Arndt Company provides the following information for the month ended October 31, 2019; sales on credit $280,000, cash sales $100,000, sales discounts $5,000, and sales returns and allowances $11,000. Prepare the sales section of the income statement based on this information.
> If someone is in the 25 percent tax bracket, this means that ______ is owed in taxes. a) 25 percent of his or her salary b) 25 percent of his or her adjusted gross income c) 25 percent of his or her taxable income d) less than 25 percent of his or
> In 2013, a worker who earned $125,000 would have _____ in Social Security taxes taken out of his or her pay and _____ would also be paid by the employer. a) $17,396; $17,396 (both equal to $113,700*.153) b) $8,860.45; $8,860.45 (both equal to $113,700*
> The typical Head Start teacher is a) an ill-trained minimum-wage worker. b) a professional credentialed worker making more than typical day-care worker. c) a college graduate making $30,000 a year or more. d) a professional with a master’s degree or
> Using a poverty line of $12,500, under the current system of calculating the poverty rate, which of the following people are considered to be in poverty and probably ought not to be? a) A rural family whose sole income earner is from a minimum wage ($10
> The evidence on charter schools is that they a) have had no impact in any locations they have been tried. b) have had an enormously positive impact on education generally. c) have had a negative impact on students. d) have had some impact in some loc
> The evidence on charter schools is that they a) have had no impact in any locations they have been tried. b) have had an enormously positive impact on education generally. c) have had a negative impact on students. d) have had some impact in some loc
> Which of the following is likely to occur after several years of relevant rent control? a) Rents exceeding equilibrium b) An increase in available housing c) A decrease in available housing d) Rents equaling equilibrium
> When an existing prescription drug goes over the counter a) everyone wins. b) drug companies win but consumer lose. c) drug companies lose but consumers win. d) drug companies likely win because of the increase in sales, and consumers may win depend
> The model for a promoter is _____ whereas the model for scalpers is that of ________. a) monopoly; monopolistic competition b) monopolistic competition; perfect competition c) monopoly; oligopoly d) monopoly; perfect competition
> The argument that the minimum wage does not significantly increase unemployment is based on a) producer surplus. b) consumer surplus. c) elasticity. d) aggregate demand.
> Looking at the Figure 32.3, maintaining Pfloor as the target minimum price (rather than equilibrium) would a) raise consumer surplus more than it would decrease producer surplus. b) raise producer surplus more than it would decrease consumer surplus.
> Which of the following had the effect of decreasing income inequality? a) The increase in the female labor force participation rate b) The increase in globalization of capital c) The increase in globalization of trade in steel, autos, and consumer dur
> If a woman does not get an interview for a job requiring heavy lifting because the manager has noted that the average women can lift less than the average man, this is a) a legal example of statistical discrimination. b) an illegal example of statistic
> Standard Oil’s trust involved monopolizing a) gas stations only. b) oil exploration only. c) refining. d) all aspects of the petroleum industry.
> The average cost per crime has been estimated at between a) $500 and $2,500. b) $1,000 and $10,000. c) $10,000 and $100,000. d) $100,000 and $1,000,000.
> The percentage that casinos make on the average bet is called the a) vig. b) rip. c) take. d) rob.
> Economists call the increase in insurance costs that resulted from the September 11th attacks an _____ shock which leads to the ________. a) aggregate demand; aggregate demand curve shifting left b) aggregate demand; aggregate demand curve shifting rig
> The impact of Walmart on its suppliers is a) unambiguously positive. b) unambiguously negative. c) positive and negative in that Walmart enlarges the market for their products but demands a much lower price than they typically receive. d) negligible.
> One significant feature of a “single-payer” system lacking in the U.S. system is a) government involvement in health care. b) coverage for the elderly. c) coverage for the poor. d) universal coverage.
> A union that trains and restricts supply has an effect on the supply curve that moves it to the ______ and, at a point, makes it _______. a) left; vertical b) left; horizontal c) right; vertical d) right; horizontal
> Stock market crashes tend to result when stocks get _______ their fundamental values. a) too far below b) too close to c) too far above d) confused with
> The motorsports industry is dominated by independent teams running in series operated as a) monopolies. b) oligopolies. c) monopolistic competitors. d) perfect competitors.
> Cartels are considered ______ because each participant is motivated to ______. a) stable; work with each other cooperatively b) stable; work in their own interest to produce more c) unstable; work with each other cooperatively d) unstable; work in th
> If Congress wants to use $100 billion on tax cuts, the version that would help a family of four making $40,000 a year would a) lower marginal tax rates by one percentage point. b) increase the standard deduction by $2,000. c) increase the child credit
> Since its inception, the portion of earnings that have been subject to the Social Security tax has a) remained roughly intact. b) increased substantially. c) decreased slightly. d) decreased substantially.
> The early evidence on programs like Head Start made it clear that a) the rate of return to these programs was very low. b) the net present value of the external benefits was positive. c) the short-run benefits were not worth the costs. d) the long-ru
> Using a poverty line of $12,500, under the current system of calculating the poverty rate, which of the following people are not considered to be in poverty and probably ought to be? a) A rural family whose sole income earner is from a minimum wage ($10
> The institution of teacher tenure is meant to a) ensure job security for teachers with 10 years of experience. b) ensure that teachers do not get fired for political reasons. c) allow teachers to engage in any behavior they wish. d) allow the easy fi
> The institution of teacher tenure is meant to a) ensure job security for teachers with 10 years of experience. b) ensure that teachers do not get fired for political reasons. c) allow teachers to engage in any behavior they wish. d) allow the easy fi
> An environmental economist would likely recommend which of the following policies? a) Eliminate fossil fuel consumption b) A tax on gasoline equal to the environmental damage caused by a gallon of gasoline c) A tax on gasoline greater than environment
> The use of a Backward-L shaped aggregate supply curve allows us to ________ in a way that other shapes would not. a) consider various levels of prices b) consider different macroeconomic points of view c) deal with shifting curves d) create an equil
> Dashan Company debits Supplies Expense for all purchases of supplies and credits Rent Revenue for all advanced rentals. For each type of adjustment, give the adjusting entry.
> Summarized operations for Lakeview Co. for the month of July are as follows. Revenues recognized: for cash $30,000; on account $70,000. Expenses incurred: for cash $26,000; on account $38,000. Indicate for Lakeview Co. (a) the total revenues, (b) the t
> Monique Enterprises had a stockholders’ equity balance of $158,000 at the beginning of the period. At the end of the accounting period, the stockholders’ equity balance was $198,000. (a) Assuming no additional investment or distributions during the perio
> Paul Scott Company reports net sales of $800,000, gross profit of $370,000, and net income of $240,000. What are its operating expenses?
> Aaron Lynch Company has the following balances in selected accounts on December 31, 2019. Service Revenue………. $40,000 Insurance Expense….……. 2,700 Supplies Expense…………. 2,450 All the accounts have normal balances. Aaron Lynch Company debits prepayments
> Journalize the following business transactions. (a) Mark Stein invests $9,000 cash in the business in exchange for shares of common stock. (b) Insurance of $800 is paid for the year. (c) Supplies of $2,000 are purchased on account. (d) Cash of $7,800 is
> The income statement of Gopitkumar Co. for the month of July shows net income of $1,400 based on Service Revenue $5,500, Salaries and Wages Expense $2,300, Supplies Expense $1,200, and Utilities Expense $600. In reviewing the statement, you discover the
> Primo Industries collected $105,000 from customers in 2019. Of the amount collected, $25,000 was for services performed in 2018. In addition, Primo performed services worth $40,000 in 2019, which will not be collected until 2020. Primo Industries also pa
> Presented below is information related to Alexis and Ryans, Attorneys at Law. Retained earnings, January 1, 2019………………$ 23,000 Legal service revenue—2019…………………………340,000 Total expenses—2019……………………………………..211,000 Assets, January 1, 2019…………………………………..8
> Presented below is financial information related to the 2019 operations of Louisa Cruise Company. Maintenance and repairs expense…………. $ 92,000 Utilities expense……………………………………..…10,000 Salaries and wages expense…………………...142,000 Advertising expense………………
> Robyn Howser is the bookkeeper for Madison Company. Robyn has been trying to determine the correct balance sheet for Madison Company. Madison’s balance sheet is shown below. Instructions Prepare a correct balance sheet. MADISON CO
> A company’s annual report usually will identify the inventory method used. Knowing that, you can analyze the effects of the inventory method on the income statement and balance sheet. Address: www.cisco.com Instructions Answer the following questions b
> A. Hall Company has the following merchandise account balances: Sales Revenue $180,000, Sales Discounts $2,000, Purchases $120,000, and Purchases Returns and Allowances $30,000. In addition, it has a beginning inventory of $40,000 and an ending inventory
> Prepare the journal entries to record these transactions on Nimmer Company’s books using a periodic inventory system. (a) On March 2, Nimmer Company purchased $900,000 of merchandise on acccount from Sen Company, terms 2/10, n/30. (b) On March 6, Nimme
> Assume the same information as in BE5-12 and also that Gallant Company has beginning inventory of $60,000, ending inventory of $90,000, and net sales of $730,000. Determine the amounts to be reported for cost of goods sold and gross profit.
> Assume that Gallant Company uses a periodic inventory system and has these account balances: Purchases $450,000, Purchase Returns and Allowances $13,000, Purchase Discounts $8,000, and Freight-In $16,000. Determine net purchases and cost of goods purch
> Minnick Co. has net sales of $105,000, cost of goods sold of $70,000, and operating expenses of $20,000. What is its gross profit and its gross profit rate?
> Assume Kader Company has the following reported amounts: Sales revenue $510,000, Sales returns and allowances $15,000, Cost of goods sold $330,000, and Operating expenses $110,000. Compute the following: (a) net sales, (b) gross profit, (c) income f
> Hudson Company has the following account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000. Prepare the entries to record the closing of these items to Income Summary.
> From the information in BE5-4, prepare the journal entries to record these transactions on Sensat Company’s books under a perpetual inventory system.
> Prepare the journal entries to record the following transactions on Kwang Company’s books using a perpetual inventory system. (a) On March 2, Kwang Company sold $900,000 of merchandise on account to Sensat Company, terms 2/10, n/30. The cost of
> Radomir Company buys merchandise on account from Lemke Company. The selling price of the goods is $780, and the cost of the goods is $470. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies.  
> Presented below are the components in Gates Company’s income statement. Determine the missing amounts.
> At October 31, Burgess Company made an accrued expense adjusting entry of $2,100 for salaries. Prepare the reversing entry on November 1, and indicate the balances in Salaries and Wages Payable and Salaries and Wages Expense after posting the reversing
> The following are the major balance sheet classifications: Current assets (CA) Current liabilities (CL) Long-term investments (LTI) Long-term liabilities (LTL) Property, plant, and equipment (PPE) Stockholders’ equity (SE) Intangible assets (
> The balance sheet debit column of the worksheet for Hamidi Company includes the following accounts: Accounts Receivable $12,500, Prepaid Insurance $3,600, Cash $4,100, Supplies $5,200, and Debt Investments (short-term) $6,700. Prepare the current asset
> Prepare the closing entries for the Sales Revenue account, assuming a balance of $200,000 and the Cost of Goods Sold account with a $145,000 balance.
> At Creighton Company, the following errors were discovered after the transactions had been journalized and posted. Prepare the correcting entries. 1. A collection on account from a customer for $870 was recorded as a debit to Cash $870 and a credit to
> The ledger of Rios Company contains the following balances: Retained Earnings $30,000, Dividends $2,000, Service Revenue $50,000, Salaries and Wages Expense $27,000, and Supplies Expense $7,000. Prepare the closing entries at December 31.
> The ledger of Clayton Company includes the following unadjusted balances: Prepaid Insurance $3,000, Service Revenue $58,000, and Salaries and Wages Expense $25,000. Adjusting entries are required for (a) expired insurance $1,800; (b) services perform
> Mayes Company records all prepayments in income statement accounts. At April 30, the trial balance shows Supplies Expense $2,800, Service Revenue $9,200, and zero balances in related balance sheet accounts. Prepare the adjusting entries at April 30 ass
> Partial adjusted trial balance data for Parsons Company is presented in BE3-9. The balance in Common Stock is the balance as of January 1. Prepare a retained earnings statement for the year assuming net income is $12,200 for the year and Retained Earning
> The adjusted trial balance of Parsons Company at December 31, 2019, includes the following accounts: Common Stock $15,600, Dividends $7,000, Service Revenue $37,000, Salaries and Wages Expense $16,000, Insurance Expense $2,000, Rent Expense $4,000, Suppl
> The bookkeeper for Bradbury Company asks you to prepare the following accrued adjusting entries at December 31. 1. Interest on notes payable of $400 is accrued. 2. Services performed but not recorded total $1,900. 3. Salaries earned by employees of $900
> Using the data in BE3-5, journalize and post the entry on July 1 and the adjusting entry on December 31 for Kalter Insurance Co. Kalter uses the accounts Unearned Service Revenue and Service Revenue. Data from BE3-5: On July 1, 2019, Dobbs Co. pays $14,
> On July 1, 2019, Dobbs Co. pays $14,400 to Kalter Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Dobbs Co., journalize and post the entry on July 1 and the annual adjusting entry on December 31.
> At the end of its first year, the trial balance of Nygaard Company shows Equipment $30,000 and zero balances in Accumulated Depreciation—Equipment and Depreciation Expense. Depreciation for the year is estimated to be $4,000. Prepare the annual adjusting
> A credit sale is made on July 10 for $900, terms 2/10, n/30. On July 12, $100 of goods are returned for credit. Give the journal entry on July 19 to record the receipt of the balance due within the discount period.
> Ritter Advertising Company’s trial balance at December 31 shows Supplies $6,700 and Supplies Expense $0. On December 31, there are $2,500 of supplies on hand. Prepare the adjusting entry at December 31, and using T-accounts, enter the balances in the acc
> An inexperienced bookkeeper prepared the following trial balance. Prepare a correct trial balance, assuming all account balances are normal. ERIKA COMPANY Trial Balance December 31, 2019 Debit Credit Cash $16,800 Prepaid Insurance Accounts Payable U
> From the ledger balances given below, prepare a trial balance for the Favre Company at June 30, 2019. List the accounts in the order shown on page 71 of the textbook. All account balances are normal. Accounts Payable $7,000, Cash $5,200, Common Stock $20
> Selected transactions for the Nikolai Company are presented in journal form below. Post the transactions to T-accounts. Make one T-account for each item and determine each account’s ending balance. J1 Date Account Titles and Explan
> Using the data in BE2-5, journalize the transactions. (You may omit explanations.) Reference Data BE 2-5: Aug. 1 Opens an office as a financial advisor, investing $5,000 in cash in exchange for common stock. 4 Pays insurance in advance for 6 months, $1,
> Using the data in BE2-2, journalize the transactions. (You may omit explanations.) Reference Data BE 2-2: June 1 Sheldon Cooper invests $4,000 cash in exchange for shares of common stock in a small welding business. 2 Purchases equipment on account for
> In alphabetical order below are balance sheet items for Ellerby Company at December 31, 2019. Prepare a balance sheet, following the format of Illustration 1-10. Accounts payable……………………. $85,000 Accounts receivable…………………..72,500 Cash………………………………………..4
> Given the accounting equation, answer each of the following questions. (a) The liabilities of Holland Company are $120,000 and its stockholders’ equity is $232,000. What is the amount of Holland Company’s total assets? (b) The total assets of Holland Com
> Presented below is the basic accounting equation. Determine the missing amounts. Assets Liabilities Stockholders' Equity (a) $78,000 (b) (c) $94,000 $50,000 $45,000 ? $70,000 $60,000 ? ? II
> Goods costing $3,000 are purchased on account on July 15 with credit terms of 2/10, n/30. On July 18, a $200 credit was received from the supplier for damaged goods. Give the journal entry on July 24 to record payment of the balance due within the discou
> Goods costing $2,000 are purchased on account on July 15 with credit terms of 2/10, n/30. On July 18, a $200 credit memo is received from the supplier for damaged goods. Give the journal entry on July 24 to record payment of the balance due within the di
> What is the major advantage and major disadvantage of the specific identification method of inventory costing?
> Kyle Ebert believes that the allocation of cost of goods available for sale should be based on the actual physical flow of the goods. Explain to Kyle why this may be both impractical and inappropriate.
> Explain the difference between the terms FOB shipping point and FOB destination.
> Katz Hat Shop received a shipment of hats for which it paid the wholesaler $2,970. The price of the hats was $3,000, but Katz was given a $30 cash discount and required to pay freight charges of $50. What amount will Katz record for inventory? Why?
> Your friend Theo Dolan has been hired to help take the physical inventory in Silker Hardware Store. Explain to Theo Dolan what this job will entail.
> Emporia Shoe Shop had goods available for sale in 2019 with a retail price of $120,000. The cost of these goods was $84,000. If sales during the period were $80,000, what is the estimated cost of ending inventory using the retail inventory method?
> Wiggins Company has net sales of $400,000 and cost of goods available for sale of $300,000. If the gross profit rate is 35%, what is the estimated cost of the ending inventory? Show computations.
> When is it necessary to estimate inventories?
> How does the average-cost method of inventory costing differ between a perpetual inventory system and a periodic inventory system?
> An item must possess two characteristics to be classified as inventory by a merchandiser. What are these two characteristics?
> Distinguish between FOB shipping point and FOB destination. Identify the freight terms that will result in a debit to Inventory by the buyer and a debit to Freight-Out by the seller.
> What inventory cost flow does Apple use for its inventories? (Hint: You will need to examine the notes for Apple’s financial statements.)
> Under what circumstances might inventory turnover be too high? That is, what possible negative consequences might occur?
> Ryder Company’s balance sheet shows Inventory $162,800. What additional disclosures should be made?
> Kuzu Company discovers in 2019 that its ending inventory at December 31, 2018, was $7,000 understated. What effect will this error have on (a) 2018 net income, (b) 2019 net income, and (c) the combined net income for the 2 years?
> Bonnie Stores has 20 toasters on hand at the balance sheet date. Each costs $27. The net realizable value is $30 per unit. Under the lower-of-cost-or-net realizable value basis of accounting for inventories, what value should Bonnie report for the toaste
> Taylor Entertainment Center has 5 TVs on hand at the balance sheet date that cost $400 each. The net realizable value is $350 per unit. Under the lower-of-cost-or net realizable value basis of accounting for inventories, what value should Taylor report f
> Which assumed inventory cost flow method: (a) usually parallels the actual physical flow of merchandise? (b) divides cost of goods available for sale by total units available for sale to determine a unit cost? (c) assumes that the latest units purchased
> “The key to successful business operations is effective inventory management.” Do you agree? Explain.
> Ming Xu believes revenues from credit sales may be recorded before they are collected in cash. Do you agree? Explain.
