On January 1, Year 1, Residence Company issued bonds with a $64,000 face value. The bonds were issued at face value. They had a 20-year term and a stated rate of interest of 7%, which is paid at the end of each year. Which of the following shows how the recognition of interest expense will affect Residence’s financial statements on December 31, Year 14? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenues−Expenses=Net IncomeA.(4,480)= +(4,480) −4,480=(4,480)(4,480) FAB.(4,480)= +(4,480) −4,480=(4,480)(4,480) OAC.(4,480)=(4,480)+ −4,480=(4,480)(4,480) OAD.(4,480)=(4,480)+ −4,480=(4,480)(4,480) FA

On January 1, Year 5, Raven Limo Service, Incorporated sold a used limo that had cost $80,000 and had accumulated depreciation of $44,000. The limo was sold for $32,400 cash. Which of the following shows how the sale of the limo would affect Raven’s financial statements? Balance SheetIncome StatementStatement of Cash Flows Assets=Liabilities+EquityCash+Book Value of LimoGain−Loss=Net IncomeA.32,400+(36,000)= +(3,600)3,600− =(3,600)32,400 IAB.32,400+(36,000)= +3,6003,600− =3,6003,600 IAC.32,400+(36,000)= +(3,600) −3,600=(3,600) D.32,400+(36,000)= +(3,600) −3,600=(3,600)32,400 IA

Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each. During the period, the company purchased inventory items as follows: PurchaseNumber of ItemsCost1200$9.002150$9.30350$10.50 Glasgow sold 220 units after purchase 3 for $17.00 each.What is Glasgow’s ending inventory under LIFO?

Chester Company has established internal control policies and procedures in order to achieve the following objectives:1) Effective evaluation of management performance.2) Assure that the accounting records contain reliable information.3) Safeguard the company’s assets.4) Assure that employees comply with company policy.Which of these objectives are achieved by accounting controls?

On January 1, Year 2, Kincaid Company’s Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $63,400 and $1,300, respectively. During Year 2, Kincaid reported $152,000 of credit sales, wrote off $1,200 of receivables as uncollectible, and collected cash from receivables amounting to $161,300. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales.What is the amount of uncollectible accounts expense that will be reported on the Year 2 income statement?

The net realizable value of receivables is not shown on the balance sheet of a company using the

Which of the following occurs when a company replenishes its petty cash fund?

Tom Tom Toys, Incorporated has sales of $501,800 in Year 1. Tom Tom warrants its products and estimates warranty expense to be 20% of sales. Which of the following shows how the year-end adjusting entry for warranty expense would affect the company’s financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenue−Expenses=Net IncomeA. =$(100,360)+$(100,360) −$100,360=$(100,360) B. =$100,360+$(100,360) −$100,360=$(100,360)$(100,360) OAC.$(100,360)= +$(100,360) −$100,360=$(100,360) D. =$100,360+$(100,360) −$100,360=$(100,360)

Marvin Company issues $125,000 of bonds at face value on January 1. The bonds carry a 6% annual stated rate of interest. Interest is payable in cash on December 31 of each year. Which of the following shows the effect of the first interest payment on the financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenue−Expense=Net IncomeA.(7,500)=(7,500)+ − = (7,500) FAB.(7,500)= +(7,500) −7,500=(7,500)(7,500) FAC.(7,500)=(7,500)+ − = (7,500) OAD.(7,500)= +(7,500) −7,500=(7,500)(7,500) OA

How does the year-end adjustment to recognize uncollectible accounts expense affect the elements of the financial statements?