Question: The balance sheet for The Itex Corporation
The balance sheet for The Itex Corporation on December 31, 2012, includes the following cash and receivables balances. ![The balance sheet for The Itex Corporation on December 31, 2012, includes the following cash and receivables balances.
Current liabilities reported in the December 31, 2012, balance sheet included:
Obligation on discounted notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,500
Transactions during 2013 included the following:
(a) Sales on account were $767,000.
(b) Cash collected on accounts totaled $576,500, including accounts of $93,000 with cash discounts of 2%.
(c) Notes received in settlement of accounts totaled $82,500.
(d) Notes receivable discounted as of December 31, 2012, were paid at maturity with the exception of one $3,000 note on which the company had to pay the bank $3,090, which included interest and protest fees. It is expected that recovery will be made on this note early in 2014.
(e) Customer notes of $58,500 were discounted with recourse during the year, proceeds from their transfer being $58,500. (All discounting transactions were recorded as loans.) Of this total, $48,000 matured during the year without notice of protest.
(f) Customer accounts of $8,720 were written off during the year as worthless.
(g) Recoveries of bad debts written off in prior years were $2,020.
(h) Notes receivable collected during the year totaled $27,000 and interest collected was $2,450.
(i) On December 31, accrued interest on notes receivable was $630.
(j) Uncollectible accounts are estimated to be 5% of the December 31, 2013, Accounts Receivable balance.
(k) Cash of $35,000 was borrowed from First Security Bank with accounts receivable of $40,000 being pledged on the loan. Collections of $19,500 had been made on these receivables [included in the total given in transaction (b)], and this amount was applied on December 31, 2013, to payment of accrued interest on the loan of $600, and the balance to partial payment of the loan.
(l) The petty cash fund was reimbursed (meaning that cash was removed from the bank account and placed in the petty cash fund) based on the following analysis of expenditure vouchers:
Travel expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $112
Entertainment expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Postage expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Office supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Cash short and over (a revenue account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(m) Cash of $3,000 was added to a bond retirement fund.
(n) Currency on hand at December 31, 2013, was $12,000.
(o) Total cash payments for all expenses during the year were $665,300. Charge to General Expenses.
Instructions:
1. Prepare journal entries summarizing the preceding transactions and information.
2. Prepare a summary of current cash and receivables for balance sheet presentation.](../images/the-balance-sheet-for-the-itex-corporation-on-december-31-2012-69000-1.jpg)
Current liabilities reported in the December 31, 2012, balance sheet included: Obligation on discounted notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,500 Transactions during 2013 included the following: (a) Sales on account were $767,000. (b) Cash collected on accounts totaled $576,500, including accounts of $93,000 with cash discounts of 2%. (c) Notes received in settlement of accounts totaled $82,500. (d) Notes receivable discounted as of December 31, 2012, were paid at maturity with the exception of one $3,000 note on which the company had to pay the bank $3,090, which included interest and protest fees. It is expected that recovery will be made on this note early in 2014. (e) Customer notes of $58,500 were discounted with recourse during the year, proceeds from their transfer being $58,500. (All discounting transactions were recorded as loans.) Of this total, $48,000 matured during the year without notice of protest. (f) Customer accounts of $8,720 were written off during the year as worthless. (g) Recoveries of bad debts written off in prior years were $2,020. (h) Notes receivable collected during the year totaled $27,000 and interest collected was $2,450. (i) On December 31, accrued interest on notes receivable was $630. (j) Uncollectible accounts are estimated to be 5% of the December 31, 2013, Accounts Receivable balance. (k) Cash of $35,000 was borrowed from First Security Bank with accounts receivable of $40,000 being pledged on the loan. Collections of $19,500 had been made on these receivables [included in the total given in transaction (b)], and this amount was applied on December 31, 2013, to payment of accrued interest on the loan of $600, and the balance to partial payment of the loan. (l) The petty cash fund was reimbursed (meaning that cash was removed from the bank account and placed in the petty cash fund) based on the following analysis of expenditure vouchers: Travel expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $112 Entertainment expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Postage expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Office supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Cash short and over (a revenue account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 (m) Cash of $3,000 was added to a bond retirement fund. (n) Currency on hand at December 31, 2013, was $12,000. (o) Total cash payments for all expenses during the year were $665,300. Charge to General Expenses. Instructions: 1. Prepare journal entries summarizing the preceding transactions and information. 2. Prepare a summary of current cash and receivables for balance sheet presentation.
Transcribed Image Text:
Cash-First Security Bank. $45,000 Currency on hand 16,000 Petty cash fund... 1,000 Cash in bond sinking fund 15,000 Notes receivable (including notes discounted with recourse, $15,500). 36,500 Accounts receivable $85,600 Less: Allowance for bad debts 4,150 81,450 Interest receivable.. 525
> Refer to Practice 8-7, Practice 8-10, and Practice 8-12. Indicate how, and in what amount, the following accounts will be reported in the company’s balance sheet for Year 1, Year 2, and Year 3: (1) Accounts Receivable, (2) Progress Bi
> In 2013, Rawlings Wholesalers transferred goods to a retailer on consignment. The transaction was recorded as a sale by Rawlings. The goods cost $45,000 and normally are sold at a 30% markup. In 2014, $12,000 (cost) of merchandise was sold by the retaile
> What are the five general categories of intangible assets?
> The company had installment sales in Year 1 of $350,000, in Year 2 of $270,000, and in Year 3 of $210,000. The gross profit percentage of each year, in order, was 20%, 25%, and 30%. Past history has shown that 40% of total sales are collected in the year
> In general, how is the cost of internally generated intangibles accounted for?
> Transistor Electronics makes all of its sales on credit and accounts for them using the installment sales method. For simplicity, assume that all sales occur on the first day of the year and that all cash collections are made on the last day of the year.
> What happens to the remaining net book value of a component that is replaced?
> The company had sales during the year of $350,000. The gross profit percentage during the year was 20%. Cash collected during the year related to these sales was 40% of the sales. Give all journal entries necessary during the year, assuming use of the in
> Briefly describe the dangers to financial statement users inherent in the use of the fixed asset turnover ratio.
> The Washington Blue Sox is a minor league baseball team. The team has 55 home games during a season and sells season tickets for $600 each. For the most recent season, the Blue Sox sold 1,900 season tickets. The total initial direct costs (in cash) relat
> Under the provisions of IAS 16, what is the credit entry when noncurrent operating assets are written up to reflect an increase in market value?
> Why do some companies expense asset expenditures that are less than an established monetary amount?
> The company signed a $1,450,000 contract to build an environmentally friendly access trail to Stansbury Peak. The project was expected to take approximately three years. The following information was collected for each year of the projectâ€
> What argument is given for reporting noncurrent operating assets at their historical costs instead of at current values?
> Refer to Practice 8-14. Assume that the company uses the percentage of trail feet constructed in estimating the percentage of completion. Make the journal entries to record revenue and cost for the construction project in (1) Year 1, (2) Year 2, and (3
> (a) Under what conditions may goodwill be reported as an asset? (b) Roper Company engages in a widespread advertising campaign on behalf of new products, charging above normal expenditures to goodwill. Do you approve of this practice? Why or why not?
> Refer to Practice 8-7. In addition to the percentage-of-completion information, the following information is available regarding billing and cash collection for the project: Make the journal entries necessary to record the construction cost, the progre
> What two approaches are used in estimating fair values using present value computations? Briefly explain the difference between the two approaches.
> Jackie Wilson, manager of Expert Building Company, is a valued and trusted employee. She has been with the company from its start two years ago. Because of the demands of her job, she has not taken a vacation since she began working. She is in charge of
> (a) What type of activities are considered to be research and development activities? (b) Under what conditions, if any, are research and development costs capitalized?
> During the audit of accounts receivable of Montana Company, the new CEO, Joe Frisco, asked why the company had debited the current-year expense for bad debts on the assumption that some accounts will become uncollectible next year. Frisco believes that t
> Indicate the effects of the following errors on the balance sheet and the income statement in the current year and succeeding years. (a) The cost of a depreciable asset is incorrectly recorded as an expense. (b) An expense expenditure is incorrectly reco
> The company offers a 1-year warranty to its customers. Warranty expenditures are estimated to be 4% of sales. Sales occur evenly throughout the year. The following information relates to the company’s first two years of business: Sales—Year 1 . . . . .
> Ultimate Corporation is a computer products supplier. Ultimate sells products to dealers who then sell the products to the end users. Most of the company’s competitors require dealers to pay for shipments within 45 to 60 days. Ultimate has followed a mor
> What amount of interest is capitalized under IAS 23?
> Olin Company currently makes only cash sales. Given the number of potential customers who have requested to buy on credit, Olin is considering allowing credit sales. What factors should Olin consider in making the decision whether to allow credit sales?
> Gaylen Corp. decides to construct a building for itself and plans to use existing plant facilities to assist with such construction. (a) What costs will enter into the cost of construction? (b) What two positions can the company take with respect to gene
> 1. At December 31, 2013, Kale Co. had the following balances in the accounts it maintains at First State Bank: Checking account No. 001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $175,000 Checking acc
> What procedure should be followed to allocate the cost of a basket purchase of assets among specific accounts?
> Strata Company had a $275,000 balance in Accounts Receivable on January 1. The balance in Allowance for Bad Debts on January 1 was $68,000. Sales for the year totaled $2,100,000. All sales were credit sales. Bad debt expense is estimated to be 3% of sale
> Terri Morton has been recently hired as a financial analyst. Her first assignment is to analyze why the reported return on assets (ROA) for Arnold Company is so much different from that of Baker Company. Arnold Company develops and markets innovative con
> On January 1, 2013, Denver Company sold land that originally cost $400,000 to Boise Company. As payment, Boise gave Denver a $600,000 note. The note bears an interest rate of 4% and is to be repaid in three annual installments of $200,000 (plus interest
> Strategy, Inc., was organized by Elizabeth Durrant and Ramona Morales, two students working their way through college. Both Elizabeth and Ramona had used the Internet extensively while in high school and had become very proficient Web surfers. Elizabeth
> What is an asset retirement obligation? What is the proper accounting for an asset retirement obligation?
> On January 1, 2013, Rapid River Realty sold a tract of land to three doctors as an investment. The land, purchased 10 years ago, was carried on Rapid River’s books at a value of $210,000. Rapid River received a non-interest-bearing note for $275,000 from
> Fugate Energy Corp. has recently purchased a small local company, Gleave Inc., for $556,950 cash. Fugate’s chief accountant has been given the assignment of preparing the journal entry to record the purchase. An investigation disclosed the following info
> Freemont Factors provides financing to other companies by purchasing their accounts receivable on a nonrecourse basis. Freemont charges its clients a commission of 15% of all receivables factored. In addition, Freemont withholds 10% of receivables factor
> 1. Cole Co. began constructing a building for its own use in January 2013. During 2013, Cole incurred interest of $50,000 on specific construction debt and $20,000 on other borrowings. The amount of interest that could have been avoided if the building c
> During its second year of operations, Shank Corporation found itself in financial difficulties. Shank decided to use its accounts receivable as a means of obtaining cash to continue operations. On July 1, 2013, Shank sold $75,000 of accounts receivable f
> Progressive Company reported the following asset values in 2012 and 2013: In addition, in 2013, Progressive had sales of $4,800,000; cost of goods sold for the year was $2,900,000. As of the end of 2012, the fair value of Progressive’
> On July 1, 2013, McEnroe Company used receivables totaling $150,000 as collateral on a $100,000, 15% note from Standard One Bank. The transaction is not structured such that receivables are being sold. McEnroe will continue to collect the assigned receiv
> Beecher’s Boston Barbeque Company purchased a customer list and an ongoing research project for a total of $300,000. Beecher uses the expected cash flow approach for estimating the fair value of these two intangibles. The appropriate interest rate is 7%.
> The following data were taken from Tyrone Tardieff’s check register for the month of April. Tyrone’s bank reconciliation for March showed one outstanding check, Check No. 78 for $57.00 (written on March 23), and one de
> Trevor Company completed a program of expansion and improvement of its plant during 2013. You are provided with the following information concerning its buildings account: (a) On October 31, 2013, a 50-foot extension to the present factory building was c
> Using the following information, prepare a complete statement of cash flows. (a) Cash balance, beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,500 (b) Cash paid to purchase inventory .
> The cash account of Abstract, Inc., disclosed a balance of $16,348.82 on October 31. The bank statement as of October 31 showed a balance of $19,711.75. Upon comparing the statement with the cash records, the following facts were developed. (a) Abstract&
> As of December 31, 2013, W. W. Cole Company’s total assets were $325 million and total liabilities were $180 million. Net income for 2013 was $38 million. During 2013, W. W. Cole’s chief executive officer had put extreme pressure on employees to meet the
> Krebsbach Company is negotiating a loan with FIS Bank. Krebsbach needs $900,000. As part of the loan agreement, FIS Bank will require Krebsbach to maintain a compensating balance of 15% of the loan amount on deposit in a checking account at the bank. Kre
> Santa Clarita Company reported interest expense in 2013 and 2012 of $470,000 and $410,000, respectively. The balance in Accrued Interest Payable at the end of 2013, 2012, and 2011 was $51,000, $59,000, and $46,000, respectively. In addition, a note to Sa
> Aurora Corp. acquired Payette Company on December 31, 2013. The following information concerning Payette’s assets and liabilities was assembled on the acquisition date: Instructions: 1. Make the journal entry necessary for Aurora Corp
> Lafayette Corporation, a client, requests that you compute the appropriate balance of its estimated liability for product warranty account for a statement as of June 30, 2013. Lafayette Corporation manufactures television components and sells them with a
> Madison Company has purchased land that will serve as a temporary repository for nuclear waste. The site will function for 20 years, at which time Madison will be required to completely decontaminate the land. The purchase price for the land is $700,000.
> Sound Portal Corporation sells stereos under a 2-year warranty contract that requires Sound Portal to replace defective parts and provide free labor on all repairs. During 2012, 1,290 units were sold at $950 each. In 2013, Sound Portal sold an additional
> American Corporation received a $400,000 low bid from a reputable manufacturer for the construction of special production equipment needed by American in an expansion program. Because its own plant was not operating at capacity, American decided to const
> What type of asset value increases are recognized under IAS 41?
> The following costs were incurred in the most recent year: (a) Paid $30,000 to purchase a piece of equipment. In addition, paid $1,000 to have the equipment shipped to and installed in its final location. Spent $1,750 to have the equipment tested before
> Rainy Day Company, a wholesaler, uses the aging method to estimate bad debt losses. The following schedule of aged accounts receivable was prepared at December 31, 2013. Age of Accounts _________________________________________Amount 0–
> Oceanwide Enterprises, Inc., is involved in building and operating cruise ships. Each ship is identified as a separate discrete job in the accounting records. At the end of 2012, Oceanwide correctly reported $5,400,000 as Construction in Progress on the
> During 2013, Lacee Enterprises had gross sales of $247,000. At the end of 2013, Lacee had accounts receivable of $83,000 and a credit balance of $5,600 in Allowance for Bad Debts. Lacee has used the percentage-of-gross-sales method to estimate the bad de
> At December 31, 2012, Davis Company’s noncurrent operating asset accounts had the following balances: Category Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 280,
> Stockton Company sold goods on account with a sales price of $70,000 on August 17. The terms of the sale were 2/10, n/30. Instructions: 1. Record the sale using the gross method of accounting for cash discounts. 2. Record the sale using the net method o
> At December 31, 2012, certain accounts included in the Noncurrent Operating Assets section of Salvino Company’s balance sheet had the following balances: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
> The following transactions affecting the accounts receivable of Wonderland Corporation took place during the year ended January 31, 2013: Sales (cash and credit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
> Powersoft Company is engaged in developing computer software for the small business and home computer market. Most of the computer programmers are involved in developmental work designed to produce software that will perform fairly specific tasks in a us
> The following selected information is provided for Lynez Company. All sales are credit sales and all receivables are trade receivables. Accounts receivable, January 1 net balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1
> Bridges Wholesale Company incurred the following costs in 2013 for a warehouse acquired on July 1, 2013, the beginning of its fiscal year: Cost of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
> Refer to Practice 5-9. Prepare the Operating Cash Flow section of the statement of cash flows using the indirect method. In Practice 5-9 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
> Abacus, Inc., purchased inventory costing $95,000. Terms of the purchase were 3/10, n/30. Abacus uses a perpetual inventory system. In order to take advantage of the cash discount, Abacus borrowed $75,000 from Commercial First Bank, signing a 2-month, 8%
> Transactions during 2013 of the newly organized Menlove Corporation included the following: Jan. 2 Paid legal fees of $15,000 and stock certificate costs of $8,300 to complete organization of the corporation. 15 Hired a clown to stand in front of the cor
> Zobell Corporation sells equipment with a book value of $8,000, receiving a non-interest bearing note due in three years with a face amount of $10,000. There is no established market value for the equipment. The interest rate on similar obligations is es
> In your audit of the books of Dyer Corporation for the year ended September 30, 2013, you found the following items in connection with the company’s patents account: (a) The company had spent $120,000 during its fiscal year ended September 30, 2012, for
> The following information was included in the bank reconciliation for Bryant, Inc., for June. What was the total of outstanding checks at the beginning of June? Assume all other reconciling items are listed. Checks and charges recorded by bank in June,
> Bylund Corporation was organized in June 2013. In auditing its books, you find the following land, buildings, and equipment account: An analysis of this account and of other accounts disclosed the following additional information: (a) The building acqu
> The accounting department supplied the following data in reconciling the September 30 bank statement for Clegg Auto. Ending cash balance per bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,972.67 Endi
> The following transactions were completed by Millenial Toy Co. during 2013: Mar. 1 Purchased real property for $829,700, which included a charge of $29,700 representing property tax for March 1–June 30 that had been prepaid by the vendor; 25% of the purc
> Lewiston Corporation’s bank statement for the month of April included the following information: Bank service charge for April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $110 Check deposited
> Skyline Corporation has decided to expand its operations and has purchased land in Salina for construction of a new manufacturing plant. The following costs were incurred in purchasing the property and constructing the building: Land purchase price . .
> Parkhurst Corporation acquires land and buildings valued at $250,000 as a gift from a local philanthropist. The president of the company maintains that because there was no cost for the acquisition, neither the cost of the facilities nor depreciation nee
> Ortiz Company had the following cash balances at December 31, 2013: Undeposited coin and currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,500 Unrestricted demand deposits . . . . . . . . . . . . .
> The accountant for Stansbury Development Company is uncertain how to record the following costs associated with the construction of a golf course. (a) Building artificial lakes. (b) Moving earth around to enhance the “hilliness” of the course. (c) Planti
> Baltic Group, Inc., operates Baltic Group resorts in the United States, Mexico, the Caribbean, Asia, the South Pacific, and the Indian Ocean Basin. Baltic Group routinely receives payment in advance from vacationers. In some countries, Baltic Group is re
> On December 31, 2013, Bridgeport Co. shows the following account for machinery it had assembled for its own use during 2013: Account: MACHINERY (Job Order #1329) An analysis of the details in the account disclosed the following: (a) The old machine, wh
> 1. Indicate how each of the items below should be reported using the following classifications: (a) Cash, (b) Restricted cash, (c) Temporary investment, (d) Receivable, (e) Liability, or (f) Office supplies. (1) Checking account at First Security
> Omniportal Company purchased Network Enterprises. The following fair values were associated with the items acquired in this business acquisition: The fair value associated with Network Enterprises’ government contacts is not based on
> Hitech Appliance Company’s accountant has been reviewing the firm’s past television sales. For the past two years, Hitech has been offering an extended service contract on all televisions sold. With the purchase of a t
> Taraz Company paid $500,000 to purchase the following portfolio of intangibles with estimated fair values as indicated: ____________________________________________Estimated Fair Value Internet domain name . . . . . . . . . . . . . . . . . . . . . . . .
> In 2012, Carver Electronics Co. began selling a new computer that carried a 2-year warranty against defects. Based on the manufacturer’s recommendations, Carver projects estimated warranty costs (as a percentage of dollar sales) as foll
> Landers Inc. is considering purchasing J&B Properties, which has the following assets and liabilities. 1. Make the journal entry necessary for Landers Inc. to record the purchase if the purchase price is $650,000 cash. 2. Assume that the purchase p
> Using the following income statement and cash flow adjustment information, prepare the Operating Cash Flow section of the statement of cash flows using the direct method. Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
> Blanchard Company’s accounts receivable subsidiary ledger reveals the following information: Blanchard Company’s receivable collection experience indicates that, on average, losses have occurred as follows: Age of A
> Conglomerate Company purchased Individual Company for $935,000 cash. A schedule of the fair values of Individual’s assets and liabilities as of the purchase date follows. 1. Make the journal entry necessary for Conglomerate Company to
> Accounts Receivable of the Chalet Housing Co. on December 31, 2013, had a balance of $550,000. Allowance for Bad Debts had a $4,500 debit balance. Sales in 2013 were $3,450,000 less sales discounts of $51,000. Give the adjusting entry for estimated Bad D
> One of the most difficult problems facing an accountant is the determination of which expenditures should be capitalized and which should be immediately expensed. What position would you take in each of the following instances? (a) Painting partitions in
> On July 23, Louie Company sold goods costing $3,000 on account for $4,500. The terms of the sale were n/30. Payment in satisfaction of $3,000 of this amount was received on August 17. Also on August 17, the customer returned goods costing $1,000 (with a
> In 2013, the Slidell Corporation incurred research and development costs as follows: Materials and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160,000 Personnel . . . . . . . . . . . .
> On November 1, Rosario Company sold goods on account for $7,000. The terms of the sale were 3/10, n/40. Payment in satisfaction of $3,000 of this amount was received on November 9. Payment in satisfaction of the remaining $4,000 was received on December
> Simpson Company purchased a nerve gas detoxification facility. The facility cost $900,000. The cost of cleaning up the routine contamination caused by the initial location of nerve gas on the property is estimated to be $1,300,000; this cost will be incu
> Classify each of the following items as: (A) Accounts Receivable, (B) Notes Receivable, (C) Trade Receivables, (D) Nontrade Receivables, or (E) Other (indicate nature of item). Because the classifications are not mutually exclusive, more than one cla
> For each of the situations described here, indicate when interest should be capitalized (C) and when it should not be capitalized (NC). (a) Queen Company is constructing a piece of equipment for its own use. Total construction costs are expected to be $4
> Refer to Practice 10-6. Assume that construction was not completed on December 31 of Year 1. Also assume that the same loans were outstanding for all of Year 2. The following expenditure was made during Year 2: July 1 . . . . . . . . . . . . . . . . . .
