International standards are developed by the
a.IFRS.
b.GAAP.
c.IASB.
d.FASB.
Wilton sells softball equipment. On November 14, they shipped $3,000 worth of
softball uniforms to Paola Middle School, terms 2/10, n/30. On November 21, they
received an order from Douglas High School for $1,800 worth of custom printed bats to
be produced in December. On November 30, Paola Middle School returned $300 of
defective merchandise. Wilton has received no payments from either school as of month
end. What amount will be recognized as net accounts receivable on the balance sheet as
of November 30?
a.$4,800
b.$4,500
c.$3,000
d.$2,700
Which of the following is the best way to evaluate a series of financial statement data
over a period of time?
a.Common size statements
b.Trend analysis
c.Vertical analysis
d.Ratio analysis
Radical Radials Company has the following inventory data:
A physical count of merchandise inventory on July 30 reveals that there are 32 units on
hand. Using the LIFO inventory method, the amount allocated to ending inventory for
July is
a.$620
b.$608
c.$640
d.$704.
The following totals for the month of April were taken from the payroll records of Metz
Company.
The entry to record accrual of employer’s payroll taxes would include a
a.debit to Payroll Tax Expense for $4,035.
b.credit to Payroll Tax Expense for $4,035.
c.credit to FICA Taxes Payable for $1,740.
d.credit to Payroll Tax Expense for $1,740.
Stan’s Market recorded the following events involving a recent purchase of inventory:
Received goods for $90,000, terms 2/10, n/30.
Returned $1,800 of the shipment for credit.
Paid $450 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company’s inventory
a.increased by $86,436
b.increased by $88,650
c.increased by $86,877
d.increased by $86,886
Navarro, Inc. reported the following item in its balance sheet at December 31, 2014:
Which statement is true?
a.Navarro’s customers owe $57,240.
b.During the year, customers charged $56,300 on account.
c.The balance owed by customers is $56,300.
d.Navarro expects its customers to pay $55,360.
Morales Company issued $400,000 of 8%, 5-year bonds at 106, which pays interest
annually. Assuming straight-line amortization, what is the carrying value of the bonds
after one year?
a.$424,000
b.$421,600
c.$419,200
d.$426,400
Manner, Inc. has 10,000 shares of 5%, £100 par value, noncumulative preference shares
and 20,000 ordinary shares with a £1 par value outstanding at December 31, 2014.
There were no dividends declared in 2013. The board of directors declares and pays a
¤90,000 dividend in 2014. What is the amount of dividends received by the ordinary
share holders in 2014?
a.£0
b.£50,000
c.£90,000
d.£40,000
What occurs when a company factors its receivables?
a.An estimate for bad debts is made
b.Accounts are written off
c.Receivables are sold
d.An aging analysis is performed
Shafer Company has the following accounts in its general ledger at July 31: Accounts
Receivable $49,000 and Allowance for Doubtful Accounts $3,400. During August, the
following transactions occurred.
Instructions
(a)Journalize the transactions.
(b)Indicate the statement presentation of service charges.
Big Town Retailers operates in Florida and collects sales taxes from customers on all
purchases. How should these sales taxes be reported when collected?
a.As an expense on the income statement
b.As sales revenue along with the selling price of the items sold
c.As unearned revenues
d.As a current liability until paid to the State of Florida
The information in the following table is from the statement of cash flows for a
company at four different points in time (Period 1, Period 2, Period 3, and Period 4).
Negative values are presented in parentheses.
Based on this information, which of the following answers most likely corresponds with
the introductory phase, growth phase, maturity phase, or decline phase?
a.Period 2, Period 1, Period 3, Period 4.
b.Period 1, Period 4, Period 3, Period 2.
c.Period 3, Period 4, Period 1, Period 2.
d.Period 4, Period 3, Period 2, Period 1.
Thayer Company purchased a building on January 2 by signing a long-term $2,520,000
mortgage with monthly payments of $23,100. The mortgage carries an interest rate of
10 percent. The entry to record the first monthly payment will include a
a.debit to the Cash account for $23,100.
b.credit to the Cash account for $21,000.
c.debit to the Interest Expense account for $21,000.
d.credit to the Mortgage Payable account for $23,100.
On January 1, 2014, Browning Corporation had 75,000 shares of $1 par value common
stock issued and outstanding. During the year, the following transactions occurred:
Net income for 2014 amounted to $951,000.
Instructions
Prepare journal entries to record the above transactions.
Hansen Company uses the periodic inventory method and had the following inventory
information available:
A physical count of inventory on December 31 revealed that there were 380 units on
hand.
Instructions
Answer the following independent questions and show computations supporting your
answers.
1>Assume that the company uses the FIFO method. The value of the ending inventory
at December 31 is $__________.
2>Assume that the company uses the average cost method. The value of the ending
inventory on December 31 is $__________.
3>Assume that the company uses the LIFO method. The value of the ending inventory
on December 31 is $__________.
4>Determine the difference in the amount of income that the company would have
reported if it had used the FIFO method instead of the LIFO method. Would income
have been greater or less?
West County Bank agrees to lend Drake Builders Company $200,000 on January 1.
Drake Builders Company signs a $200,000, 6%, 6-month note. What is the adjusting
entry required if Drake Builders Company prepares financial statements on March 30?
The comparative balance sheets of Lander Rosen Clothiers are as follows:
Instructions: Perform horizontal and vertical analysis for Lander Rosen Clothiers.
Express your answers with 2 decimal places.
Horizontal
Vertical
Prepare your answer in the tabular form presented below.
A new sales representative, Eddy Wherli, has just received his copy of the month-end
financial reports. He is puzzled by the term “unearned revenue.” He left the following
e-mail message for you on the company’s bulletin board system:
What is this??? Creative Accounting, or what??? Line item 12 on year-to-date financials
shows over $25Gs in Unearned Revenue!!! Come on, guys! Either we earned it, or we
didn’t . . . Right??! Is this how you guys lower our commissions? Reply to
e.wherli@sbd
Required:
Write a response to send to Eddy. (Since the answer is being prepared for a “bulletin
board” type system, it can be in informal language and can respond in kind to the
humor. However, proper grammar and spelling are essential, as is the message about
what unearned revenue really is.)