Exam 2
Brackney Manufacturing Company has the following account balances at year-end: Office supplies$6,000Raw materials21,000Work-in-process44,000Finished goods52,000Prepaid insurance8,000 What amount should Brackney report as inventories in its balance sheet?
$117,000.
Zagat Inc. is a calendar-year corporation. Its financial statements for the years 2017 and 2016 contained errors as follows: 2017 2016 Ending Inventory $9,000 overstated $18,000 overstated Depreciation Expense $6,000 understated $13,500 overstated Assume that the proper correcting entries were made at December 31, 2016. By how much will 2017 income before taxes be overstated or understated? $15,000 overstated $3,000 understated $7,500 overstated $10,500 overstated Correct! Since correcting entries were made in 2016, there is no misstatement in the net income calculation for 2017. In 2017, the overstatement of the ending inventory by $9,000 results in an understatement of the cost of goods sold, and thus, an overstatement of the net income, by $9,000. The understatement of depreciation expense by $6,000 overstates net income by $6,000. The combined effect of these two errors would be a total overstatement of the net income of $15,000 ($9,000 + $6,000)
$15,000 overstated
Avery Tag makes an investment today (January 1, 2017). Avery will receive $40,000 every December 31st for the next six years (2017 - 2022). If Avery wants to earn 12% on her investment, what is the most she should invest on January 1, 2017? PV Annuity due 5 4.03735 PV Annuity due 6 4.60478PV Ordinary annuity 5 3.60478PV Ordinary annuity 6 4.11141
$164,456. (Using the present value of an ordinary annuity factor for 6 periods, 4.11141, and multiplying it by the annual receipt, $40,000 produces the present value of the 6 ordinary rental receipts or the investment amount necessary of $164,456.)
Avery Tag makes an investment today (January 1, 2017). Avery will receive $40,000 every December 31st for the next six years (2017 - 2022). If Avery wants to earn 12% on her investment, what is the most she should invest on January 1, 2017? Time periodsFactorPV Annuity due54.03735PV Annuity due64.60478PV Ordinary annuity53.60478PV Ordinary annuity64.11141
$164,456. (use financial calculator)
Joan's uncle has promised her $20,000 when she graduates college 4 years from now. What is the equivalent amount stated in today's dollars? Given below are the present value factors for 1 at 8% for one to three periods with interest compounded annually. PeriodsPresent Value of 1 at 8% 1 .92593 2 .85734 3 .79383 $20,000 × .92593 ÷ .79383 $20,000 × .79383 × 1.08 $20,000 ÷ 1.080 × .79383 $20,000 ÷ .79383
$20,000 ÷ 1.080 × .79383
Alexa Smith has saved $250,000 for her retirement. It is invested in an annuity that pays 12%. Alexa wishes to make equal semi-annual withdrawals over the next 10 years, beginning 6 months from now. How much can she withdraw each period without exhausting her initial investment? Time periodsFactor PV Annuity due 12%10 6.32825 PV Annuity due 6%20 12.15812 PV Ordinary annuity 12%10 5.65022 PV Ordinary annuity 6%20 11.46992 $39,505. $20,562. $44,246. $21,796.
$21,796. (use financial calc)
Jamie wants to set aside enough money now to go on vacation in two years. She has developed the following estimates: Estimated Cash Outflows Probability ssessment $2,700 30% $3,300 50% $4,500 20% Time periods Factor PV of 1 2 .90703 PV Annuity of 1 2 1.85941 FV of 1 2 1.10250 FV Ordinary annuity 2 2.05 How much should she deposit today in an account earning 5%, compounded annually, to have sufficient cash on hand to pay for the vacation? $3,048 $3,704 $6,248 $3,360
$3,048 (PCO1)
Sally Tucker wants to invest a certain sum of money at the end of each year for six years. The investment will earn 6% compounded annually. At the end of six years, she will need a total of $500,000 accumulated. How should she compute her required annual investment?
$500,000 divided by the future value of a 6-year, 6% ordinary annuity of 1 factor. 500,000/6.97532=71,681.31 (got 71,681.31 from financial calc)
Granger Company had January 1 inventory of $150,000 when it adopted dollar-value LIFO. During the year, purchases were $900,000 and sales were $1,500,000. December 31 inventory at year-end prices was $189,750, and the price index was 110. What is Granger Company's gross profit? $624,750. $600,000. $450,000. $550,250 Correct! Sales, $1,500,000 - [{(Beginning Inventory, $150,000 * Price Index, 110%) + Purchases, $900,000} - Ending Inventory, $189,750] = Gross Profit, $624,750.
$624,750.
Which of the following statements regarding a deferred annuity is correct? The future value of a deferred annuity is the same as the future value of an annuity not deferred. A deferred annuity does not begin to produce rents until three or more periods have expired. The future value of a deferred annuity includes interest accumulated during the deferral period. A deferred annuity can only be an ordinary annuity.
The future value of a deferred annuity is the same as the future value of an annuity not deferred.
The larger the amount of principal, the larger the dollar amount of interest. True False
True
Future value is the value now of a future amount. the amount that must be invested now to produce a known future value. always greater than the present value. all of these answer choices are correct.
always greater than the present value.
The process of accumulation involves determining: present value. future value or present value. the number of time periods. future value.
future value.
The use of a Purchase Discounts Lost account implies that the recorded cost of a purchased inventory item is its invoice price less the purchase discount allowable whether taken or not. invoice price plus the purchase discount lost. invoice price. invoice price less the purchase discount taken.
invoice price less the purchase discount allowable whether taken or not.
Buffalo has the following assets at December 31, 2017. Cash in bank—savings account 131,000 Certificates of deposit (270-day) 215,000 Cash on hand 1,600 Postdated checks 6,900 Cash refund due from State Taxing Authority 31,000 Checking account balance 11,000 What amount should be reported as cash? Cash to be reported$
131,200 (120,000+1,200+10,000)
What is the future value of 17 periodic payments of $5,000 each made at the beginning of each period and compounded at 6%? (Round answer to 0 decimal places, e.g. 458,581.) Future value
149528 (use FVOA, then multiple it by 1.06, then multiple that by 5,000)
Karen wants to buy a mountain cabin for her retirement. Karen recently came into an inheritance of $230,000. She estimates that the cabin she wants will cost $250,000 when she retires in 8 years. How much of her inheritance must she invest at an annual rate of 6% (compounded annually) to buy her cabin?
156853
Tamarisk Inc. has completed the purchase of new Surface computers. The fair value of the equipment is $476,625. The purchase agreement specifies an immediate down payment of $100,000 and semiannual payments of $51,413 beginning at the end of 6 months for 4 years. What is the interest rate, to the nearest percent, used in discounting this purchase transaction?
2% semiannually (PVO1) (7.325, 8 yrs)
On January 1, 2017, Simmons Company sold to Flay Corporation $400,000 of its 10% bonds for $354,118 to yield 12%. Interest is payable semiannually on January 1 and July 1. What amount should Simmons report as interest expense for the six months ended June 30, 2017? (The effective-interest method of amortization is being used.) $24,000 $21,247 $17,768 $21,322
21,247 The interest expense for the first 6-month period is computed as carrying value x rate of interest x number of periods = $354,118 X 12% X (6/12) equals $21,247. Cash interest paid is computed as principal x stated interest rate x number of periods (in terms of one year) = $400,000 x 10% x 6/12 = $20,000.
For an investment that earns 1% compounded monthly for two years, how many compounding periods are there? 12 8 2 24
24
The controller for Blossom Co. is attempting to determine the amount of cash to be reported on its December 31, 2017, balance sheet. The following information is provided. 1.Blossom received a post-dated check from a customer. The check is dated January 1, 2018, in the amount of $44,000. 2.The company has a certificate of deposit of $122,000. The CD matures 120 days after its November 1, 2017 date of origination. 3.Blossom Co. holds a commercial savings account of $432,000 and a commercial checking account balance of $1,380,000 at First National Bank of Alexander. In addition, a bank overdraft of $72,000 existed at year-end in a separate account that the company uses to deposit cash receipts at First National Bank of Alexander. 4.A separate cash fund in the amount of $1,565,000 is set aside for the expansion of the company's New Jersey factory. 5.On December 21, 2017, Blossom Co. purchased $820,000 of commercial paper from Voight, Inc. The commercial paper matures January 14, 2018. 6.Currency and coin on hand amounted to $10,686. 7.A money market fund account held at Rogers, Inc. (a mutual fund organization) permits Blossom Co. to write checks on the full account balance, which was $905,000 at December 31, 2017. 8.Blossom Co. has agreed to maintain a cash balance of $240,000 at all times at First National Bank of Alexander to ensure future credit availability. 9.The balance in Blossom Co.'s petty cash fund is $300. 10.During December 2017, Blossom Co. made travel advances to employees totaling $32,000 for executive travel that will occur during the first quarter of 2018. The employees will not reimburse the company for the advance, but are required to spend the funds on company-related travel and to submit receipts. 11.The company received an I.O.U. from Stiller LLP, a company customer, on December 12, 2017, in the amount of $20,250. Cash and cash equivalents reported on December 31, 2017, balance sheet
3,475,986 432,000 + 1,380,000 +(72,000)+ 820,000 + 10,686 + 905,000 300 + 3,475,986=
Instead of investing the entire $2,400,000, Alan invests $480,000 today and plans to make 9 equal annual investments into the fund beginning one year from today. What amount should the payments be to establish the $4,797,600 Alan the Tank Foundation at the end of 9 years?
307,352 (use financial calc)
What would you pay for a $50,000 debenture bond that matures in 15 years and pays $6,000 a year in interest if you wanted to earn a yield of: 12% 14% 10%
50,000 43,858 57,606 (use financial calc)
Carla Vista Co., a wholesale company, had the following information in its general ledger for the year 2018. Merchandise purchased for resale$545,000Purchase returns8,500Marketing expense6,400Freight-in20,000Interest on notes payable to vendors5,000Freight-out (delivery expense on sales)23,700Cash discounts on purchases5,240 What is Carla Vista's inventoriable cost for 2018? Carla Vista's inventoriable cost for 2018$
551260
Chris is investing $40,000 in a fund that earns 5% interest compounded annually. What equal amounts can Chris withdraw at the end of each of the next 8 years?
6,189 (Use financial calc)
Sage Hill Inc. issues $7,750,000 of 6% bonds due in 9 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 8% . What amount will Sage Hill receive when it issues the bonds?
6,781,741.35 (7,750,000xPVO1=.50025)=3,876,937.5 7,750,000x6%=465,000 (465,000xPVOA=6.24689)=2,904,803.85
Adam is investing $34,549 at the end of each year in a fund that earns 6% interest. In how many years will the fund be at $290,000?
7 290,000/34,549=8.393(look down the FVOA to find year)
Ivanhoe Company took a physical inventory on December 31 and determined that goods costing $669,000 were on hand. Not included in the physical count were $11,000 of goods purchased from Pharoah Corporation, f.o.b. shipping point, and $27,000 of goods sold to Ro-Ro Company for $36,000, f.o.b. destination. Both the Pharoah purchase and the Ro-Ro sale were in transit at year-end. What amount should Ivanhoe report as its December 31 inventory? December 31 Inventory
707000
Alan Kaminski just received a signing bonus of $2,400,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually If Alan plans to establish the Alan the Tank Foundation once the fund grows to $4,797,600, how many years until he can establish the foundation?
9 years (FVO1)
Tamarisk Inc. wishes to accumulate $1,200,000 by December 31, 2027, to retire bonds outstanding. The company deposits $200,000 on December 31, 2017, which will earn interest at 10% compounded quarterly, to help in the retirement of this debt. In addition, the company wants to know how much should be deposited at the end of each quarter for 10 years to ensure that $1,200,000 is available at the end of 2027. (The quarterly deposits will also earn at a rate of 10%, compounded quarterly.)
9836 (use financial calc)
Under a perpetual inventory system which accounts should be debited each time a sale on account is made? Accounts Receivable and Purchases. Inventory and Cost of Goods Sold. Accounts Payable and Purchases. Accounts Receivable and Cost of Goods Sold.
Accounts Receivable and Cost of Goods Sold
Which of the following has an impact on the dollar amount of the interest related to any financing transaction? Principal. Interest rate. Time. All of these answer choices are correct.
All of these answer choices are correct.
Both U.S. GAAP and IFRS exclude which of the following from the cost of inventory? Most storage costs. General administrative costs. Selling costs. All of these answer choices are excluded by U.S. GAAP and IFRS.
All of these answer choices are excluded by U.S. GAAP and IFRS.
A business whose inventory consists of similar items would be most likely to use which of the following cost flow assumptions?
Average.
Novak Suppliers reported cost of goods sold for 2017 of $850,000 and retained earnings of $1,270,000 at December 31, 2017. Novak later discovered that its ending inventories at December 31, 2016 and 2017, were overstated by $32,500 and $60,800, respectively.Determine the corrected amounts for 2017 cost of goods sold and December 31, 2017, retained earnings. COGSRetained EarningsCorrected amounts$enter a dollar amount $enter a dollar amount
COGSRetained Earnings Corrected amounts$878,300 Retained Earnings Corrected amount $1,209,200 a dollar amount
The ending inventory and cost of goods sold will be the same whether a perpetual or periodic system is used under the: FIFO method. weighted-average method. moving-average method. LIFO method.
FIFO method.
An annuity due requires that the time intervals between rents vary in length. True False An ordinary annuity and an annuity due both require that the time intervals between rents remain the same length.
False
An interest compounding period may be greater than a year. True False
False
Interest incurred while getting inventories ready for sale is a product cost. True False
False
LIFO liquidation can distort net income, but generally results in substantial tax savings. True False
False
Merchandising concerns report the cost assigned to unsold units left on hand as finished goods inventory. True False
False
The Allowance to Reduce Inventory to LIFO account is reported on the income statement in the Other Expenses and Losses section. True False
False
When the compounding frequency is greater than once a year, the effective-interest rate will always be less than the stated rate. True False
False
Young Enterprises has an overdraft at one of its banks, Bank of Cleveland. Young has no other accounts at Bank of Cleveland. Young should report the bank overdraft as an offset against cash held at other banks. True False
False
Which table would you use to determine how much you will have five years from now if you deposit $10,000 today at 8% compounded annually? Future value of an annuity due of 1 Present value of an ordinary annuity of 1 Future value of 1 or present value of 1 Future value of an ordinary annuity of 1
Future value of 1 or present value of 1
Which of the following items should be included in a company's inventory at the balance sheet date? Goods sold to a customer, that were shipped f.o.b. shipping point. Goods sold to a customer that are being held for the customer to call for at his or her convenience. Goods in transit, which were purchased f.o.b. shipping point. Goods received from another company for sale on consignment.
Goods in transit, which were purchased f.o.b. shipping point.
Which of the following statements is not true as it relates to the dollar-value LIFO inventory method? Several pools are commonly employed in using the dollar-value LIFO inventory method. It is easier to erode LIFO layers using dollar-value LIFO techniques than it is with specific goods pooled LIFO. Under the dollar-value LIFO method, it is possible to have the entire inventory in only one pool. Under dollar-value LIFO, increases and decreases in a pool are determined and measured in terms of total dollar value, not physical quantity.
It is easier to erode LIFO layers using dollar-value LIFO techniques than it is with specific goods pooled LIFO.
Which of the following statements related to the LIFO method is incorrect? LIFO is not appropriate in situations where specific identification is traditional. LIFO is preferable if revenues have been increasing faster than costs. LIFO is appropriate where prices tend to lag behind costs. LIFO is preferable in situations where it has been traditional.
LIFO is appropriate where prices tend to lag behind costs.
Which of the following statements related to the LIFO method is incorrect? LIFO is not appropriate where prices tend to lead costs. LIFO is preferable in situations where it has been traditional. LIFO is preferable if revenues have been increasing faster than costs. LIFO is not appropriate in situations where specific identification is traditional.
LIFO is not appropriate where prices tend to lead costs.
Which of the following statements related to the LIFO method is incorrect? LIFO is not appropriate where prices tend to lead costs. LIFO is preferable in situations where it has been traditional. LIFO is preferable if revenues have been increasing faster than costs. LIFO is not appropriate in situations where specific identification is traditional.
LIFO is not appropriate where prices tend to lead costs.
Select the correct statement concerning LIFO liquidations from the following. LIFO liquidations seldom distort net income and do not result in substantial tax payments. LIFO liquidations seldom distort nets income and may result in substantial tax payments. LIFO liquidations often distort net income and may result in substantial tax payments. LIFO liquidations often distort net income and do not result in substantial tax payments.
LIFO liquidations often distort net income and may result in substantial tax payments.
In a period of rising prices, the inventory method that produces the lowest ending inventory is the: LIFO periodic method. FIFO perpetual method. LIFO perpetual method. average cost method.
LIFO periodic method
Which of the following is not a fundamental variable to all compound interest problems? Present value. Interest rate. Market value. Future value.
Market value.
Which of the following would not be included in a manufacturing company's balance sheet?
Merchandise inventory.
The factor of 0.94232 is taken from the column marked 2% and the row marked three periods in a certain interest table. From what interest table is this figure taken? Present value of annuity of 1 Future value of 1 Present value of 1 value of 1Future value of annuity of 1
Present value of 1
Which of the following is true? Rents occur at the beginning of each period in an ordinary annuity. Rents occur at the end of each period in an annuity due. Rents occur in the middle of each period in an ordinary annuity. Rents occur at the beginning of each period in an annuity due.
Rents occur at the beginning of each period in an annuity due.
Which cost flow assumption would be most appropriate when a relatively small number of costly, easily distinguishable items are sold? FIFO. Specific identification. LIFO. Average.
Specific identification.
Which of the following is false? A deferred annuity is an annuity in which the rents begin after a specified number of periods. If the first rent is received at the end of the sixth period, it means the ordinary annuity is deferred for five periods. To compute the present value of a deferred annuity, we compute the present value of an ordinary annuity of 1 for the entire period and subtract the present value of the rents which were not received during the deferral period. The future value of a deferred annuity is computed using 1 more compounding period than the future value of an annuity not deferred.
The future value of a deferred annuity is computed using 1 more compounding period than the future value of an annuity not deferred.
Which of the following statements related to an annuity is correct? The interval between payments need not be the same. An annuity can be classified as an ordinary annuity or an unordinary annuity. The periodic payments must always be the same amount. The interest must be compounded annually.
The periodic payments must always be the same amount.
Which of the following is a primary characteristic of an annuity? The periodic rent is always paid at the beginning of each time period. The periodic rents are always equal. Interest is compounded once each year. All of these answer choices are correct.
The periodic rents are always equal.
When using the expected cash flow approach, which of the following interest rates is used to discount the cash flows? The credit risk rate of interest. The risk-free rate of return. The pure rate of interest. The expected inflation rate of interest.
The risk-free rate of return.
A sale with a "repurchase" agreement allows the seller to finance their inventory and retain the risks of ownership even though the technical title has been transferred. True False
True
All things being equal, if a company borrows money it prefers to pay simple interest. True False
True
All things being equal, if a company lends money it prefers to receive compound interest. True False
True
Cash can be classified as a current or long-term asset. True False
True
Environmental liabilities are valued using present value-based measurements. True False
True
Goods shipped f.o.b. destination, which arrive to a customer, on January 2, 2017 should be included in the seller's December 31, 2016 inventory. True False
True
The present value is always a smaller amount than the known future value. True False The present value is always a smaller amount that the known future value due to earned and accumulated interest.
True
To convert an annual interest rate into the "compounding period interest rate", a company divides that annual interest by the number of compounding periods per year. True False
True
When goods are shipped f.o.b. shipping point, title passes to the buyer when the seller delivers the goods to a common carrier. True False
True
If, as anticipated, the FASB eliminates the cash equivalent classification, a treasury bill will be classified as: an investment. cash. a temporary investment. a receivable.
a temporary investment.
All of the following are advantages of LIFO except: a deferral of income tax occurs as long as the price level increases. an improvement of cash flow. recent costs are matched against current revenues. an approximation of the physical flow of goods is achieved.
an approximation of the physical flow of goods is achieved.
A new layer is formed under dollar-value LIFO when the ending inventory at: base-year prices exceeds the beginning inventory at base-year prices. end-of-year prices exceeds the beginning inventory at base-year prices. current cost exceeds the beginning inventory at base-year cost. end-of-year prices exceeds the beginning inventory at end-of-year prices.
base-year prices exceeds the beginning inventory at base-year prices.
Which of the following classifications is likely to be eliminated by the FASB? short-term investments cash equivalents restricted cash temporary investments
cash equivalents
Short-term paper with maturities of less than 3 months should be classified as temporary investments. investments. receivables. cash equivalents.
cash equivalents.
The minimum cash amounts that banks often require customers to whom they lend money to maintain in checking accounts is called: cash equivalents. money market funds. compensating balances. bank overdrafts.
compensating balances.
If inventory levels are stable or increasing, an argument which is not an advantage of the LIFO method as compared to FIFO is cost assignments typically parallel the physical flow of goods. income tends to be smoothed as prices change over time. cost of goods sold tends to be stated at approximately current cost on the income statement. income taxes tend to be reduced in periods of rising prices.
cost assignments typically parallel the physical flow of goods.
The approach employed by most companies that currently use the LIFO method is: specific goods LIFO. specific goods pooled LIFO. unit LIFO. dollar-value LIFO.
dollar-value LIFO.
Accounting topics where present value-based accounting measurements are relevant include: taxes. inventory. environmental liabilities. all of these answer choices are correct.
environmental liabilities.
Under dollar-value LIFO each layer in ending inventory at LIFO cost is calculated by: multiplying the layer at current-year prices by the current year price index. dividing the layer at current-year prices by the current year price index. dividing the layer at base-year prices by base-year price index. first expressing the year at base-year prices and then extending it to current LIFO cost by multiplying by the year's price index.
first expressing the year at base-year prices and then extending it to current LIFO cost by multiplying by the year's price index.
All of the following are major disadvantages of using LIFO, except: doesn't approximate the physical flow of inventory. future earnings will not be affected substantially by future price declines. lower profits reported in inflationary times. inventory is understated.
future earnings will not be affected substantially by future price declines.
FBS Corporation uses the perpetual inventory method and the gross method for recording purchases on account. On May 11, it purchased $44,000 of inventory, terms 2/10, n/30. On May 13, FBS returned goods that cost $4,000. On May 19, FBS paid the supplier. On May 19, the company should credit
inventory for $800.
The future value of an ordinary annuity will always be: greater than the future value of an annuity due. greater than or equal to the future value of an annuity due. less than the future value of an annuity due. equal to the future value of an annuity due.
less than the future value of an annuity due.
All of the following are properly classified as temporary investments except: money orders. money market certificates. money market funds (no checking privileges). certificates of deposit (CDs).
money orders.
When a company uses LIFO for external reporting purposes and FIFO for internal reporting purposes, an Allowance to Reduce Inventory to LIFO account is used. This account should be reported: on the income statement in the Other Revenues and Gains section. on the balance sheet in the Current Assets section. on the income statement in the Cost of Goods Sold section. on the income statement in the Other Expenses and Losses section.
on the balance sheet in the Current Assets section.
When an annuity is received at the end of each period, it is called a (n): annual annuity. annuity due. ordinary annuity. deferred annuity.
ordinary annuity.
Freight charges on goods sold are accounted for as: product costs. period costs. variable costs. manufacturing costs.
period costs.
The table that would show the smallest value for 7 periods at 5% is the: present value of an ordinary annuity table. present value of an annuity due table. future value of 1 table. present value of 1 table.
present value of 1 table.
The amounts that must be deposited now at 6% interest to permit withdrawals of $10,000 at the end of each period for a specified number of periods are contained in the: present value of an ordinary annuity of 1 table. present value of an annuity due of 1 table. future value of an ordinary annuity of 1 table. present value of 1 table. The present value of an ordinary annuity (not an annuity due) of 1 table contains the amounts that must be deposited now at a specified rate of interest to permit withdrawals of 1 at the end of regular periodic intervals for the specified number of
present value of an ordinary annuity of 1 table.
The buyer would report the inventory in its balance sheet for items: shipped f.o.b. destination and in transit. purchased f.o.b. shipping point and in transit. purchased with a buyback agreement. received on consignment.
purchased f.o.b. shipping point and in transit.
If the beginning inventory is overstated: retained earnings is understated. working capital is understated. cost of goods sold is understated the current ratio is overstated.
retained earnings is understated.
Cash consists of all of the following except: money orders. short-term paper with a maturity of 6 months. certified checks. personal checks.
short-term paper with a maturity of 6 months.
An inventory method that makes it possible to manipulate net income is the: FIFO method. LIFO method. specific identification method. average cost method.
specific identification method.
Atlantic Company had 500 units of "CL-10" in its inventory at a cost of $12 each. It purchased 300 more units of "CL-10", for $8,400. Atlantic then sold 400 units of "CL-10 at a selling price of $30 each, resulting in a gross profit of $4,800. The cost flow assumption used by Atlantic is FIFO. cannot be determined from the information given. weighted average. LIFO.
weighted average.
Wendy Brown invests $50,000 at 10% annual interest. How much money has accumulated after five years, assuming simple interest? $80,526. $75,000. $55,000. $25,000. Simple interest is computed as principal x rate of interest x number of periods = ($50,000 x .10 x 5) = $25,000. Adding the interest accumulated, $25,000 to the original investment, $50,000 = $75,000 money accumulated after 5 years.
$75,000.
Asimov Manufacturing Company has the following account balances at year-end: Office supplies$3,000Raw materials21,000Work-in-process32,000Finished goods46,000Prepaid insurance 5,000 What amount should Asimov report as inventories in its balance sheet?
$99,000.
Which of the following is not a fundamental variable that is a part of all compound interest problems? Interest rate. Future value. Past value. Present value.
Past value.
Which of the following accounts does not exist in a perpetual inventory system? Cost of Goods Sold. Purchases. Sales Returns and Allowances. Inventory.
Purchases.
