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1) An investing company that owns _________ of another (investee) company's voting
stock (but not more than 50%) is presumed to have a significant influence over the
investee.
2) The Skyview Company uses a sales journal, purchases journal, cash receipts journal,
cash disbursements journal, and general journal. They use the periodic inventory
method. The following purchase and cash payments transactions occurred during the
month of December:
Record these transactions using the journals below.
3) A company that uses a job order costing system incurred $10,000 of factory payroll
during May. Present the May 31 entry assuming $8,000 is direct labor and $2,000 is
indirect labor.
4) A company reported the following year-end information:
Required:
1> Explain the purpose of the acid-test ratio.
2> Calculate the acid-test ratio for this company.
3> What does the acid-test ratio reveal about this company?
5) Explain the accounting procedures when a bond's interest period does not coincide
with the issuer's accounting period.
6) A company uses the periodic inventory system, and the following information is
available. All purchases and sales are on credit. The selling price for the merchandise is
$11 per unit.
Required:
Determine the cost of the ending inventory and the cost of goods sold for June using the
LIFO method.
7) The balances for the accounts of Milo€s Management Co. for the year ended
December 31 are shown below. Each account shown had a normal balance.
Calculate the correct balance for Cash and prepare a trial balance.
8) The ________________________ methods of computing uncollectible accounts use
balance sheet relations to estimate bad debts-mainly the relation between accounts
receivable and the allowance amount.
