QUESTION 1
Harriet’s Toy Shop had net sales of $852,000. The gross profit was $230,000. Calculate Harriet’s cost of goods sold.
QUESTION 2
A company allows its customers to use bank credit cards to charge purchases. When customers use the credit cards, the net amount is deposited in the company’s checking account. The company also is charged a 2.5% service charge for these credit card sales. Assume that on April 13, the company sold $25,000 worth of merchandise to customers who used credit cards. Prepare the company’s journal entry to record the credit card sales for April 13 assuming the company deposited the receipts that same day.
QUESTION 3
Define plant assets and identify the four primary issues in accounting for them.
QUESTION 4
Leonard Matson completed these transactions during December of the current year:
Prepare general journal entries to record these transactions.
QUESTION 5
The following information is available for some of Coca-Cola’s segments (all amounts are in millions):
Determine the segment return on assets for each geographic segment.
Comment on the results. How do the segments compare with respect to profitability?
QUESTION 6
Explain the difference between cash and cash equivalents.
QUESTION 7
Wal-Mart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million. Sears had income before interest expense and income taxes of $3,596 million and interest expense of $1,143 million. Calculate the times interest earned for each company and comment on the results.
QUESTION 8
Journalizing and posting closing entries is a required step in the accounting cycle. Explain why it is necessary to close the books at the end of an accounting period.
QUESTION 9
Identify and describe the four inventory valuation methods.
QUESTION 10
Identify the differences between accrual accounting and cash basis accounting.
