Jorgensen Department Store has three departments: Clothing, Toys, and Jewelry. The
most recent income statement, showing the total operating profit and departmental
results is shown below:
Based on this income statement, management is planning on eliminating the hardware
department, as it is generating a net loss. If the hardware department is eliminated, the
toy department will expand to fill the space, but sales will not change in total, nor will
direct expenses. None of the allocated expenses will be avoided, but they will be
reallocated. Clothing will be allocated $200,000 of these expenses, and Toys will be
allocated $150,000 of these expenses.
Prepare a new income statement for Jorgensen Department Store, showing the results if
the Hardware Department is eliminated. Should the Hardware Department be
eliminated?
On October 1 of the current year, Morton Company paid $9,600 cash for a one-year
insurance policy that took effect on that day. On the date of the payment, Morton
recorded the following entry:
Prepare the required adjusting entry at December 31 of the current year.
A company paid cash dividends on its preferred stock of $40,000 in the current year
when its net income was $120,000 and its average common stockholders’ equity was
$640,000. What is the company’s return on common stockholders’ equity?
Explain the responsibilities of and the accounting by employers for employee payroll
deductions.
How does the going-concern principle affect reporting asset values of a business?
A company’s sales in 2009 were $280,000, and its sales in 2010 were $341,600. Using
2009 as the base year, what is the sales trend percent for 2010?
What are the components of the manufacturing statement? Describe each component.
What is a short-term note payable? Explain the accounting issues related to notes
payable.
The ______________________ method of assigning costs to inventory and cost of
goods sold required that we divide the cost of goods available for sale by the units of
inventory available at the time of each sale.
Match the following terms with the appropriate definition.
1) Adjusted trial balance
2) Adjusting entry
3) Account form balance sheet
4) Accounting period
5) Contra account
6) Unadjusted trial balance
7) Interim financial reports
8) Fiscal year
9) Report form balance sheet
10) Natural business year
A) A balance sheet that lists assets on the left side and liabilities and equity on the right.
B) A journal entry used at the end of an accounting period to bring an asset or liability
account balance to its proper amount and update the related expense or revenue
account.
C) A listing of accounts and balances prepared before adjustments are recorded.
D) The consecutive 12 months (or 52 weeks) selected as the organization’s annual
accounting period.
E) A balance sheet that lists items vertically in the order: assets, liabilities and equity.
F) The length of time covered by financial statements.
G) An account linked with another account and having an opposite normal balance.
H) Financial reports covering less than one year, usually one, three, or six-month
periods.
I) A listing of accounts and balances prepared after adjustments are recorded and posted
to the ledger.
J) A 12-month period that ends when a company’s sales activities are at their lowest
point.
Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
A company borrows money from the bank by promising to make 8 semiannual
payments of $9,000 each. How much is the company able to borrow if the interest rate
is 10% compounded semiannually?
______________________ capture information from source documents and enable its
transfer to the system’s information processing component.