Which of the following items is not considered to be a cash equivalent?
a.Short-term highly liquid investments maturing in 30 days
b.Commercial paper
c.Restricted cash funds
d.Money market funds
Land costing $125,000 was sold for $325,000 cash. The gain on the sale was reported
on the income statement as other income. On the statement of cash flows, what amount
should be reported as an investing activity from the sale of land?
a.$125,000.
b.$325,000.
c.$280,000.
d.$200,000.
A common measure of long-term solvency is
a.the cash debt coverage.
b.the current ratio.
c.the asset turnover.
d.inventory turnover.
Patchett Company reported income before taxes of $800,000 and an extraordinary loss
of $200,000. Assume that the company’s tax rate is 25%. What amounts will be reported
on the income statement for income before irregular items and extraordinary items,
respectively?
a.$600,000 and $200,000
b.$600,000 and $150,000
c.$600,000 and $200,000
d.$600,000 and $150,000
Randace Enterprises incurred several costs related to the acquisition of plant assets.
At what amount should the building be recorded in Randace€s accounting records?
a.$1,051,000
b.$1,029,000
c.$870,000
d.$894,000
Use the following information regarding Black Company and Red Company to answer
the question “Which amount is equal to Red Company’s “days in inventory” for 2013
(to the closest decimal place)?”
a.67.8 days
b.38.4 days
c.28.1 days
d.40.6 days
Boyce Company purchased office supplies costing $5,000 and debited Supplies for the
full amount. At the end of the accounting period, a physical count of office supplies
revealed $1,800 still on hand. The appropriate adjusting journal entry to be made at the
end of the period would be:
a.debit Supplies Expense, $3,200; credit Supplies, $3,200.
b.debit Supplies, $1,800; credit Supplies Expense, $1,800.
c.debit Supplies Expense, $1,800; credit Supplies, $1,800.
d.debit Supplies, $3,200; credit Supplies Expense, $3,200.
A company purchased office equipment for $30,000 and estimated a salvage value of
$6,000 at the end of its 10-year useful life. The constant percentage to be applied
against book value each year if the double-declining-balance method is used is
a.10%.
b.15%.
c.20%.
d.2%.
The following information is provided for Nguyen Company and Northwest
Corporation.
What is Nguyen’s return on assets for 2014?
a.400%
b.136%
c.25%
d.73%
When an asset is depreciated, to what amount will its book value at the end of its useful
life be equal?
a.The cost of the asset being depreciated
b.Total accumulated depreciation
c.The salvage value of the asset
d.The annual cost allocation amount
Neufeld Company issued $800,000 of 6%, 5-year bonds at 98, which pays interest
annually. Assuming straight-line amortization, what is the carrying value of the bonds
after one year?
a.$784,000
b.$785,600
c.$787,200
d.$790,400
Grand Company issued $800,000, 10%, 20-year bonds on January 1, 2014, at 104.
Interest is payable annually on January 1. Grand uses the straight-line method of
amortization and has a calendar year end.
Instructions
Prepare all journal entries made in 2014 related to the bond issue.
You are comparing two companies in the same industry. You have determined that Nenn
Corp. depreciates its plant assets over a 40-year life, whereas Henderson Corp.
depreciates its plant assets over a 20-year life. Discuss the implications this has for
comparing the results of the two companies.
Nance Co. holds Gant Inc.’s $25,000, 120 day, 9% note. The entry made by Nance Co.
when the note is collected, assuming no interest has previously been accrued is: