139.In 2013, WD Company reported the cost of its theme parks, resorts, and other assets at $14,037
million and the accumulated depreciation at $5,382 million. In that same year, "Toys 4 U" reported
$5,610 million in operating assets and accumulated deprec
68. The trade payables turnover ratio can indicate if a company is experiencing cash flow problems.
69. The "trade payables" account should generally be used only for trade payables (obligations owed
to suppliers in the normal course of busines
All Sports Inc. manufactures sporting equipment and clothing. Its recent annual report included
the following on its statement of financial position:
In addition to the above statement of financial position information, All Sports Inc. reported
Which of the following statements is false?
A. Depreciation expense is added to profit in the operating activities section of the statement of
cash flows because it had no cash effect on profit under the indirect method.
B. Depreciation expense is inc
Under what conditions would a company most likely adopt the double-declining-balance
method for financial reporting?
A. They have high technology, robotic equipment in their plant that have a long usable life.
B. They have a fleet of trucks where repa
149.Hilman Company purchased a truck on January 1, 20A, at a cost of $34,000. The company
estimated that the truck would have a useful life of 4 years and a residual value of $4,000.
1. Complete the following table:
2. Which of the two methods i
A. must be reported under the heading Property, Plant, and Equipment.
B. are not reported on the statement of financial position because they lack physical substance.
C. should be reported as Current Assets on the statement of financ
Taste Best Company uses the periodic inventory system. It has compiled the following
information in order to prepare the financial statements at the end of 20B:
A. $70,000 + $730,000 = $800,000
B. $800,000 - $60,000 = $740,000
C. $1,400,000 - $20,000
102.At the end of the annual accounting period, the adjusting entries for the following three items have
not been made. You are to provide the 20B adjusting entry for each item.
A. Unpaid wages for the last two days of December, 20B amounting to $3,200 ha
Tweed Feed & Seed purchased a new machine on January 1, 20A:
Accumulated depreciation at the end of year 5 (assume straight-line depreciation) $12,000
It is now the beginning of year 6 and the management re-evaluated the estimates related to the
121.If a building is sold at a gain, the gain on disposal should be reported in the non-operating section
of the cash flow statement.
122.Acquiring and disposing of long-lived assets are financing activities on the cash flow statement.
Telly Company reported profit in 20A of $22,000 and in 20B of $32,000. Later it was discovered
that the 20A ending inventory was overstated by $5,000. Compute the amount of profit
(disregard income tax) for 20A and 20B.
20A $_ 20B $_
20A-$22,000 - $5
provides the most accurate cost of goods sold and ending inventory values. It is appropriate for
this company because of the heterogeneity of the company's inventory items. The small
volume of inventory purchased and sold by the company makes this method
12. Belmont Corporation made a basket purchase of land, a building and equipment, paying a total of
$1,500,000. Market values for the assets were not available, but the appraised values were
$300,000 for the land, $900,000 for the building, and $600,000 f
33. In 2013, P Co reported a trade payables turnover ratio of 2.49 and C Co reported a turnover ratio
of 1.74 for that same year. Which of the following statements is true?
A. C Co pays their vendors in a more timely manner than P Co pays their vendors.
Jaywall Corporation, which uses a perpetual inventory system, recorded the following inventory
transactions during 2013.
(a) Using the FIFO cost formula, calculate the amount of the cost of goods sold for the quarter
ended June 30. (Show calculations
Most companies keep separate sets of accounting records for financial reporting and for
income tax computations. Which of the following statements is true?
A. They do it even though this practice is illegal and in violation of international financial
45. Situations which require that future income tax be reported involve a difference that is called which
of the following?
A. A permanent difference.
B. A reversing tax inverse difference.
C. A temporary difference.
D. A contingent liability.
50. Fraser Ltd. has decided to change the estimate of the useful life of an asset that has been in
service for two years. Which of the following statements describes the proper way to revise a
useful life estimate?
A. Revisions in useful life are permitte
22. Failure to make a necessary adjusting entry for accrued interest on a note payable would cause
which of the following?
A. An understatement of liabilities and shareholders' equity.
B. Profit to be overstated and assets to be understated.
C. Profit to
97. Time value of money is based on the concept that money received today is worth more than
money to be received a year from today.
98. Match the liabilities with their usual classification on the statement of financial position by entering
Learning Objective: 09-03 Apply various depreciation methods as assets are held and used over time.
Libby - Chapter 09 #149
FAL Corporation purchased a robot to be used in manufacturing. The purchase was made at
the beginning of 20
145.Duval Company acquired a machine on January 1, 20A, that cost $2,700 and had an estimated
residual value of $200. Complete the following schedule using the three methods of depreciation:
A.) straight-line, B.) units-of-production, C.) declining-balanc
108.In 2012, The W D Company reported the following increases or decreases in current assets and
current liabilities. Identify whether each of these increases or decreases caused cash to increase
or decrease. Show increases with a (+) in front of the amou
Libby - Chapter 09 #152
Give the required adjusting entry at December 31, 20F, the end of the annual accounting period
for the three items below. If no entry is required, explain why.
A. Web Company acquired a patent that cost $4,260 on January 1, 20
Libby - Chapter 09 #132
Research costs are an example of intangible assets.
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Learning Objective: 09-06 Apply measurement and reporting concepts for natural resources and intang
25. In 20B, Gamma Company made an ordinary repair to a delivery truck at a cost of $300. Gamma's
accountant debited the asset account, Delivery Vehicles. Was this treatment an error, and if so,
what will be the effect on the financial statements of Gamma?