Question 1

What is the amount of working capital for Symphony?

Accepted Answer

According to the information given in the question, Symphony's working capital is calculated as: 
Current Assets - Current Liabilities = Working Capital

Plugging in the numbers we get: 
$458 (Current Assets) - $330 (Current Liabilities) = $128 (Working Capital)

Therefore, the correct answer is C.

Question 2

Cash equivalents would not include:

Accepted Answer

Cash equivalents are short-term, highly liquid assets that can be readily converted into cash with little to no risk of loss in value. Cash not available for current operations, such as restricted cash or cash held for long-term investments, would not meet the criteria for cash equivalents.

Question 3

An asset that is not expected to be converted to cash or consumed within one year or the operating cycle is:

Accepted Answer

Goodwill is an intangible asset that represents the value of a company's brand name, reputation, customer base, and other intangible assets. Goodwill is not expected to be converted to cash or consumed within one year or the operating cycle. Accounts receivable, inventory, and supplies are current assets that are expected to be converted to cash or consumed within one year or the operating cycle.

Question 4

Which of the following accounts are closed at the end of the accounting period?

Accepted Answer

Income tax expense is a temporary account that is closed at the end of the accounting period to the retained earnings account.

Question 5

Red Onion Restaurant classifies a six-month prepaid insurance policy as a current asset. Its rationale is based on:

Accepted Answer

The answer of Red Onion Restaurant classifies a six-month prepaid...

Question 6

Rent collected in advance is:

Accepted Answer

Rent collected in advance represents a liability as it is money received for a service that has not yet been provided. Therefore, it is a liability account in the balance sheet.

Question 7

Assets do not include:

Accepted Answer

Paid-in capital is a component of equity rather than assets, which includes things like property, plant, and equipment, investments, and unexpired insurance.

Question 8

New Oaks Winery requires two months to make wine, two years to age it, one month to bottle it, two months to sell it, and one month to collect the receivable. Its operating cycle is:

Accepted Answer

The operating cycle is the time it takes for a company to convert its investments in inventory back into cash. In this case, the operating cycle consists of two months to make the wine, two years to age it, one month to bottle it, two months to sell it, and one month to collect the receivable, which adds up to a total of 30 months (2 + 24 + 1 + 2 + 1 = 30). Therefore, the answer is B.

Question 9

What would Symphony report as total shareholders' equity?

Accepted Answer

The total shareholders' equity is calculated by adding up the Common Stock ($485), Additional Paid-in Capital ($15), Retained Earnings ($48,120), and Treasury Stock ($380), which gives a total of $808. Therefore, the correct answer is B.

Question 10

Non-operating assets include:

Accepted Answer

Non-operating assets are assets that are not necessary for the day-to-day operations of a business. Land held for a possible future plant site is an example of a non-operating asset as it is not currently being used in the normal operations of the business. Choice A (inventory held for sale) and choice C (accounts receivable) are operating assets as they are directly related to the company's normal business activities. Choice B (construction in progress) is also an operating asset as it relates to the company's expansion or improvement of existing facilities.

Question 11

Which of the following is never a current liability account?

Accepted Answer

Prepaid rent is classified as a current asset account, not a current liability account. The other options (A, B, and D) are all examples of current liability accounts.

Question 12

What would Symphony report as total current assets?

Accepted Answer

The total current assets can be calculated by adding up all the current assets listed in the question. This gives us a total of $823, which is option A.

Question 13

What would Symphony report as total assets?

Accepted Answer

Total assets can be calculated as follows:
($680 x 20) + ($920 x 80) + 34 + 50 + 30 + 16 + 150 + 450 + 5 + 20 + 8 + 40 
= $13,600 + $73,600 + $743 
= $88,943
Therefore, the correct answer is D) $2,303.

Question 14

Cash equivalents would include:

Accepted Answer

Cash equivalents are highly liquid short-term investments that are easily convertible into cash and have a maturity date of less than three months from the date of purchase. Therefore, debt instruments with maturity dates of less than three months would be considered cash equivalents. Highly liquid equity securities, accounts receivable, and sinking funds for bonds do not meet the criteria for cash equivalents.

Question 15

Notes payable:

Accepted Answer

The answer of Notes payable:
...

Question 16

Accrued expenses:

Accepted Answer

Accrued expenses result from services received before payment. This means that the expense has been incurred but has not yet been paid for, resulting in a liability on the balance sheet until the expense is settled. Accrued expenses are typically settled with cash rather than services.

Question 17

The usual difference between accounts payable and notes payable is:

Accepted Answer

The answer of The usual difference between accounts payable and...

Question 18

Janson Corporation Co.'s trial balance included the following account balances at December 31, 2009: What amount should be included in the current liability section of Janson's December 31, 2009, balance sheet?

Accepted Answer

The answer of Janson Corporation Co.'s trial balance included the...

Question 19

Janson Corporation Co.'s trial balance included the following account balances at December 31, 2009: Investments consist of treasury bills that were purchased in November and mature in January. Prepaid insurance is for the next two years. What amount should be included in the current asset section of Janson's December 31, 2009, balance sheet?

Accepted Answer