1. In the completed work sheet, which of the following sets of columns would contain the two balances in the Income Summary account representing beginning and ending inventory when using the periodic inventory system?
a. Adjustments and Balance Sheet columns
b. Trial Balance and Adjustments columns
c. Trial Balance and Income Statement columns
d. Adjustments and Income Statement columns
e. Trial Balance and Balance Sheet columns
2. If the trial balance amount of Unearned Pest Spray Revenue is $50,000, and $40,000 has been earned by the end of the fiscal period, the adjustment would be
a. debit Pest Spray Revenue; credit Unearned Pest Spray Revenue.
b. debit Unearned Pest Spray Revenue; credit Cash.
c. debit Cash; credit Unearned Pest Spray Revenue.
d. debit Accounts Payable; credit Unearned Pest Spray Revenue.
e. debit Unearned Pest Spray Revenue; credit Pest Spray Revenue.
3. Adjusting entries are journalized and posted in a noncomputerized system
a. after the closing entries have been journalized.
b. after the trial balance is prepared but before the work sheet is completed.
c. after the adjustments are entered in the work sheet but before the work sheet is completed.
d. after the worksheet is completed but before the financial statements are prepared.
e. at none of these times.
4. Which of the following account type is NOT located on the worksheet's balance sheet?
a. Assets
b. Purchase Discounts
c. Drawing
d. Liabilities
5. Net income appears on the work sheet in the
a. Balance Sheet Debit column.
b. Income Statement Debit column.
c. Adjustments Debit column.
d. Income Statement Credit column.
e. Adjusted Trial Balance Debit column.
In: Accounting
1.How can accrual adjustments for interest incurred but not yet paid affect the balance sheet and the income statement?
A) Accrual adjustments can increase liabilities and increase expenses.
B) Accrual adjustments can increase assets and decrease revenues.
C) Accrual adjustments can decrease liabilities and increase revenues.
D) Accrual adjustments can increase assets and increase expenses.
2.Which of the following types of transactions could be an accrual adjustment?
A) An increase to an asset account and an increase to a liability account.
B) An increase to a revenue account and an increase to an expense account.
C) An increase to a liability account and an increase to a revenue account.
D) An increase to a liability account and an increase to an expense account.
3.In an accrual adjustment for expenses incurred but not yet paid:
A) a liability is decreasing since cash is being paid for an expense incurred at the time of the adjustment.
B) the liability recorded when cash was received is increasing as the expense is incurred.
C) the liability recorded when cash was received is decreasing as the expense is incurred.
D) a liability is increasing since cash will be paid in the future due to the expense incurred
4.In a deferral adjustment for revenues collected in advance that are now earned:
A) a liability is decreasing because cash is being paid for an expense incurred at the time of the adjustment.
B) the liability recorded when cash was received is increased by the adjustment for the revenue being earned.
C) the liability recorded when cash was received is decreased by the adjustment for revenue being earned.
D) a liability is increasing because cash will be paid for an expense in the future.
5.Accruing a revenue or expense in accounting means that the amount:
A) will not be reported in the accounting records.
B) will be reported as a revenue or an expense in the current period.
C) will be reported as a revenue or an expense in a later period.
D) was reported as a revenue or an expense in a prior period.
In: Accounting
The following comparative income statement (in thousands of dollars) for two recent years was adapted from the annual report of Speedway Motorsports, Inc. (TRK), owner and operator of several major motor speedways, such as the Atlanta, Bristol, Charlotte, Texas, and Las Vegas Motor Speedways.
| Year 2 | Year 1 | |||||||
| Revenues: | ||||||||
| Admissions | $100,694 | $100,798 | ||||||
| Event-related revenue | 146,980 | 146,849 | ||||||
| NASCAR® broadcasting revenue | 217,469 | 207,369 | ||||||
| Other operating revenue | 31,320 | 29,293 | ||||||
| Total revenue | $496,463 | $484,309 | ||||||
| Expenses and other: | ||||||||
| Direct expense of events | $(104,303) | $(102,196) | ||||||
| NASCAR® event management fees | (133,682) | (128,254) | ||||||
| Other direct expenses | (19,541) | (18,513) | ||||||
| General and administrative | (285,166) | (194,120) | ||||||
| Total expenses | $(542,692) | $(443,083) | ||||||
| Income (loss) from continuing operations | $ (46,229) | $ 41,226 | ||||||
Note: General & administrative expenses for Year 2 include impairment of goodwill of $98,868. The impairment of goodwill is discussed in Chapter 7.
a. Prepare a comparative income statement for
Years 1 and 2 in vertical form, stating each item as a percent of
revenues.
Round percentage answers to one decimal place.
| Speedway Motorsports, Inc. | ||||
| Comparative Income Statement (in thousands of dollars) | ||||
| For the Years Ended Year 2 and Year 1 | ||||
| Year 2 amount | Year 2 percent | Year 1 amount | Year 1 percent | |
| Revenues: | ||||
| Admissions | $100,694 | % | $100,798 | % |
| Event-related revenue | 146,980 | 146,849 | ||
| NASCAR® broadcasting revenue | 217,469 | 207,369 | ||
| Other operating revenue | 31,320 | 29,293 | ||
| Total revenue | $496,463 | % | $484,309 | % |
| Expenses and other: | ||||
| Direct expense of events | $(104,303) | % | $(102,196) | % |
| NASCAR® event management fees | (133,682) | (128,254) | ||
| Other direct expenses | (19,541) | (18,513) | ||
| General and administrative | (285,166) | (194,120) | ||
| Total expenses | $(542,692) | % | $(443,083) | % |
| Income (loss) from continuing operations | $(46,229) | % | $41,226 | % |
In: Accounting
1.-Given are five observations for two variables, x and y.
|
xi |
1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
|
yi |
4 | 7 | 4 | 10 | 15 |
(d) Develop the estimated regression equation by computing the values of b0 and b1 using b1 =(Σ(xi − x)(yi − y))/Σ(xi − x)2 and b0 = y − b1x.
(e)Use the estimated regression equation to predict the value of y when x = 2.
2.-Companies in the U.S. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. In 2011, Hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. Suppose the following data show the number of cars in service (1,000s) and the annual revenue ($ millions) for six smaller car rental companies.
| Company | Cars (1,000s) |
Revenue ($ millions) |
|---|---|---|
| Company A | 11.5 | 118 |
| Company B | 10.0 | 135 |
| Company C | 9.0 | 100 |
| Company D | 5.5 | 37 |
| Company E | 4.2 | 42 |
| Company F | 3.3 | 30 |
(c) Use the least squares method to develop the estimated regression equation that can be used to predict annual revenue (in $ millions) given the number of cars in service (in 1,000s). (Round your numerical values to three decimal places.)
ŷ =_____
(d) For every additional car placed in service, estimate how much annual revenue will change (in dollars). (Round your answer to the nearest integer.)
Annual revenue will increase by $ ___ , for every additional car placed in service.
(e) A particular rental company has 6,000 cars in service. Use the estimated regression equation developed in part (c) to predict annual revenue (in $ millions) for this company. (Round your answer to the nearest integer.)
$ __ million
In: Statistics and Probability
Net Present Value MethodA series of equal cash flows at fixed intervals.—Annuity
Briggs Excavation Company is planning an investment of $153,700 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for seven years. Customers will be charged $130 per hour for bulldozer work. The bulldozer operator costs $34 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $10,000. The bulldozer uses fuel that is expected to cost $45 per hour of bulldozer operation.
| Present Value of an Annuity of $1 at Compound Interest | |||||
| Year | 6% | 10% | 12% | 15% | 20% |
| 1 | 0.943 | 0.909 | 0.893 | 0.870 | 0.833 |
| 2 | 1.833 | 1.736 | 1.690 | 1.626 | 1.528 |
| 3 | 2.673 | 2.487 | 2.402 | 2.283 | 2.106 |
| 4 | 3.465 | 3.170 | 3.037 | 2.855 | 2.589 |
| 5 | 4.212 | 3.791 | 3.605 | 3.352 | 2.991 |
| 6 | 4.917 | 4.355 | 4.111 | 3.784 | 3.326 |
| 7 | 5.582 | 4.868 | 4.564 | 4.160 | 3.605 |
| 8 | 6.210 | 5.335 | 4.968 | 4.487 | 3.837 |
| 9 | 6.802 | 5.759 | 5.328 | 4.772 | 4.031 |
| 10 | 7.360 | 6.145 | 5.650 | 5.019 | 4.192 |
a. Determine the equal annual net cash flows from operating the bulldozer. Use a minus sign to indicate cash outflows.
| Briggs Excavation | |||
| Equal Annual Net Cash Flow | |||
| Cash inflows: | |||
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|
$ | ||
|
$ | ||
| Cash outflows: | |||
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|
$ | ||
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|
$ | ||
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$ | ||
Feedback
b. Determine the net present value of the investment, assuming that the desired rate of return is 20%. Use the The sum of the present values of a series of equal cash flows to be received at fixed intervals.present value of an annuity of $1 table above. Round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.
| Present value of annual net cash flows | $ |
| Amount to be invested | $ |
| Net present value | $ |
c. Should Briggs Excavation invest in the
bulldozer, based on this analysis?
d. Determine the number of operating hours such that the present value of cash flows equals the amount to be invested. Round interim calculations and final answer to the nearest whole number.
hoursIn: Accounting
On December 31, 2016, Krug Company reported total assets of $320,000 prior to the following adjusting entries:
Depreciation expense was $34,000;
Accrued sales revenue totaled $32,000;
Accrued expenses totaled $14,000;
Used insurance: $6,000; the insurance was initially recorded as prepaid.
Rent revenue earned: $4,000; the rent was initially prepaid by the tenant and credited to unearned rent revenue.
How much are Krug's total assets after the adjusting entries?
In: Accounting
The following accounts appeared in recent financial statements of Continental Airlines:
Accounts Payable Flight Equipment
Air Traffic Liability Landing Fees
Aircraft Fuel Expense Passenger Revenue
Cargo and Mail Revenue Purchase Deposits for Flight Equipment
Commissions Spare Parts and Supplies
Identify each account as either a balance sheet
account or an income statement account. For each balance sheet account, identify it as an asset, a liability, or owner’s equity. For each income statement account, identify it as a revenue or an expense.
In: Accounting
Company MNO generates between 11000 and 15000 million dollars revenue per year. Suppose that the company's revenue stays within this range. Use an interest rate of 9.75% per year compounded continuously. Fill in the blanks in the paragraph below, rounding your answers to the nearest tenth.
The present value of MNO's revenue over a five year period is
between _______________ and ______________ million dollars.
Over a twenty-five year period, the present value falls between ____________ and _____________ million dollars
In: Math
7aresh company has these accounts on 31st december 2019:
as of december 31st 2019, provide 7aresh's journal entry
In: Accounting
Consider a sealed-bid auction in which the seller draws one of the N bids at random. The buyer whose bid was drawn wins the auction and pays the amount bid. Assume that buyer valuations follow a uniform(0,1) distribution.
1. What is the symmetric equilibrium bidding strategy b(v)?
2.What is the seller’s expected revenue?
3.Why doesn’t this auction pay the seller the same revenue as the four standard auctions? That is, why doesn’t the revenue equivalence theorem apply here? Be specific.
In: Economics