Questions from Intermediate Accounting

Q: How does the acid-test ratio differ from the current ratio

How does the acid-test ratio differ from the current ratio? How are they similar?

Q: When should liabilities for each of the following items be recorded on

When should liabilities for each of the following items be recorded on the books of an ordinary business corporation? (a) Acquisition of goods by purchase on credit. (b) Officers’ salaries....

Q: BE13-1 Roley Corporation uses a periodic inventory system and the

BE13-1 Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $60,000 of inventory, terms 2/10, n/30, FOB shipping poi...

Q: Under what conditions is an employer required to accrue a liability for

Under what conditions is an employer required to accrue a liability for sick pay? Under what conditions is an employer permitted but not required to accrue a liability for sick pay?

Q: Upland Company borrowed $40,000 on November 1, 2014

Upland Company borrowed $40,000 on November 1, 2014, by signing a $40,000, 9%, 3-month note. Prepare Upland’s November 1, 2014, entry; the December 31, 2014, annual adjusting entry; and the February 1...

Q: Takemoto Corporation borrowed $60,000 on November 1, 2014

Takemoto Corporation borrowed $60,000 on November 1, 2014, by signing a $61,350, 3-month, zero-interest-bearing note. Prepare Takemoto’s November 1, 2014, entry; the December 31, 2014, annual adjustin...

Q: Sport Pro Magazine sold 12,000 annual subscriptions on August 1

Sport Pro Magazine sold 12,000 annual subscriptions on August 1, 2014, for $18 each. Prepare Sport Pro’s August 1, 2014, journal entry and the December 31, 2014, annual adjusting entry, assuming the m...

Q: Leon Wight, a newly hired loan analyst, is examining the

Leon Wight, a newly hired loan analyst, is examining the current liabilities of a corporate loan applicant. He observes that unearned revenues have declined in the current year compared to the prior...

Q: Dillons Corporation made credit sales of $30,000 which are

Dillons Corporation made credit sales of $30,000 which are subject to 6% sales tax. The corporation also made cash sales which totaled $20,670 including the 6% sales tax. (a) Prepare the entry to rec...

Q: Lexington Corporation’s weekly payroll of $24,000 included FICA taxes

Lexington Corporation’s weekly payroll of $24,000 included FICA taxes withheld of $1,836, federal taxes withheld of $2,990, state taxes withheld of $920, and insurance premiums withheld of $250. Prepa...