Identify the inventory costing method best described by each of the following separate statements. Assume a period of increasing costs. results in

a. Results in the highest cost of goods sold.
b. Yields the highest net income.
c. Has the lowest tax expense because of reporting the lowest net income.
d. Better matches current costs with revenues,
e. Precisely matches the costs of items with the revenues they generate.

Answer:

LIFO is a form of inventory costing that assumes that more recent stock is sold first and early stock sold last. FIFO is the opposite of this and believes earlier stock is sold first and later stock is sold last.

Weighted average uses a weighted price for all available stock and specific identification uses the exact cost of the inventory.

a. Results in the highest cost of goods sold. ⇒ LIFO

This is LIFO because the closing stock that is subtracted from the cost of goods sold will be earlier stock and as costs are rising, it will be lower than the purchases.

b. Yields the highest net income. ⇒ FIFO

Because FIFO gives a lower Cost of goods sold as opposed to LIFO, it gives a higher income.

c. Has the lowest tax expense because of reporting the lowest net income.⇒ LIFO

Reports lowest income due to high cost of goods sold.

d. Better matches current costs with revenues. ⇒ LIFO

LIFO uses the current inventory which would reflect the current cost of inventory so it matches current costs with revenue.

e. Precisely matches the costs of items with the revenues they generate. ⇒ Specific Identification.

Uses the exact cost of the inventory so precisely matches costs.

What percentage of authorized shares was issued by Coca-Cola at December 31, 2015, and by PepsiCo at December 26, 2015

The term city-state refers to:_________.
a. A walled urban center and its agricultural hinderlands
b. The political institution that ruled over all ancient kingdoms
c. The capital of a large empire run by a monarch
d. An association of mutually dependent cities

Alliances are often used to pursue business-level goals, but they may be managed at the corporate level. Explain why this portfolio approach to alliance management would make sense.

A restaurant currently uses 62,500 boxes of napkins each year at a constant daily rate. The cost to order napkins is $200.00 per order and the annual carrying cost for one box of napkins is $1.00. If the restaurant orders the optimal (EOQ) number of boxes each time an order is placed, then the number of orders placed during the year would be

g The declaration, record, and payment dates in connection with a cash dividend of $59,400 on a corporation's common stock are July 9, August 31, and October 1. Journalize the entries required on each date.

Barnes Books allows for possible bad debts. On May 7, Barnes writes off a customer account of $10,600. On September 9, the customer unexpectedly pays the $10,600 balance. Record the cash collection on September 9

Jerry Rice and Grain Stores has $4,320,000 in yearly sales. The firm earns 1.8 percent on each dollar of sales and turns over its assets 3.5 times per year. It has $139,000 in current liabilities and $372,000 in long-term liabilities.
a. What is its return on stockholders’ equity?
b. If the asset base remains the same as computed in part a, but total asset turnover goes up to 4.00, what will be the new return on stockholders’ equity? Assume that the profit margin stays the same as do current and long-term liabilities.

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next months budget appear below:

Selling price per unit $29 per unit
Variable expenses $16 per unit
Fixed expenses $8,600 per month
Unit sales 1,010 units per month

Required:
a. Compute the company’s margin of safety.
b. Compute the company’s margin of safety as a percentage of its sales.

At December 31, 2020, Suffolk Corporation had an estimated warranty liability of $105,000 for accounting purposes and $0 for tax purposes. (The warranty costs are not deductible until paid.) The effective tax rate is 20%. Compute the amount Suffolk should report as a deferred tax asset at December 31, 2020.

Suppose that $1 lottery tickets have the following probabilities and values: 1 in 5 to win a free ticket (worth $1), 1 in 100 to win $5, 1 in 100,000 to win $1000, and 1 in 10 million to win $1 million. What is the expected value of a lottery ticket to the consumer

Jake lives in Detroit and runs a business that sells boats. In an average year, he receives $722,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. He owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Jake does not operate this boat business, he can work as a paralegal, receive an annual salary of $21,000 with no additional monetary costs, and rent out his showroom at the $2,000 per year rate. No other costs are incurred in running this boat business.
Identify each of Felix’s costs in the following table as either an implicit cost or an explicit cost of selling guitars.
Implicit Cost Explicit Cost
The wholesale cost for the guitars that Felix pays the manufacturer
The rental income Felix could receive if he chose to rent out his showroom
The salary Felix could earn if he worked as a paralegal
The wages and utility bills that Felix pays
Complete the following table by determining Felix’s accounting and economic profit of his guitar business. Profit (Dollars)Accounting Profit Economic Profit

Poorer developing countries which often produce and export primary commodities tend to face unfair _____________________ in relationship to rich countries that produce manufactured (capital) goods. Question 15 options:

In a sandwich shop, 3 workers are able to make 45 sandwiches in an hour during the lunch rush. When a 4th worker is added, the team is able to make 57 sandwiches. Calculate the marginal product of adding the 4th worker.

The following is TRUE about Inventory: A. Firms increase inventory because more inventory means more movement of materials B. Firms increase inventory because there is a risk of interruptions in the flow of production due to unreliable or highly variable process outcomes C. Firms increase inventory because more inventory sitting for longer periods of time present more opportunities for damage, errors, rework, theft, and obsolescence D. Firms increase inventory because there is an opportunity cost to holding inventory E. Firms increase inventory because the more we spend on inventory, the more we need to spend on other inventory-related expenditures

In the following MRP planning schedule for Item J, indicate the correct net requirements, planned order receipts, and planned order releases to meet the gross requirements. Lead time is one week.

WEEK NUMBER

ITEM J 0 1 2 3 4 5
Gross requirements 67 43 63
On-hand 46
Net requirements
Planned order receipt
Planned order release

There is a phenomena that worker/capital output has not increased in line with the increased performance capabilities of information technology. What is this phenomena called?

The net profit margin ratio can mathematically be broken down as:______.
a. Tax impact x Capital structure impact x Net Profit / Sales
b. Tax impact x Capital structure impact x EBITDA / Sales
c. Tax impact x Capital structure impact x Gross Profit / Sales
d. Tax impact x Capital structure impact x EBIT / Sales

Larry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company’s stock currently is valued at $45.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $36.00 per share. Larry worries about the value of his investment.

a. Larry's current investment in the company is __________If the company issues new shares and Larry makes no additional purchase, Larry's investment will be worth _____________
b. This scenario is an example of __________ . Larry could be protected if the firm's corporate charter includes a provision.
c. If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm will become ___________

Brett wants to sell throw blankets for the holiday season at a local flea market. Brett purchases the throws for $15 and sells them to his customers for $35. The rental space is fixed fee of $1,800 for the season. Assume there is no leftover value for unsold units. If he orders 220 and demand is 160, what is the payoff

A company borrowed $19,000 by signing a 180-day promissory note at 10%. The maturity value of the note is: (Use 360 days a year.)

A popular application of the__________, which is a major business-to-business (B2B) e-commerce model, is e-procurement.

lannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the current margin of safety in dollars for Flannigan Company

Suppose that the inflation rate is 2% and the real terminal value of an investment is expected to be $82,500 in 4 years. Calculate the nominal terminal value of the investment at the end of year 4.

Cross-training occurs: Group of answer choices when employers need to enhance the effectiveness of training by reducing employees' job duties. when e-learning is used as the primary mode for delivering the content of a training program. when the training takes place outside the employing organization. when people are trained to do more than one job.

When a firm uses the LIFO inventory cost flow assumption: ____________
a) ending inventory will be greater than if FIFO were used.
b) cost of goods sold will be the same as if FIFO were used.
c) net income will be greater than if FIFO were used.
d) better matching of revenue and expense is achieved than under FIFO.

The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers. Also note that the company uses a clearing house to take care of all bank as well as non-bank credit cards used by its customers.
Record on page 10 of the journal
Mar. 2 Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the goods sold was $13,300.
3 Sold merchandise for $11,350 plus 6% sales tax to retail cash customers. The cost of the goods sold was $7,000.
4 Sold merchandise on account to Empire Co., $55,400, terms FOB shipping point, n/eom. The cost of the goods sold was $33,200.
5 Sold merchandise for $30,000 plus 6% sales tax to retail customers who used MasterCard. The cost of the goods sold was $19,400.
12 Received check for amount due from Equinox Co. for sale on March 2.
14 Sold merchandise to customers who used American Express cards, $13,700. The cost of the goods sold was $8,350.
16 Sold merchandise on account to Targhee Co., $27,500, terms FOB shipping point, 1/10, n/30. The cost of the goods sold was $16,000.
18 Issued credit memo for $4,800 to Targhee Co. for merchandise returned from sale on March 16. The cost of the merchandise returned was $2,900.
Record on page 11 of the journal
Mar. 19 Sold merchandise on account to Vista Co., $8,250, terms FOB shipping point, 2/10, n/30. Added $75 to the invoice for prepaid freight. The cost of the goods sold was $5,000.
26 Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18.
28 Received check for amount due from Vista Co. for sale of March 19.
31 Received check for amount due from Empire Co. for sale of March 4.
31 Paid Fleetwood Delivery Service $5,600 for merchandise delivered during March to customers under shipping terms of FOB destination.
Apr. 3 Paid City Bank $940 for service fees for handling MasterCard and American Express sales during March.
15 Paid $6,544 to state sales tax division for taxes owed on sales.
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
Chart of Accounts
CHART OF ACCOUNTS
Amsterdam Supply Co.
General Ledger
ASSETS
110 Cash
121 Accounts Receivable-Empire Co.
122 Accounts Receivable-Equinox Co.
123 Accounts Receivable-Targhee Co.
124 Accounts Receivable-Vista Co.
125 Notes Receivable
130 Inventory
131 Estimated Returns Inventory
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
180 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
216 Salaries Payable
218 Sales Tax Payable
219 Customer Refunds Payable
221 Notes Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
313 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710 Interest Expense
Journal
Shaded cells have feedback.
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
How does grading work?
PAGE 10
JOURNAL
ACCOUNTING EQUATION

Howard Inc. had prepaid rent of $79,000 and $88,000 at the end of Year 1 and Year 2, respectively. During Year 2, Howard recorded $244,000 in rent expense in its income statement. Cash outflows for rent in Year 2 were:

A contra account will not:_____.
a. be listed immediately after its related account.
b. be potentially classified as a contra-assets or contra-liabilities.
c. always has a normal debit balance.
d. has a normal balance which is the opposite of its related account.

__________aggregate customers' opinions related to products or services that they have purchased and then suggest them to others with the same interest.

On December 31, the company estimates future sales refunds to be $900. As of that date, the company has an unadjusted debit balance in Accounts Receivable of $25,000 and an unadjusted credit balance of $300 in Sales Refunds Payable.

Requried:
Write down the necessary adjusting entry.