121. A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 4% stock dividend on a date when the market price was $12 a share. What is the amount transferred from the Retained Earnings account to Paid-in Capital accounts as a result of the stock dividend? A. $12,800 B. $19,200 C. $32,000 D. $48,800 122. treasury stock shares are […]
196. 1) Bowen Company is completing its first year of operations on April 30, 2012. Reconstruct the entries for the year ended April 30, 2012 from the T accounts below. Record them as follows: A – L Journal Entries M- R Adjusting Journal Entries 2) Prepare the income statement, retained earnings statement, and classified balance sheet from the T […]
161. Shown below is the stockholders’ equity section of Powell’s balance sheet at December 31, 2009: In 2010, the following events occurred: Powell issued 2,500 shares of $2 par common stock as payment for legal services. Although Powell’s stock is not traded on any exchange, the agreed-upon value of the legal services is $80,000. Powell issued 4,500 shares of 6% cumulative preferred stock, $100 […]
31. Which is the correct order of the following steps in the accounting cycle? A. Prepare financial statements, journalize and post adjusting entries, journalize and post the closing entries, and prepare a post-closing trial balance. B. Prepare an unadjusted trial balance, journalize and post adjusting entries, journalize and post the closing entries, and prepare financial statements. C. Journalize and post adjusting entries, journalize and post the closing entries, […]
192.Stonehurst Corporation is authorized to issue 100,000 shares of $5 stated value common stock and 2,000 shares of $100 par value, 6 percent preferred stock. Prepare entries in journal form without explanations to record the following transactions: July 15 Issued 1,000 shares of common stock to an attorney for a bill of $7,000 in connection with the organization of the corporation. […]
111. Given the following information, determine the cost of goods sold at December 31 using the LIFO perpetual inventory method. December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units […]
41. Roy DeSoto earns a regular hourly salary of $24.50. He is paid time-and-a-half for all hours in excess of 40 in the week. For the week ended March 8, 2013, he worked a total of 50 hours. His gross wages year to date, prior to his March 8, paycheck, are $11,980. Social Security Tax is 6.2%, Medicare Tax is 1.45%, federal unemployment tax […]
81. Non-cash financing and investing activities A. must be reported in the notes to the financial statements. B. are not separately disclosed within the financial statements. C. are disclosed in a separate schedule as a supplement to the statement of cash flows. D. are reported as cash flows because of their significance. 82. A company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares […]
10.2 Understand the various methods of cost estimation and use historical data to predict future costs. 1) The account analysis method classifies cost accounts with respect to the identified cost driver. 2) All of the following are approaches to cost estimation EXCEPT A) the account analysis method. B) the conference method. C) the flexible cost analysis method. D) the industrial engineering method. […]
31. Which of the following is a drawback of an industrial system based on unilateral control by the management? A. Conflict resolution sacrifices workers’ rights. B. Conflict resolution is expensive. C. Conflict resolution is slow. D. Conflict resolution is imposed by someone with much less firsthand knowledge of the circumstances. Unilateral control by management sacrifices workers’ rights. Extensive involvement of government and the courts can result in conflict […]
Multiple Choice Questions
66.A merchandiser:
A.Earns net income by buying and selling merchandise.
B.Receives fees only in exchange for services.
C.Earns profit from commissions only.
D.Earns profit from fares only.
E.Buys products from consumers.
67.Cost of goods sold:
A.Is another term for merchandise sales.
B.Is the term used for the expense of buying and preparing merchandise for sale.
C.Is another term for revenue.
D.Is also called gross margin.
E.Is a term only used by service firms.
68.A company has sales of $695,000 and cost of goods sold of $278,000. Its gross profit equals:
A.$(417,000).
B.$695,000.
C.$278,000.
D.$417,000.
E.$973,000.
69.A company has sales of $375,000 and its gross profit is $157,500. Its cost of goods sold equals:
A.$(217,000).
B.$375,000.
C.$157,500.
D.$217,500.
E.$532,500.
70.The following statements regarding gross profit are true except:
A.Gross profit is also called gross margin.
B.Gross profit less other operating expenses equals income from operations.
C.Gross profit is not calculated on the multiple-step income statement.
D.Gross profit must cover all operating expenses to yield a return for the owner of the business.
E.Gross profit equals net sales less cost of goods sold.
71.The following statements regarding merchandise inventory are true except:
A.Merchandise inventory is reported on the balance sheet as a current asset.
B.Merchandise inventory refers to products a company owns and intends to sell.
C.Merchandise inventory may include the costs of freight in and making them ready for sale.
D.Merchandise inventory appears on the balance sheet of a service company.
E.Purchasing merchandise inventory is part of the operating cycle for a business.
72.The following statements are true regarding the operating cycle of a merchandising company except:
A.The operating cycle begins with the purchase of merchandise.
B.The operating cycle is shortened by credit sales.
C.The operating cycle ends with the collection of cash from the sale of merchandise.
D.The operating cycle can vary in length among different merchandising companies.
E.The operating cycle sometimes involves accounts receivable.
73.Merchandise inventory:
A.Is a long-term asset.
B.Is a current asset.
C.Includes supplies the company will use in future periods.
D.Is classified with investments on the balance sheet.
E.Must be sold within one month.
74.The operating cycle for a merchandiser that sells only for cash moves from:
A.Purchases of merchandise to inventory to cash sales.
B.Purchases of merchandise to inventory to accounts receivable to cash sales.
C.Inventory to purchases of merchandise to cash sales.
D.Accounts receivable to purchases of merchandise to inventory to cash sales.
E.Accounts receivable to inventory to cash sales.
75.The current period's ending inventory is:
A.The next period's beginning inventory.
B.The current period's cost of goods sold.
C.The prior period's beginning inventory.
D.The current period's net purchases.
E.The current period's beginning inventory.
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