Cash equivalents include short-term investments that will be converted to cash within 120 days.
a. True
b. False
Indicate whether the statement is true or false
(
Q. 2) _____________________________
_ in an internal control system means assessment by management to determine whether the control plans in place are continuing to function appropriately over time.
Fill in the blank(s) with correct word
(
Q. 3) On January 1, 2012, Orbit, Inc purchased land and a building for a total of 90,000 by paying 20,000 cash and issuing a note for the rest. The market value of the building was appraised at 80,000 and the land at 20,000.
Write in both the correct dollar amounts and the account titles involved. Use a plus for increases and parentheses () for decreases.
Part A: Show the effect of the purchase on the accounting equation.
Assets
Liabilities Shareholders' equity
CC Retained earnings
Part B: Show the effect of the first year's depreciation, assuming the straight-line method and an estimated useful life of 20 years with a 32,000 salvage value.
Assets
Liabilities Shareholders' equity
CC Retained earnings
Part C: Show the effect of the first year's depreciation, assuming double-declining depreciation and an estimated useful life of 20 years with a 32,000 salvage value.
Assets
Liabilities Shareholders' equity
CC Retained earnings
Part D: Show the amounts that would appear on the annual financial statements at the end of the THIRD YEAR for each method.
Straight-line Double-declining balance
1. Depreciation expense
2. Accumulated depreciation
3. Building (net of accumulated
depreciation)
4. Land
What will be an ideal response?
(
Q. 4) Berry Rich, Inc. had 600,000 in total assets, of which 200,000 are current assets, and 200,000 in shareholders' equity, of which 80,000 is contributed capital. Calculate the debt-to-equity ratio. Round your answer to the nearest whole percent.
What will be an ideal response?
(
Q. 5) Net sales less sales returns and allowances and sales discounts equal gross sales.
a. True
b. False
Indicate whether the statement is true or false
(
Q. 6) A compensating balance occurs when a bank may require a company to maintain a maximum cash balance.
a. True
b. False
Indicate whether the statement is true or false
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