Recent Question

The ability to consummate the refinancing 1. Which of the following does not demonstrate evidence regarding the ability to consummate a refinancing of short-term debt? a. Management indicated that they are going to refinance the obligation. b. Actually refinance the obligation. c. Have capacity under existing financing agreements that can be used to refinance the obligation. d. Enter into a financing agreement that clearly permits the ...

Other / Other 04 Apr 2016

Dobbs Corporation engaged Kiner, Inc. to design Pr. 1—Capitalization of interest. Early in 2010, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was begun on June 1, 2010 and was completed on December 31, 2010. Dobbs made the following payments to Kiner, Inc. during 2010: Date Payment June 1, 2010 $3,600,000 August 31, 2010 5,400,000 Dec ...

Other / Other 04 Apr 2016

Jeff Brown is a farmer who owns land which borders on the right-of-way 1. Jeff Brown is a farmer who owns land which borders on the right-of-way of the Northern Railroad. On August 10, 2014, due to the admitted negligence of the Railroad, hay on the farm was set on fire and burned. Brown had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to a ...

Other / Other 04 Apr 2016

Beeman Company exchanged machinery with an appraised value Pr. 1—Nonmonetary exchange. Hodge Co. exchanged Building 24 which has an appraised value of $3,200,000, a cost of $5,060,000, and accumulated depreciation of $2,400,000 for Building M belonging to Fine Co. Building M has an appraised value of $3,008,000, a cost of $6,020,000, and accumulated depreciation of $3,168,000. The correct amount of cash was also paid. Assume depre ...

Other / Other 04 Apr 2016

All long-term debt maturing within the next year True or false: 1. A zero-interest-bearing note payable that is issued at a discount will not result in any interest expense being recognized. 2. Dividends in arrears on cumulative preferred stock should be recorded as a current liability. 3. Magazine subscriptions and airline ticket sales both result in unearned revenues. 4. Discount on Notes Payable is a contra account to Note ...

Other / Other 04 Apr 2016

When is a contingent liability recorded 1. Which of the following gives rise to the requirement to accrue a liability for the cost of compensated absences? a. Payment is probable. b. Employee rights vest or accumulate. c. Amount can be reasonably estimated. d. All of these answers are correct. 2. Under what conditions is an employer required to accrue a liability for sick pay? a. Sick pay benefits can be reasonably estimated. b. ...

Other / Other 04 Apr 2016

Roxy Co., which has a taxable payroll 1. Palco Co., which has a taxable payroll of $900,000, is subject to FUTA tax of 6.2% and a state contribution rate of 5.4%. However, because of stable employment experience, the company’s state rate has been reduced to 2%. What is the total amount of federal and state unemployment tax for Palco Co.? a. $104,400 b. $73,800 c. $36,000 d. $25,200 2. Roxy Co., which has a taxable payroll ...

Other / Other 04 Apr 2016

The amount of sales taxes payable Use the following information for questions 1 and 2. Posner Co. is a retail store operating in a state with a 7% retail sales tax. The retailer may keep 2% of the sales tax collected. Posner Co. records the sales tax in the Sales Revenue account. The amount recorded in the Sales Revenue account during May was $251,450. 1. The amount of sales taxes (to the nearest dollar) for May is a. $20,762. b. $ ...

Other / Other 04 Apr 2016

An electronics store is running a promotion where for every video game S1. Use of the accrual method in accounting for product warranty costs a. is required for federal income tax purposes. b. is frequently justified on the basis of expediency when warranty costs are immaterial. c. finds the expense account being charged when the seller performs in compliance with the warranty. d. represents accepted practice and should be used whene ...

Other / Other 04 Apr 2016

A company discloses gain contingencies in the notes True or false: 1. Companies should recognize the expense and related liability for compensated absences in the year earned by employees. 2. Companies should accrue an estimated loss from a loss contingency if information available prior to the issuance of financial statements indicates that it is reasonably possible that a liability has been incurred. 3. A company discloses gain ...

Other / Other 04 Apr 2016