Chapter 2 Questions

Chapter 2 Questions - a. Inventory b. Accounts Payable c....

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Unformatted text preview: a. Inventory b. Accounts Payable c. Land d. Common Stock 1. Which one of the following items is reported as a current asset on a classified balance sheet? ANSWER A Jones Company Cash $ 50,000 Inventory $ 45,000 Land $ 75,000 Accumulated Depreciation $ 40,000 Plant & Equipment $150,000 Accounts Payable $ 60,000 a. $220,000 b. $155,000 c. $130,000 d. $ 95,000 2. Refer to Jones Company. Calculate Current Assets. ANSWER D ($50,000 Cash + $45,000 Inventory = $95,000) 3. For several years, Bozeman Corporation has had a current ratio that was consistent with other companies in its industry. For the most recent year, Bozeman's current ratio was significantly higher than that for the industry. What is the best possible explanation for this situation? a. The other companies in the industry were not as profitable. b. Bozemans liquidity has improved c. Bozeman has less property, plant and equipment than other companies. d. Bozeman has too much debt. ANSWER B Cash $ 29,000 Accounts Receivable $ 39,000 Inventory $ 79,000 Prepaid Insurance $ 3,000 Land $ 90,000 Accounts Payable $ 21,000 Taxes Payable $ 29,000 Capital Stock $ 50,000 Retained Earnings $ 97,000 Long-term Notes Payable $ 43,000 Curbo Brothers Curbo Brothers, Inc. a retailer of mens clothing, earned a net profit of $77,000 for 2010. The balance sheet for Curbo Brothers includes the following items: a. $ 100,000 b. $ 147,000 c. $ 150,000 d. $ 249,000 1. Refer to Curbo Brothers. Calculate the total amount of current assets for Curbo Brothers. ANSWER C ($29,000 Cash + $39,000 Accounts Receivable + $79,000 Inventory + $3,000 Prepaid Insurance = $150,000) Cash $ 29,000 Accounts Receivable $ 39,000 Inventory $...
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This note was uploaded on 04/15/2011 for the course ACCT 2101 taught by Professor Christianwurst during the Spring '08 term at Temple.

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Chapter 2 Questions - a. Inventory b. Accounts Payable c....

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