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1) The worksheet for Montoya Company has been completed through the adjusted trial
balance. You are ready to extend each amount to the appropriate financial statement
column. Indicate for each account, the financial statement column to which the account
should be extended by placing a check mark () in the appropriate column.
Income Statement Balance Sheet
Account TitleDr.Cr.Dr.Cr.
(1)Cash
(2)Owners Capital
(3)Mortgage Payable
(4)Interest Receivable
(5)Supplies
(6)Accounts Payable
(7)Short-term Investments
(8)Maintenance and Repairs Expense
(9)Unearned Service Revenue
(10)Equipment
(11)Depreciation Expense
(12)Interest Revenue
(13)Salaries and Wages Expense
(14)Owners Drawings
(15)Accum. Deprec.Equipment
(16)Utilities Expense
(17)Salaries and Wages Payable
(18)Accounts Receivable
(19)Notes Payable
(20)Service Revenue
2) Ted Knight Scott is confused about the differences between a product cost and a
period cost. Explain the differences to Ted.
3) Ladle Corporation had net income of $2,000,000 in 2013 . Using 2013 as the base
year, net income decreased by 70% in 2014 and increased by 180% in 2015 .
Instructions
Compute the net income reported by Ladle Corporation for 2014 and 2015 .
4) On April 30, the bank reconciliation of Baxter Company shows three outstanding
checks: no. 354, $650, no. 355, $820, and no. 357, $615. The May bank statement and
the May cash payments journal show the following.
Instructions
Using step 2 in the reconciliation procedure, list the outstanding checks at May 31 .
5) On January 1, 2014, Vidalia Company issued 30,000 shares of $2 par value common
stock for $150,000. On March 1, 2014, the company purchased 6,000 shares of its
common stock for $8 per share for the treasury. On June 1, 2014, 1,500 of the treasury
shares are sold for $10 per share. On September 1, 2014, 3,000 treasury shares are sold
at $6 per share.
Instructions
Journalize the stock transactions of Vidalia Company in 2014 .
6) In a manufacturing company, goods that are ready to be sold to customers are
referred to as ________________, whereas in a merchandising company they are
generally referred to as _______________.
