer their current customers a $10 per tire rebate on their purchase. In addition to the $10 rebate, the program would cost the company approximately $24,000 to manage. They predict that either option will rid them completely of their excess inventory. The decision to sell directly to the car dealerships over offering the rebate will result in: A $15,000 decrease in profits. A $24,000 decrease in profits. A $21,000 increase in profits. A $9,000 increase in profits.

A $9,000 increase in profits.

When capacity is limited, which of the following are alternative courses of action to consider? A and B only. A, B and C. Purchase some components from outside suppliers. Produce the items with the largest selling price to maximize revenue. Produce the items with the largest contribution margin per unit of capacity.

A and B only.

Debbie's Donut Shop has been the only donut shop in town. However, after Barry's Breakfast Treats opened up last month, Debbie's sales have dropped. Debbie decides to cut the selling price of her delicious donuts. The decrease in selling price will result in:

A reduction in the unit contribution margin.

A trial balance would only help in detecting which one of the following errors?

A transposition error when transferring the debit side of journal entry to the ledger

If the transaction causes an asset account to decrease, which of the following related effects may occur?

An increase of equal amount in another asset account.

which of the following statements is correct? A. Unearned revenues are revenue for services performed but not yet received in cash or recorded. B. A liability—revenue relationship exists with unearned revenue adjusting entries. C. An asset—expense relationship exists with accrued expense adjusting entries. D. Depreciation expense for a period is the original cost of an asset - accumulated depreciation.

B is correct

When demand is high and a scarce resource is in short supply, a company should decide how much of each product to produce by ranking products by the contribution margin per unit of the product.

False

which of the following statements is correct? Advertising expense is a product cost Service firms do not incur depreciation costs Human capital is an important resource for service firms, but not for other firms Cardboard packaging for the product is product cost Sales commissions for the current month is a product cost

Cardboard packaging for the product is product cost

The income statement for a service firm distinguishes between which of the following costs? Cost of goods manufactured and conversion costs. Costs of providing services and product costs. Cost of providing service and selling and administrative costs. Selling and administrative costs and period costs. None of the above.

Cost of providing service and selling and administrative costs.

An accountant has debited an asset account for $1,200 and credited a liability account for $500. What can be done to complete the recording of the transaction?

Credit a different asset account for $700.

Meat Puppets Company purchased equipment for $7,200 on December 1. It is estimated that annual depreciation on the equipment will be $1,800. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

Debit Depreciation Expense, $150; Credit Accumulated Depreciation, $150.

Dreamtime Laundry purchased $7,000 worth of supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the supplies indicated only $1,000 on hand. The adjusting entry that should be made by the company on June 30 is

Debit Supplies Expense, $6,000; Credit Supplies, $6,000.

REM Real Estate received a check for $27,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $27,000. Financial statements will be prepared on July 31. REM Real Estate should make the following adjusting entry on July 31:

Debit Unearned Rent Revenue, $4,500; Credit Rent Revenue, $4,500.

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

Debit a Stockholders' account for $800.

Which of the following statements is true about expenses?

Expenses decrease stockholders' equity, so an expense account's normal balance is a debit balance

Capacity costs are controllable in the short term.

False

Quantifying the longer-term implications of short-term actions is difficult. Consequently: Long-term implications should be ignored in the decision-making process. It is impossible to make an informed decision. A, B, and C are consequences. A and B only. Frequently, only qualitative assessments are possible.

Frequently, only qualitative assessments are possible.

Which of the following is an example of utilizing capacity effectively? An airline selling 20% more tickets for a flight than their airplane has available seats. Having all employees of a donut shop work a regular 8-hour shift every day. Building a plant large enough so that production can be increased as demand increases. Hiring extra temporary employees to work extended hours during Christmas season at a retail store. A caterer having a limited number of chefs working during the week and on weekends.

Hiring extra temporary employees to work extended hours during Christmas season at a retail store.

Which of the following statements is correct? Expenses are closed to the Expense Summary account. In order to close the dividends account, the retained earnings account should be credited. Revenues, expenses, and the dividends account are closed to the Income Summary account. In order to close the dividends account, the income summary account should be debited. In preparing closing entries, each expense account will be credited.

In preparing closing entries, each expense account will be credited.

Shickman Company makes the widgets it uses in one of its products at a cost of $8 per unit. This cost includes $2 of fixed overhead. The company needs 10,000 of these plugs annually, and Orlando Company has offered to sell them at $5 per unit. If Shickman Company purchases the plugs, the company would: Increase profits by $10,000. Increase profits by $30,000. Decrease profits by $30,000. Decrease profits by $10,000.

Increase profits by $10,000.

Which of the following is a drawback of using regression analysis?

It makes a number of assumptions about the data, and accounting data sometimes do not satisfy these assumptions.

Which of the following is a short-term decision that is a reaction to excess demand? Management makes the decision to emphasize sales in a certain market to boost poor sales. All of the above a short-term decisions that are reactions to excess demand. Management makes the decision to close a plant because of increased competition. Management makes the decision to make parts rather than buy them after calculating a positive opportunity cost for capacity. Management makes the decision to buy parts rather than make them after calculating a positive opportunity cost for capacity.

Management makes the decision to buy parts rather than make them after calculating a positive opportunity cost for capacity.

On January 1, 2015, Cat Power Company reported stockholders' equity of $705,000. During the year, the company paid dividends of $30,000. At December 31, 2015, the amount of stockholders' equity was $825,000. What amount of net income or net loss would the company report for 2015?

Net income of $150,000

Which of the following statements is correct? A. Adjusting entries can be classified as accruals and advances. B. Accrued revenues are revenue for services performed and already received in cash and recorded. C. Prepaid expenses are paid and recorded in an asset account after they are used or consumed. D. Accrued expenses are incurred and already paid or recorded.

None of them is correct

The Southeast Company makes three products in one manufacturing facility. Data regarding these products are as follows: A B C Direct Materials $5.70 $6.20 $8.90 Direct Labor 2.05 1.90 2.20 Variable Overhead .70 .80 .90 Fixed Overhead 1.10 1.40 1.60 Unit Product Cost $9.55 $10.30 $13.60 Machine Hours Per Unit .5 1 .25 Selling Price per Unit $16.00 $18.00 $20.00 Demand (units) 1,200 1,400 800 If there are only 2,000 machine hours available, the production of which product will result in the most income per machine hour? Product A Product B Cannot be determined Product C

Product C

Ryan Adams, an employee of Heartbreaker Corp., will not receive his paycheck until April 2. Based on services performed from March 15 to March 31, his salary was $1,000. The adjusting entry for Heartbreaker Corp. on March 31 is

Salaries and Wages Expense 1,000 Salaries and Wages Payable 1,000

Stone Roses Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29-31). Employees work 5 days a week and the company pays $1,500 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January?

Salaries and Wages Expense 4,500 Salaries and Wages Payable 4,500

Sebadoah is a barber who does his own accounting for his shop. When he buys supplies he routinely debits Supplies Expense. Sebadoah purchased $1,500 of supplies in January and his inventory at the end of January shows $300 of supplies remaining. What adjusting entry should Sebadoah make on January 31?

Supplies 300 Supplies Expense 300

Which of the following statements is correct? After closing entries are posted, the balance in the retained earnings account in the ledger will be equal to the net income for the period. The balance in the income summary account before it is closed will be equal to the net income or loss on the income statement. The balance in the income summary account before it is closed will be equal to the ending balance in the retained earnings account. After closing entries are posted, the balance in the retained earnings account in the ledger will be equal to the beginning retained earnings reported on the retained earnings statement. After closing entries are posted, the balance in the retained earnings account in the ledger will be equal to zero.

The balance in the income summary account before it is closed will be equal to the net income or loss on the income statement.

Which of the following statements is correct? A post-closing trial balance should be prepared before adjusting entries are posted to the ledger accounts. A post-closing trial balance will show the amount of net income (or loss) for the period. The purpose of the post-closing trial balance is to prove the equality of the income statement account balances that are carried forward into the next accounting period. A post-closing trial balance will show zero balances for balance sheet accounts. The balances that appear on the post-closing trial balance will match the balance sheet account balances after closing entries.

The balances that appear on the post-closing trial balance will match the balance sheet account balances after closing entries.

When management must decide whether to offer special promotions in order to reduce excess inventory, which of the following is not relevant?

The regular selling price of the product when not on promotion.

Which of the following statements is true when describing a make-or-buy decision? The variable costs assigned to the item when made are not relevant, but the cost to buy is. Neither the variable costs assigned to the item when made nor the costs to buy are relevant. The variable costs assigned to the item when made and the cost to buy are both relevant. The variables costs assigned to the item when made are relevant, but the cost to buy is not.

The variable costs assigned to the item when made and the cost to buy are both relevant.

In addition to planning profits, the CVP relation helps organizations make short-term decisions.

True

Over the short-term, fixed costs do not change with the number of units sold.

True

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: Revenues $7,000 Expenses: Salaries and Wages Expense $3,000 Rent Expense 1,500 Advertising Expense 800 Supplies Expense 300 Insurance Expense 100 Total expenses 5,700 Net income $1,300 The entry to close Income Summary to Retained Earnings includes a debit to Revenues for $7,000. a credit to Income Summary for $1,300 a credit to Retained Earnings for $1,300. credits to Expenses totaling $5,700.

a credit to Retained Earnings for $1,300.

If a plant asset is retired before it is fully depreciated and no salvage value is received, None of choices is correct a gain on disposal occurs a loss on disposal occurs neither a gain nor a loss occurs either a gain or a loss can occur

a loss on disposal occurs

If a plant asset is retired before it is fully depreciated, and the salvage value received is less than the asset's book value, additional depreciation expense must be recorded. a loss on disposal occurs. there is no gain or loss on disposal. a gain on disposal occurs.

a loss on disposal occurs.

If a resource has been consumed but a bill has not been received at the end of the accounting period, then

an adjusting entry should be made recognizing the expense.