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Kate Company uses a perpetual inventory system and purchased inventory from Phoebe
Company. The shipping costs were $500 and the terms of the shipment were FOB
shipping point. Kate would have the following entry regarding the shipping charges:
Answer:
Conceptually, the cost allocation procedures for natural resources parallels that of plant
assets.
Answer:
The cost of a noncash asset acquired in exchange for common stock should be either the
fair value of the consideration given up or the consideration received, whichever is
more clearly determinable.
Answer:
The financial statements of Lowz Company appear below:
The following additional data were provided:
1> Dividends declared and paid were $35,000.
2> During the year, equipment was sold for $17,000 cash. This equipment cost $28,000
originally and had a book value of $17,000 at the time of sale.
3> All depreciation expense is in the operating expenses.
4> All sales and purchases are on account.
5> Accounts payable pertain to merchandise suppliers.
6> All operating expenses except for depreciation were paid in cash.
Instructions
Prepare a statement of cash flows for Lowz Company using the direct method.
Answer:
Wave Company originally issued 30,000 shares of $5 par common stock for $210,000
on January 3, 2015. Wave purchased 1,500 shares of treasury stock for $12,000 on
November 2, 2015. On December 6, 2015, 600 shares of the treasury stock are sold for
$7,200.
Instructions
Prepare journal entries to record these stock transactions.
Answer:
Use the accounting equation to answer the following questions.
1> Picaresque Sails Co. has total assets of $140,000 and total liabilities of $45,000.
What is stockholders' equity?
2> The Natenal Fun Center has total assets of $225,000 and stockholders' equity of
$100,000. What are total liabilities?
3> Okkervil River Restaurant has total liabilities of $50,000 and stockholders' equity of
$100,000. What are total assets?
Answer:
The ledger accounts given below, with an identification number for each, are used by
Riley Company. Instructions: Prepare appropriate adjusting entries for the year ended
December 31, 2015, by placing the appropriate identification number(s) in the debit and
credit columns provided and the dollar amount in the adjoining column. Item 0 is given
as an example.
Answer:
Windsor Service had the following financial information at the end of 2015.
Instructions:
Prepare a 2015 income statement, 2015 retained earnings statement, and a 12/31/15
balance sheet for Windsor Service.
Answer:
A merchandising company using a perpetual inventory system will usually need to
make an adjusting entry to ensure that the recorded inventory agrees with physical
inventory count.
Answer:
A corporation that issues bonds at a discount will recognize interest expense at a rate
which is greater than the market interest rate.
Answer:
