Accounting Final
Richmond Company made a loan of $7,500 to one of the company's employees on April 1, 2011. The one-year note carried a 9% rate of interest. The amount of interest revenue that Richmond would report in 2011 and 2012, respectively would be:
a. $675.00, $0 b. $506.25, $168.75 c. $0, $675.00 d. $168.75, $506.25 b.
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $2,280,000. Harding paid $665,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $703,000; Building, $2,090,000 and Equipment, $1,387,000. What value will be recorded for the building?
a. 332,500 b. 190,000 c. 1,140,000 d. 2,090,000 c
The following balance sheet information was provided by Western Company: AssetsYear 2 Year 1 Cash$2,200 $1,700 Accounts receivable$16,000 $14,000 Inventory$26,000 $32,000 Assuming Year 2 net credit sales totaled $122,000, what was the company's average days to collect receivables? (Use 365 days in a year. Do not round your intermediate calculations.)
a. 47.90 days b. 44.90 days c. 41.90 days d. 89.80 days b.
The following balance sheet information is provided for Santana Company for Year 2: What is the company's debt to equity ratio?
a. 54.65% b. 133.58% c. 41.94% d. 32.92% a.
Montana Company was authorized to issue 70,000 shares of common stock. The company had issued 21,000 shares of stock when it purchased 3,000 shares of treasury stock. The number of outstanding shares of common stock was:
a. 67,000. b. 24,000. c. 18,000. d. 21,000. c.
Which of the following is not considered an advantage of the corporate form of business organization?
a. Ability to raise capital. b. Continuity of existence. c. Ease of transferability of ownership. d. Lack of government regulation. d.
Under what condition is a pending lawsuit recognized as a liability on a company's balance sheet?
a. The amount can be reasonably estimated. b. The outcome is probable. c. The outcome is reasonably possible. d. The outcome is probable and can be reasonably estimated. d.
On January 2, Year 1, Torres Corporation issued 15,000 shares of $10 par-value common stock for $15 per share. Which of the following statements is true?
a. The common stock account will increase by $225,000. b. The cash account will increase by $150,000. c. Total equity will increase by $150,000. d. The paid-in capital in excess of par value account will increase by $75,000. d.
The Wilson Company purchased $26,000 of merchandise from the Poole Wholesale Company. Wilson also paid $1,900 for freight costs to have the goods shipped to its location. Which of the following statements regarding the necessary entries for the transactions is true? Wilson uses the perpetual inventory system.
a. Total increases to the inventory account would be $27,900. b. Total increases to the inventory account would be $26,000. c. Transportation-in would be increased by $1,900. d. Total increases to the inventory account would be $1,900. a.
Jackson Company had a net increase in cash from operating activities of $9,200 and a net decrease in cash from financing activities of $2,800. If the beginning and ending cash balances for the company were $4,200 and $13,400, then net cash change from investing activities was:
a. an outflow or decrease of $2,800. b. an inflow or increase of $1,400. c. an inflow or increase of $2,800. d. zero. c.
Hoover Company purchased two identical inventory items. The item purchased first cost $34.00. The item purchased second cost $37.75. Then Hoover sold one of the inventory items for $75. Based on this information, the amount of:
a. ending inventory is $37.75 if Hoover uses the LIFO cost flow method. b. gross margin is $39.12 if Hoover uses the weighted average cost flow method. c. cost of goods sold is $37.75 if Hoover uses the FIFO cost flow method. d. cost of goods sold is $34.00 if Hoover uses the LIFO cost flow method. b.
Jack's Snow Removal Company received a cash advance of $9,900 on December 1, Year 1 to provide services during the months of December, January, and February. The year-end adjustment on December 31, Year 1, to recognize the partial expiration of the contract will
a. increase assets by $3,300 b. increase equity by $3,300 c. increase liabilities by $3,300 d. increase assets by $3,300 and increase equity by $3,300 b.
Li Company paid cash to purchase land. As a result of this accounting event:
a. total assets decreased. b. total assets were unaffected. c. total equity decreased. d. both assets and total equity decreased. b.
Nelson Company experienced the following transactions during Year 1, its first year in operation. 1.Issued $8,400 of common stock to stockholders. 2.Provided $4,700 of services on account. 3.Paid $2,200 cash for operating expenses. 4.Collected $3,100 of cash from accounts receivable. 5.Paid a $220 cash dividend to stockholders. The amount of net income recognized on Nelson Company's Year 1 income statement is:
a. $2,500. b. $1,820. c. $1,600. d. $2,280. a.
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,710,000. Harding paid $455,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $481,000; Building, $1,430,000 and Equipment, $949,000. (Round your intermediate percentages to the nearest whole number: i.e 0.054231 = 5%. Do not round any other intermediate calculations.) Assume that Harding uses the units-of-production method when depreciating its equipment. Harding estimates that the purchased equipment will produce 1,080,000 units over its 5-year useful life and has salvage value of $18,000. Harding produced 273,000 units with the equipment by the end of the first year of purchase. Which amount below is closest to the amount Harding will record for depreciation expense for the equipment in the first year?
a. $239,886 b. $124,872 c. $138,093 d. $235,336 c
On January 1, Year 1, Friedman Company purchased a truck that cost $49,000. The truck had an expected useful life of 8 years and an $9,000 salvage value. The book value of the truck at the end of Year 1, assuming that Friedman uses the double-declining-balance method, is: (Do not round intermediate calculations.)
a. $27,750. b. $36,750. c. $39,000. d. $30,000. b
Revenue on account amounted to $4,600. Cash collections of accounts receivable amounted to $2,750. Expenses for the period were $2,400. The company paid dividends of $600. Net income for the period was
a. $350. b. $2,200. c. $1,600. d. $2,150. b.
On January 1, Year 1, Missouri Co. purchased a truck that cost $33,000. The truck had an expected useful life of 10 years and a $3,000 salvage value. The amount of depreciation expense recognized in Year 2 assuming that Missouri uses the double declining-balance method is:
a. $4,800. b. $5,280. c. $3,300. d. $6,600. b
Stosch Company's balance sheet reported assets of $102,000, liabilities of $27,000 and common stock of $24,000 as of December 31, Year 1. If Retained Earnings on the balance sheet as of December 31, Year 2, amount to $66,000 and Stosch paid a $26,000 dividend during Year 2, then the amount of net income for Year 2 was which of the following?
a. $41,000 b. $51,000 c. $15,000 d. $26,000 a.
On January 1, 2011 Grace Company had an $17,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During 2011, Grace provided $59,000 of service on account. The company collected $48,180 cash from account receivable. Uncollectible accounts are estimated to be 20% of sales on account. Based on this information, the amount of cash flow from operating activities that would appear on the 2011 statement of cash flows is:
a. $48,180. b. $31,796. c. $59,000. d. $58,700. a.
Ballard Company uses the perpetual inventory system. The company purchased $8,200 of merchandise from Andes Company under the terms 2/10, net/30. Ballard paid for the merchandise within 10 days and also paid $270 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $15,400 cash. The amount of gross margin for this merchandise is:
a. $6,930. b. $7,094. c. $7,200. d. $8,200. b.
Retained Earnings at the beginning and ending of the accounting period was $350 and $800, respectively. If revenues were $1,300 and dividends paid to stockholders were $250, expenses for the period must have been:
a. $600. b. $450. c. $1,050. d. $850. a.
Laramie Co. paid $600,000 for a purchase that included land, building, and office furniture. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: Land, $84,000, Building, $490,000, and Office Furniture, $126,000. Based on this information the cost that would be allocated to the land is: (Do not round intermediate calculations.)
a. $61,920. b. $72,000. c. $84,000. d. $91,430. b
Darden Company has cash of $29,000, accounts receivable of $39,000, inventory of $20,500, and equipment of $59,000. Assuming current liabilities of $28,500, this company's working capital is:
a. $10,500. b. $90,000. c. $60,000. d. $39,500. c.
On January 1, 2011 Grace Company had an $17,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During 2011, Grace provided $59,000 of service on account. The company collected $48,180 cash from account receivable. Uncollectible accounts are estimated to be 20% of sales on account. The amount of uncollectible accounts expense recognized on the 2011 income statement is:
a. $11,400. b. $590. c. $11,800. d. $3,400. c.
The Abel Company provided the following information from its financial records: What is the amount of the company's earnings per share?
a. $26.19 b. $0.75 c. $0.75 d. $0.68 d.
Jason Company paid $4,800 for one year's rent in advance beginning on October 1, Year 1. Jason's Year 1 income statement would report rent expense, and its statement of cash flows would report cash outflow for rent, respectively, of
a. $4,800; $4,800 b. $1,200; $1,200 c. $1,200; $4,800 d. $800; $4,800 c.
Currie Company borrowed $13,000 from the Sierra Bank by issuing a 10% three-year note. Currie agreed to repay the principal and interest by making annual payments in the amount of $4,321. Based on this information, the amount of the interest expense associated with the second payment would be: (Round your answer to the nearest dollar.)
a. $596. b. $998. c. $1,300. d. $4,321. b
Assume the perpetual inventory method is used. 1) The company purchased $12,900 of merchandise on account under terms 3/10, n/30. 2) The company returned $2,400 of merchandise to the supplier before payment was made. 3) The liability was paid within the discount period. 4) All of the merchandise purchased was sold for $19,800 cash. The amount of gross margin from the four transactions is:
a. $6,900. b. $9,687. c. $6,693. d. $9,615. d.
Koontz Company uses the perpetual inventory method. On January 1, Year 1, the company's first day of operations, Koontz purchased 1,100 units of inventory that cost $5.30 each. On January 10, Year 1, the company purchased an additional 1,350 units of inventory that cost $7.20 each. If Koontz uses a weighted average cost flow method and sells 1,250 units of inventory, the amount of inventory appearing on balance sheet following the sale will be approximately:
a. $7,560. b. $7,875. c. $9,000. d. $6,360. a
The recognition of an expense may be accompanied by which of the following?
a. An increase in liabilities b. A decrease in liabilities c. A decrease in revenue d. An increase in assets a.
Addison Company experienced an accounting event that affected its financial statements as indicated below: Assets=Liab.+Equity Rev.−Exp.=Net Inc. Cash Flow + NA + + NA + NA Which of the following accounting events could have caused these effects on Addison's statements?
a. Issued common stock. b. Earned revenue on account. c. Earned cash revenue. d. Collected cash from accounts receivable. b.
Curtain Co. paid dividends of $1,500; $3,000; and $4,000 during Year 1, Year 2, and Year 3, respectively. The company had 700 shares of 3.5%, $100 par value preferred stock outstanding that paid a cumulative dividend. The amount of dividends received by the common shareholders during Year 3 would be:
a. $2,450. b. $1,500. c. $1,150. d. $950. c.
Richmond Company made a loan of $12,500 to one of the company's employees on April 1, 2011. The one-year note carried a 19% rate of interest. The amount of interest revenue that Richmond would report in 2011 and 2012, respectively would be:
a. $593.75, $1,781.25 b. $2,375.00, $0 c. $1,781.25, $593.75 d. $0, $2,375.00 c.
The following balance sheet information is provided for Apex Company for Year 2: What is the company's working capital?
a. $9,010 b. $20,810 c. $28,040 d. $5,010 b.
Ix Company issued 16,000 shares of $10 par value common stock at a market price of $21. As a result of this accounting event, the amount of stockholders' equity would
a. increase by $336,000. b. be unaffected. c. increase by $160,000. d. increase by $176,000. a.
Madison Company issued an interest-bearing note payable with a face amount of $13,800 and a stated interest rate of 8% to the Metropolitan Bank on August 1, Year 1. The note carried a one-year term. The amount of cash flow from operating activities on the Year 1 statement of cash flows would be:
$1,104. $460. $13,800. zero. d
Kier Company issued $660,000 in bonds on January 1, Year 1. The bonds were issued at face value and carried a 5-year term to maturity. They had a 6.00% stated rate of interest that was payable in cash on December 31st. Based on this information alone, the amount of interest expense shown on the December 31, Year 1 income statement and the cash flow from operating activities shown on the December 31, Year 1 statement of cash flows would be: Interest Expense Cash OutflowA.$39,600 zero B. zero $39,600 C.$39,600 $39,600 D. zero zero
Choice A Choice B Choice C Choice D Choice C
On January 12, Year 1, Gilliam Corporation issued 550 shares of $12 par-value common stock for $15 per share. The number of shares authorized is 5,000, and the number of shares outstanding prior to this transaction is 1,200. Which of the following answers describes the effect of the January 12, Year 1 transaction? Assets=Liab.+Com. Stk.+Pd-in ExcessRev.−Exp.=Net Inc.Cash Flow a.6,600=NA+6,600+NA NA−NA=NA 6,600FA b.8,250=NA+8,250+NA NA−NA=NA 8,250FA c.8,250=NA+6,600+1,650 NA−NA=NA 8,250FA d.8,250=NA+6,600+1,650 NA−NA=NA 8,250IA
Choice A Choice B Choice C Choice D Choice C
Emir Company purchased equipment that cost $110,000 cash on January 1, Year 1. The equipment had an expected useful life of six years and an estimated salvage value of $8,000. Assuming that Emir depreciates its assets under the straight-line method, the amount of depreciation expense appearing on the Year 4 income statement and the amount of accumulated depreciation appearing on the December 31, Year 4, balance sheet would be: Depreciation expense Accumulated depreciationA. $17,000 $17,000 B. $17,000 $68,000 C. $68,000 $17,000 D. $17,000 $51,000
Option A Option B Option C Option D Option B
Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $1,800 cash from the issue of common stock. 2) Borrowed $1,270 from a bank. 3) Earned $1,450 of revenues cash. 4) Paid expenses of $420. 5) Paid a $220 dividend. During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.) 1) Issued an additional $1,175 of common stock. 2) Repaid $815 of its debt to the bank. 3) Earned revenues of $1,600 cash. 4) Incurred expenses of $700. 5) Paid dividends of $270. Packard Company's net cash flow from financing activities for Year 2 is:
a. $1,085 inflow. b. $90 inflow. c. $815 outflow. d. $905 outflow. b.
Sheldon Company began Year 1 with $700 in its supplies account. During the year, the company purchased $2,000 of supplies on account. The company paid $1,600 on accounts payable by year end. At the end of Year 1, Sheldon counted $900 of supplies on hand. Sheldon's financial statements for Year 1 would show:
a. $1,100 of supplies; $200 of supplies expense b. $900 of supplies; $1,100 of supplies expense c. $900 of supplies; $1,800 of supplies expense d. $1,100 of supplies; $2,000 of supplies expense c.
Revenue on account amounted to $5,400. Cash collections of accounts receivable amounted to $5,100. Cash paid for expenses was $3,700. The amount of employee salaries accrued at the end of the year was $1,500. Cash flow from operating activities was
a. $1,500. b. $1,400. c. $1,700. d. $6,500. b.
Anchor Company purchased a manufacturing machine with a list price of $95,000 and received a 2% cash discount on the purchase. The machine was delivered under terms FOB shipping point, and freight costs amounted to $4,200. Anchor paid $6,000 to have the machine installed and tested. Insurance costs to protect the asset from fire and theft amounted to $7,800 for the first year of operations. Based on this information, the amount of cost recorded in the asset account would be:
a. $103,300. b. $97,300. c. $111,100. d. $93,100. a
Anton Co. uses the perpetual inventory method. Anton purchased 1,120 units of inventory that cost $5 each. At a later date the company purchased an additional 1,140 units of inventory that cost $7 each. If Anton uses the FIFO cost flow method and sells 1,600 units of inventory, the amount of cost of goods sold will be:
a. $11,200. b. $8,000. c. $11,180. d. $8,960. d.
On January 1, Year 1, Friedman Company purchased a truck that cost $53,000. The truck had an expected useful life of 100,000 miles over 8 years and an $9,000 salvage value. During Year 2, Friedman drove the truck 28,000 miles. The amount of depreciation expense recognized in Year 2 assuming that Friedman uses the units-of-production method is: (Do not round intermediate calculations.)
a. $12,320. b. $14,840. c. $5,500. d. $6,625. a
Valdez Company uses the percent of receivables method to estimate uncollectible accounts expense. Valdez began 2011 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $46,750 and $3,070 (credit), respectively. During the year, the company wrote off $4,020 in uncollectible accounts. In preparation for the company's 2011 estimate, Valdez prepared the following aging schedule (Do not round your intermediate calculations. Round your final answer to two decimal places): What will Valdez record as Uncollectible Accounts Expense for 2011?
a. $12,391.10 b. $10,668.10 c. $4,020.00 d. $11,618.10 d.
The balance in Accounts Receivable at the beginning of the period amounted to $7,600. During the period $7,600 of credit sales were made to customers, and uncollectible accounts expense amounted to $520. The ending balance in Accounts Receivable is $2,200, and the ending balance in the uncollectibles allowance account is $600. The amount of cash inflow from customers that would appear in the operating section of the statement of cash flows is
a. $13,000. b. $7,600. c. $15,200. d. None of these. a.
On January 1, Year 1, the Mahoney Company borrowed $165,000 cash from Sun Bank by issuing a five-year 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, Year 1. The annual payment on the loan based on the present value of annuity factor would be $40,650. The amount of principal repayment included in the December 31, Year 1 payment is:
a. $13,200. b. $37,398. c. $40,650. d. $27,450. d
The year-end financial statements of Calloway Company contained the following elements and corresponding amounts: Assets = $38,000; Liabilities = ?; Common Stock = $6,800; Revenue = $14,600; Dividends = $1,650; Beginning Retained Earnings = $4,650; Ending Retained Earnings = $8,800. The amount of liabilities reported on the end-of-period balance sheet was:
a. $13,450. b. $26,550. c. $11,450. d. $22,400. d.
Hailey Medical Supply Co., which had no beginning balance in its Accounts Receivable and Allowance for Doubtful Accounts, earned $80,000 of revenue on account during 2011. During 2011, Hailey collected $64,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 1% of revenue on account. The amount of net realizable value of receivables on the December 31, 2011 balance sheet would be:
a. $16,000. b. $15,000. c. $15,200. d. $16,640. c.
The year-end financial statements of Calloway Company contained the following elements and corresponding amounts: Assets = $30,000; Liabilities = ?; Common Stock = $6,000; Revenue = $13,000; Dividends = $1,250; Beginning Retained Earnings = $4,250; Ending Retained Earnings = $8,000. Based on this information, the amount of expenses on Calloway's income statement was
a. $16,000. b. $3,750. c. $8,000. d. $9,250. c.
Dinkins Company purchased a truck that cost $72,000. The company expected to drive the truck 100,000 miles over its 5-year useful life, and the truck had an estimated salvage value of $11,000. If the truck is driven 32,000 miles in the current accounting period, what would be the amount of depreciation expense for the year? (Do not round intermediate calculations.)
a. $19,520. b. $23,040. c. $12,200. d. $28,800. a
On January 1, 2011, the Accounts Receivable balance was $21,500 and the credit balance in the Allowance for Doubtful Accounts was $1,470. On January 15, 2011 a $470 uncollectible account was written-off. The net realizable value of accounts receivable immediately after the write-off is:
a. $19,560. b. $20,500. c. $20,030. d. $21,030. c.
The following balance sheet information is provided for Gaynor Company: AssetsYear 2 Year 1 Cash$2,850 $2,100 Accounts receivable 15,600 13,600 Inventory$30,500 $38,000 Assuming Year 2 cost of goods sold is $116,000, what is the company's inventory turnover?
a. 3.05 times b. 3.39 times c. 3.80 times d. None of the these answers is correct. b.
On January 1, 2011, Chase Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $66,000 and $1,120 (credit), respectively. During the year Chase reported $141,200 of credit sales. Chase wrote off $2,300 of receivables as uncollectible in 2011. Cash collections of receivables amounted to $151,500. Chase estimates that it will be unable to collect six percent (6%) of credit sales.The amount of uncollectible accounts expense recognized in the 2011 income statement will be:
a. $8,472. b. $2,300. c. $10,300. d. $3,960. a.
Assume the perpetual inventory method is used. 1) Green Company purchased merchandise inventory that cost $17,100 under terms of 4/10, n/30 and FOB shipping point. 2) The company paid freight cost of $710 to have the merchandise delivered. 3) Payment was made to the supplier within 10 days. 4) All of the merchandise was sold to customers for $25,700 cash and delivered under terms FOB shipping point with freight cost amounting to $510. The gross margin from these transactions of Green Company is
a. $9,284. b. $8,064. c. $8,574. d. $8,774. c.
On December 31, 2011, the Lincoln Corporation estimated that 5% of its credit sales of $225,000 would be uncollectible. Lincoln uses the allowance method of accounting for uncollectible accounts. In February 2012, one of Lincoln's customers failed to pay his $2,700 account and was written off. On April 4, 2012, this customer paid Lincoln the $2,700. Which of the following answers correctly states the effect of the February 2012 entry to write off the customer's account?
a. (2,700) NA (2,700) NA 2,700 (2,700) (2,700) OA b. NA 2,700 (2,700) NA 2,700 (2,700) NA c. NA NA NA NA NA NA NA d. 2,700 NA 2,700 NA (2,700) 2,700 2,700 OA c.
Milton Company has total current assets of $62,000, including inventory of $18,500, and current liabilities of $38,000. The company's current ratio is:
a. 0.61. b. 1.14. c. 1.63. d. 2.12. c.
The following balance sheet information is provided for Greene Company for Year 2: What is the company's quick (acid-test) ratio? (Round your answer to 2 decimal places.)
a. 1.66 b. 3.19 c. 1.38 d. 0.76 a. quick ratio= quick assets (Cash + Receivables + Current marketable securities) ÷ Current liabilities
The Miller Company reported gross sales of $820,000, sales returns and allowances of $6,300 and sales discounts of $6,300. The company has average total assets of $470,000, of which $235,000 is property, plant, and equipment. What is the company's asset turnover ratio?
a. 1.77 times b. 0.58 times c. 1.74 times d. 1.72 times d.
Flagler Corporation shows a total of $960,000 in its common stock account and $1,020,000 in its paid-in capital in excess of par value - common stock account. The par value of Flagler's common stock is $6. How many shares of Flagler stock have been issued?
a. 170,000. b. 330,000. c. 160,000. d. It cannot be determined c.
On December 31, 2011, the Lincoln Corporation estimated that 5% of its credit sales of $225,000 would be uncollectible. Lincoln uses the allowance method of accounting for uncollectible accounts. In February 2012, one of Lincoln's customers failed to pay his $2,700 account and was written off. On April 4, 2012, this customer paid Lincoln the $2,700. Which of the following answers correctly states the effect of recording the collection of the reestablished receivable on April 4, 2012?
a. 2,700 NA 2,700 2,700 NA 2,700 2,700 OA b. NA (2,700) 2,700 2,700 NA 2,700 NA c. NA NA NA NA NA NA 2,700 OA d. (2,700) NA (2,700) (2,700) NA (2,700) (2,700) OA c.
On December 31, 2011, the Lincoln Corporation estimated that 5% of its credit sales of $225,000 would be uncollectible. Lincoln uses the allowance method of accounting for uncollectible accounts. In February 2012, one of Lincoln's customers failed to pay his $2,700 account and was written off. On April 4, 2012, this customer paid Lincoln the $2,700. Which of the following answers correctly states the effect of recording the reestablishment of the receivable on April 4, 2012?
a. 2,700 NA 2,700 2,700 NA 2,700 2,700 OA b. NA NA NA NA NA NA NA c. (2,700) NA (2,700) NA 2,700 (2,700) NA d. (2,700) 2,700 NA NA NA NA (2,700) OA b.
The following balance sheet information was provided by O'Connor Company: Assets Year 2 Year 1 Cash$2,100 $1,100 Accounts receivable$7,100 $ 5,100 Inventory$21,000 $22,000 Assuming that net credit sales for Year 2 totaled $146,000, what is the company's most recent accounts receivable turnover?
a. 28.63 times b. 20.56 times c. 11.97 times d. 23.93 times d.
The following balance sheet information is provided for Patton Company: AssetsYear 2 Year 1 Cash$3,000 $2,600 Accounts receivable$12,500 $14,500 Inventory$26,500 $33,500 Assuming Year 2 cost of goods sold is $370,000, what are the company's average days to sell inventory? (Use 365 days in a year. Do not round your intermediate calculations.)
a. 29.59 days b. 26.14 days c. 33.05 days d. 53.00 days a.
Which of the following represents the impact of a taxable cash sale of $1,200 on the accounting equation if the sales tax rate is 5%?
a. An increase to cash for $1,260, an increase to sales tax expense for $60, and an increase to sales revenue for $1,200. b. An increase to cash for $1,200, an increase to sales tax payable for $60, and an increase to sales revenue for $1,140. c. An increase to cash for $1,260, an increase to sales tax payable for $60, and an increase to sales revenue for $1,200. d. None of these answer choices is correct. c
Assume the perpetual inventory method is used. 1) The company purchased $12,600 of merchandise on account under terms 2/10, n/30. 2) The company returned $2,100 of merchandise to the supplier before payment was made. 3) The liability was paid within the discount period. 4) All of the merchandise purchased was sold for $19,200 cash. What effect will the return of merchandise to the supplier have on the accounting equation?
a. Assets and equity are reduced by $2,100. b. Assets and liabilities are reduced by $2,058. c. Assets and liabilities are reduced by $2,100. d. None. It is an asset exchange transaction. c.
Which of the following items is an example of revenue?
a. Cash received from a bank loan b. Cash received from investors from the sale of common stock c. Cash received from customers at the time services were provided d. Cash received from the sale of land for its original selling price c.
Abbott Company purchased $8,000 of merchandise inventory on account. Advent uses the perpetual inventory method. How does this transaction affect the financial statements?
a. Decrease accounts payable and decrease purchases. b. Increase inventory and increase accounts payable. c. Increase cost of goods sold and increase accounts payable. d. Decrease accounts payable and decrease inventory. b.
Blake Company purchased two identical inventory items. The item purchased first cost $27.00, and the item purchased second cost $28.00. Blake sold one of the items for $50.00. Which of the following statements is true?
a. Ending inventory will be lower if Blake uses weighted average than if FIFO were used. b. Cost of goods sold will be higher if Blake uses FIFO than if weighted average were used. c. The dollar amount assigned to ending inventory will be the same no matter which cost flow method is used. d. Gross margin will be higher if Blake uses LIFO than it would be if FIFO were used. a.
Which of the following choices accurately reflects how the recording of accrued salary expense affects the financial statements of a business? A.NA + - - + NA NA B.NA NA +/- NA NA NA NA C.NA + - NA - - NA D. + + NA NA - - -OA
a. Option A b. Option B c. Option C d. Option D c.
Monthly remittance of sales tax:
a. Reduces liabilities. b. Is a claims exchange transaction. c. Reduces stockholders' equity. d. All of these answer choices are correct. a.
SX Company sold merchandise on account for $14,700. The merchandise had cost the company $9,900. What is the effect of the sale on the income statement?
a. Revenue increases by $4,800 b. Expenses increase by $9,900 c. Net Income increases by $14,700 d. All of the above b.
Which form of business organization is established as a legal entity separate from its owners?
a. Sole proprietorship b. Partnership c. Corporation d. None of these c.
Santa Fe Company was started on January 1, Year 1, when it acquired $8,300 cash by issuing common stock. During Year 1, the company earned cash revenues of $3,950, paid cash expenses of $2,900, and paid a cash dividend of $450. Based on this information,
a. The Year 1 statement of cash flows would show a net cash flow from financing activities of $8,300. b. The Year 1 statement of cash flows would show net cash inflow from financing activities of $7,850. c. The balance sheet at December 31, Year 1 would show total equity of $12,250. d. The Year 1 income statement would show net income of $600. b.
