1. Pleasant Company has established a pension plan for its employees that operates as follows:
Pleasant Company places a fixed dollar amount in a pension fund for each employee. The funds
invested. Upon retirement, each employee is ent
1. The records of Twist Company include the following:
Average total assets $ 60,000
Average total liabilities. 25,000
Total revenue. 107,600
Total expense (including income tax) 100,000
Interest expense (included in total expenses). 2,000
I ncome tax rat
1. As of December 31, Mesa Company has a balance of $5,000 in accounts receivable of which
more than 30 days overdue. Mesa has a credit balance of $45 in the allowance for doubtful
Mesa estimates its bad debts losses at 1% of current acc
1. The accounting process does not include:
a. interpreting d. observing
b. reporting e. classifying
2. The financial statement or statements that pertain to a stated period of time is (are) the:
a. balance sheet
b. balance sheet and
Use the following to answer questions 1-3:
Bennett Industries purchased a large piece of equipment from Crumpet Company on January 1,
signed a note, agreeing to pay Crumpet $400,000 for the equipment on December 31, 2003. The
market rate of
Use the following to answer question 1:
On 1/1/2001 Deltaair acquired an aircraft from Boeing and gave a note in return. The note
payable at the end of eight years (12/31/2008). The fair market value of the aircraft on 1/1/2001
1. On the maturity date of bonds payable after interest has been paid, the issuing company will
A) record a loss of the market rate of interest on the maturity date exceeds the stated rate of
B) pay bondholders the original amount the bondholder
1. On January 1, 2000, Garth company purchased as an available-for-sale investment,
10,000 shares (15% of the outstanding shares) of Brooks Corporation (cost, $40 per
share, par $25) common stock.
During November, 2000, Brooks declared and paid a cash div
1. A major purpose of the classified balance sheet is to provide users with information about the
A) liquidity of the company by separating current from noncurrent assets and liabilities
B) solvency of the company by separating debt from equity
C) the bal
1. Which of the following is usually NOT considered to be a long-term liability?
A) Bonds payable.
B) Mortgages payable.
C) Accrued post-retirement benefits.
D) FICA taxes payable.
E) None of the above is correct.
2. The effect on total assets of the purc