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The organization(s) primarily responsible for establishing generally accepted
accounting principles is(are) the
Answer:
Treasury stock is a contra stockholders' equity account.
Answer:
Identify the factors that are considered in classifying an expenditure as a capital or a
revenue expenditure. Are there instances where it may be difficult to classify an
expenditure as one or the other (e.g., the purchase of a wastebasket that has a useful life
of 5 years and cost $10)? What basis would be used in a decision?
Answer:
The following items were taken from the financial statements of Buttercup Company.
[All dollars are in thousands.)
Instructions
Prepare a classified balance sheet in good form as of December 31, 2015.
Answer:
New Slang Pest Control has the following balances in selected accounts on December
31, 2014.
All of the accounts have normal balances. The information below has been gathered at
December 31, 2015.
1> Depreciation on the equipment for 2015 is $1,300.
2> New Slang Pest Control borrowed $20,000 by signing a 10%, one-year note on July
1, 2015.
3> New Slang Pest Control paid $2,220 for 12 months of insurance coverage on
October 1, 2015.
4> New Slang Pest Control pays its employees total salaries of $11,000 every Monday
for the preceding 5-day week (Monday-Friday). On Monday, December 27, 2015,
employees were paid for the week ending December 24, 2015. All employees worked
the five days ending December 31, 2015.
5> New Slang Pest Control performed disinfecting services for a client in December
2015. The client will be billed $3,200.
6> On December 1, 2015, New Slang Pest Control collected $30,000 for disinfecting
processes to be performed from December 1, 2015, through May 31, 2015.
7> A count of supplies on December 31, 2015, indicates that supplies of $850 are on
hand.
Instructions
Prepare in journal form with explanations, the adjusting entries for the seven items
listed for New Slang Pest Control.
Answer:
Consolidated financial statements are appropriate when an investor controls an investee
by ownership of more than 50% of the investee's common stock.
Answer:
Many business transactions affect more than one time period.
Answer:
Nola Corporation gathered the following information for the fiscal year ended
December 31, 2015:
Sales $1,300,000
Extraordinary fire loss 110,000
Selling and administrative expenses 160,000
Cost of goods sold 900,000
Loss on sale of equipment 40,000
Nola Corporation is subject to a 30% income tax rate.
Instructions
Prepare a partial income statement, beginning with income before income taxes.
Answer:
