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Study Resources (Accounting)

11) Safeguarding property, plant and equipment includes all of the following except: A) training the operating personnel in the proper use of the assets B) setting up security measures to prevent theft C) separating custody of the assets from the accounting for the assets D) assigning responsibility for the custody of the assets to.
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31) Stardust Company issued a five-year, interest-bearing note payable for $50,000 on January 1, 2013. Each January, Stardust is required to pay $10,000 principal on the note. What is the amount that will be reported on the current portion of long-term notes payable on the December 31, 2014 balance sheet? A).
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Objective 11-3 1) Gross pay is the total amount of compensation earned by the employee less deductions. 2) Employee income tax is an optional deduction, which is withheld from the employee's pay. 3) Payroll deductions withheld from employees become a liability of the employer. 4) Employment Insurance premiums are imposed on both the employer.
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  Table 11-8   BCN Bank agrees to lend Samson Company $80,000 on January 1. Samson Company signs an $80,000, 5%, 9-month note. 16) Refer to Table 11-8. Show how the note and any related interest will appear on the June 30 balance sheet of Samson Company. Be specific about the classification of the.
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20) Prepare journal entries for the following transactions. Explanations are not required. 2013 Jan. 1Purchased a building for $84,000 cash, $4,000 residual value, 20-year expected life, double-declining-balance amortization. May 1Purchased equipment for $25,000 cash, $3,000 residual value, 10-year expected life, straight-line amortization. Dec. 31Recorded amortization on the building and equipment. 2014 June 30Sold the equipment for.
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  Table 10-7   On January 1, 2013, Brazeau Transport purchased a $165,000 truck for hauling cattle across the border. Brazeau plans on driving the truck for four years or 450,000 kilometres. Expected residual value for the truck is $35,000. On June 30, 2016, after having driven the truck 44,000 kilometres, the truck.
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  Match the following. A) Operating line of credit B) interest payable C) contingent liability D) liability 67) A potential liability that depends on a future event arising out of past events 68) An obligation to transfer assets or to provide services in the future 69) An account related to notes payable 70) A bank loan that is negotiated.
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Objective 10-7 1) Accounting for intangible assets under international financial reporting standards (IFRS) is more complex than under accounting standards for private enterprises (ASPE). Match the following. A) componentization B) revaluation model C) segregated amortization D) impairment 2) Depreciating parts of assets separately 3) The IFRS method of restating property, plant, and equipment at market value 4) With respect.
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  Table 10-9 Sandu Trucking On July 1, 2013, Sandu Trucking bought a truck for $42,000 cash. It has estimated residual value of $6,000, and an estimated life of 4 years, or 300,000 kilometres. The truck drove 80,000 kilometres in 2013, 90,000 kilometres in 2014, 100,000 kilometres in 2015, and 50,000 kilometres.
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87) Most companies use straight-line amortization for their books but an accelerated method for the tax return. Explain why companies use these two different methods that result in the need for two sets of records. 88) Durham Bike Shop Ltd.'s year end is December 31. Some of the company's transactions are.
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11) Current liabilities on the balance sheet would include all of the following except: A) accrued expenses. B) estimated liabilities. C) earned revenues. D) unearned revenues. 12) Which of the following is not an advantage of paying employees using electronic funds transfer (EFT)? A) reduced salary expense. B) reduced administrative costs. C) no lost pay cheques. D) ensures that.
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Objective 11-1 1) Accrued interest on a note payable should be credited to interest payable. 2) Interest payable is a contra liability account and is deducted from the note payable on the balance sheet. 3) A $45,000, 10%, 90-day note payable comes to maturity. The amount to be paid at maturity including interest.
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75) For each of the independent situations below, determine the age of the asset in question. a)The balance in the buildings account is $550,000, while the balance sheet shows the book value of buildings at $233,200. The notes to the financial statements indicate that straight-line amortization is used for all property,.
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21) Secured operating lines of credit normally have lower rates of interest than unsecured operating lines of credit. 22) Long-term debt refers to obligations that have to be paid within a year of the balance sheet date. 23) Which of the following liabilities creates no expense on the part of the company? A).
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Objective 11-5 1) The components of the payroll system are a payroll register, payroll cheques, and an earnings record for each employee. 2) The duties of hiring and terminating employees should be separated from payroll accounting and from access to pay cheques. 3) Current liabilities: A) are subtracted from long-term liabilities on the balance.
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75) Newtowne Furniture Gallery issued two notes payable during 2013. Pertinent data on these notes are shown below: NoteAmountRateTermDate Issued A $10,00010%120 daysNovember 1 B$12,5009%60 daysDecember 1 In addition to the above two notes, Newtowne Furniture Gallery gave a $50,000, 8%, 180-day note to the First City Bank on September 2, 2013 for a.
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  Table 11-10 Benny's Bagels operates in a province that has HST collected by the federal government at a rate of 12%. During the month of December 2013 Benny's Bagels purchased baking materials for $12,000; bought a new oven for $15,000; paid salaries of $14,000; and, had cash sales of $35,000. 58) Refer.
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  Match the following. A) warranty 30) Product guarantee against defects 31) Bill's Bargain Vacuums warrants all of its products for one full year against any defect in manufacturing. Sales for 2013 and 2014 were $758,000 and $871,000, respectively. Bill's Bargain Vacuums expects warranty claims to run 4.5% of annual sales. Bill's paid $30,150.
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  Table 10-9 Sandu Trucking On July 1, 2013, Sandu Trucking bought a truck for $42,000 cash. It has estimated residual value of $6,000, and an estimated life of 4 years, or 300,000 kilometres. The truck drove 80,000 kilometres in 2013, 90,000 kilometres in 2014, 100,000 kilometres in 2015, and 50,000 kilometres.
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21) Franconia Sales offers warranties on all their electronic goods.  Warranty expense is estimated at 2% of sales revenue.  In 2013, Franconia had $500,000 of sales.  In the same year, Franconia paid out $7,500 of warranty payments.  Which of the following is the entry needed to record the estimated warranty.
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Objective 10-6 1) Intangible assets are generally amortized using an accelerated method over 40 years or less. 2) Goodwill is a tangible asset. 3) The cost of a trademark or trade name is amortized over its useful life or 60 years. 4) Goodwill can only be recorded at the purchase of a business. 5) Intangible.
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61) Refer to Table 10-8. What is the amortization expense for 2014 if the company uses the units-of-production amortization? A) $6,000 B) $18,000 C) $10,000 D) $9,000 62) Refer to Table 10-8. What is the book value of the machine at the end of 2014 if the company uses units-of-production amortization? A) $20,000 B) $10,000 C) $17,778 D) $28,000 Match.
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  Table 10-7   On January 1, 2013, Brazeau Transport purchased a $165,000 truck for hauling cattle across the border. Brazeau plans on driving the truck for four years or 450,000 kilometres. Expected residual value for the truck is $35,000.  On June 30, 2016, after having driven the truck 44,000 kilometres, the truck.
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  Table 11-9   During 2013, Cougar Manufacturing launched a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 3% within 12 months following sale and 5% in the second 12 months following sale. Sales and actual warranty claims for the years ended December 31,.
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Objective 11-2 1) The matching objective requires that a company record warranty expense at the time the repair is made. 2) Sales for the current year amount to $900,000. The company estimates warranty expense to be 5% of sales. The journal entry to accrue the estimated warranty expense includes a debit to.
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11) Warranty expense is debited in the period that: A) the product is repaired. B) the product is sold. C) the cash is collected from the customer. D) either the product is sold or the cash is collected. 12) What entry is required when a business estimates warranty payable each period based on sales revenue? A).
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Objective 10-5 1) Amortization expense on wasting assets is usually computed in the same manner as units-of-production amortization. 2) In accounting for natural resources the future removal and restoration costs are referred to as an "asset retirement obligation". Table 10-4   Golden Miners purchased a mine in 2013 for $960,000. It was estimated that the.
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  Match the following. A) deductions B) Canada Pension Plan contributions C) Employment Insurance contributions D) employees' income tax payable E) benefits F) Workers' Compensation premiums G) gross pay H) net pay 17) A contribution withheld from employees' pay and matched by the employer 18) A contribution withheld from employees' pay and matched by the employer at the rate of 1.4.
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25) Data Services has five hourly employees. Some employees work overtime each week and are paid time and one-half for all work exceeding 40 hours per week. Based on the data below, compute gross pay for each employee. Employee Hours Worked Pay Rate Per Hour Mary Jarvis 45 $12.00 Wilson Sparks 50 $13.50 Eunice Cope 38 $11.00 Elmer Beauchamp 44 $10.00 Jennifer White 40 $12.50 26) The Brown Roof.
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77) Faulkner Company engaged in the following transactions regarding unearned rent during 2013: Feb. 1Collected $6,000 from a tenant who was paying for a two-year lease. (Lease A) Mar. 1Collected $3,600 from a tenant who was paying for a one-year lease. (Lease B) Apr. 1Collected $7,200 from a tenant who was paying for.
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81) Refer to Table 10-7. Calculate and record the amortization expense for the truck for the year 2016 using the straight-line method.         82) Refer to Table 10-7. Calculate and record the amortization expense for the truck for the year 2016  assuming the the unit-of-production method is used and that the truck.
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Objective 11-6 1) Under IFRS the preferred term for accounts payable is provisions. 2) Under both ASPE and IFRS, obligations to parties outside the company are typically carried at their fair value. 3) With respect to current liabilities, in what area is the main difference between international financial reporting standards (IFRS) and accounting.
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  Table 10-9 Sandu Trucking On July 1, 2013, Sandu Trucking bought a truck for $42,000 cash. It has estimated residual value of $6,000, and an estimated life of 4 years, or 300,000 kilometres. The truck drove 80,000 kilometres in 2013, 90,000 kilometres in 2014, 100,000 kilometres in 2015, and 50,000 kilometres.
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80) Refer to Table 11-8. Prepare the adjusting journal entry made by Samson Company on June 30.         81) Refer to Table 11-8. Prepare the entry that Samson Company will make to pay off the note and interest at maturity assuming that interest has been accrued to June 30.         82) Jenny's Jewellery.
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  Table 10-5 On January 1, 2013, Button Manufacturing Company purchased a machine for $39,980, and expects to use the machine a total of 32,000 hours over the next four years. Button set the residual value on the machine at $3,500. Button used the machine 6,000 hours in 2013 and 7,200 hours.
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11) All of the following are forms of employee compensation except: A) salary. B) subcontractor fee. C) wages. D) commissions. 12) The total payroll expense of the employer is equal to: A) net pay plus employee withholdings. B) gross pay plus employees' income tax. C) net pay plus employer payroll taxes and fringe benefits. D) gross pay plus employer.
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11) Research costs incurred by a company should be: A) capitalized and amortized over 17 years or less. B) capitalized and amortized over its useful life. C) expensed on the current year's income statement. D) either capitalized and amortized or expensed immediately at the option of the accountant. 12) Which of the following is the.
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73) Beta Construction Ltd. acquired the following property, plant and equipment on January 1, 2013:                                                                                  Residual Asset CostValueUseful Life Office equipment $ 75,000 $ 5,0005 years Building 200,000 20,00025 years Delivery equipment250,000 25,00010 years Beta Construction Ltd. amortizes the office equipment using the straight-line method, the building using the double-declining-balance method, and.
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72) Stanton Delivery purchased a truck costing $100,000 on September 3, 2013, by paying $4,000 down and signing a 10%, 180-day note payable for the balance. Stanton's year end is December 31. 1)Prepare journal entries to: a) record the purchase of the truck on September 3, 2013 b) record the accrual of interest.
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38) Explain the accounting for warranties. Be specific and include in your discussion the principle or objective that governs the accounting method. 39) Define a contingent liability. Discuss the CICA Handbook's guidelines on reporting contingencies. Give an example of a contingent liability and indicate how it should be reported. 40) Answer the.
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Objective 10-3 1) Canada Revenue Agency specifies the maximum amortization a taxpayer may deduct for income tax purposes. 2) If a firm changes its estimate of the useful life of an asset, the firm must recalculate amortization expense for each previous year since the asset was placed in service. 3) A fully amortized.
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17) M & D Company has numerous employees who are paid on a monthly basis. Payroll information for August of the current year is given below. Employee compensation$135,000 Union dues 1,450 Charitable contributions875 Employee CPP contributions4,320 Employee EI contributions 2,336 Employee income tax withheld20,250 Prepare the journal entries to record the August payroll and the payroll benefits.
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