1) How is the current ratio calculated? How is it used to evaluate a company?
2) Starling Company sells merchandise for $24,000 cash on March 31 (cost of
merchandise is $12,300). The sales tax law requires Starling to collect 8.25% sales tax
on every dollar of merchandise sold. Record the entry for the sale and its applicable
sales tax.
3) The following data relates to the Density Company’s first operating period. Calculate
the total cost of goods sold for each product.
4) Thomas Co. produces and sells Ultra, Super, and Mega, and has total fixed costs of
$52,000. Sales and cost data follow:
Calculate the break-even point in composite units.
5) Describe the journal entries required to record the issuance of bonds and the payment
of bond interest.
6) Jacques Company planned to use 18,000 pounds of material costing $2.50 per pound
to make 4,000 units of its product. In actually making 4,000 units, the company used
18,800 pounds that cost $2.54 per pound. Calculate the direct materials price variance.
7) What is the difference between the periodic and perpetual inventory systems?
8) A company reported net sales of $900,000, net income of $100,000 and average total
assets of $425,000. Calculate its return on total assets.