Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
1) Unsecured bonds that are issued against the general credit of the borrower are called
________________ bonds.
2) To be classified as a short-term investment, the investment must be readily
marketable and intended to be converted into cash within the next year or operating
cycle.
3) Shellhammer Company's inventory records show the following data for the month of
September:
UnitsUnit Cost
Inventory, September 1100$3.34
Purchases:September 84503.50
September 183503.70
A physical inventory on September 30 shows 200 units on hand. Calculate the value of
ending inventory and cost of goods sold if the company uses LIFO inventory costing
and a periodic inventory system.
4) An article recently appeared in the Wall Street Journal indicating that companies are
selling their receivables at a record rate. Why are companies selling their receivables?
5) Actor, Brees, and Cotswald are forming The ABC Partnership. Actor is transferring
$40,000 of personal cash and equipment worth $38,000 to the partnership. Brees owns
land worth $27,000 and a small building worth $112,000, which he transfers to the
partnership. There is a long-term mortgage of $40,000 on the land and building, which
the partnership assumes. Cotswald transfers cash of $10,000, accounts receivable of
$54,000, supplies worth $5,000, and equipment worth $28,000 to the partnership. The
partnership expects to collect $48,000 of the accounts receivable.
Instructions
Prepare a classified balance sheet for the partnership after the partners investments on
December 31, 2014 .
6) Sullivan Corporation purchased the following long-term investments in stock
securities on January 10, 2014:
10,000 shares of the 100,000 outstanding common shares of Alec Corporation for
$400,000.
3,000 shares of the 10,000 outstanding common shares of Mountain Company for
$135,000.
6,000 shares of the 50,000 outstanding common shares of Hudson Company for
$150,000.
Other information:
DividendsPer Share
Net IncomeDeclared andFair Value
for 2014Paid in 2014at 12/31/14
Alec Corporation$ 90,000$50,000$37
Mountain Company180,00070,00050
Hudson Company50,00025,00023
Instructions: Prepare the journal entries for Sullivan Corporation to record the
acquisition of the long-term stock investments, the receipt of dividends, and any other
necessary entries at year end on December 31, 2014 . Assume that Sullivan
Corporation's ownership interest in each company remained constant throughout the
year.
7) Listed below in alphabetical order are the balance sheet items of Madjack Company
at December 31, 2014 . Prepare a balance sheet and include a complete heading.
Accounts payable$ 21,000
Accounts receivable15,000
Buildings91,000
Cash6,000
Equipment17,000
Owners Capital108,000
8) Leist Company uses a flexible budget for manufacturing overhead based on machine
hours. Variable manufacturing overhead costs per machine hour are as follows:
Indirect labor$5.00
Indirect materials2.75
Maintenance.50
Utilities.30
Fixed overhead costs per month are:
Supervision$1,200
Insurance400
Property taxes600
Depreciation1,800
The company believes it will normally operate in a range of 4,000 to 8,000 machine
hours per month.
Instructions
Prepare a flexible manufacturing overhead budget for the expected range of activity,
using increments of 2,000 machine hours.
9) The terms of a bond issue are set forth in a formal legal document called a bond
________________.
