1) A company is considering a 5-year project. It plans to invest $60,000 now and it
forecasts cash flows for each year of $16,200. The company requires a hurdle rate of
12%. Calculate the internal rate of return to determine whether it should accept this
project. Selected factors for a present value of an annuity of 1 for five years are shown
below:
2) _____________________ inventory consists of goods a company acquires to use in
making products.
3) On October 31, Mayfair Co. received cash dividends of $0.15 per share from its
investment in Carter Corp.’s common stock. Mayfair owned 1,200 shares of Carter
Corp.’s stock on October 31. The investment is considered available-for-sale. Prepare
the investor’s journal entry to record the receipt of the cash dividends.
4) The difference in the sales journal between the perpetual and periodic inventory
systems is a column to record ___________________________ and
__________________ for each sale. This column is used in the perpetual system but
not in the periodic.
5) Rhone Importers purchases automotive parts from Germany. Prepare journal entries
for the following transactions of Rhone.
6) ___________________ activities generally include those transactions and events that
affect long-term assets.
7) At year-end, Harris Cleaning Service noted the following errors in its trial balance:
1> It understated the total debits to the Cash account by $500 when computing the
account balance.
2> A credit sale for $311 was recorded as a credit to the revenue account, but the
offsetting debit was not posted.
3> A cash payment to a creditor for $2,600 was never recorded.
4> The $680 balance of the Prepaid Insurance account was listed in the credit column
of the trial balance.
5> A $24,900 truck purchase was recorded as a $24,090 debit to Vehicles and a $24,090
credit to Notes Payable.
6> A purchase of office supplies for $150 was recorded as a debit to Office Equipment.
The offsetting credit entry was correct.
7> An additional investment of $4,000 by Del Harris was recorded as a debit to Del
Harris, Capital and as a credit to Cash.
8> The cash payment of the $510 utility bill for December was recorded (but not paid)
twice.
9> The revenue account balance of $79,817 was listed on the trial balance as $97,817.
10> A $1,000 cash withdrawal was recorded as a $100 debit to Del Harris, Withdrawal
and $100 credit to cash.
Using the form below, indicate whether each error would cause the trial balance to be
out of balance, the amount of any imbalance, and whether a correcting journal entry is
required.