Questions on Company Accounting

Date: Name: ID: Answer the following Questions: 1. Tower Inc. owns 30% of Yale Co. and applies the equity method. During the current year, Tower bought inventory costing $66,000 and then sold it to Yale for $120,000. At year-end, only $24,000 of merchandise was still being held by Yale. What amount of inter-company inventory profit must be deferred by Tower? A. $6,480 B. $3,240 C. $10,800 D. $16,200 E. $6,610 2. All of the following statements regarding the investment account using the equity method are true except A. The investment is recorded at cost B. Dividends received are reported as revenue C. Net income of investee increases the investment account D. Dividends received reduce the investment account E.

9. Clemente Co. owned all of the voting common stock of Snider Co. On January 2, 2009, Clemente sold some equipment to Snider for $125,000. The equipment had cost $140,000. At the time of the sale, the balance in accumulated depreciation was $40,000. The equipment had a remaining useful life of five years and a $0 salvage value. Straight-line depreciation is used by both Clemente and Snider. At what amount should the equipment (net of depreciation) be included on the consolidated balance sheet dated December 31, 2009?

The company's management estimates that 2.5% of net credit sales will be uncollectible. Net credit sales are $115,000. What will be the amount of uncollectible accounts expense reported on the income statement?

4. Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?

4. What amount should have been reported for the land on a consolidated balance sheet, assuming theinvestment was obtained prior to SFAS 141(R) and the parent company concept was used?

Because more categories and more refining provide more accurate information, but it is really difficult and costly to track more categories. The best option is to simplify the categories, in result, reducing the cost of ABC system.

Feedback: Management accounting is the preparation and use of accounting information systems to achieve the organization's objectives by supporting decision makers inside the enterprise. LO 4

A non-cash item is an expense charged against revenues that does not directly affect the cash flow.

Accounting principles are like the Ten Commandments to a CPA. The principles are recommendation or instructions on what an account should follow when logging and informing on all accounting transactions. Businesses rely on their account every month to maintain the financials records of the company. At the end of each month, it is important for every transaction to be documented and posted as a financial entry in the monthly trail balance. An account needs to ensure all journaling is correct; an account must know the importance of how to record prepaid expenses, unearned revenues, accrued expenses, and accrued revenues.

| It is assumed that the activities of Ford Motor Corporation can be distinguished from those of General Motors because of the

Part 1 Dr CREDITORS A/C Cr Date Particulars Amount Date Particulars Amount       31-Dec-12 sales a/c 5,000   bal c/d 5,000           5,000     5,000             STOCK A/C Date Particulars Amount Date Particulars Amount       31-Dec-12 sales a/c 5,000   bal c/d 5,000           5,000     5,000             PACKAGING EXPENCE A/C Date Particulars Amount

b) Determine the carrying amount and tax base of the plant at year end. Prepare the

2. At the end of its first year of operations, Matlocke Company has total assets of $2,000,000 and total liabilities of $1,200,000. The owner originally invested $200,000 in the business, but has not made any further investments or taken any withdrawals. What is the first year 's net income for Matlocke Company?

Make appropriate disclosure on timing and payment terms relating to its performance obligations, this would broadly include grants on assets and services rendered to customers.

“Management Accounting is the utilization of proper strategies and ideas in preparing chronicled and anticipated financial information of a substance to help administration in setting up arrangements for sensible monetary goals really taking shape of judicious choices with a view towards these destinations."