Napa Corp. sells one-year memberships to its Fine Wine Club for $180. Wine Club members each receive a bottle of white wine and a bottle of red wine, selected by the Club director, four times each year at the beginning of each quarter. To properly account for sales of Wine Club memberships, Napa will record:
A. an asset called prepaid sales.
B. a liability called accrued expenses.
C. a liability called unearned revenue.
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Loose Truck, Inc. has cash of $100000, accounts receivable of $ 500000, and inventory of $ 400000. The firm has accounts payable of $ 200000, notes payable of $ 300000, and long-term debt of $ 200000. The firm wishes to increase its current ratio to 2.4. How much would current assets or current liabilities need to change in order to increase the current ratio to 2.4 Current assets Current liabilities ①A. + $ 200000 $ 83333 ②B. + $200000 + $ 83333 ③C. + $ 680000 $ 83333
A. ①
B. ②
C. ③
Information related to Bledsoe Corporation’s inventory, as of December 31,2007, follows:Estimated selling price $3500000Estimated disposal costs 50000Estimated completions 3000000Original FIFO cost 3200000Replacement cost 3300000 Using the appropriate valuation method, what adjustment is necessary to accurately report Bledsoe’ s inventory at the end of 2007, and will this adjustment affect Bledsoe’ s quick ratio Adjustment Quick ratio ①A. $ 50000 write-down Yes ②B. $ 50000 write-down No ③C. $100000 write-up No
A. ①
B. ②
C. ③
A company reported the following for the year: Net sales $ 500 Increase in accounts receivable 20 Decrease in accounts payable 40 Increase in inventory 30 Sale of new common stock 100 Repayment of debt 10 Depreciation 2 Net income 100 Interest expense on debt 5 The company’s cash flow from operations(CFO) and cash flow from investing(CFI) are closest to ; CFO CFI ①A. $12 $100 ②B. $12 $0 ③C. $92 $100
A. ①
B. ②
C. ③
JME Construction always uses the percentage of completion method of recognizing revenue. During 2004 JME signs a contract in the amount of $10 million with the following data available:Costs incurred to date$2200000Billings to date $2000000Cash collected $1750000Total cost of project $8800000 How much gross profit should JME recognize for 2004
A. $ 300000.
B. $450000.
C. $ 200000.