Ultimate Business Study Guide - Questions & Answers
Bearcat Construction begins operations in March and has the following transactions. March 1 Issue common stock for $21,000. March 5 Obtain $9,000 loan from the bank by signing a note. March 10 Purchase construction equipment for $25,000 cash. March 15 Purchase advertising for the current month for $1,100 cash. March 22 Provide construction services for $18,000 on account. March 27 Receive $13,000 cash on account from March 22 services. March 28 Pay salaries for the current month of $6,000. Required: 1. Record each transaction. Bearcat uses the following accounts: Cash, Accounts Receivable, Equipment, Notes Payable, Common Stock, Service Revenue, Advertising Expense, and Salaries Expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Badgersize Company has the following information for its Forming Department for the month of August. Work in Process Inventory, August 1: 20,000 units Direct materials: 100% complete $ 80,000 Conversion: 20% complete 24,000 Balance in work in process, August 1 $ 104,000 Units started during August 49,000 Units completed and transferred in August 60,000 Work in process (70% complete), August 31 ?Costs charged to Work in Process in AugustDirect materials$140,000Conversion costs:Direct labor$105,000Overhead applied148,000Total conversion$253,000Assume materials are added at the start of processing.Required:1. Calculate the equivalent units for the Forming Department for the month of August.2. Find the cost per equivalent of input resource.
On April 1, Year 1, a company realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting the company's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. The company agrees to lend $470,000 to its supplier using a 12-month, 11% note.Record the following transactions for Shoemaker Corporation. 1. The loan of $470,000 and acceptance of the note receivable on April 1, Year 1 (If not entry is required for a transaction/event, select 'No journal entry required' in the first account field.) 2. The adjustment for accrued interest on December 31, Year 1. (If not entry is required for a transaction/event, select 'No journal entry required' in the first account field.) 3. Cash collection of the note and interest on April 1, 2002 (If not entry is required for a transaction/event, select 'No journal entry required' in the first account field.)
Company A sold merchandise with a list price of $4,200 and costing $2,300 on account to Company B.The sale was subject to the following terms: FOB destination, 2/10, n/30.Company A prepays the freight costs of $85 (debit Delivery Expense for the freight costs). Prior to payment for the goods, Company A issues a credit memo for $750 to Company B for merchandise costing $425 that is returned.Company A received payment from Company B within the discount period.Company A uses a perpetual inventory system.Which of the following statements is true about the amount Company A receives from Company B for the sale?a. None of these answers are correct.b. The invoice amount is greater than $3,500 and less than $3,600.c. The invoice amount is greater than $3,400 and less than $3,500.d. The invoice amount is greater than $3,300 and less than $3,400.e. The invoice amount is greater than $2,700 and less than $2,800.f. The invoice amount is greater than $3,100 and less than $3,200.g. The invoice amount is greater than $2,900 and less than $3,000.h. The invoice amount is greater than $3,000 and less than $3,100.i. The invoice amount is greater than $3,200 and less than $3,300.j. The invoice amount is greater than $2,800 and less than $2,900.
The bookkeeper at Jefferson Company has not reconciled the bank statement with the Cash account, saying, "I dont have time." You have been asked to prepare a reconciliation and review the procedures with the bookkeeper. The April 30, Current Year, bank statement and the April ledger account for cash showed the following (summarized):Bank Statement Checks Deposits Balance Balance, April 1, 2014 $37400 32,700 Deposits during Apri 1,340 70,100 Interest collected 71,440 Checks cleared during April $45,600 25,840 NSF check-A. B. Wright 270 25,570 Bank service charges 230 25,340 Balance, April 30, 2014 25,340Cash (A) Apr. 1 Balance 24,700Apr Deposits 43,500 Apr. Checks written 42,100A comparison of checks written before and during April with the checks cleared through the bank showed outstanding checks at the end of April of $4,500. No deposits in transit were carried over from March, but a deposit was in transit at the end of April.
BENETEAU CORPORATIONComparative Balance Sheet2017 2016 Assets Cash $37,000 $31,000 Accounts receivable (net) 80,000 60,000 Prepaid insurance 22,000 17,000 Land 18,000 40,000 Equipment 70,000 60,000 Accumulated depreciation (20,000) (13,000) Total assets $207,000 $195,000 Liabilities and Stockholder's EquityAccounts payable $12,000 $6,000 Bonds payable 27,000 19,000 Common stock 140,000 115,000 Retained earnings 28,000 55,000 Total liabilities and stockholder's equity $207,000 $195,000 Additional information:1. Net loss for 2017 is $12,000. Net sales for 2017 are $250,000.2. Cash dividends of $15,000 were declared and paid in 2017.3. Land was sold for cash at a loss of $2,000. This was the only land transaction during the year.4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash.5. $12,000 of bonds were retired during the year at carrying (book) value.6. Equipment was acquired for common stock. The fair value of the stock at the time of the exchange was $25,000Required:1. Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method.
You have been engaged to review the financial statements of Flounder Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows. 1. Year-end wages payable of $3,410 were not recorded because the bookkeeper thought that "they were immaterial." 2. Accrued vacation pay for the year of $30,000 was not recorded because the bookkeeper "never heard that you had to do it." 3. Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,868 because "the amount of the check is about the same every year." 4. Reported sales revenue for the year is $1,928,140. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the states Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that "the sales tax is a selling expense." At the end of the current year, the balance in the Sales Tax Expense account is $94,140.Prepare the necessary correcting entries, assuming that Headland uses a calendar-year basis.
Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates uncollectible receivables of $13,000. 1. Which of the following entries records the proper adjusting entry for bad debt expense?a. debit Bad Debt Expense, $12,400; credit Allowance for Doubtful Accounts, $12,400b. debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600c. debit Allowance for Doubtful Accounts, $600; credit Bad Debt Expense, $600d. debit Bad Debt Expense, $600; credit Allowance for Doubtful Accounts, $600
QUESTION ONEMr. Balham started business on July 1, 2019 with a capital of GH16,000 cash.July 2. Opened a bank account with GH8,000July 2. Bought goods costing GH1,000 with chequeJuly 3. Purchased Shop Fittings on credit from Jupiter Furniture at GH5,000July 5. Bought motor van by cheque GH4,000July 8. Purchased stationery GH150 and goods GH5,000 by cashJuly 17. Paid insurance GH100 by cashJuly 18. Cash sales made GH2,500July 20. Sent cash of GH2,700 to the bankJuly 22. Withdrew GH1,000 from the bank for personal useJuly 25. Paid motor expenses GH300July 28. Cash sales sent to the bank GH5,400Required: Prepare the ledger accounts of Mr. Balham and extract a trial balance.
Cardinal Company is considering a five-year project that would require a $2,915,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 12%. The project would provide net operating income in each of five years as follows: Sales $ 2,746,000Variable expenses 1,126,000 Contribution margin 1,620,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $615,000 Depreciation 583,000 Total fixed expenses 1,198,000 Net operating income $ 422,000Prepare journal entry
Process further or sell Benjamin Signal Company produces products R, J, and C from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $92,000 per year are allocated to the products based on the relative number of units produced Data for Benjamin's operations for the current year are as follows: Sales Value at Split-off $76,000 $71,000 $48,000 Units Produced 8,000 10,000 5,000 Allocated Joint Production Cost $32,000 $40,000 $20,000 Product R... Product J... Product C... Product R can be processed beyond the split-off point for an additional cost of $26,000 and can then be sold for $105,000. Product J can be processed beyond the split-off point for an additional cost of $38,000 and can then be sold for $117,000. Product C can be processed beyond the split-off point for an additional cost of $12,000 and can then be sold for $57,000 Required: Which products should be processed beyond the split-off point? A. R $3,000 profit B. J 8,000 profit C (3,000) loss So R and J should be processed beyond the split off point. (Show computations)
The trial balance of Barger Company at the end of the accounting period, immediately prior to recording closing entries, showed the following:________. Debit Credit Cash 29,000 Land 56,000 Notes payable 32,400 Common stock 22,000 Retained earnings 15,800 Service revenue 62,000 Expenses 44,900 Dividends 2,300 Total $ 132,200 $ 132,200What will the balance of the retained earnings account be after the closing entries are recorded?