136A_F07_MT2

136A_F07_MT2 - ANDERSON ECON 136A FALL 2007 MIDTERM 2 v 1...

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NOVEMBER 21, 2007 ANDERSON ECON 136A FALL 2007 MIDTERM 2 v. 1 Name _________________________ Answer questions #1-25 on your green scantron--WRITE YOUR VERSION # ON YOUR SCANTRON PLEASE!!! Answer the remaining questions in your blue-books. 1. If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be a. reported as a deduction from accounts receivable in determining the net realizable value of accounts receivable. b. reported as a deduction from sales in the income statement. c. reported as an item of "other expense" in the income statement. d. reported as sales discounts forfeited in the cost of goods sold section of the income statement. 2. Which of the following are required inventory disclosures: a. The composition of the ending inventory. b. Unusual or significant inventory financing arrangements. c. All of these. d. The inventory costing method used. 3. WeCount, Inc. uses a periodic inventory system. At the beginning of the period they had $100,000 of inventory. During the period they made $500,000 of purchases and sold goods to customers for a sales price of $600,000. What should their ending inventory balance be? a. $100,000 b. $1,000,000 c. Insufficient information to answer d. $0 4. Inventory is recorded under LIFO by the accounting system at a cost of $10,000. The inventory is expected to sell for $11,000, it would cost $9,900 to replace, $200 in commissions to sell, and has a normal profit margin of 20%. Which of the following is true of this inventory? a. The designated market value is $9,900 and the inventory should be reported on the balance sheet at $10,000. b. The designated market value is $11,000 and the inventory should be reported on the balance sheet at $10,000. c. The designated market value is $9,900 and the inventory should be reported on the balance sheet at $9,900. d. The designated market value is $10,800 and the inventory should be reported on the balance sheet at $10,000.
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MIDTERM 2 v. 1--Page 2 5. Two Saturdays from now falls on which weekend? a. The weekend after next b. This weekend c. Next weekend d. GAAP 6. The bank lent XYZ, Inc. $1 million and XYZ agreed to maintain a cash reserve of at least $100,000 at all times. XYZ's general ledger shows cash in the amount of $500,000, which includes checks outstanding of $25,000, and deposits in transit of $30,000. In addition, they hold $50,000 of certificates of deposit (CD's) at the bank with an original maturity of 1 month, 90 day treasury bills of $5,000, and stock in AOL at $45,000. Finally, the bank charged XYZ a fee of $500 which XYZ has not yet recorded. How much should XYZ present as cash and cash equivelants on their balance sheet? a.
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This note was uploaded on 05/18/2011 for the course ECON 136A taught by Professor Anderson during the Spring '08 term at UCSB.

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136A_F07_MT2 - ANDERSON ECON 136A FALL 2007 MIDTERM 2 v 1...

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