86. Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee’s […]

  21) Miniature Company sells stuffed tigers. Birtal Inc. manufactures many different stuffed animals. Miniature orders 20,800 tigers per year, 400 per week, at $15 per tiger. The manufacturer covers all shipping costs. Miniature earns 15% on its cash investments. The purchase-order lead time is 3 weeks. Miniature sells 310 tigers per week. The following data are available (based on management’s estimates):   Estimated ordering […]

    81. A publishing company records the subscriptions paid in advance by its customers in an account called Unearned Subscription Revenue. If the company fails to make the end-of-period adjusting entry to record the portion of the subscriptions that have been earned, one effect will be:  A. An overstatement of equity. B. An overstatement of liabilities. C. An understatement of assets. D. An understatement of liabilities. E. An overstatement of […]

11) The balance sheet of Rogers Company reports: accounts receivable (less allowance for doubtful accounts of $25,700), $695,500. Therefore Rogers Company’s gross accounts receivable must be $721,200.   12) Aging-of-accounts-receivable and percent-of-accounts receivable are both considered income-statement approaches in estimating uncollectible accounts.   13) If the allowance method of accounting for doubtful receivables is used, what account is credited in the entry to write off […]

  31) Renaud, Inc. had credit sales for the period of $85,000. The balance in Allowance for Doubtful Accounts is a debit of $817. What is the credit to Allowance for Doubtful Accounts if Renaud uses the aging  method to estimate uncollectible accounts and an aging of accounts receivable reflected an estimated  amount of uncollectible accounts of $6,342? A) $7,159 B) $5,525 C) $6,342 D) […]

  9.2   Multiple-Choice Questions 1) Which of the following describes the descriptive measure “median”? A) It is the center point of the data set, when the observations are ordered by magnitude. B) It is the average value calculated by adding all the observations and dividing by the number of observations. C) It is the average of the squared deviations of the observations from the mean. […]

  Answer the following questions using the information below:   Joni’s Kitty Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy Mouse product. Estimates for this order include: Direct materials $40,000; 500 direct manufacturing labor-hours at $20 per hour; and a 20% […]

    71. The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles   A. will increase net income in the period it is collected. B. will decrease net income in the period it is collected. C. does not affect net income in the period it is collected. D. requires a correcting entry for the period in which the account was […]

  91. The most widely used depreciation method is   A. straight-line B. double-declining-balance C. units-of-production D. units-of-production or double-declining-balance 92. Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined that the useful life should be shortened by 3 years and the residual value changed to […]

    31.Based on the income statements shown below, which division has the cost structure with the highest operating leverage?      A. Bottled Water.   B. Fruit Juices.   C. Soft Drinks.   D. The three divisions have identical operating leverage.     32.The following income statements are provided for two companies operating in the same industry  Assuming sales increase by $1,000, select the correct statement from the following:    A. Felix’s net […]