Cost of goods sold for the year amounted to $130,000, and during the year, accounts
payable ______________ by $9,000 and inventory ______________ by $5,000
resulting in cash paid to suppliers of $116,000.
Answer:
Richter Company sells merchandise on account for $2,500 to Lynch Company with
credit terms of 3/10, n/60. Lynch Company returns $200 of merchandise that was
damaged, along with a check to settle the account within the discount period. What
entry does Richter Company make upon receipt of the check and the damaged
merchandise?
Answer:
Phast Express specializes in the overnight transportation of medical
equipment and laboratory specimens. The company has selected the
following information from its most recent annual report to be the subject
of an immediate press release.
•The financial statements are being released.
•Net income this year was $2.12 million. Last year’s net income had
been $2.0 million.
•The current ratio has changed to 2:1 from last year’s 1.4:1
•The debt/assets ratio has changed to 3:5 from last year’s 2:5
•The company expanded its truck fleet substantially by purchasing ten
new delivery vans. The company already had twelve delivery vans.
•The company is now the largest medical courier in the mid-Atlantic
region.
Prepare a brief press release incorporating the information above. Include all
information. Think carefully which information (if any) is good news for the
company, and which (if any) is bad news.
Answer:
Which of the following adjustments to convert net income to net cash provided by
operating activities is incorrect?
Answer:
The purchase of store equipment for cash reduces stockholders’ equity by an equal
amount.
Answer:
The book value of a plant asset is obtained by subtracting ______________ from the
______________ of the plant asset.
Answer:
In the stockholders’ equity section, paid-in capital and retained earnings are reported
and the specific sources of paid-in capital are identified.
Answer:
A sales slip, a check, and a cash register tape are examples of ________________ used
as evidence that a transaction has taken place.
Answer:
Most notes are not interest bearing.
Answer: