1) The means of recording purchases under the assumption that the cash discount for
prompt payment will be taken is called the _________________________.
2) A company reported net income of $78,000 and had 15,000 common shares
outstanding throughout the current year. At year-end, the price per share of the
company’s stock was $49.40. What is the company’s year-end price-earnings ratio?
3) To write off an uncollectible account receivable when the allowance method of
accounting for uncollectible accounts is used, a company should debit
_______________________ and credit accounts receivable.
4) What are rolling budgets? Why are rolling budgets prepared?
5) Schwartz Co. paid $780,000 cash to buy the plant assets of Kimberly Co. that went
out of business. An independent appraiser assigned the following values to the assets
acquired:
Prepare Schwartz’ journal entry to record the acquisition of these assets.
6) A company reported the following information for the month of July:
7) Prudence Co. receives a $26,000, 90-day, 4% note receivable. What is the amount of
interest that is due at maturity?
8) Using the information given below for a company that uses a perpetual inventory
system, calculate the ending inventory using weighted average.