31) The production-volume variance A) only pertains to variable overhead costs. B) only pertains to fixed overhead costs. C) is not applicable in analysis of inventory costs. D) pertains to both fixed and variable overhead costs. E) equals the rate variance minus the efficiency variance. 32) Capacity cost is A) only an inventoriable cost. B) only a period cost. C) never amortized. […]
86.Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins. On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is: A.Accounts Receivable—A. […]
127.Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 20,000 shares authorized, 9,000 shares issued, and 8,000 shares of common stock outstanding. The journal entry to record the dividend payment is: A.Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000. B.Debit Common Dividends Payable $4,000; credit Cash $4,000. C.Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500. […]
41. Under U.S. GAAP, the classification of interest expense as an operating activity and dividends paid on common or preferred shares as a financing activity appears inconsistent to some observers as both are payments to suppliers of funds. Authoritative guidance requires the different treatments because A. interest is an expense in computing net income B. dividends represent a distribution of assets generated by net income not […]
189. Simpson Designers began operations on April 1, 2011. The financial statements for Simpson Designers are shown below for the month ended April 30, 2011 (the first month of operations). Determine the missing amounts for letters (a) through (o). Simpson DesignersIncome StatementFor the Month Ended April 30, 2011 Fees earned $27,000 Operating expenses: Wages expense $5,250 Rent expense (a) Supplies […]
141. Indicate whether each of the following represents an asset, liability, or owner’s equity item. 142. The accountant for Franklin Company prepared the following list of account balances from the company’s records for the year ended December 31, 2011: 143. The accountant for Franklin Company prepared the following list of account balances from the company’s records for the year ended December 31, 2011: 144. The accountant for Franklin […]
46.The salaries of employees who spend all their time working in one department are: A. Variable expenses. B. Indirect expenses. C. Direct expenses. D. Responsibility expenses. E. Unavoidable expenses. 47.A challenge in calculating the total costs and expenses of a department is: A. Determining the gross profit ratio. B. Assigning direct costs to the department. C. Allocating indirect expenses to the department. D. Determining the amount of sales of the department. E. Determining the […]
86.Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins. On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is: A. Accounts […]
71. Which of the following is the usual final step in the accounting cycle? A. Journalizing transactions. B. Preparing an adjusted trial balance. C. Preparing a post-closing trial balance. D. Preparing the financial statements. E. Preparing a work sheet. 72. Each letter below contains three of the steps found in the accounting cycle. Which presents the given steps in the proper sequence, first to last? A. Adjust, analyze transactions, close. […]
ESSAY. Write your answer in the space provided or on a separate sheet of paper. 87) Better Battery has been in the battery renewal business for four years. It rents a building but owns all of its equipment. All employees are paid a fixed salary except for the busy season (April – June), when temporary help is hired by the hour. Utilities and other […]
111. When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with the following entry (assuming the exchange was considered to have commercial substance):
A. debit Machinery and Accumulated Depreciation; credit Machinery, Cash, and Gain on Disposal
B. debit Machinery and Accumulated Depreciation; credit Machinery and Cash
C. debit Cash and Machinery; credit Accumulated Depreciation
D. debit Cash and Machinery; credit Accumulated Depreciation and Machinery
112. When a company exchanges machinery and receives a trade-in allowance less than the book value, this transaction would be recorded with the following entry:
A. debit Machinery and Accumulated Depreciation; credit Machinery and Cash
B. debit Cash and Machinery; credit Accumulated Depreciation
C. debit Cash and Machinery; credit Accumulated Depreciation and Machinery
D. debit Machinery, Accumulated Depreciation, and Loss on Disposal; credit Machinery and Cash
113. On December 31, Strike Company has decided to discard one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The following will be included in the entry to record the disposal.
A. Accumulated Depreciation Dr. $215,000
B. Loss on Disposal of Asset Dr. $185,000
C. Equipment Cr. $215,000
D. Gain on Disposal of Asset Cr. $30,000
114. On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $30,000. What is the amount of the gain or loss on this transaction?
A. Gain of $30,000
B. Loss of $30,000
C. No gain or loss
D. Cannot be determined
115. On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $20,000. What is the amount of the gain or loss on this transaction?
A. Gain of $20,000
B. Loss of $10,000
C. No gain or loss
D. Cannot be determined
116. On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $55,000. What is the amount of the gain or loss on this transaction?
A. Cannot be determined
B. No gain or loss
C. Gain of $25,000
D. Gain of $55,000
117. On December 31, Strike Company has decided to trade-in one of its batting cages for another one that has a cost of $500,000. The seller of the batting cage is willing to allow a trade-in amount of $11,000. The initial cost of the old equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction?
A. Loss of $11,000
B. Gain of $11,000
C. Loss of $19,000
D. No loss or gain will be recorded.
118. When a company replaces a component of property, plant and equipment, which statement below does not account for one of the steps in the process?
A. book value of the replaced component is written off to depreciation expense
B. the asset cost of the replaced component is credited
C. any cost to remove the old component is charged to expense
D. the identifiable direct costs associated with the new component are capitalized
119. The accumulated depletion account is
A. an expense account
B. an intangible asset account
C. reported on the income statement as other expense
D. reported on the balance sheet as a deduction from the cost of the mineral deposit
120. The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called
A. depletion
B. deferral
C. amortization
D. depreciation
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