ACC 557 Week 4 Homework Solution ( It if the the Questions in the list)

Question 1

The income statement and balance sheet columns of Iron and Wine Company's worksheet reflect the following totals:

                Income Statement          Balance Sheet

                Dr.          Cr.          Dr.          Cr.

Totals    $72,000                $44,000                $60,000                   $88,000

The net income (or loss) for the period is                                              

Question 2

The income statement for the year 2018 of Fugazi Co. contains the following information:

•             Revenues $70,000

•             Expenses:

o             Salaries and Wages Expense $45,000

o             Rent Expense $12,000

o             Advertising Expense $10,000

o             Supplies Expense $6,000

o             Utilities Expense $2,500

o             Insurance Expense $2,000

o             Total expenses $77,500

•             Net income (loss) $ (7,500)

After all closing entries have been posted, the Income Summary account will have a balance of                   

Question 3

The steps in the preparation of a worksheet do not include                                          

Question 4

If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a                                 

Question 5

The information for preparing a trial balance on a worksheet is obtained from                                    

Question 6

The income statement for the year 2018 of Fugazi Co. contains the following information:

•             Revenues $70,000

•             Expenses:

o             Salaries and Wages Expense $45,000

o             Rent Expense $12,000

o             Advertising Expense $10,000

o             Supplies Expense $6,000

o             Utilities Expense $2,500

o             Insurance Expense $2,000

o             Total expenses $77,500

•             Net income (loss) $ (7,500)

The entry to close the revenue account includes a                                            

Question 7

The following selected account balances appear on the December 31, 2018 balance sheet of Superchunk Co.

•             Land (location of the office building) $150,000

•             Land (held for future use) $225,000

•             Office Building $800,000

•             Inventory $300,000

•             Equipment $675,000

•             Office Furniture $225,000

•             Accumulated Depreciation $640,000

What is the total amount of property, plant, and equipment that will be reported on the balance sheet?

Qestion 8

The income statement for the year 2018 of Fugazi Co. contains the following information:

•             Revenues $70,000

•             Expenses:

o             Salaries and Wages Expense $45,000

o             Rent Expense $12,000

o             Advertising Expense $10,000

o             Supplies Expense $6,000

o             Utilities Expense $2,500

o             Insurance Expense $2,000

o             Total expenses $77,500

•             Net income (loss) $ (7,500)

The entry to close the expense accounts includes a                                          

Question 9

On September 23, Sebadoh Company received a $350 check from Surfer Rosa Inc. for services to be performed in the future. The bookkeeper for Sebadoh Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should                                             

Question 10

Closing entries are made                                             

Question 11

Eneri Company's inventory records show the following data:

                Units     Unit Cost

Inventory, January 1       10,000   $9.20

Purchases: June 18          9,000     $8.00

Purchases: November 8                6,000     $7.00

A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. If the company uses FIFO, what is the gross profit for the period?                                    

Question 12

Delmar Company had beginning inventory of $90,000, ending inventory of $110,000, cost of goods sold of $600,000, and sales of $960,000. Delmar's days in inventory is:                                       

                Selected Answer:              

Question 13

As a result of a thorough physical inventory, Horace Company determined that it had inventory worth $320,000 at December 31, 2018. This count did not take into consideration the following facts: Herschel Consignment currently has goods worth $47,000 on its sales floor that belong to Horace but are being sold on consignment by Herschel. The selling price of these goods is $75,000. Horace purchased $22,000 of goods that were shipped on December 27, FOB destination, that will be received by Horace on January 3. Determine the correct amount of inventory that Horace should report.                                  

Question 14

Nick's Place recorded the following data:

 Units  

Date      Received              Sold       On Hand              Unit Cost

1/1 Inventory                                   600         $2.50

1/8 Purchased   1,000                    1,600     $3.00

1/12 Sold                            1,200     300        

The weighted average unit cost of the inventory at January 31 is:                                              

Question 15

Switzer, Inc. has 8 computers which have been part of the inventory for over two years. Each computer cost $600 and originally retailed for $900. At the statement date, each computer has a net realizable value of $400. How much loss should Switzer, Inc., record for the year?                                              

Question 16

Partridge Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows:

Date      Purchases           Sales

Jan. 14                   375 @ $14

Jan. 17   250 @ $10          

Jan. 25   250 @ $11          

Jan. 29                   260 @ $16

Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31.

The cost of the inventory at January 31, under the FIFO method is:                                           

Question 17

The manager of Brick Company is given a bonus based on income before income taxes. Net income, after taxes, is $11,200 for FIFO and $9,800 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?                                              

Question 18

Moroni Industries has the following inventory information.

July 1     Beginning Inventory       40 units at $120

July 5     Purchases           240 units at $112

July 14   Sale        160 units

July 21   Puchases             120 units at $115

July 30   Sale        140 units

Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis?                                               

Question 19

Netta Shutters has the following inventory information.

November 1       Inventory            30 units @ $8.00

November 8       Purchase             120 units @ $8.30

November 17     Purchase             60 units @ $8.40

November 25     Purchase             90 units @ $8.80

A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand. Assume a periodic inventory system is used. Assuming that the specific identification method is used and that ending inventory consists of 20 units from each of the three purchases and 30 units from the November 1 inventory, cost of goods sold is                                            

Question 20

In a period of inflation, the cost flow method that results in the lowest income taxes is the                                           

Question 21

During August, 2018, Baxter's Supply Store generated revenues of $60,000. The company's expenses were as follows: cost of goods sold of $36,000 and operating expenses of $4,000. The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000. Baxter's non-operating income (loss) for the month of August, 2015 is:                                               

Question 22

If a company has net sales of $700,000 and cost of goods sold of $455,000, the gross profit percentage is                                               

Question 23

Jake’s Market recorded the following events involving a recent purchase of merchandise:

•             Received goods for $60,000, terms 2/10, n/30.

•             Returned $1,200 of the shipment for credit.

•             Paid $300 freight on the shipment.

•             Paid the invoice within the discount period.

As a result of these events, the company’s inventory increased by                                            

Question 24

Costner’s Market recorded the following events involving a recent purchase of merchandise:

•             Received goods for $40,000, terms 2/10, n/30.

•             Returned $800 of the shipment for credit.

•             Paid $200 freight on the shipment.

•             Paid the invoice within the discount period.

As a result of these events, the company’s inventory                                      

Question 25

On November 2, 2018, Kasdan Company has cash sales of $6,000 from merchandise having a cost of $3,600. The entries to record the day's cash sales will include:                                             

Question 26

On July 9, Sheb Company sells goods on credit to Wooley Company for $5,000, terms 1/10, n/60. Sheb receives payment on July 18. The entry by Sheb on July 18 is:                                        

Question 27

Scott Company purchased merchandise with an invoice price of $3,000 and credit terms of 1/10, n/30. Assuming a 360 day year, what is the implied annual interest rate inherent in the credit terms?                                  

Question 28

Financial information is presented below:

•             Operating Expenses $90,000

•             Sales Returns and Allowances $26,000

•             Sales Discounts $12,000

•             Sales Revenue $300,000

•             Cost of Goods Sold $158,000

Gross profit would be                                    

Question 29

When the physical count of Rosanna Company inventory had a cost of $4,350 at year end and the unadjusted balance in Inventory was $4,500, Rosanna will have to make the following entry:                               

Question 30

During 2018, Parker Enterprises generated revenues of $90,000. The company's expenses were as follows: cost of goods sold of $45,000, operating expenses of $18,000 and a loss on the sale of equipment of $3,000. Parker's income from operations is   

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