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35 terms

Chapter 5

STUDY
PLAY
Investment in Preferred Stock.*
current asset
Treasury Stock.*
shareholder's equity
Common Stock.*
shareholder's equity
Dividends Payable.*
current liability
Accumulated Depreciation—Equipment.*
P,P,E
Construction in Process (Constructed for another party).*
current asset
Construction in Process (Constructed for the use of Cunningham, Inc. aka you).*
P,P,E
Petty Cash.*
current asset
Interest Payable.*
current liability
Deficit.*
retained earnings
Equity Investments (trading).*
current asset
Income Tax Payable.*
current liability
Unearned Subscription Revenue.*
current liability
Work in Process.*
current asset
Vacation Wages Payable.*
current liability
Issuance of capital stock.
financing activity-add
Purchase of land and building.
investing activity-subtract
Redemption of bonds
financing activity
Sale of equipment.
investing activity-add
Depreciation of machinery.
operating activity-add to net income
Amortization of patent.
operating activity-add to net income
Issuance of bonds for plant assets.
reported as significant non-cash activity
Payment of cash dividends.
financing activity-subtract
Exchange of furniture for office equipment.
reported as significant non-cash activity
Purchase of treasury stock.
financing activity
Loss on sale of equipment.
operating activity-add to net income
Increase in accounts receivable during the year.
operating activity-deduct from net income
Decrease in accounts payable during the year.
operating activity-deduct from net income
A special machine, fabricated to order for a customer, was finished and specifically segregated in the back part of the shipping room on December 31, 2012. The customer was billed on that date and the machine excluded from inventory although it was shipped on January 4, 2013.
include in inventory as of December 31, 2012
Merchandise costing $2,800 was received on January 3, 2013, and the related purchase invoice recorded January 5. The invoice showed the shipment was made on December 29, 2012, f.o.b. destination.
do not include in inventory as of December 31, 2012
A packing case containing a product costing $3,400 was standing in the shipping room when the physical inventory was taken. It was not included in the inventory because it was marked "Hold for shipping instructions." Your investigation revealed that the customer's order was dated December 18, 2012, but that the case was shipped and the customer billed on January 10, 2013. The product was a stock item of your client.
include in inventory as of December 31, 2012
Merchandise costing $720 was received on December 28, 2012, and the invoice was not recorded. You located it in the hands of the purchasing agent; it was marked "on consignment."
do not include in inventory as of December 31, 2012
Merchandise received on January 6, 2013, costing $680 was entered in the purchases journal on January 7, 2013. The invoice showed shipment was made f.o.b. supplier's warehouse on December 31, 2012. Because it was not on hand at December 31, it was not included in inventory.
include in inventory as of December 31, 2012
decrease in inventory
operating activity-add to net income
sale of investments
investing activity-add