Question :
131. The Crafter Company had the following assets and liabilities as : 1239251
131. The Crafter Company had the following assets and liabilities as of December 31, 2012:
ASSETS
Cash
$35,000
Accounts receivable
15,000
Inventory
30,000
Equipment
50,000
LIABILITIES
Current portion of long-term debt
10,000
Accounts payable
2,000
Long-term debt
25,000
Determine the quick ratio for the end of the year (rounded to one decimal point). A. 6.7B. 13.0C. 4.2D. 3.5
132. Garrett Company sells merchandise with a one year warranty. In 2012, sales consisted of 3,500 units. It is estimated that warranty repairs will average $15 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013. In the 2012 income statement, Garrett should show warranty expense of A. $36,750B. $15,750C. $52,500D. $0
133. Elgin Company sells merchandise with a one year warranty. Sales consisted of 2,500 units in 2012 and 2,000 units in 2013. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013 for the 2012 sales. Similarly, 30% of repairs will be made in 2013 and 70% in 2014 for the 2013 sales. In the 2013 income statement, how much of the warranty expense shown will be due to 2012 sales? A. $7,500B. $17,500C. $25,000D. $0
134. The cost of a product warranty should be included as an expense in the A. period the cash is collected for a product sold on accountB. future period when the cost of repairing the product is paidC. period of the sale of the productD. future period when the product is repaired or replaced
135. Power Company sells merchandise with a one year warranty. In 2012, sales consisted of 1,600 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013. In the 2012 income statement, Power should show warranty expense of A. $4,800B. $11,200C. $16,000D. $0
136. During May, Blast sold 650 portable CD players for $50 each. Each CD player cost Blast $25 to purchase and carried a one-year warranty. If 10 percent of the goods sold typically need to be replaced over the warranty period, what amount should Blast debit Product Warranty Expense for in May? A. $3,250B. $1,625C. $ 650D. $1,300
137. Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts? A. cost conceptB. business entity conceptC. matching conceptD. materiality concept
138. The Crafter Company had the following assets and liabilities as of December 31, 2012:
ASSETS
Cash
$28,000
Accounts receivable
15,000
Inventory
20,000
Equipment
50,000
LIABILITIES
Current portion of long-term debt
10,000
Accounts payable
2,000
Long-term debt
25,000
Determine the quick ratio for the end of the year (rounded to one decimal point). A. 5.3B. 3.6C. 3.3D. 2.3
139. The journal entry a company uses to record the estimated accrued product warranty liability is A. debit Product Warranty Expense; credit Product Warranty PayableB. debit Product Warranty Payable; credit CashC. debit Product Warranty Expense; credit CashD. debit Product Warranty Payable; credit Product Warranty Expense
140. Which of the following is the most desirable quick ratio? A. 2.20B. 1.80C. 1.95D. 1.50
141. According to a summary of the payroll of Scotland Company, $450,000 was subject to the 7.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (4.2%) and federal (0.8%) unemployment taxes. The journal entry to record accrued salaries would include: A. a debit to Salary Payable of $313,000B. a credit to Salary Payable of $363,000C. a debit to Salary Expense of $363,000D. a credit to Salary Expense of $313,000
142. According to a summary of the payroll of Scotland Company, $450,000 was subject to the 7.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (4.2%) and federal (0.8%) unemployment taxes. The journal entry to record accrued salaries would include: A. a debit to Salary Payable of $450,000B. a credit to Salary Payable of $500,000C. a debit to Salary Expense of $500,000D. a credit to Salary Expense of $450,000
143. According to a summary of the payroll of Scotland Company, $450,000 was subject to the 7.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (4.2%) and federal (0.8%) unemployment taxes. The journal entry to record accrued payroll taxes would include: A. a debit to SUTA Payable of $630B. a debit to SUTA Payable of $18,900C. a credit to SUTA Payable of $630D. a credit to SUTA Payable of $18,900
