Question 1

Explain the difference between a periodic inventory system and a perpetual one.If a firm uses a perpetual inventory system,it still has to physically count the inventory on hand at least once a year.Why?

Accepted Answer

The answer of Explain the difference between a periodic inventory...

Question 2

Carolina Corporation reported the following account balances at the beginning and end of 2010:
  Determine the amount of cash paid for (
A)supplies,(b)salaries,and (c)inventory during 2010.

Accepted Answer

The answer of Carolina Corporation reported the following account balances...

Question 3

Which of the following payroll-related items is paid only by the employee?

Accepted Answer

Union dues are paid only by the employee, while FICA tax, state unemployment tax, and federal unemployment tax are typically split between the employer and employee.

Question 4

Kinsey Company had beginning inventory of $50,000,ending inventory of $54,000,and cost of goods sold of $240,000.What was the cost of goods purchased?

Accepted Answer

The answer of Kinsey Company had beginning inventory of $50,000,ending...

Question 5

Ogallah Corporation purchased $100,000 inventory on account with terms of 1/10 net 30 on November 1,2010.
Required:
Assume periodic inventory system and gross method
(A.)Make the entries to record the purchase of the inventory and subsequent payment of amount due on Nov 9,2010
Assume perpetual inventory system and net method
(B.)Make the entries to record the purchase of the inventory and subsequent payment of the amount due on Nov 30,2010.

Accepted Answer

The answer of Ogallah Corporation purchased $100,000 inventory on account...

Question 6

Why are subsidiary ledgers used?

Accepted Answer

The answer of Why are subsidiary ledgers used?...

Question 7

Wildcat Supply had a beginning balance of $600 in Utilities Payable account at the start of the year and an ending balance of $1,000.During the year Wildcat paid $4,000 cash to the utilities company.How much utilities expense was incurred during this year?

Accepted Answer

To calculate the utilities expense incurred during the year, we need to use the following formula:
Utilities expense = Beginning balance + Payments made - Ending balance
Utilities expense = $600 + $4,000 - $1,000
Utilities expense = $4,600
Therefore, the answer is B) $4,400, which is the closest option.

Question 8

If a firm overstates its ending inventory,how are its income statement and balance sheet affected for the current and next year?

Accepted Answer

The answer of If a firm overstates its ending inventory,how...

Question 9

Acme Paint company had a beginning balance in its prepaid advertising account of $1,000 and an ending balance of $750.During the year it spent $600 cash on advertising.How much advertising expense did Acme incur this year?

Accepted Answer

The beginning balance in the prepaid account was $1,000 and the ending balance was $750, which means Acme used $250 of the prepaid amount during the year. In addition, they spent $600 cash on advertising. Therefore, the total advertising expense incurred by Acme this year was $850 ($250 from the prepaid account + $600 cash spent).

Question 10

Park Corp had a beginning balance in its prepaid rent account of $10,000 and an ending balance of $7,500.Rent expense for the year was $12,000.How much cash did Park pay for rent during the year?

Accepted Answer

The beginning balance in the prepaid rent account is not relevant to determine the cash paid for rent during the year. To calculate the cash paid, we need to adjust the rent expense for the change in prepaid rent. The adjustment is:

Ending prepaid rent balance = Beginning prepaid rent balance - Rent expense + Cash paid for rent
$7,500 = $10,000 - $12,000 + Cash paid for rent
Cash paid for rent = $9,500

Question 11

Thermalite Corporation uses the perpetual inventory system and the net price method.Prepare Thermalite's journal entries to record the following transactions:

Accepted Answer

The answer of Thermalite Corporation uses the perpetual inventory system...

Question 12

The following information was taken from the accounting records of Swanson Farms in 2010.For each of the following determine the amount of expense Swanson Farms should report on its income statement related to data presented below and give the entry made to record the expense.

Accepted Answer

The answer of The following information was taken from the...

Question 13

If wages payable increases between the beginning and end of a month,this indicates that

Accepted Answer

An increase in wages payable between the beginning and end of a month indicates that the company incurred more wages expense than it paid during the month. Wages payable represents the amount owed to employees for work done but not yet paid for. Therefore, an increase in wages payable means that the company owes more to employees at the end of the month than it did at the beginning, indicating that it incurred more wages expense than it paid.

Question 14

Information from the 2010 financial statements of Bravura Corporation is shown below.Calculate the cash paid for merchandise inventory.

Accepted Answer

The answer of Information from the 2010 financial statements of...

Question 15

An increase in prepaid insurance indicates that

Accepted Answer

An increase in prepaid insurance means that insurance paid during the period exceeded insurance expense. This is because prepaid insurance represents payments for insurance coverage that has not yet been used. As a result, when prepaid insurance increases, it means that more insurance has been paid for than has been recorded as an expense.

Question 16

Lacross Corporation purchased $50,000 inventory on account with terms of 1/10 net 30 on September 1,2010.
Required:
Assume periodic inventory system and net method
(A.)Make the entries to record the purchase of the inventory and subsequent payment of amount due on Sept 30,2010
Assume perpetual inventory system and gross method
(B.)Make the entries to record the purchase of the inventory and subsequent payment of the amount due on Sept 9,2010.

Accepted Answer

The answer of Lacross Corporation purchased $50,000 inventory on account...

Question 17

The following information was taken from the accounting records of Trego Farms in 2010.For each of the following determine the amount of cash Trego Farms paid for the item given the data presented below.

Accepted Answer

The answer of The following information was taken from the...

Question 18

Iowa Corporation had a beginning balance of $8,600 in Utilities Payable account at the start of the year and an ending balance of $4,000.During the year Iowa recorded $10,000 of utilities expense.How much cash did Iowa pay the utility company during the year?

Accepted Answer

The cash paid is calculated as: Beginning balance ($8,600) + Utilities expense ($10,000) - Ending balance ($4,000) = $14,600.

Question 19

Gross pay for the employees of Mr.Scott Corporation for February 28,2010 is as follows:
  Information on withholding and payroll taxes are shown below:
  Required:
(A.)Make the journal entry to record the February payroll.
(B.)Record the journal entry for the employer's payroll taxes.
(C.)Make the journal entry to record the employer's monthly payment of payroll tax liabilities.

Accepted Answer

The answer of Gross pay for the employees of Mr.Scott...

Question 20

Why would the amount of supplies expense differ from the amount of cash paid for supplies in a year?

Accepted Answer

The answer of Why would the amount of supplies expense...

Quiz 8: Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities