Assuming a current ratio of 1.2 and an acid-test ratio of 0.80, how will the purchase of inventory with cash affect each ratio?A) Increase the current...
The acid-test ratio is
The acid-test ratio isA) Current assets divided by current liabilities.B) Cash and short-term investments divided by current liabilities.C) Cash, short-term...
Which of the following measures of liquidity does not control for the relative size of the company?
Which of the following measures of liquidity does not control for the relative size of the company?A) Working capital.B) Current ratio.C) Acid-test ratio.D)...
Which financial ratio relates most closely to a company's ability to pay its short-term debts?
Which financial ratio relates most closely to a company's ability to pay its short-term debts?A) Receivables turnoverB) Debt to equity ratioC) Return...
Working capital is
Working capital isA) Current assets divided by current liabilities.B) Current assets minus current liabilities.C) Cash, short-term investments, and accounts...
The current ratio is
The current ratio isA) Current assets divided by current liabilities.B) Cash and short-term investments divided by current liabilities.C) Cash, short-term...
Which of the following is true regarding the relationship between the current ratio and the acid-test ratio?
Which of the following is true regarding the relationship between the current ratio and the acid-test ratio?A) The current ratio will always be equal...
A company's liquidity refers to its:
A company's liquidity refers to its:A) Ability to collect accounts receivable.B) Ability to sell inventory efficiently.C) Ability to generate profits...
Which of the following statements regarding liquidity ratios is true?
Which of the following statements regarding liquidity ratios is true?A) A low current ratio generally indicates the ability to pay current liabilities...
Unified Airlines is being sued by Northeast Airlines for $5,000,000. At the end of the year, Unified feels it is reasonably possible that it will pay $5,000,000 at some point in the following year. What should Unified and Northeast record at the end of the year concerning the lawsuit?
Unified Airlines is being sued by Northeast Airlines for $5,000,000. At the end of the year, Unified feels it is reasonably possible that it will pay...
Discount Travel has the following current assets: cash, $102 million receivables, $94 million inventory, $182 million and other current assets, $18 million. Discount Travel also has the following liabilities: accounts payable, $98 million current portion of long-term debt, $35 million and long-term debt, $23 million. Based on these amounts, what is the current ratio?
Discount Travel has the following current assets: cash, $102 million receivables, $94 million inventory, $182 million and other current assets, $18 million....
Discount Travel has the following current assets: cash, $102 million receivables, $94 million inventory, $182 million and other current assets, $18 million. Discount Travel also has the following liabilities: accounts payable, $98 million current portion of long-term debt, $35 million and long-term debt, $23 million. Based on these amounts, what is the acid-test ratio?
Discount Travel has the following current assets: cash, $102 million receivables, $94 million inventory, $182 million and other current assets, $18 million....
Which of the following statements regarding liquidity ratios is false?
Which of the following statements regarding liquidity ratios is false?A) A high current ratio generally indicates the ability to pay current liabilities...
Which of the following is a contingency that should be recorded?
Which of the following is a contingency that should be recorded?A) The company is being sued and a loss is reasonably possible and reasonably estimable.B)...
Unified Airlines is being sued by Northeast Airlines for $5,000,000. At the end of the year, Unified feels it is probable that it will pay $5,000,000 at some point in the following year. What should Unified and Northeast record at the end of the year concerning the lawsuit?
Unified Airlines is being sued by Northeast Airlines for $5,000,000. At the end of the year, Unified feels it is probable that it will pay $5,000,000...
When a gain contingency is probable and the amount of gain is reasonably estimable, the gain should be:
When a gain contingency is probable and the amount of gain is reasonably estimable, the gain should be:A) Reported in the income statement and disclosed.B)...
A contingent liability should be disclosed in a note to the financial statements rather than being recorded if:
A contingent liability should be disclosed in a note to the financial statements rather than being recorded if:A) The likelihood of a loss is remote.B)...
Volt Electronics sells equipment that includes a three-year warranty. Repairs under the warranty are performed by an independent service company under a contract with Volt. Based on prior experience, warranty costs are estimated to be $25 per item sold. Volt should recognize these warranty costs:
Volt Electronics sells equipment that includes a three-year warranty. Repairs under the warranty are performed by an independent service company under...
Carpenter Inc. estimates warranty expense at 2% of sales. Sales during the year were $4 million and warranty expenditures were $44,000. What was the balance in the Warranty Liability account at the end of the year?
Carpenter Inc. estimates warranty expense at 2% of sales. Sales during the year were $4 million and warranty expenditures were $44,000. What was the balance...
Note disclosure is required for material potential losses when the loss is at least reasonably possible:
Note disclosure is required for material potential losses when the loss is at least reasonably possible:A) Only if the amount is known.B) Only if the...
Gain contingencies usually are recognized in a company's income statement when:
Gain contingencies usually are recognized in a company's income statement when:A) The gain is certain.B) The amount is reasonably estimable.C) The gain...
A contingent liability should be recorded in a company's financial statements only if the likelihood of a loss occurring is:
A contingent liability should be recorded in a company's financial statements only if the likelihood of a loss occurring is:A) At least remotely possible...
In 2021, a company estimates that warranty costs in the following year will be $25,000. Actual warranty costs in 2022 are only $20,000. What is the effect on the accounting equation when recording actual warranty costs in 2022?
In 2021, a company estimates that warranty costs in the following year will be $25,000. Actual warranty costs in 2022 are only $20,000. What is the effect...
Patriot Paddleboards sells a paddleboard model that carries a one-year warranty on all included accessories. Past experience indicates that 15% of those sold will have defective accessories within a year and that average repair cost is $20 per paddleboard. If 1,000 were sold this year and 50 have already been repaired under warranty, the entry to record warranty expense for the year would include a debit to:
Patriot Paddleboards sells a paddleboard model that carries a one-year warranty on all included accessories. Past experience indicates that 15% of those...
Talks-A-Lot, Inc. sells cell phones to customers and expects that 10% of phones sold will be returned for repair under its warranty program. The average repair cost is $75 per phone. For 2021, Talks-A-Lot has sold 750 cell phones and has repaired 30 of them as of December 31, 2021. What amount of warranty liability should be reported at December 31, 2021?
Talks-A-Lot, Inc. sells cell phones to customers and expects that 10% of phones sold will be returned for repair under its warranty program. The average...
The account "Warranty Liability":
The account "Warranty Liability":A) is adjusted at the end of the year.B) is closed at the end of the year.C) has a year-end credit balance equal to the...
Strikers, Inc. sells soccer goals to customers over the Internet. History has shown that 2% of Strikers' goals will need repair under the warranty program. For the year, Strikers has sold 4,000 goals and 45 have been repaired. If the estimated cost to repair a goal is $200, what would be the warranty expense for the year?
Strikers, Inc. sells soccer goals to customers over the Internet. History has shown that 2% of Strikers' goals will need repair under the warranty program....
Strikers, Inc. sells soccer goals to customers over the Internet. History has shown that 2% of Strikers' goals will need repair under the warranty program. For the year, Strikers has sold 4,000 goals and 45 have been repaired. If the estimated cost to repair a goal is $200, what would be the warranty liability at the end of the year?
Strikers, Inc. sells soccer goals to customers over the Internet. History has shown that 2% of Strikers' goals will need repair under the warranty program....
Bears Inc. sells football helmets to local schools and warrants all of its products for one year. While no helmets sold in 2021 have been returned yet, based upon previous years, Bears Inc. estimates that 3% of its products will need repairs or be replaced within the next year. What effect would this warranty have on assets, liabilities, and stockholders' equity in 2021?
Bears Inc. sells football helmets to local schools and warrants all of its products for one year. While no helmets sold in 2021 have been returned yet,...
Ogden Motors, Inc. is involved in a lawsuit. It is reasonably possible that the jury will find in favor of the plaintiff and Ogden will owe ten million dollars. What is the appropriate reporting of this lawsuit and what is the effect in the balance sheet?
Ogden Motors, Inc. is involved in a lawsuit. It is reasonably possible that the jury will find in favor of the plaintiff and Ogden will owe ten million...
Amplify, Inc. was sued by Sound City for $50,000. Sound City feels very confident that it will win the case and will be awarded the full amount. Amplify, Inc. feels it is probable that it will lose the case and pay Sound City the full amount. Which of the following is correct?
Amplify, Inc. was sued by Sound City for $50,000. Sound City feels very confident that it will win the case and will be awarded the full amount. Amplify,...
A company has two active lawsuits at the end of the year. In Lawsuit 1, the company feels it is probable that it will win $10,000. In Lawsuit 2, the company feels that it is probable that it will lose $6,000. At the end of the year, the company should report a:
A company has two active lawsuits at the end of the year. In Lawsuit 1, the company feels it is probable that it will win $10,000. In Lawsuit 2, the company...
While providing services to Palmer Co., Raider Group caused damages of $125,000. As of the end of the year, both parties agree that it is probable that Raider will pay Palmer the full amount of the damages within the next two months. How would Raider and Palmer report the lawsuit at the end of the year?
While providing services to Palmer Co., Raider Group caused damages of $125,000. As of the end of the year, both parties agree that it is probable that...
At the beginning of 2021, Angel Corporation began offering a 1-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2021 were $180 million. Five percent of the units sold were returned in 2021 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense in Angel's 2021 income statement is:
At the beginning of 2021, Angel Corporation began offering a 1-year warranty on its products. The warranty program was expected to cost Angel 4% of net...
Reeves Co. filed suit against Higgins, Inc., seeking damages for copyright violations. Higgins' legal counsel believes it is probable that Higgins will settle the lawsuit for an estimated amount in the range of $100,000 to $200,000, with all amounts in the range considered equally likely. How should Higgins report this litigation?
Reeves Co. filed suit against Higgins, Inc., seeking damages for copyright violations. Higgins' legal counsel believes it is probable that Higgins will...
Away Travel filed suit against West Coast Travel seeking damages for copyright violations. West Coast Travel's legal counsel believes it is reasonably possible that West Coast Travel will settle the lawsuit for an estimated amount in the range of $100,000 to $200,000, with all amounts in the range considered equally likely. How should West Coast Travel report this litigation?
Away Travel filed suit against West Coast Travel seeking damages for copyright violations. West Coast Travel's legal counsel believes it is reasonably...
Away Travel filed suit against West Coast Travel seeking damages for copyright violations. Away Travel's legal counsel believes it is probable (but not certain) that Away Travel will win the lawsuit for an estimated amount in the range of $100,000 to $200,000, with all amounts in the range considered equally likely. How should Away Travel report this litigation?
Away Travel filed suit against West Coast Travel seeking damages for copyright violations. Away Travel's legal counsel believes it is probable (but not...
Young Company is involved in a lawsuit. The liability that could arise as a result of this lawsuit should be recorded on the books if the probability of Young owing money as a result of the lawsuit is:
Young Company is involved in a lawsuit. The liability that could arise as a result of this lawsuit should be recorded on the books if the probability...
The current portion of long-term debt is:
The current portion of long-term debt is:A) The amount that will be paid within one year of the balance sheet date.B) Reported as an asset.C) Reported...
Region Jet has a $50 million liability at December 31, 2021, of which $10 million is payable in 2022. In its December 31, 2021 balance sheet, the company reports the $50 million debt as a:
Region Jet has a $50 million liability at December 31, 2021, of which $10 million is payable in 2022. In its December 31, 2021 balance sheet, the company...
United Supply has a $5 million liability at December 31, 2021, of which $1 million is payable in each of the next five years. United Supply reports the liability in the balance sheet as a:
United Supply has a $5 million liability at December 31, 2021, of which $1 million is payable in each of the next five years. United Supply reports the...
If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is reasonably possible, a contingent liability should be
If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is reasonably possible,...
If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a contingent liability should be
If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a contingent...
If a 6% sales tax is recorded together with sales revenue in the sales account and the balance at the end of the month is $5,300, how much sales tax is payable?
If a 6% sales tax is recorded together with sales revenue in the sales account and the balance at the end of the month is $5,300, how much sales tax is...
Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, what are Union Apparel's sales for the month?
Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, what are Union Apparel's sales for the month?A)...
Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, how much does Union Apparel owe for sales tax?
Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, how much does Union Apparel owe for sales tax?A)...
The current portion of long-term debt should be
The current portion of long-term debt should beA) Reported as a current liability in the balance sheet.B) Reported as a long-term liability in the balance...
When a company collects sales tax from a customer, the event results in a(n) ________ in Cash and a(n) ________ in Sales Tax Payable:
When a company collects sales tax from a customer, the event results in a(n) ________ in Cash and a(n) ________ in Sales Tax Payable:A) increase decreaseB)...
Suppose you buy lunch for $8.39 that includes a 5% sales tax. How much did the restaurant charge you for the lunch (excluding any tax) and how much does the restaurant owe for sales tax? (Do not round intermediate calculations. Round the answers to 2 decimal places.)
Suppose you buy lunch for $8.39 that includes a 5% sales tax. How much did the restaurant charge you for the lunch (excluding any tax) and how much does...
The Route 66 Gift Shop, which records sales and sales tax separately, had sales on account of $1,500 and cash sales of $1,000. The state sales tax is 8%. The journal entry to record the sales would include a:
The Route 66 Gift Shop, which records sales and sales tax separately, had sales on account of $1,500 and cash sales of $1,000. The state sales tax is...
Suppose you buy dinner for $23.75 that includes an 8% sales tax. How much did the restaurant charge you for the dinner (excluding any tax) and how much does the restaurant owe for sales tax?
Suppose you buy dinner for $23.75 that includes an 8% sales tax. How much did the restaurant charge you for the dinner (excluding any tax) and how much...
On October 1, 2021, a company sells $800 of gift cards to customers. The gift cards expire one year from the date of sale. By October 1, 2022, $750 of the gift cards have been redeemed and the sales recorded at the time of redemption. What entry, if any, should the company record on October 1, 2022?
On October 1, 2021, a company sells $800 of gift cards to customers. The gift cards expire one year from the date of sale. By October 1, 2022, $750 of...
On July 1, 2021, a company sells $2,000 of gift cards to customers. The gift cards expire one year from the date of sale. By December 31, 2021, $1,600 of the gift cards have been redeemed. What is the appropriate balance in the Deferred Revenue account on December 31, 2021?
On July 1, 2021, a company sells $2,000 of gift cards to customers. The gift cards expire one year from the date of sale. By December 31, 2021, $1,600...
Sales taxes collected by a company on behalf of the state and local governments are recorded by:
Sales taxes collected by a company on behalf of the state and local governments are recorded by:A) A debit to an expense account.B) A credit to a revenue...
When a company collects sales tax from a customer, the event is recorded by:
When a company collects sales tax from a customer, the event is recorded by:A) A debit to Sales Tax Expense and a credit to Sales Tax Payable.B) A debit...
At times, businesses require advance payments from customers that will be applied to the purchase price when goods are delivered or services provided. These customer advances represent:
At times, businesses require advance payments from customers that will be applied to the purchase price when goods are delivered or services provided....
The sale of gift cards by a company is a direct example of:
The sale of gift cards by a company is a direct example of:A) Deferred revenues.B) Sales tax payable.C) Current portion of long-term debt.D) Contingencies.Answer:...
When a company delivers a product or service for which a customer has previously paid, the company records the following:
When a company delivers a product or service for which a customer has previously paid, the company records the following:A) A debit to a revenue account...
Gift card breakage refers to:
Gift card breakage refers to:A) The inability of the company to satisfy its obligation to customers that have previously purchased gift cards.B) The point...
On March 31, 2021, a company sells $1,200 of gift cards to customers. The gift cards expire one year from the date of sale. What entry should the company record on March 31, 2021?
On March 31, 2021, a company sells $1,200 of gift cards to customers. The gift cards expire one year from the date of sale. What entry should the company...
Rock Adventures has 15 employees each working 40 hours per week and earning $30 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the employer's total payroll tax expense for the first week of January?
Rock Adventures has 15 employees each working 40 hours per week and earning $30 an hour. Federal income taxes are withheld at 15% and state income taxes...
Deferred Revenues is a(n):
Deferred Revenues is a(n):A) Liability account.B) Asset account.C) Stockholders' equity account.D) Revenue account.Answer:...
In December 2020, Quebecor Printing received magazine subscriptions for 2021 from customers, who paid $500 in cash. What would be the appropriate journal entry for this event in December 2020?
In December 2020, Quebecor Printing received magazine subscriptions for 2021 from customers, who paid $500 in cash. What would be the appropriate journal...
In January 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes back and spends $20 of the gift card to purchase a water bottle. What would be the appropriate journal entry for the sale of the gift card in January?
In January 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes back and spends $20 of the...
In January, 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes back and spends $20 of the gift card to purchase a water bottle. What would be the appropriate journal entry for the customer's purchase of the water bottle in February?
In January, 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes back and spends $20 of the...
Greger Peterson is a senior manager at a public accounting firm making a base salary of $180,000 a year ($15,000 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assuming the Social Security maximum base amount is $128,400, how much will be withheld during the year for Peterson's Social Security and Medicare taxes. (Round your answers to the nearest dollar amount.)
Greger Peterson is a senior manager at a public accounting firm making a base salary of $180,000 a year ($15,000 per month). Employers are required to...
Greger Peterson is a senior manager at a public accounting firm making a base salary of $180,000 a year ($15,000 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assuming the Social Security maximum base amount is $128,400, through what month will Social Security be withheld?
Greger Peterson is a senior manager at a public accounting firm making a base salary of $180,000 a year ($15,000 per month). Employers are required to...
Action Travel has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the actual payroll payment (Salaries Payable) for the first week of January?
Action Travel has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15% and state income taxes...
Action Travel has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the employer's total payroll tax expense for the first week of January?
Action Travel has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15% and state income taxes...
Rock Adventures has 15 employees each working 40 hours per week and earning $30 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the actual payroll payment (salaries payable) for the first week of January?
Rock Adventures has 15 employees each working 40 hours per week and earning $30 an hour. Federal income taxes are withheld at 15% and state income taxes...
Which of the following are not included in an employer's payroll tax expense?
Which of the following are not included in an employer's payroll tax expense?A) Employer portion of FICA taxes.B) Federal unemployment taxes.C) State...
Which of the following are included in an employer's payroll tax expense?
Which of the following are included in an employer's payroll tax expense?A) Employer portion of FICA taxes.B) Federal unemployment taxes.C) State unemployment...
Suppose a college football coach makes a base salary of $2,400,000 a year ($200,000 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assuming the Social Security maximum base amount is $128,400, how much will be withheld during the year for the coach's Social Security and Medicare taxes? (Round your answers to the nearest dollar amount.)
Suppose a college football coach makes a base salary of $2,400,000 a year ($200,000 per month). Employers are required to withhold a 6.2% Social Security...
Suppose a college football coach makes a base salary of $2,400,000 a year ($200,000 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assuming the Social Security maximum base amount is $128,400, through what month will Social Security be withheld?
Suppose a college football coach makes a base salary of $2,400,000 a year ($200,000 per month). Employers are required to withhold a 6.2% Social Security...
Which of the following are withheld from an employee's salary?
Which of the following are withheld from an employee's salary?I. FICA taxes.II. Federal and state unemployment taxes.III. Federal and state income taxes.IV....
Which of the following is true regarding FICA taxes?
Which of the following is true regarding FICA taxes?A) FICA taxes are paid only by the employee.B) FICA taxes are paid only by the employer.C) FICA taxes...
Which of the following are employer payroll costs?
Which of the following are employer payroll costs?I. FICA taxes.II. Federal and state unemployment taxes.III. Federal and state income taxes.IV. Employer...
Which of the following is not withheld from an employee's salary?
Which of the following is not withheld from an employee's salary?A) FICA taxes.B) Federal and state unemployment taxes.C) Federal and state income taxes.D)...
Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable in full at maturity on October 31, 2022. In connection with this note, Universal Travel, Inc. should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.) A) $8,000. B) $30,000. C) $5,000. D) $25,000. Answer: C
Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable...
Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable in full at maturity on October 31, 2022. In connection with this note, Universal Travel, Inc. should record interest expense in 2022 in the amount of:
Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable...
Large, highly-rated firms sometimes sell commercial paper:
Large, highly-rated firms sometimes sell commercial paper:A) To borrow funds at a lower rate than through a bank.B) To borrow funds when they cannot obtain...
An informal agreement that allows a company to borrow up to a prearranged limit without having to follow formal loan procedures and prepare paperwork is known as:
An informal agreement that allows a company to borrow up to a prearranged limit without having to follow formal loan procedures and prepare paperwork...
Which of the following is not an employer payroll cost?
Which of the following is not an employer payroll cost?A) FICA taxes.B) Federal and state unemployment taxes.C) Federal and state income taxes.D) Employer...
On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2022. Old World Deli records the appropriate adjusting entry for the note on December 31, 2021. What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1, 2022?
On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later...
On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. New Morning Bakery should record which of the following adjusting entries at December 31, 2021? (Do not round your intermediate calculations.)
On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later...
On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. New Morning Bakery records the appropriate adjusting entry for the note on December 31, 2021. What amount of cash will be needed to pay back the note payable plus any accrued interest on May 1, 2022? (Do not round your intermediate calculations.)
On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later...
The Pita Pit borrowed $100,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at maturity on May 1, 2022. In connection with this note, The Pita Pit should report interest expense at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)
The Pita Pit borrowed $100,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at...
The Pita Pit borrowed $100,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at maturity on May 1, 2022. In connection with this note, The Pita Pit should report interest expense in 2022 for the amount of:
The Pita Pit borrowed $100,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at...
On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. The company should report interest payable at December 31, 2021, in the amount of:
On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May...
On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. The company records the appropriate adjusting entry for the note on December 31, 2021. In recording the payment of the note plus accrued interest at maturity on May 1, 2022, the company would:
On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May...
On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on Mar, 2022. Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)
On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later...
On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on Mar, 2022. Daylight Donuts records the appropriate adjusting entry for the note on December 31, 2021. In recording the payment of the note plus accrued interest at maturity on Mar, 2022, Daylight Donuts would: (Do not round your intermediate calculations.)
On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later...
On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2022. Old World Deli should record which of the following adjusting entries at December 31, 2021?
On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later...
Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Bear Essentials record?
Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Bear Essentials record?A) Debit Cash, $50,000 Credit...
Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Stacks Bank record?
Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Stacks Bank record?A) Debit Cash, $50,000 Credit Notes...
Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should Brian Inc. record?
Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should Brian Inc. record?A) Debit Cash, $8,000 Credit Notes Receivable,...
Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should First Bank record?
Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should First Bank record?A) Debit Cash, $8,000 Credit Notes Receivable,...
Which of the following is not a liability?
Which of the following is not a liability?A) Notes payable.B) Current portion of long-term debt.C) An unused line of credit.D) Deferred revenue.Answer:...
Liabilities are defined as:
Liabilities are defined as:A) Resources owed by an entity as a result of past transactions.B) Resources owned by an entity as a result of past transactions.C)...
Which of the following is not a characteristic of a liability?
Which of the following is not a characteristic of a liability?A) It represents a probable, future sacrifice of economic benefits.B) It must be payable...
Which of the following is not a current liability?
Which of the following is not a current liability?A) Accounts payable.B) A note payable due in 2 years.C) Current portion of long-term debt.D) Sales tax...
In most cases, current liabilities are payable within ________ year(s), and long-term liabilities are payable more than ________ year(s) from the balance sheet date.
In most cases, current liabilities are payable within ________ year(s), and long-term liabilities are payable more than ________ year(s) from the balance...
Given a choice, most companies would prefer to report a liability as long-term rather than current because:
Given a choice, most companies would prefer to report a liability as long-term rather than current because:A) It may cause the firm to appear less risky...
Which of the following is not a reason why a company might prefer to report a liability as long-term rather than current?
Which of the following is not a reason why a company might prefer to report a liability as long-term rather than current?A) It may cause the firm to appear...
Wilson Inc. owns equipment for which it originally paid $70 million and has recorded accumulated depreciation on the equipment of $12 million. Due to adverse economic conditions, Wilson's management determined that it should assess whether an impairment should be recognized for the equipment. The estimated future cash flows to be provided by the equipment total $60 million, and its fair value at that point totals $50 million. Under these circumstances, Wilson:
Wilson Inc. owns equipment for which it originally paid $70 million and has recorded accumulated depreciation on the equipment of $12 million. Due to...
Leonard's Jewelry owns a patent with a carrying value of $50 million. Due to adverse economic conditions, Leonard's management determined that it should assess whether an impairment should be recognized for the patent. The estimated future cash flows to be provided by the patent total $43 million, and its fair value at that point totals $35 million. Under these circumstances, Leonard:
Leonard's Jewelry owns a patent with a carrying value of $50 million. Due to adverse economic conditions, Leonard's management determined that it should...
Based on the above information, what is the total amount of impairment loss that C-Stop should record at year-end?
C-Stop reports the following information at year-end:EstimatedBook Value Cash Flows Fair ValueBuilding $ 500,000 $ 380,000 $ 360,000Patent $ 35,000 $...
What amount of loss should be recorded due to asset impairment?
Maple Inc. has the following information regarding its assets:EstimatedBook Value Cash Flows Fair ValueEquipment $ 35,000 $ 30,000 $ 28,000Building $...
Based on the information below, what amount of impairment loss would be reported?
Based on the information below, what amount of impairment loss would be reported?EstimatedAsset Fair value cash flows Book valueEquipment $ 25,000 $ 36,000...
The amount of impairment loss is the excess of book value over:
The amount of impairment loss is the excess of book value over:A) Carrying value.B) Future cash flows.C) Fair value.D) Future revenues.Answer:...
Accounting for impairment losses:
Accounting for impairment losses:A) Involves a two-step process to first test for impairment and then record the loss.B) Applies only to depreciable,...
In testing for impairment of an operational asset, an impairment loss has occurred if the:
In testing for impairment of an operational asset, an impairment loss has occurred if the:A) Asset's book value exceeds the present value of its expected...
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's asset turnover?
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income...
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%. What is Hidden Valley's net income for the year?
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return...
Recognition of impairment for long-term assets is required if book value exceeds:
Recognition of impairment for long-term assets is required if book value exceeds:A) Original cost.B) Fair value.C) Future cash flows.D) Accumulated depreciation.Answer:...
The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year, respectively. Net income and sales for the year are $85,000 and $1,700,000, respectively. What is Purdy's asset turnover?
The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year, respectively. Net income and sales...
The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year, respectively. The return on assets for the year is 20%. What is Purdy's net income for the year?
The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year, respectively. The return on assets...
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's return on assets?
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income...
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's profit margin?
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income...
The balance sheet of Paradise Pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and sales for the year are $240,000 and $2,000,000, respectively. What is Paradise Pizza's return on assets?
The balance sheet of Paradise Pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and...
The balance sheet of Paradise Pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and sales for the year are $240,000 and $2,000,000, respectively. What is Paradise Pizza's profit margin?
The balance sheet of Paradise Pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and...
The balance sheet of Paradise Pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and sales for the year are $240,000 and $2,000,000, respectively. What is Paradise Pizza's asset turnover?
The balance sheet of Paradise Pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and...
The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year, respectively. Net income and sales for the year are $85,000 and $1,700,000, respectively. What is Purdy's return on assets?
The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year, respectively. Net income and sales...
The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year, respectively. Net income and sales for the year are $85,000 and $1,700,000, respectively. What is Purdy's profit margin?
The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year, respectively. Net income and sales...
Oregon Adventures purchased equipment for $80,000. They sold the equipment at the end of three years for $45,000. If the expected useful life of the equipment was seven years with a residual value of $10,000, and they use straight-line depreciation, which of the following is true regarding the entry to record the sale of the equipment?
Oregon Adventures purchased equipment for $80,000. They sold the equipment at the end of three years for $45,000. If the expected useful life of the equipment...
Gains on the sale of long-term assets for cash:
Gains on the sale of long-term assets for cash:A) Are the excess of the book value over the cash received.B) Are recorded as a debit.C) Are reported on...
Losses on the sale of long-term assets for cash:
Losses on the sale of long-term assets for cash:A) Are the excess of the book value over the cash received.B) Are recorded as a credit.C) Are reported...
Return on assets is calculated as:
Return on assets is calculated as:A) Net Income divided by total assets.B) Net Income divided by average total assets.C) Net Income divided by ending...
Return on assets is equal to:
Return on assets is equal to:A) Profit margin plus asset turnover.B) Profit margin minus asset turnover.C) Profit margin times asset turnover.D) Profit...
Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated by the straight-line method and was sold at the end of the third year of use. For what amount should Alliance record the gain or loss if the equipment is sold for $25,000?
Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated...
Career Services, Incorporated sold some office equipment for $52,000 on December 31, 2021. The journal entry to record the sale would include which of the following if the original cost of the equipment was $80,000 with a residual value of $5,000 and a useful life of 10 years? Assume the machine was purchased on January 1, 2018, and depreciated using the straight-line method.
Career Services, Incorporated sold some office equipment for $52,000 on December 31, 2021. The journal entry to record the sale would include which of...
ABO purchased a truck at the beginning of 2021 for $140,000. They sold the truck at the end of 2022 for $95,000. If the expected useful life of the truck was six years with a residual value of $20,000 and ABO uses straight-line depreciation, which of the following is true regarding the entry to record the sale of the truck?
ABO purchased a truck at the beginning of 2021 for $140,000. They sold the truck at the end of 2022 for $95,000. If the expected useful life of the truck...
On January 1, 2020, a company purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2022, the company sold the truck for $30,000. What amount of gain or loss should the company record on December 31, 2022?
On January 1, 2020, a company purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of...
On January 1, 2020, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2021, Jacob Inc. sold the truck for $43,000. What amount of gain or loss should Jacob Inc. record on December 31, 2021?
On January 1, 2020, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of...
On January 1, 2021, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. Assume the truck was totaled in an accident on December 31, 2022. What amount of gain or loss should Jacob Inc. record on December 31, 2022?
On January 1, 2021, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of...
On January 1, 2021, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2022, the truck was exchanged for a new truck valued at $60,000. Jacob received a trade allowance of $35,000 on the exchange with the remaining $25,000 paid in cash. What amount of gain or loss should Jacob Inc. record on December 31, 2022?
On January 1, 2021, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of...
Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated by the straight-line method and was sold at the end of the second year of use. For what amount should Alliance record the gain or loss if the equipment is sold for $65,000?
Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated...
Equipment was sold for $50,000. The equipment was originally purchased for $85,000. At the time of the sale, the equipment had accumulated depreciation of $30,000. Calculate the gain or loss to be recorded on the sale of equipment.
Equipment was sold for $50,000. The equipment was originally purchased for $85,000. At the time of the sale, the equipment had accumulated depreciation...
Equipment was sold for $40,000. The equipment was originally purchased for $75,000. At the time of the sale, the equipment had accumulated depreciation of $50,000. Calculate the gain or loss to be recorded on the sale of equipment.
Equipment was sold for $40,000. The equipment was originally purchased for $75,000. At the time of the sale, the equipment had accumulated depreciation...
A company purchased a computer that cost $10,000. It had an estimated useful life of five years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the fourth year of use for $3,000 cash. The company should record:
A company purchased a computer that cost $10,000. It had an estimated useful life of five years and no residual value. The computer was depreciated by...
A company purchased a computer that cost $10,000. It had an estimated useful life of five years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the second year of use for $5,000 cash. The company should record:
A company purchased a computer that cost $10,000. It had an estimated useful life of five years and no residual value. The computer was depreciated by...
Berry Co. purchases a patent on January 1, 2021, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming Berry Co. uses the straight-line method, what is the carrying value of the patent on December 31, 2022?
Berry Co. purchases a patent on January 1, 2021, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming...
Charco purchased a franchise from Burger Master on January 1, 2021, for $240,000. The franchise agreement allows Charco to sell hamburgers and other related food items using the Burger Master name for a period of six years. Assuming Charco uses the straight-line method, what is the amortization expense for the year ended December 31, 2021?
Charco purchased a franchise from Burger Master on January 1, 2021, for $240,000. The franchise agreement allows Charco to sell hamburgers and other related...
Charco purchased a franchise from Burger Master on January 1, 2021, for $240,000. The franchise agreement allows Charco to sell hamburgers and other related food items using the Burger Master name for a period of 6 years. Assuming Charco uses the straight-line method, what is the carrying value of the franchise on December 31, 2022?
Charco purchased a franchise from Burger Master on January 1, 2021, for $240,000. The franchise agreement allows Charco to sell hamburgers and other related...
When a company reports a gain on the sale of a depreciable asset, which of the following is always true?
When a company reports a gain on the sale of a depreciable asset, which of the following is always true?A) The company sold the asset for more than its...
When a company reports a loss on the sale of a depreciable asset, which of the following is always true?
When a company reports a loss on the sale of a depreciable asset, which of the following is always true?A) The company sold the asset for less than accumulated...
Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years with no residual value. Assume the company uses the straight-line method to record amortization. What is the amortization expense for the first year?
Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years...
Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years with no residual value. Assume the company uses the straight-line method to record amortization. What is the carrying value of the copyright at the end of the first year?
Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years...
Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years with no residual value. Assume the company uses the straight-line method to record amortization. What is the carrying value of the copyright at the end of the second year?
Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years...
Berry Co. purchases a patent on January 1, 2021, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming Berry Co. uses the straight-line method, what is the amortization expense for the year ended December 31, 2022?
Berry Co. purchases a patent on January 1, 2021, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming...
Which of the following amortization methods is most commonly used?
Which of the following amortization methods is most commonly used?A) Straight-line.B) Double-declining-balance.C) Activity-based.D) A combination of methods.Answer:...
Which of the following statements is true regarding the amortization of intangible assets?
Which of the following statements is true regarding the amortization of intangible assets?A) The expected residual value of most intangible assets is...
Which of the following intangible assets has an indefinite useful life?
Which of the following intangible assets has an indefinite useful life?A) Patents.B) Copyrights.C) Franchises.D) Goodwill.Answer:...
A company purchased equipment at the beginning of 2021 for $500,000. The equipment is depreciated on a straight-line basis with an estimated useful life of nine years and a $50,000 residual value. At the beginning of 2024, the company revised the equipment's useful life to a total of seven years (four more years) because of changing customer demand. The company also revised the expected residual value to $30,000. What depreciation expense would the company record for the year 2024 on this equipment?
A company purchased equipment at the beginning of 2021 for $500,000. The equipment is depreciated on a straight-line basis with an estimated useful life...
A company purchased equipment at the beginning of 2021 for $650,000. In 2021 and 2022, the company depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $10,000 residual value. At the beginning of 2023, due to changes in technology, the company revised the useful life to a total of six years (four more years) with zero residual value. What depreciation expense would the company record for the year 2023 on this equipment?
A company purchased equipment at the beginning of 2021 for $650,000. In 2021 and 2022, the company depreciated the asset on a straight-line basis with...
Which of the following intangible assets is not amortized?
Which of the following intangible assets is not amortized?A) Patents.B) Copyrights.C) Franchises.D) Goodwill.Answer:...
Which of the following intangible assets may or may not be amortized depending on whether it has a finite or an indefinite life?
Which of the following intangible assets may or may not be amortized depending on whether it has a finite or an indefinite life?A) Patents.B) Copyrights.C)...
A company purchased a piece of equipment for $50,000 and the equipment has an expected useful life of five years. Its residual value is estimated to be $4,000. Assuming the company uses the double-declining-balance depreciation method, what is the depreciation expense for the equipment for the second full year?
A company purchased a piece of equipment for $50,000 and the equipment has an expected useful life of five years. Its residual value is estimated to be...
During the first two years, Supplies, Inc. drove the company truck 15,000 and 22,000 miles, respectively, to deliver merchandise to its customers. The company originally purchased the truck for $175,000. If the truck has an estimated life of 10 years or 300,000 miles, and an estimated residual value of $25,000, what amount of depreciation expense should Supplies, Inc. record in the second year using the activity-based method?
During the first two years, Supplies, Inc. drove the company truck 15,000 and 22,000 miles, respectively, to deliver merchandise to its customers. The...
On January 1, 2021, a company purchased a machine that cost $500,000 and had a residual value of $50,000. The machine is expected to produce 360,000 units and is estimated to last 10 years. If 25,000 units were produced in 2022 and 35,000 were produced in 2023, what amount of accumulated depreciation is reported at the end of 2022 using the activity-based method (rounded to the nearest whole dollar if necessary)?
On January 1, 2021, a company purchased a machine that cost $500,000 and had a residual value of $50,000. The machine is expected to produce 360,000 units...
A company purchased a tractor on January 1, 2021, for $65,000. The tractor's useful life is estimated to be 30,000 miles with an expected residual value of $5,000. If the company used the tractor 5,000 miles in 2021 and 3,000 miles in 2022, what is the balance for accumulated depreciation at the end of 2022 using the activity-based method?
A company purchased a tractor on January 1, 2021, for $65,000. The tractor's useful life is estimated to be 30,000 miles with an expected residual value...
A company purchased a computer system at a cost of $40,000. The estimated useful life is 10 years, and the estimated residual value is $5,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year?
A company purchased a computer system at a cost of $40,000. The estimated useful life is 10 years, and the estimated residual value is $5,000. Assuming...
Calculate depreciation expense for the year ended December 31, 2022, using straight-line depreciation.
Best Construction purchased a delivery truck on June 1, 2021. The following information is available:Cost = $90,000Estimated service life = 5 yearsEstimated...
Calculate the balance of accumulated depreciation for the year ended December 31, 2022, using straight-line depreciation.
Best Construction purchased a delivery truck on June 1, 2021. The following information is available:Cost = $90,000Estimated service life = 5 yearsEstimated...
A company purchased office equipment for $130,000 on Mar, 2021. The estimated service life is four years with a $40,000 residual value. The company records partial-year depreciation based on the number of months in service. The balance of accumulated depreciation for the year ended December 31, 2022, using straight-line depreciation, is:
A company purchased office equipment for $130,000 on Mar, 2021. The estimated service life is four years with a $40,000 residual value. The company records...
A company purchased a delivery truck on January 1, 2021, for $65,000. The truck has an estimated life of 10 years and an estimated residual value of $5,000. If the company uses straight-line depreciation, what would be the book value after four years?
A company purchased a delivery truck on January 1, 2021, for $65,000. The truck has an estimated life of 10 years and an estimated residual value of $5,000....
A company purchased a delivery truck on January 1, 2021, for $100,000. The truck has an estimated life of 10 years and an estimated residual value of $10,000. If the company uses double-declining balance, what would be the book value of the truck after two years?
A company purchased a delivery truck on January 1, 2021, for $100,000. The truck has an estimated life of 10 years and an estimated residual value of...
A company purchased a machine for $100,000 on October 1, 2021. The estimated service life is 10 years with a $10,000 residual value. The company records partial-year depreciation based on the number of months in service. Depreciation expense for the year ended December 31, 2021, using straight-line depreciation, is:
A company purchased a machine for $100,000 on October 1, 2021. The estimated service life is 10 years with a $10,000 residual value. The company records...
A company purchased equipment for $240,000 on Mar, 2021. The estimated service life is six years with a $60,000 residual value. The company records partial-year depreciation based on the number of months in service. Depreciation expense for the year ended December 31, 2021, using straight-line depreciation, is:
A company purchased equipment for $240,000 on Mar, 2021. The estimated service life is six years with a $60,000 residual value. The company records partial-year...
Best Construction purchased a delivery truck on June 1, 2021. The following information is available:
Best Construction purchased a delivery truck on June 1, 2021. The following information is available:Cost = $90,000Estimated service life = 5 yearsEstimated...
A building was purchased for $50,000. The asset has an expected useful life of six years and depreciation expense each year is $8,000 using the straight-line method. What is the residual value of the building?
A building was purchased for $50,000. The asset has an expected useful life of six years and depreciation expense each year is $8,000 using the straight-line...
A company purchases a piece of equipment on January 1, 2021, for $70,000 and the equipment has an expected useful life of five years. Its residual value is estimated to be $10,000. Assuming the company uses the straight-line depreciation method, what should be the balance in accumulated depreciation for the equipment as of December 31, 2023 (three years later)?
A company purchases a piece of equipment on January 1, 2021, for $70,000 and the equipment has an expected useful life of five years. Its residual value...
Equipment with a cost of $390,000 and estimated residual value of $60,000 is expected to have a useful life of 30,000 hours. During August, the equipment was operated 700 hours. What amount should be recorded as depreciation expense for the month?
Equipment with a cost of $390,000 and estimated residual value of $60,000 is expected to have a useful life of 30,000 hours. During August, the equipment...
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $5,000 at the end of five years. Using the double-declining balance method, depreciation expense for 2022 would be:
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value...
Using the double-declining balance method, the book value at December 31, 2022, would be:
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year life, with a residual value of $5,000...
A machine has a cost of $15,000, an estimated residual value of $3,000, and an estimated useful life of four years. The machine is being depreciated on a straight-line basis. At the end of the second year, what amount will be reported for accumulated depreciation?
A machine has a cost of $15,000, an estimated residual value of $3,000, and an estimated useful life of four years. The machine is being depreciated on...
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $5,000 at the end of five years. Using the straight-line method, the book value at December 31, 2021, would be:
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value...
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $5,000 at the end of five years. Using the straight-line method, depreciation expense for 2022 and the book value at December 31, 2022, would be:
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value...
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $5,000 at the end of five years. Using the double-declining balance method, depreciation expense for 2021 would be:
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value...
Which of the following is considered a "contra" account?
Which of the following is considered a "contra" account?A) Deferred Revenue.B) Goodwill.C) Accumulated Depreciation.D) Cost of Goods Sold.Answer:...
The factors used to compute depreciation expense are an asset's:
The factors used to compute depreciation expense are an asset's:A) Cost, residual value, and physical life.B) Cost, residual value, and service life.C)...
The depreciable cost used in calculating depreciation expense is:
The depreciable cost used in calculating depreciation expense is:A) Its service life.B) The amount allowable under tax depreciation methods.C) The difference...
Which depreciation method generally will result in the greatest amount of depreciation expense in the first year of the asset's life?
Which depreciation method generally will result in the greatest amount of depreciation expense in the first year of the asset's life?A) Straight-line.B)...
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $5,000 at the end of five years. Using the straight-line method, depreciation expense for 2021 would be:
Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value...
The replacement of a major component increased the productive capacity of equipment from 10 units per hour to 18 units per hour. The expenditure for the replacement component should be debited to:
The replacement of a major component increased the productive capacity of equipment from 10 units per hour to 18 units per hour. The expenditure for the...
Which of the following subsequent expenditures would not be capitalized?
Which of the following subsequent expenditures would not be capitalized?A) Unsuccessful legal defense of intangible assets.B) Additions.C) Improvements.D)...
Which of the following statements accurately describes depreciation?
Which of the following statements accurately describes depreciation?I. Depreciation is used to allocate the cost of the asset over periods benefited.II....
Which one of the following regarding the book value of an asset is correct?
Which one of the following regarding the book value of an asset is correct?A) It is the fair value of the asset if the asset is sold.B) It reflects the...
The cost of an engine tune-up is an example of which of the following expenditures after acquisition?
The cost of an engine tune-up is an example of which of the following expenditures after acquisition?A) Ordinary repairs and maintenance.B) Additions.C)...
Which of the following subsequent expenditures would not be capitalized?
Which of the following subsequent expenditures would not be capitalized?A) Ordinary repairs and maintenance.B) Additions.C) Improvements.D) Successful...
The cost of replacing a major component on a piece of equipment is an example of:
The cost of replacing a major component on a piece of equipment is an example of:A) Repairs and maintenance.B) Improvements.C) Additions.D) An expenditure...
Adding a refrigeration unit to a delivery truck that previously did not have this capability is an example of:
Adding a refrigeration unit to a delivery truck that previously did not have this capability is an example of:A) Repairs and maintenance.B) Additions.C)...
The purchase of a new cooling system for $150,000 to upgrade an office building owned by the company would be accounted for as:
The purchase of a new cooling system for $150,000 to upgrade an office building owned by the company would be accounted for as:A) Goodwill.B) An addition...
Woods Company made an ordinary repair to a delivery truck at a cost of $500. Woods' accountant debited the asset account, Equipment. Was this treatment an error, and if so, what will be the effect on Woods' financial statements?
Woods Company made an ordinary repair to a delivery truck at a cost of $500. Woods' accountant debited the asset account, Equipment. Was this treatment...
Lake would record goodwill of:
Lake Incorporated purchased all of the outstanding stock of Huron Company, paying $850,000 cash. Lake assumed all of the liabilities. Book values and...
The company believes that these efforts have increased the fair value of the entire company by $325,000. How much goodwill can the company recognize at the end of the year associated with these expenditures?
A company has the following expenditures during the year.Advertising $ 100,000Employee training 80,000Customer outreach and consultation 50,000The company...
Which of the following subsequent expenditures would be capitalized?
Which of the following subsequent expenditures would be capitalized?A) Ordinary repair.B) Costs that increase the service life of an asset.C) Routine...
Which of the following subsequent expenditures would be capitalized?
Which of the following subsequent expenditures would be capitalized?A) Ordinary repairs and maintenance.B) Additions.C) Improvements.D) Additions and...
How much goodwill did Northern pay for acquiring Southern?
Northern purchased the entire business of Southern including all its assets and liabilities for $600,000. Below is information related to the two companies:Northern...
How much goodwill would be recorded if Torretta Holdings purchases Vikings, assuming its liabilities, for $635,000?
Vikings Inc. reports the following amounts:Book Value Fair ValueAssets $ 400,000 $ 500,000Liabilities 45,000 45,000Net income 25,000How much goodwill...
In accounting, goodwill
In accounting, goodwillA) Is never recorded.B) May be recorded when a company's level of net income exceeds the industry average.C) Must be expensed in...
Which of the following is true concerning goodwill?
Which of the following is true concerning goodwill?A) Goodwill can never be recorded.B) Goodwill is recorded when a company is purchased for more than...
The balance sheet of Cattleman's Steakhouse shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is $90,000 and the fair value of its liabilities is $15,000. Longhorn paid Cattleman's $95,000 to acquire all of its assets and liabilities. Longhorn should record goodwill on this purchase of:
The balance sheet of Cattleman's Steakhouse shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is $90,000 and the fair value...
Aspen, Inc. developed a new horse transport device and incurred research and development costs of $250,000. Rather than continue with its own research, Aspen decided to purchase a patent for a similar design from Vail, Inc. for $350,000. What are the total assets and expenses for these developments?
Aspen, Inc. developed a new horse transport device and incurred research and development costs of $250,000. Rather than continue with its own research,...
Research and development costs should be capitalized when the:
Research and development costs should be capitalized when the:A) Future benefit is probable and the amount can be reasonably estimated.B) Future benefit...
Bio-Lab Pharmaceuticals was engaged in a project to develop a new drug that would dramatically shorten the recovery period of influenza. The project cost the company $150,000 before Bio-Lab abandoned the project due to the slim possibility to gain FDA approval. Bio-Lab then spent $300,000 on another project to develop a shot that would achieve the same goal, and the company is confident in gaining FDA approval and in generating profits from the shot. What amount would be expensed for these projects?
Bio-Lab Pharmaceuticals was engaged in a project to develop a new drug that would dramatically shorten the recovery period of influenza. The project cost...
Goodwill is:
Goodwill is:A) Amortized over the greater of its estimated life or forty years.B) Only recorded by the seller of a business.C) The value of a business...
In accounting, goodwill
In accounting, goodwillA) May be recorded whenever a company achieves a level of net income that exceeds the industry average.B) Is amortized over its...
Research and development costs should be:
Research and development costs should be:A) Expensed in the period incurred.B) Expensed in the period they are determined to be unsuccessful.C) Deferred...
Morgan Pharmaceutical spends $50,000 this year in research and development for a new drug to cure liver damage. By the end of the year, management feels confident that the new drug will gain FDA approval and lead to higher future sales. What impact will the $50,000 spending have on this year's financial statements?
Morgan Pharmaceutical spends $50,000 this year in research and development for a new drug to cure liver damage. By the end of the year, management feels...
Suppose a company spends $100,000 on research and development in 2021. As a result of the products developed, additional revenue is generated over the next five years totaling $600,000. When is the cost of the research and development in 2021 recognized as an expense?
Suppose a company spends $100,000 on research and development in 2021. As a result of the products developed, additional revenue is generated over the...
Suppose a company spends $100,000 in the current year to research and develop a safety device for motorcycles. By the end of the year, the company estimates that the new safety device has an 80% chance of generating $300,000 in revenues from sales to customers over the next five years. For what amount would Research and Development Expense be reported in the current year?
Suppose a company spends $100,000 in the current year to research and develop a safety device for motorcycles. By the end of the year, the company estimates...
The legal life of a patent is:
The legal life of a patent is:A) Forty years.B) Twenty years.C) Life of the inventor plus fifty years.D) Indefinite.Answer:...
An exclusive 20-year right to manufacture a product or to use a process is a:
An exclusive 20-year right to manufacture a product or to use a process is a:A) Patent.B) Copyright.C) Trademark.D) Franchise.Answer:...
The exclusive right to benefit from a creative work, such as a film, is a:
The exclusive right to benefit from a creative work, such as a film, is a:A) Patent.B) Copyright.C) Trademark.D) Franchise.Answer:...
A word, slogan, or symbol that distinctively identifies a company, product, or service is a:
A word, slogan, or symbol that distinctively identifies a company, product, or service is a:A) Patent.B) Copyright.C) Trademark.D) Franchise.Answer:...
The exclusive right to use another company's name and to sell its products within a specified geographical area is a:
The exclusive right to use another company's name and to sell its products within a specified geographical area is a:A) Patent.B) Copyright.C) Trademark.D)...
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