Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
1) The City Store reported the following amounts on their financial statements for Year
1, Year 2, and Year 3:
It was discovered early in Year 4 that the ending inventory on December 31, Year 1 was
overstated by $6,000, and the ending inventory on December 31, Year 2 was
understated by $2,500. The ending inventory on December 31, Year 3 was correct.
Ignoring income taxes determine the correct amounts of cost of goods sold, net income,
total current assets, and equity for each of the years Year 1, Year 2, and Year 3.
2) ______________ is the area of accounting aimed at serving external users.
3) The ______________________ is the sales level at which a company neither earns a
profit nor incurs a loss.
4) A company paid $314,000 for a machine that was expected to last five years and to
have a salvage value of $40,000. During the third year of the machine's life, $37,000
cash was paid for replacement parts that were expected to increase the machine's
productivity by 10% each year. Prepare the journal entry to record the $37,000 cost
incurred in the third year.
5) Gross pay less all deductions is called __________________.
