Kilmer Corporation began the year with retained earnings of $620,000. During the year,
the company issued $840,000 of common stock, recorded expenses of $2,400,000, and
paid dividends of $160,000. If Kilmer’s ending retained earnings was $660,000, what
was the company’s revenue for the year?
a.$2,440,000
b.$2,600,000
c.$3,280,000
d.$33,440,000
Failure to record a liability will probably
a.understate net income.
b.result in overstated total liabilities and owner’s equity.
c.understate the debt total assets ratio.
d.make a company appear to be less solvent
The maturity value of a $5,000, 6%, 60-day note receivable dated February 10th is
a.$5,050.
b.$5,025.
c.$5,000.
d.$5,300.
Financial information is presented below:
Gross profit would be
a.$56,000.
b.$49,000.
c.$52,000.
d.$59,000.
Peach Pink Inc. has the following inventory data:
A physical count of merchandise inventory on July 30 reveals that there are 25 units on
hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for
July is
a.$1,555
b.$1,585
c.$1,505
d.$1,540
On January 1, Thompson Corporation issued $3,000,000, 14%, 5-year bonds with
interest payable on December 31. The bonds sold for $3,216,288. The market rate of
interest for these bonds was 12%. On the first interest date, using the effective-interest
method, the debit entry to Interest Expense is for
a.$360,000.
b.$376,743.
c.$385,955.
d.$420,000.
Marvin Services Corporation had the following accounts and balances:
If the balance of the Buildings account was $24,000 and $6,000 of Accounts Payable
were paid in cash, what would be the total liabilities and stockholders’ equity?
a.$54,000
b.$78,000
c.$48,000
d.$72,000
Which one of the following statements is true concerning the interrelationships of
financial statements?
a.Net income on the income statement equals the cash balance at the end of the period
on the balance sheet.
b.The ending balance of retained earnings on the statement of retained earnings is equal
to net income on the income statement.
c.The amount of net income on the income statement is added to the beginning retained
earnings balance on the statement of retained earnings.
d.The amount of cash used during the period on the statement of cash flows is equal to
total expenses on the income statement.
On January 1, a machine with a useful life of four years and a residual value of $9,000
was purchased for $57,000. What is the depreciation expense for year 2 under
straight-line depreciation?
a.$6,000.
b.$12,000.
c.$24,000.
d.$14,250.
At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the
year, the company purchased goods costing $800,000. If Wildcat Athletic reported
ending inventory of $300,000 and sales of $1,000,000, their cost of goods sold and
gross profit rate would be
a.$500,000 and 70%
b.$700,000 and 30%.
c.$500,000 and 30%.
d.$700,000 and 70%.
The collection of an $900 account within the 2 percent discount period will result in a
a.debit to Sales Discounts for $18.
b.debit to Accounts Receivable for $882.
c.credit to Cash for $882.
d.credit to Accounts Receivable for $882.
Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an
estimated life of 4 years or 10,000 hours. It is to be depreciated by the units-of-activity
method. What is the amount of depreciation for the first full year, during which the
equipment was used 2,700 hours?
a.$75,000.
b.$70,000.
c.$75,600.
d.$72,500.
The cash balance per books for Wellmeyer Company on November 30, 2014, is
$10,740.93. The following checks and receipts were recorded for the month of
December 2014:
In addition, the bank statement for the month of December is presented below:
Check No. 18 was correctly written for $708.62 for a payment on account. The NSF
check was from S. Gill, a customer, in settlement of an account receivable. An entry has
not been made for the NSF check. The credit memo is for the collection of a note
receivable including interest of $60 that has not been accrued. The bank service charge
is $15.00.
Instructions
(a)Prepare a bank reconciliation at December 31.
(b)Prepare the adjusting journal entries required by the bank reconciliation.
Bonds with a face value of $400,000 and a quoted price of 104¼ have a selling price of
a.$417,000.
b.$416,100.
c.$401,700.
d.$416,000.
The following information is provided for Nguyen Company and Northwest
Corporation.
What is Northwest’s return on assets for 2014?
a.12.7%
b.11.4%
c.13.0%
d.11.1%
In 2014 the Golic Co. had net credit sales of $600,000. On January 1, 2014, the
Allowance for Doubtful Accounts had a credit balance of $15,000. During 2014,
$24,000 of uncollectible accounts receivable were written off. Past experience indicates
that the allowance should be 10% of the balance in receivables
(percentage-of-receivables basis). If the accounts receivable balance at December 31
was $160,000 what is the required adjustment to the Allowance for Doubtful Accounts
at December 31, 2014?
a.$16,000.
b.$25,000.
c.$31,000.
d.$24,000.
Classic Floors has the following inventory data:
Assuming that a perpetual inventory system is used, what is the cost of goods sold on a
LIFO basis for July?
a.$465.60
b.$236.40
c.$702.00
d.$348.00
Which of the following is a basic principle of cash management?
a.Increase the speed of receivables collection
b.Keep inventory levels high
c.Maintain a high cash balance for unanticipated emergencies
d.Defer the timing of major expenditures