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In: Accounting

66. A business purchases equipment by paying $6,081 in cash and issuing a note payable of...

66. A business purchases equipment by paying $6,081 in cash and issuing a note payable of $12,291. Which of the following occurs?

A.Cash is credited for $6,081, Equipment is credited for $18,372, and Notes Payable is debited for $12,291.

B.Cash is debited for $6,081, Equipment is credited for $12,291, and Notes Payable is debited for $6,210.

C.Cash is debited for $6,081, Equipment is debited for $12,291,and Notes Payable is credited for $18,372.

D.Cash is credited for $6,081, Equipment is debited for $18,372, and Notes Payable is credited for $12,291.

67. Jason Retail had the following balances and transactions during 2017.

Beginning Inventory	1515 units at $ 72$72
June 10	Purchased 3030 units at $ 83$83
December 30	Sold 2020 units
December 31	Replacement cost $ 85$85

The company maintains its records of inventory on a perpetual basis using the FIFO inventory costing method. Calculate the amount of ending Merchandise Inventory at December 31, 2017 using the lowerminus−ofminus−costminus−orminus−market rule.

A.$3,825

B.$2,550

C.$2,075

D.$ 2125

68. What is the acid-test ratio for a merchant with the following account balances? (Round your answer to two decimal places.)

Cash	$21,000
Short-term investments	41,000
Net current receivables	53,000
Merchandise inventory	93,000
Total current liabilities	275,000

A.0.82

B.0.61

C.0.42

D.0.76

70. For an accounting equation to balance, a transaction must affect both sides of the equation.

True

False

74. The ability of a company to repay its liabilities can be determined from its ________.

A.journal

B.creditors

C.debt ratio

D.bankers

Solutions

Expert Solution

66. A business purchases equipment by paying $6,081 in cash and issuing a note payable of $12,291. Which of the following occurs?

D.Cash is credited for $6,081, Equipment is debited for $18,372, and Notes Payable is credited for $12,291.

67. Jason Retail had the following balances and transactions during 2017.

Ending Units of rawmaterial =15+30-20 = 25 Units

Cost of ending rawmaterial =25*83=2075

Replacement cost =25*85 =2125

Lower is $2075

Answer is $2075

68. What is the acid-test ratio for a merchant with the following account balances? (Round your answer to two decimal places.)

Acid test Ratio =(Current Asset -Merchadise Inventory)/Current liabilities

Cash	21000
Short-term investments	41,000
Net current receivables	53,000
Merchandise inventory	93,000
Total Current Asset	2,08,000
Less Merchandise inventory	-93,000
Current Asset -Merchadise Inventory	1,15,000

Acid test Ratio =(Current Asset -Merchadise Inventory)/Current liabilities

=115000/275,000 =.42

70. For an accounting equation to balance, a transaction must affect both sides of the equation.

Answer is False

A single side can have a postive and Negative to balance the Equation

74. The ability of a company to repay its liabilities can be determined from its ________.

C.debt ratio

ekkarill92 answered 1 year ago

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