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Appendix N The Equity Method Accounting For Investment
Appendix 2—Investments Key 1. Securities issued by a corporation as a form of ownership in the business, such as common stock and preferred stock, are called equity securities. 2. The equity method of accounting is used if the investor owns […]
Appendix N what is the income statement effect of the entry, if any
50. Tail Winds Corporation acquired the following equity securities during 2013: TICO Industries capital stock, 150 shares $11,250 Thankful Products capital stock, 400 shares 10,200 The company’s investment in these two companies is passive and classified as available-for-sale. During 2013, […]
Chapter 1 Black beards Restaurant Began Operations January
196. Listed below are several amounts from the accounting records of Bike Links for the year ended December 31, 2013. Prepare a multiple-step income statement in good form. Service revenue $960,000 Selling expense 176,000 Income tax expense 160,000 General and […]
Chapter 1 Presented Below Are Selected Data From
175. A certain company started business on January 1, 2012 with assets of $1,000,000 and stockholders’ equity of $565,000. By the end of the year, assets increased by $100,000 and liabilities decreased by $150,000. Other than net income or loss, […]
Chapter 1 Which One The Following Internal User
Chapter 1—Accounting and the Financial Statements Key 1. There are more corporations than sole proprietorships and partnerships in the United States. 2. The three main business activities are financing, operating, and investing. TRUE 3. Internal users of accounting information include […]
Chapter 1 Which One The Following Items Reported
119. Benchmark Surveyors The following balances are provided: Cash $234,000 Accounts Payable $ 97,000 Inventories 121,000 Notes Payable (due 2018) 211,000 Land 453,000 Accounts Receivable 46,000 Refer to Benchmark Surveyors. Calculate Current Assets. 120. Benchmark Surveyors The following balances are […]
Chapter 10 A corporation had several transactions affecting its
188. A corporation had several transactions affecting its stockholders’ equity accounts during the year. The transactions are presented in chronological order. In the space provided, indicate the impact on the equity accounts shown by placing the respective dollar amounts along […]
Chapter 10 how many shares of stock are outstanding at December
172. The equity section of a balance sheet at December 31, 2014, is presented below: Common Stock, $10 par, 10,000 shares issued and outstanding $100,000 Paid-in Capital in Excess of Par—Common Stock 50,000 Retained Earnings 100,000 Total Stockholders’ Equity $250,000 […]
Chapter 10 When Corporation Decides Whether Pay Cash
114. If a corporation issues cumulative, participating preferred stock, which of the following is true regarding the rights of the preferred stockholders? 115. When a corporation decides whether to pay a cash dividend, which of the following is an important […]
Chapter 10 Which The Following One The Elements
Chapter 10—Stockholders’ Equity Key 1. All authorized stock is issued. 2. Shares outstanding may be less than shares issued. TRUE 3. All treasury stock is outstanding. FALSE 4. When true no-par stock is sold for cash, the amount credited to […]
Chapter 11 Company Reported The Following Information Salaries
108. A company reported the following information: Salaries payable, December 31, 2014 $20,000 Salaries payable, December 31, 2013 15,000 Salaries expense for 2014 80,000 How much cash was paid for salaries during 2014? 109. A company reported the following information: […]
Chapter 11 compute the company’s cash flow adequacy ratio assuming
163. Maritime Marine Services Selected data from the financial statements for the years ended December 31, 2014 and 2013, are presented below: (In millions) 2014 2013 Property, plant and equipment $14,100 $12,200 Accumulated depreciation 4,900 4,700 Investments 450 240 Short-term […]
Chapter 11 which of the following is not an investing activity
Chapter 11—The Statement of Cash Flows Key 1. The statement of cash flows summarizes the operating, investing, and financing activities of a business for a period of time. 2. The Statement of Cash Flows is considered to be a good […]
Chapter 11 Mary Kay Cosmetics Selected data and additional information
151. Mary Kay Cosmetics Selected data and additional information from the company’s records are presented below: Balance Sheet Data 2014 2013 Cash $235,000 246,000 Accounts receivable $120,000 $150,000 Inventories 56,000 50,000 Accounts payable 38,000 70,000 Salaries payable 10,000 5,000 Equipment […]
Chapter 12 Rent a center Selected Data From The Financial
101. Rent-a-Center Selected data from the financial statements are provided below: 2015 2014 Current Assets $12,000 $6,000 Long-Term Assets 14,000 8,000 Current Liabilities 4,000 6,000 Long-Term Liabilities 14,000 0 Stockholders’ Equity 8,000 8,000 Net Sales 19,000 18,200 Net Income 2,000 […]
Chapter 12 Use The Following Selected Financial Information
148. Rhodes Bakery The balance sheet taken from the company’s 2015 10-K is provided below: December 31 Assets: 2015 2014 Current Assets: Cash $ 61,100 $54,000 Accounts Receivable 22,500 17,500 Inventory 8,500 7,000 Other Current Assets 6,500 5,500 Total Current […]
Chapter 12 When Investor Evaluating Whether Purchase Stock
Chapter 12—Financial Statement Analysis Key 1. Comparing two companies in the same industry should cause no problem since both companies are required to use the same accounting principles. 2. Time series analysis compares a company’s financial data with industry averages. […]
Chapter 12 which company appears to be in the best position regarding
161. Recovery Solutions, Inc. Comparative financial statements are provided below: Statements of Income and Retained Earnings for the Fiscal Years Ended: June 30, 2015 June 30, 2014 June 30, 2013 Net Sales $2,004,719 $1,937,021 $1,835,987 Other Income 18,636 17,153 14,614 […]
Chapter 13 Extrema Company Supplied The Following Data
212. Extrema Company supplied the following data at the end of the current year. Finished goods inventory, Jan 1. $ 12,000 Finished goods inventory, Dec. 31 7,500 Cost of goods manufactured 152,380 Sales revenue 212,000 Sales commissions 19,080 Research and […]
Chapter 13 Templar Company Manufacturing Firm Has Supplied
198. Arcadia Company manufactures recreational vehicles and incurred the following costs during the current year. Required: Classify each cost using the table format given below: Product Cost Period Cost Direct Materials Direct Labor Overhead Selling Expense Administrative Expense 1. Wages […]
Chapter 13 what were the total manufacturing costs for the year
143. Which of the following would not be found on the income statement of a manufacturer? 144. Which of the following would be found on the balance sheet of a manufacturer? A. work in process B. raw materials C. finished […]
Chapter 13 Which The Following Not Objective Managerial
Chapter 13—Managerial Accounting Concepts and Decision- Making Support Key 1. Management accounting information is only used by manufacturing organizations. 2. The managerial activity of monitoring a plan’s implementation and taking corrective action as needed is referred to as decision making. […]
Chapter 14 Consider Each The Following Independent Situations
155. Just Burn It! Manufactures blank CDs. The company incurs $22,000 in monthly depreciation costs on its manufacturing equipment as well as monthly advertising costs of $2,000 to place ads in newspapers and on the radio. Each CD requires materials […]
Chapter 14 Figure 35 Maxwell Company Makes Treadmills
112. Figure 3-4. Botana Company constructed the following formula for monthly utility cost. Total utility cost = $1,200 + ($8.10 ´ labor hours) Assume that 775 labor hours are budgeted for the month of April. Refer to Figure 3-4. If […]
Chapter 14 Knowing How Costs Change Output Changes
Chapter 14—Cost Behavior Key 1. A cost that changes in total as output changes is a variable cost. 2. The cost of raw materials used is usually a fixed cost. FALSE 3. Fixed costs are costs that in total remain […]
Chapter 15 The Breakeven Point When The Company
Chapter 15—Cost-Volume-Profit Analysis: A Managerial Planning Tool Key 1. The break-even point is where total sales revenue equals total cost. 2. The contribution margin ratio can be calculated by subtracting the variable cost ratio from one. TRUE 3. Variable expense […]
Chapter 15 the young manufacturing company produces the following
149. Fry Company Projected Income Statement For the Current Year Ending December 31 Sales (12,000 units) $240,000 Less variable costs: Variable manufacturing costs $60,000 Variable selling costs 36,000 Total variable costs 96,000 Contribution margin $144,000 Less fixed costs: Fixed manufacturing […]
Chapter 15 what is the number of jungle gyms sold at break-even
98. Figure 4-8. A company provided the following data: Sales $540,000 Variable costs $378,000 Fixed costs $120,000 Expected production and sales in units 40,000 Refer to Figure 4-8. How much sales in dollars is necessary to generate a profit of […]
Chapter 16 Ring Company Designs And Builds Jewelry
106. Ring Company designs and builds jewelry. During June it had applied overhead of $120,000. Overhead is applied at the rate of 75% of direct labor cost. Direct labor wages average $20 per hour. How many direct labor hours did […]
Chapter 16 The Beginning The Year Grey Corporation
151. At the beginning of the year Grey Corporation estimated the following: Assembly Department Packaging Department Overhead $ 840,000 $ 210,000 Direct labor hours 80,000 4,000 Machine hours 20,000 12,000 Grey uses departmental overhead rates. In the assembly department , […]
Chapter 16 Which The Following Not Characteristic Job order
Chapter 16—Job-Order Costing Key 1. Manufacturing and service firms producing unique products or services require job-order accounting systems. 2. The key feature of job-order costing is that the cost of one job differs from that of another job and must […]
Chapter 17 Assuming Conversion Costs Represent Single Category
111. Figure 6-4. The following information is available for Department X for August: Work in process, August 1: Materials $ 8,000 Conversion costs $15,000 Costs added during August: Materials $28,000 Conversion costs $25,000 Equivalent units of production (weighted average): Materials […]
Chapter 17 Harley Company Manufactures Product That Passes
143. Harley Company manufactures a product that passes through two processes. The following information is available for the first department for October. All materials are added at the beginning of the process. Beginning work in process consisted of 25,000 units […]
Chapter 17 Which Type Costing System Works Best
Chapter 17—Process Costing Key 1. Process costing accumulates costs by individual jobs. 2. Process costing is most appropriate for manufacturers of homogeneous products. TRUE 3. Process costing is appropriate for companies providing services. TRUE 4. Process costing is most useful […]
Chapter 18 one of its plants produces two bicycles
146. Figure 7-7. Armstrong Company produces a variety of bicycles. One of its plants produces two bicycles: a mountain model and a racing model. At the beginning of the year, the following data were prepared for this plant: Mountain Racing […]
Chapter 18 Present Whenever Products Have Different
Chapter 18—Activity-Based Costing and Management Key 1. Unit-level activities are performed each time a unit is produced. 2. Factors that measure the consumption of activities by products and other cost objects are value-added costs. FALSE 3. Activity drivers should be […]
Chapter 18 The Length Time Required Produce
92. Figure 7-2. Steller Manufacturing has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors purchase the same […]
Chapter 19 bank loan officers would find which of the following budgets
103. Figure 9-5. Sully Company provided the following information for last month. Production in units 3,000 Direct materials cost $7,000 Direct labor cost $10,000 Overhead cost $9,600 Sales commission per unit sold $ 4 Price per unit sold $29 Fixed […]
Chapter 19 Rapid lube Provides Oil Changes And Lubes
148. Rapid-Lube provides oil changes and lubes. The estimated number of oil changes for April and May are 3,600 and 4,000. Each oil change takes 12 minutes of direct labor. The wage rate is $10 per hour. Overhead is $3,700 […]
Chapter 19 Which The Following Advantage Budgeting Forces
Chapter 19—Profit Planning Key 1. A strategic plan identifies strategies for future activities and operations, generally covering at least five years. 2. Budgets are financial plans for the future. TRUE 3. The master budget is composed of operating budgets and […]
Chapter 2 Each The Situations Through Below Applies
161. Holiday Marina The bookkeeper prepared the following journal entries during May. Assume that the descriptions of the entries are correct. Journal (partial): Date Accounts and Descriptions Debit Credit May 5 Accounts Receivable 1,600 Service Revenue 1,600 Billed customers for […]
Chapter 2 Which The Following Accounts Increased Credit
126. Which of the following accounts is increased by a credit entry? 127. All of the following accounts have normal debit balances except A. Accounts Receivable B. Dividends C. Supplies Expense D. Service Revenue 128. All of the following accounts […]
Chapter 2 Which The Following Underlying Assumptions For
Chapter 2—The Accounting Information System Key 1. The time-period assumption assumes that a company prepares its financial statements every month. 2. Because it tends to provide the most reliable measure of activity, all assets are reported on the balance sheet […]
Chapter 20 Moving Baby Company Produces Baby Strollers
148. Moving Baby Company produces baby strollers. During the year 90,000 strollers were produced. The actual labor used was 225,000 hours at $12.75 per hour. Moving Baby has the following labor standards: 2 hours at $13.00 per hour. Required: A. […]
Chapter 20 Standards Based The Amount Input That
Chapter 20—Standard Costing: A Managerial Control Tool Key 1. Managers develop quantity standards when they decide what amount of input should be used per unit of output. 2. Managers develop price standards when they determine what amount should be paid […]
Chapter 20 what is seaside’s labor rate variance
104. Figure 10-3. Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor: Leather (12 strips @ $20) $240 Direct labor (10 hours @ $12) $120 Total […]
Chapter 21 Static Budget Considered Good Choice For
Chapter 21—Flexible Budgets and Overhead Analysis Key 1. A static budget compares actual cost with budgeted costs. 2. Static budgets are the best benchmarks for preparing a performance report. FALSE 3. Before-the-fact flexible budgets give expected outcomes for a range […]
Chapter 21 The Standard Fixed Overhead Rate Often
92. Griffen Corporation uses a standard costing system. Information for the month of May is as follows: Actual manufacturing overhead costs ($26,000 is fixed) $80,000 Direct labor: Actual hours worked 12,000 hrs. Standard hours allowed for actual production 10,000 hrs. […]
Chapter 21 the company produces two types of frozen desserts
141. Figure 11-7. Larry Miller, controller for Kipling Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of frozen desserts: Icey and Tasty. The two desserts use common raw materials in different […]
Chapter 22 Economic Value Added Eva Similar Roi
Chapter 22—Performance Evaluation, Variable Costing, and Decentralization Key 1. The practice of delegating decision-making authority to lower levels of management in a company is called centralization. 2. In a decentralized company, overall profit margins can mask inefficiencies within the various […]
Chapter 22 Price Charged For Component The Selling
109. Figure 22-4. The manager of Stock Division projects the following for next year: Sales $185,000 Operating income $60,000 Operating assets $375,000 The manager can invest in an additional project that would require $40,000 investment in additional assets and would […]
Chapter 23 each model must spend time on a special machine
92. Figure 23-5. Santorino Company produces two models of a component, Model K-3 and Model P-4. The unit contribution margin for Model K-3 is $6; the unit contribution margin for Model P-4 is $14. Each model must spend time on […]
Chapter 23 Pasha Company Produced Defective Units Last
Chapter 23—Short-Run-Decision Making: Relevant Costing and Inventory Management Key 1. The first step in making a short-run decision is to identify alternatives as possible solutions to the problem. 2. In making a short-run decision, all alternatives need to be considered. […]
Chapter 23 since the metallic ink uses machinery that is also
128. Boger Company makes 30,000 lawnmowers each year. To date, all components have been made in house. All fixed costs are unavoidable. Recently, Exeter Extruding offered to supply Boger with the metal handles for the lawnmowers for $5 each. Boger […]
Chapter 24 1 General Terms Sound Capital Investment Will
Chapter 24—Capital Investment Decisions Key 1. Projects that do not affect the cash flows of other projects are called mutually exclusive projects. 2. The process of planning, setting goals and priorities, arranging financing, and using certain criteria to select long-term […]
Chapter 24 2 Firm Considering Project With Annual Cash
103. The following information pertains to an investment: Investment $140,000 Annual revenues $ 96,000 Annual variable costs $ 32,000 Annual fixed out-of-pocket costs $ 20,000 Discount rate 12% Expected life of project 8 years The present value of the annual […]
Chapter 24 3 Fill The Lettered Blanks The Following
144. Dale Davis Company is evaluating a proposal to purchase a new machine that would cost $100,000 and have a salvage value of $10,000 in four years. It would provide annual operating cash savings of $10,000, as follows: Old Machine […]
Chapter 3 Failure Record Accrued Interest Expense Would
119. Failure to record accrued interest expense would result in which of the following? 120. Failure to record the earned portion of unearned revenue would result in which of the following? A. Net income being understated B. No effect on […]
Chapter 3 Measurement The Economic Effects Entity Involves
Chapter 3—Accrual Accounting Key 1. When a company recognizes the portion of supplies used during a year, the effect is to decrease net income. 2. Adjusting entries are prepared using the accrual basis of accounting for preparing financial statements. TRUE […]
Chapter 3 unearned common retained trans revenue stock earnings
156. Cabana Club The company’s consolidated statement of income is provided below: Years Ended December 31, (in millions of dollars) 2014 2013 Revenues Sales by company-operated restaurant stores $8,894.9 $8,136.5 Revenue from franchised stores 3,526.5 3,272.3 Total revenues 12,421.4 11,408.8 […]
Chapter 4 what adjusting entries will the company record as a result
156. Diamond Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for October 2013 indicated the following: Balance, October 31, 2013 $29,700 Bank service charges for October 80 Interest earned during October 120 NSF Check from […]
Chapter 4 Which The Assets Listed Below Considered
Chapter 4—Internal Control and Cash Key 1. Petty Cash is NOT considered to be a cash equivalent. 2. The key to being classified as a cash equivalent is that the amount must be available to pay debts within a year’s […]
Chapter 4 who is primarily responsible for establishing and maintaining
105. Delco Construction The following items relate to the company’s March bank reconciliation: Bank statement balance $29,600 Unadjusted cash balance according to company records ? Deposit in transit 2,200 Outstanding checks 3,100 Bank service charges 200 Interest earned on the […]
Chapter 5 Company Needs Record Months Accrued Interest
88. A company needs to record 6 months of accrued interest on a 4-year, 12%, $12,000 promissory note payable. How much interest expense should be accrued? 89. Academy Grill Supply On October 1, 2012, the company received a $50,000 promissory […]
Chapter 5 November 2012 Aero Graphics Sold Merchandise
121. Abundant Returns This company sells its merchandise only on credit. The following data are available at December 31, 2012. Sales $411,000 Sales returns and allowances 12,000 Accounts receivable at January 1, 2012 89,000 Allowance for doubtful accounts at January […]
Chapter 5 which one of the following is an accurate description of
Chapter 5—Sales and Receivables Key 1. Selling on credit protects a company from the risk that some of its receivables will never be collected. 2. Accounts receivable are shown on the balance sheet at their net realizable value. TRUE 3. […]
Chapter 6 All The Following Are Acceptable For
107. Klump Co. Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June. June 1 On hand, 50 units at $18.00 each $ 900.00 4 Purchased 115 units at $18.20 each 2,093.00 […]
Chapter 6 La Sports Novelties Has The Following
167. White Appliances On August 1, 2013, White Appliances purchased 75 refrigerators for $45,000 cash and also paid $1,500 transportation costs related to this purchase. On the same date, White purchased 100 dishwashers for $20,000 on credit; however, the seller […]
Chapter 6 Which The Following Types Inventory Accounts
Chapter 6—Cost of Goods Sold and Inventory Key 1. For a merchandising company, the cost of goods sold is subtracted from net sales to arrive at gross profit. 2. Cost of goods sold represents an outflow of a resource, inventory, […]
Chapter 7 Company Sold Equipment Loss What The
98. A company sold equipment at a loss. What is the impact on the balance sheet of removing the equipment account and its related accumulated depreciation account? 99. Equipment with an estimated residual value at acquisition of $15,000 was sold […]
Chapter 7 Fanatics Company Purchased Patent The Beginning
124. Fabulous Creations The assets section of the company’s balance sheets for the years ended December 31, 2013 and 2012, is provided below. Fabulous Creations Assets Section of Consolidated Balance Sheets (in millions) at December 31, Assets 2013 2012 Current […]
Chapter 7 Fitness Depot Purchased Building Tract Land
Chapter 7—Operating Assets Key 1. If new equipment purchased in 2012 is reported on the balance sheet at December 31, 2012 as a long-term asset, there will be no related item on the 2012 income statement. 2. All intangible assets […]
Chapter 8 what entry is needed to record each time one of
134. A company borrowed $50,000 on November 1, 2012, at 9% interest. The interest and principal are due on October 31, 2013. Prepare the company’s journal entries on November 1, 2012, December 31, 2012, and October 31, 2013. 135. Grayson […]
Chapter 8 Which The Following Not Classified Current
Chapter 8—Current and Contingent Liabilities Key 1. An example of a current liability is a note payable that is due in two years. 2. An example of a current liability is the current maturity of a long-term debt. TRUE 3. […]
Chapter 8 Which The Following Would Appear Only
111. General Lighting During the first quarter of 2012, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%. Refer to General Lighting. Sales taxes are required to be paid to the state taxing […]
Chapter 9 Long term Debt Generally Includes Obligations That
Chapter 9—Long-Term Liabilities Key 1. Long-term debt generally refers to obligations that extend beyond one year. 2. Bonds are generally issued in denominations of $1,000. TRUE 3. Mortgage bonds are secure bonds. TRUE 4. Debenture bonds are backed by specific […]
Chapter 9 these bonds are due in five years with interest payable
122. King Cotton Company The liabilities section of the company’s most recent consolidated balance sheets is provided below: King Cotton Company Consolidated Balance Sheets (in millions) December 31, 2013 2012 Current liabilities Short-term borrowings $ 250 $ 200 Accounts payable […]
Chapter 9 which is also listed in the short-term liability section
113. Kids R Kids Company Selected data from the comparative financial statements are provided below: Kids R Kids Company Balance Sheet Accounts (all accounts have normal balances) (in thousands) December 31, 2013 2012 Accounts payable and Accrued expenses $ 3,141 […]