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1) A ______________________ accounting system records production activities using
a periodic inventory system. A ____________________ accounting system records
production activities using a perpetual inventory system.
2) Detalo Co. held bonds of Schooner Corp. with a cost of $125,000 and a market value
of $127,000. Detalo also held 1,500 shares of Tranco common stock with a cost of
$25,000 and a market value of $24,700. These are classified as long-term
available-for-sale securities. Prepare the journal entry to record the market value of the
investments as of December 31.
3) Explain the purpose of and method of depreciation for partial years.
4) Using the information given below, prepare an income statement and owner's equity
statement for Martin Sky Taxi Services from the adjusted trial balance. Helena Martin
did not make any additional investments in the company during the year.
5) The closing process resets _______, _________, and ________ account balances to
zero at the end of each accounting period.
6) Investments that are readily convertible to a known amount of cash and are
sufficiently close to their maturity so that the market value is unaffected by interest rate
changes are ____________________________.
7) Tecom had net sales of $315,000 and average accounts receivable of $75,600. Its
competitor, ZCom, had net sales of $299,000 and average accounts receivables of
$81,350. Calculate the accounts receivable turnover for both companies. Which
company is doing a better job of managing its accounts receivables?
