Posted: May 5th, 2016

When there are material differences between the results of using the straight-line method??

Journalize all events depicted as of May 15th.
(a) Journalize the purchasing of raw materials.
(b) Journalize the application of manufacturing overhead.
(c) Journalize the application of direct labor.
(d) Journalize the transfer to Semi-finished Goods Inventory (SFGI).

For a compound transaction, if an amount box does not require an entry, leave it blank or enter “0”. If required, round your answers to two decimal places.

Temporary investments

a. do not include equity securities
b. include cash equivalents
c. are reported as current assets
d. all of these

Conversion costs are

a. direct materials and factory overhead
b. factory overhead and direct labor
c. direct materials and indirect labor
d. direct materials and direct labor

The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

a. True
b. False

The percent of fixed assets to total assets is an example of

a. solvency analysis
b. horizontal analysis
c. profitability analysis
d. vertical analysis

Debtors are interested in the times-interest-earned ratio because they want to

a. know the tax effect of lending to a corporation
b. have adequate protection against a potential drop in earnings jeopardizing their interest payments
c. be sure their debt is backed by collateral
d. know what rate of interest the corporation is paying

An example of a period cost is:

a. property taxes on plant facilities
b. advertising expense
c. depreciation on factory equipment
d. indirect materials

Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

a. $150,000.
b. $102,000.
c. $110,000.
d. $118,000.

When there are material differences between the results of using the straight-line method and using the effective interest method of amortization, the effective interest method should be used.

a. True
b. False

The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.

a. True
b. False

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