Why is it important to report discontinued operations separately from income from
continuing operations?
Answer:
Buffalo Tom Cruises purchased a five-year insurance policy for its ships on April 1,
2015 for $60,000. Assuming that April 1 is the effective date of the policy, the adjusting
entry on December 31, 2015 is
Answer:
The higher the sales tax rate, the more profit a retailer can earn.
Answer:
An employee’s net pay consists of gross pay less mandatory and voluntary payroll
deductions. Identify the mandatory payroll deductions and give two or three examples
of common voluntary deductions. Are these deductions recognized as payroll expenses
by the employer? What type of payroll expenses does the employer incur related to
having a payroll?
Answer:
A bank reconciliation is generally prepared by the bank and sent to the depositor along
with cancelled checks.
Answer:
Carson Company uses the periodic inventory method and had the following inventory
information available for the month of November.
A physical count of units on November 30 revealed that 650 units were on hand.
Answer the following independent questions and show computations supporting your
answers.
1> Assume that the company uses the average cost method. What is the dollar value of
the ending inventory on November 30?
2> Assume that the company uses the LIFO inventory method. What is the dollar value
of the cost of goods sold during November?
3> Assume that the company uses the FIFO inventory method. The dollar value of the
ending inventory on November 30 is:
Answer:
The par value of stock issued for noncash assets is never a factor in determining the
cost of the assets received.
Answer:
What is the order in which assets are generally listed on a classified balance sheet?
•Current and long-term
•Current; property, plant, and equipment; long-term investments; intangible assets
•Current; property, plant, and equipment; intangible assets; long-term investments
•Current; long-term investments; property, plant, and equipment; intangible assets
•
Answer:
Listed below are items that may be useful in preparing the March 2015, bank
reconciliation for Walker Machine Works.
Using the following code, insert in the space before each item the letter where the
amount would be located or otherwise treated in the bank reconciliation process.
1> Included with the bank statement materials was a check from Bob Simpson for $40
stamped “account closed.”
2> A personal deposit by Annie Walker to her personal account in the amount of $300
for dividends on her General Electric common stock was credited to the company
account.
3> The bank statement included a debit memorandum for $22.00 for two books of
blank checks for Walker Machine Works.
4> The bank statement contains a credit memorandum for $24.75 interest on the
average checking account balance.
5> The daily deposits of March 30 and March 31, for $3,362 and $3,125 respectively,
were not included in the bank statement postings.
6> Two checks totaling $316.86, which were outstanding at the end of February, cleared
in March and were returned with the March statement.
7> The bank statement included a credit memorandum dated March 28, 2015, for
$45.00 for the monthly interest on a 6-month, $15,000 certificate of deposit that the
company owns.
8> Four checks, #8712, #8716, #8718, #8719, totaling $5,369.65, did not clear the bank
during March.
9> On March 24, 2015, Walker Machine Works delivered to the bank for collection a
$2,500, 3-month note from Don Decker. A credit memorandum dated March 29, 2015,
indicated the collection of the note and $90.00 of interest.
10> The bank statement included a debit memorandum for $25.00 for the collection
service on the above note and interest.
Answer:
The cost of a patent should be amortized over its ____________ life or its
____________ life, whichever is shorter.
Answer: