The following are held by Smite Co.:
Cash in checking account $20,000
Cash in bond sinking fund account 30,000
Postdated check from customer dated one month from balance sheet date 250
Petty cash 200
Commercial paper (matures in two months) 7,000
Certificate of deposit (matures in six months) 5,000
What amount should be reported as cash and cash equivalents on Smite’s balance sheet?
Cook Co. had the following balances on December 31, 20X4:
Cash in checking account $350,000
Cash in money market account 250,000
U.S. Treasury bill, purchased 12/1/X4, maturing 2/28/X5 800,000
U.S. Treasury bond, purchased 3/1/X4, maturing 2/28/X5 500,000
Cook’s policy is to treat as cash equivalents all highly liquid investments with a maturity of three months or less when purchased. What amount should Cook report as cash and cash equivalents in its December 31, 20X4, balance sheet?
Accounts Receivable—Accounting and Reporting
On June 1, 2005, Pitt Corp. sold merchandise with a list price of $5,000 to Burr on account. Pitt allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made FOB shipping point. Pitt prepaid $200 of delivery costs for Burr as an accommodation.
On June 12, 2005, Pitt received from Burr a remittance in full payment amounting to
Steven Corporation began operations in year 1. For the year ended December 31, year 1, Steven made available the following information:
Total merchandise purchases for the year $350,000
Merchandise inventory at December 31, year 1 70,000
Collections from customers 200,000
All merchandise was marked to sell at 40% above cost. Assuming that all sales are on a credit basis and all receivables are collectible, what should be the balance in accounts receivable at December 31, year 1?
161. During a reporting period, a computer manufacturing company used raw materials of $50,000, had direct labor costs of $75,000, and factory overhead of $30,000. Other expenses were for advertising of $5,000, staff salaries of $10,000, and bad debt of $3,000. The company did not have a beginning balance in any inventory account. All goods manufactured during the period were sold during the period. What amount was the company’s cost of goods sold during the reporting period?
On June 1, Year 2, Archer, Inc. issued a purchase order to Cotton Co. for a new copier machine. The machine requires one month to produce and is shipped f.o.b. destination on July 1, Year 2, and is received by Archer on July 15, Year 2. Cotton issues a sales invoice dated July 2, Year 2, for the machine. As of what date should Archer record a liability for the machine?
June 1, Year 2
July 1, Year 2
July 2, Year 2
July 15, Year 2
Property, Plant and Equipment
191. A company issued a purchase order on December 15, Year 1, for a piece of capital equipment that costs $100,000. The capital equipment was shipped from the vendor on December 31, Year 1, and received by the company on January 5, Year 2. The equipment was installed and placed in service on February 1, Year 2. On what date should the depreciation expense begin?
December 15, Year 1
December 31, Year 1
January 5, Year 2
February 1, Year 2
Which of the following is not a requirement for an asset to be categorized as a plant asset?
1. Have physical substance.
2. Have a useful life of at least three years.
3. Currently used in operations.
4. Not held for investment purposes.
Discuss the questions you worked on and indicate why the answer is correct AND why the other answers are not correct. This is a very important piece in your advanced financial reporting knowledge, as some of the answers the are wrong are only due to small (sometimes nuances) differences. As graduate students in this accounting program, it is important for you to not only know why a particular accounting method is correct. Some may argue it as more important to understand why the other methods are wrong (or not in accordance with GAAP).
Your responses to the correct and incorrect answers should be concise and in your own words (please don’t copy and paste for other sources).
submit your write up of the questions in a word document and submit here.