All classifications on the Balance Sheet have a general relationship with sections identified on the Statement of Cash Flows. Indicate which relationships are correctly identified in the table below:
The following information relates to year-end adjusting entries as of December 31, 2021.
a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,000.
b. Six months' of the one-year insurance policy purchased on July 1 has expired.
c. Four months of the one-year rental agreement purchased on September 1 has expired.
d. Of the$1,800 of office supplies purchased on July 4, $300 remains.
e. Interest expense on the$30,000 loan obtained from the city council on August 1 should be recorded.
f. Of the $2,800 of racing supplies purchased on December 12,$200 remains.
g. Suzie calculates that the company owes $14,000 in income taxes.
Record adjusting entries as of December 31, 2021.
The present value factor at 8% for one period is 0.92593, for two periods is 0.85734, for three periods is 0.79383, for four periods is 0.73503, and for five periods is 0.68058. The future value factors for the same rate and periods are: one period: 1.08, two periods: 1.1664, three periods: 1.944, four periods: 2.099, and five periods: 2.267.
Given these factors, what amount should be deposited in a bank today to grow to $100 three years from now? Select one:
Record the following transactions in the General Journal, accounting for GST as explained in this chapter. Use GST Payable for the tax on goods sold, and use GST-ITC for the tax on items purchased. Provide suitable explanations. Upload your completed "General Journal" PDF to Practice Question 4.5.1 below.
- Bought merchandise worth $7,500 plus 5% GST. Issued cheque.
- Bought merchandise on account from Lipton Suppliers Co.,$2,300 plus 5% GST. Invoice #234, terms net 30 days.
- Cash sales for the week, $12,500 plus GST.
- Sale on account to C. Sakrapee,$540 plus GST. Invoice #14, terms net 10 days.
- Sold merchandise on account to R.J. Lupin, $262.50 (includes$12.50 GST). Invoice #15, terms net 10 days.
- Bought office supplies, $315, which includes$15 GST. Paid cash.
- Paid water bill, $78.75, which includes$3.75 GST.
- Sold merchandise to Franco Moret on account, $210, which includes$10 GST. Invoice #16, terms net 10 days.
- Bought a new cash register, $420 plus GST. Paid cash.
A company is considering a project with the following cash flows and assumed discount rate of 26%.
Initial outlay ($5,000)
Year 2 $3,500
Year 4 $2,800
What should this firm decide based on the net present value (NPV)?
A. Reject the project since the NPV is negative
B. Accept the project since the NPV is negative
C. Reject the project since the NPV is positive
D. Accept the project since the NPV is positive
After which of the following errors would the adjusted trial balance totals not agree?
A. The adjustment for depreciation was omitted.
B. A debit to Accounts Receivable was inadvertently posted as a credit to Accounts Payable.
C. Supplies were miscounted and adjusted for the wrong amount.
D. A debit to Accounts Receivable was inadvertently posted as a debit to Accounts Payable.
Which of the following is an advantage of a dual-rate method?
A) It is the most widely used method in practice.
B) It is less costly to implement.
C) It avoids the expensive analysis for categorizing costs as either fixed or variable.
D) It allocates fixed cost as per the budgeted usage that helps in short and long-run planning.
The Raymar Company is preparing its cash budget for the months of April and May. The firm has established a $200,000 line of credit with its bank at a 12% annual rate of interest on which borrowings for cash deficits must be made in$10,000 increments. There is no outstanding balance on the line of credit loan on April 1. Principal repayments are to be made in any month in which there is a surplus of cash. Interest is to be paid monthly.
If there are no outstanding balances on the loans, Raymar will invest any cash in excess of its desired end-of-month cash balance in U.S. Treasury bills. Raymar intends to maintain a minimum balance of $100,000 at the end of each month by either borrowing for deficits below the minimum balance or investing any excess cash.
Monthly collection and disbursement patterns are expected to be:
- Collections. 50% of the current month's sales budget and 50% of the previous month's sales budget.
- Accounts Payable Disbursements. 75% of the current month's accounts payable budget and 25% of the previous month's accounts payable budget.
- All other disbursements occur in the month in which they are budgeted.
Required: Prepare a cash budget for the month of April and May.
The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $4.4 million from the beginning of the year. The company declared a dividend of$2.5 million during the year. What was the net income earned during the year?
A. $1.9 million
C. $6.9 million