Questions from Financial Accounting

Q: The management of Muni Corp. is considering the effects of various

The management of Muni Corp. is considering the effects of various inventory costing methods on its financial statements and its income tax expense. Assuming that the price the company pays for invent...

Q: Farr Company reports net income of $90,000 in 2008

Farr Company reports net income of $90,000 in 2008. However, ending inventory was understated $5,000. What is the correct net income for 2008? What effect, if any, will this error have on total assets...

Q: Abbott’s Liquor Store uses a perpetual inventory system. Data for the

Abbott’s Liquor Store uses a perpetual inventory system. Data for the Texas Chardonnay include the following purchases: On June 1, Abbott’s sold 30 bottles, and o...

Q: Sherpers carries a special French wine that is popular with wine enthusiasts

Sherpers carries a special French wine that is popular with wine enthusiasts. Below is information relating to Sherper’s purchases of this wine during September. During the same mont...

Q: The cash records of Sugar Land Country Club (SLCC) show

The cash records of Sugar Land Country Club (SLCC) show the following four situations: 1. The June 30 bank reconciliation indicated that deposits in transit total $920. During July the general ledger...

Q: Sue Ernesto is the owner of Ernesto’s Pizza. Ernesto’s is operated

Sue Ernesto is the owner of Ernesto’s Pizza. Ernesto’s is operated strictly on a carryout basis. Customers pick up their orders at a counter where a clerk exchanges the pizza for cash. While at the co...

Q: The following control procedures are used at Sandwich Company for over-

The following control procedures are used at Sandwich Company for over-the-counter cash receipts. 1. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked attaché case in th...

Q: Selected transactions from the journal of Palm Tree Travel, Inc.

Selected transactions from the journal of Palm Tree Travel, Inc. are presented below. Instructions: (a) Post the transactions to T accounts. (b) Prepare a trial balance at August 31, 2008.

Q: The following control procedures are used in Morgan’s Fishing Excursions for cash

The following control procedures are used in Morgan’s Fishing Excursions for cash disbursements: 1. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner....

Q: Lisa Ceja is unable to reconcile the bank balance for her catering

Lisa Ceja is unable to reconcile the bank balance for her catering company on January 31. Lisa’s reconciliation is as follows: Cash balance per bank ………………………………………………………….. $3,660.20 Add: NSF check...