1) Why is the sales budget usually prepared first?
2) Vaughn Co. operates three separate departments (A, B, C). The data below is
provided for the current year:
Required: Prepare an income statement showing the departmental contributions to
overhead for the current year.
3) The items that follow appeared in the Income Statement columns of the work sheet
prepared for Armstrong Delivery Service at current year-end. In addition, L. Armstrong,
Capital had a credit balance of $117,000 and L. Armstrong, Withdrawals had a debit
balance of $30,000 at year end. Prepare closing journal entries for this company.
4) _______________ bonds are bonds that mature at more than one date, often in a
series, and thus are usually repaid over a number of periods.
5) Explain how available-for-sale debt and equity securities are accounted for at and
after acquisition and how they are reported in financial statements.
6) A company had the following ending inventory costs:
Instructions;
1> Calculate the lower of cost or market (LCM) value for the inventory as a whole.
2> Calculate the lower of cost or market (LCM) value for each individual item.
7) The rate of interest that borrowers are willing to pay and lenders are willing to accept
for a particular bond and its risk level is the ____________________ of interest.
8) A company is considering two projects, Project A and Project B. The following
information is available for each project:
Calculate the profitability index for each project. Based on the profitability index,
which project should the company pursue and why?
9) Ember Co. entered into the following transactions involving short-term notes
payable.
On June 18, Ember purchased $25,000 merchandise from Halco Co., terms are 2/10,
n/30. Halco uses the perpetual inventory system.
On July 19, Ember replaced the June 18 account payable with a 60-day, $22,000 note
bearing 9% annual in addition to paying $3,000 in cash. ________ Paid the amount due
on the note at maturity.
1> Determine the maturity date for the note.
2> Prepare journal entries for all the preceding transactions and events.