Vest, Inc received cash from selling 100 shares of its 1 par value common stock at 10 per share. Show the effect of issuing stock on the accounting equation, including both account titles and amounts.
Shareholders' equity
Assets Liabilities Contributed capital Retained earnings
What will be an ideal response?
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Q. 2) Special discounts from list prices, granted by manufacturers to different classes of customers, are known as
a. cash discounts.
b. trade discounts.
c. manufacturers' discount.
d. customers' discounts.
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Q. 3) Queue, Incorporated incurred the following expenditures for the purchase and use of a machine, which was placed into service on January 1, 2011:
Expenditure Amount
invoice price of the machine 144,000
transportation costs 23,000
inspection, moving and handling 6,500
installation and testing 12,300
power and other operating costs for using the machine during the year
43,000
Required:
1. Determine the total costs that should be capitalized into the machine account. What is the total? Explain how you decided which costs to capitalize.
2. Determine the total operating expenses associated with using the machine for the year ended December 31, 2011. Assume the machine has an estimated 5-year useful life and an 8,000 salvage value. Explain how you decided which costs to expense.
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Q. 4) Allowance for Doubtful Accounts is a liability account.
a. True
b. False
Indicate whether the statement is true or false
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Q. 5) Assume that Tango Company had a beginning inventory of 100 units at a cost of 2.00 per unit. Current period purchases were 400 units at a cost of 4.00 per unit. The weighted average cost of each unit is 3.
Indicate whether the statement is true or false
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Q. 6) The most error-prone and inefficient steps in an operations or information process is:
a. report generation
b. master data update
c. data entry
d. none of the above
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