Q&A Hero

Q: A(n) ________ sale is a sale by a parent company to a subsidiary. A(n) ________ sale is a sale by a subsidiary to a parent company. A) deferred; realized. B) realized; deferred. C) upstream; downstream D) downstream; upstream

Q: PollutionA) creates a negative externality.B) is increased when property rights are defined. C) is the result of capitalism.D) exists because air and water are privately owned resources.

Q: Assume there are routine inventory sales between parent companies and subsidiaries. When preparing the consolidated financial statements, which of the following line items is indifferent to the sales being either upstream or downstream? A) Consolidated retained earnings B) Consolidated gross profit C) Noncontrolling interest share D) Controlling interest share of consolidated net income

Q: The program was created in 1975 to provide rebates of Social Security taxes to low-income workers.A) food stamp B) SSI C) TANF D) EITC

Q: Phast Corporation owns a 80% interest in Stechno Company, acquired several years ago at a cost equal to book value and fair value. Stechno sells merchandise to Phast for the first time in 2011, and some is unsold at December 31, 2011. In computing income from the investee for 2011 under the equity method, Phast uses which equation? A) 80% of Stechno's income less 100% of the unrealized profit in Phast's ending inventory B) 80% of Stechno's income plus 100% of the unrealized profit in Phast's ending inventory C) 80% of Stechno's income less 80% of the unrealized profit in Phast's ending inventory D) 80% of Stechno's income plus 80% of the unrealized profit in Phast's ending inventory

Q: Quantity of LaborHourly Wage RateTotal Marginal Wage Bill Factor Cost0-- -1$10 212 314 416 518 620 In the above table, what is the marginal factor cost of the 4th worker?A) $16 B) $30 C) $64 D) $22

Q: The material sale of inventory items by a parent company to an affiliated company A) enters the consolidated revenue computation only if the transfer was the result of arm's length bargaining. B) affects consolidated net income under a periodic inventory system but not under a perpetual inventory system. C) does not result in consolidated income until the merchandise is sold to outside parties. D) does not require a working paper adjustment if the merchandise was transferred at cost.

Q: Which of these nations has the highest rate of union membership (as a share of total employment)?A) India B) The United StatesC) Japan D) Sweden

Q: On January 1, 2011, Persona Company acquired 80% of Sule Tooling for $332,000. At that time, Sule reported their Common stock at $150,000, Additional paid in capital at $45,000, and Retained earnings at $105,000. Sule also had equipment on their books that had a remaining life of 10 years and were undervalued on the books by $40,000, but any additional fair value/book value differential is assumed to be goodwill. During the next three years, Sule reported the following: Year Net Income Dividends Paid 2011 $35,000 $5,000 2012 45,000 7,500 2013 50,000 10,000 Required: Calculate the following. a. How much excess depreciation or amortization would be recognized in the consolidated financial statements in each of these three years? b. How much goodwill would be recognized on the balance sheet at the date of acquisition, and at the end of each year listed? c. How much investment income would be reported by Persona under the equity method for each of the three years? d. What would be the balance in the Investment in Sule account at January 1, 2011, and at the end of each of the three years listed?

Q: Number of WorkersTotal OutputNumber of WorkersTotal Output0065401100760022208650332096904400107005475 Refer to the above table. If the price of the good produced is $10 and the wage rate is $500, then the marginal revenue product of the 5th worker is .A) $10 B) $50 C) $750 D) $4,750

Q: Pull Incorporated and Shove Company reported summarized balance sheets as shown below, on December 31, 2011. Pull Shove Current assets $420,000 $210,000 Noncurrent assets 670,000 430,000 Total assets $1,090,000 $640,000 Current liabilities $230,000 $50,000 Long-term debt 350,000 150 000 Stockholders' equity 510,000 440,000 Total liabilities and equities $1,090,000 $640,000 On January 1, 2012, Pull purchased 70% of the outstanding capital stock of Shove for $392,000, of which $92,000 was paid in cash, and $300,000 was borrowed from their bank. The debt is to be repaid in 10 annual installments beginning on December 31, 2012, with each payment consisting of $30,000 principal, plus accrued interest. The excess fair value of Shove Company over the underlying book value is allocated to inventory (60 percent) and to goodwill (40 percent). Required: Calculate the balance in each of the following accounts, on the consolidated balance sheet, immediately following the acquisition. a. Current assets b. Noncurrent assets c. Current liabilities d. Long-term debt e. Stockholders' equity

Q: Explain the share-the-gains, share-the-pains theory. How does it differ from the capture hypothesis?

Q: Refer to the above payoff matrix for the profits (in $ millions) of two firms (X and Y) and two product formats (A and B) in an industry. The game with the dominant strategy is also called:A) the prisonersʹ dilemma. B) Tweedle Dee-Tweedle Dum. C) Battle of the Sexes. D) Tit-for-Tat.

Q: _________________ identify and describe transactions and events and provide objective evidence and amounts for recording.

Q: On December 31, 2010, Patenne Incorporated purchased 60% of Smolin Manufacturing for $300,000. The book value and fair value of Smolin's assets and liabilities were equal with the exception of plant assets which were undervalued by $60,000 and had a remaining life of 10 years, and a patent which was undervalued by $40,000 and had a remaining life of 5 years. At December 31, 2012, the companies showed the following balances on their respective adjusted trial balances: Patenne Smolin Smolin Book Value Book Value Fair Value Assets (includes Investment in Smolin) $950,000 300,000 320,000 Plant assets - net 590,000 150,000 150,000 Patent 310,000 200,000 280,000 Expenses 800,000 300,000 Liabilities 480,000 120,000 120,000 Common Stock 300,000 100,000 Retained Earnings 890,000 330,000 Revenue 980,000 400,000 Requirement 1: Calculate the balance in the Plant assets - net and the Patent accounts on the consolidated balance sheet as of December 31, 2012. Requirement 2: Calculate consolidated net income for 2012, and the amount allocated to the controlling and noncontrolling interests. Requirement 3: Calculate the balance of the noncontrolling interest in Smolin to be reported on the consolidated balance sheet at December 31, 2012.

Q: The third step in the analyzing and recording process is to post the information to _________________________.

Q: On January 2, 2011, PBL Enterprises purchased 90% of Santos Incorporated outstanding common stock for $1,687,500 cash. Santos' net assets had a book value of $1,300,000 at the time. A building with a 15-year remaining life and a book value of $100,000 had a fair value of $175,000. Any other excess amount was attributed to goodwill. PBL reported net income for the first year of $350,000 (without regard for its ownership in Santos), while Santos had $175,000 in earnings. Required: 1. Calculate the amount of goodwill related to this acquisition as reported on the consolidated balance sheet at January 2, 2011. 2. Calculate the amount of consolidated net income for the year ended December 31, 2011. 3. What is the amount that will be assigned to the building on the consolidated balance sheet at the date of acquisition?

Q: If a firm is an oligopolist, which is NOT true?A) It must pay attention to other firmsʹ prices.B) It is one of a relatively small number of firms dominating its industry. C) It can sell all the units it wants at the going market price.D) It is engaged in a strategic game.

Q: The second step in the analyzing and recording process is to record the transactions and events in the _____________________________.

Q: On January 1, 2011, Paisley Incorporated paid $300,000 for 60% of Smarnia Company's outstanding capital stock. Smarnia reported common stock on that date of $250,000 and retained earnings of $100,000. Plant assets, which had a five-year remaining life, were undervalued in Smarnia's financial records by $10,000. Smarnia also had a patent that was not on the books, but had a market value of $60,000. The patent has a remaining useful life of 10 years. Any remaining fair value/book value differential is allocated to goodwill. Smarnia's net income and dividends paid the first three years that Paisley owned them are shown below. Net Dividends Income Paid 2011 80,000 30,000 2012 90,000 10,000 2013 60,000 20,000 Requirement 1: Calculate the noncontrolling interest share in Smarnia's income for each of the three years. Requirement 2: Calculate the noncontrolling interest that should be reported on the consolidated balance sheet at the end of each of the three years. Requirement 3: Assuming that Paisley uses the equity method to record their investment in Smarnia, calculate the ending balance in the Investment in Smarnia account for each of the three years.

Q: Because there are low barriers to entry in a monopolistically competitive market,A) there are many firms in the industry. B) they produce a homogeneous product.C) the firms are price takers. D) there is no non-price competition.

Q: PQTC$1310$8$1215$30$1120$68$1025$128$930$208$835$308Refer to the above table. Given the demand and cost schedules, what are the maximized economic profits for this monopolist?A) $122 B) $152 C) $220 D) $150

Q: ____________________________ and _____________________ are the starting points for the analyzing and recording process.

Q: Pennack Corporation purchased 75% of the outstanding stock of Shing Corporation on January 1, 2011 for $300,000 cash. At the time of the purchase, the book value and fair value of Shing's assets and liabilities were equal. Shing's balance sheet at the time of acquisition and December 31, 2011 are shown below. Jan 1, 2011 Dec 31, 2011 Cash $75,000 80,000 Other current assets 175,000 160,000 Plant Assets net 250,000 240,000 Total assets 500,000 480,000 Liabilities 100,000 50,000 Capital stock 100,000 100,000 Retained earnings 300,000 330,000 Total liabilities and equity 500,000 480,000 Shing earned $60,000 in income during the year, and paid out $30,000 in dividends. Pennack uses the equity method to account for its investment in Shing. Requirement 1: Calculate Pennack's net income from Shing in 2011. Requirement 2: Calculate the noncontrolling interest share in Shing's income for 2011. Requirement 3: Calculate the balance in the Investment in Shing account reported on Pennack's separate general ledger at December 31, 2011. Requirement 4: Calculate the noncontrolling interest that will be reported on the consolidated balance sheet at December 31, 2011.

Q: Which of the following is the best example of a decreasing-cost industry? A) the health care industry B) the personal computer industry C) the college-education industry D) the oil industry

Q: Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of owner's equity, and a balance sheet. Sal made no additional investments in the company during the year.

Q: Pommu Corporation paid $78,000 for a 60% interest in Schtick Inc. on January 1, 2011, when Schtick's Capital Stock was $80,000 and its Retained Earnings $20,000. The fair values of Schtick's identifiable assets and liabilities were the same as the recorded book values on the acquisition date. Trial balances at the end of the year on December 31, 2011 are given below: Pommu Schtick Cash $4,500 $20,000 Accounts Receivable 24,000 30,000 Inventory 100,000 70,000 Investment in Schtick 78,000 Cost of Goods Sold 71,500 50,000 Operating Expenses 22,000 37,000 Dividends 15,000 10,000 $315,000 $217,000 Liabilities $47,000 $27,000 Capital stock, $10 par value 100,000 80,000 Additional Paid-in Capital 11,000 Retained Earnings 31,000 20,000 Sales Revenue 120,000 90,000 Dividend Income 6,000 $315,000 $217,000 During 2011, Pommu made only two journal entries with respect to its investment in Schtick. On January 1, 2011, it debited the Investment in Schtick account for $78,000 and on November 1, 2011, it credited Dividend Income for $6,000. Required: 1. Prepare a consolidated income statement and a statement of retained earnings for Pommu and Subsidiary for the year ended December 31, 2011. 2. Prepare a consolidated balance sheet for Pommu and Subsidiary as of December 31, 2011.

Q: The profit-maximizing output for the perfectly competitive firm occurs at the point at whichA) TR - MR is at a maximum.B) TR - TC is at a minimum.C) MR = MC. D) TR - ATC is at a maximum.

Q: Platt Corporation paid $87,500 for a 70% interest in Suve Corporation on January 1, 2011, when Suve's Capital Stock was $70,000 and its Retained Earnings $30,000. The fair values of Suve's identifiable assets and liabilities were the same as the recorded book values on the acquisition date. Trial balances at the end of the year on December 31, 2011 are given below: Platt Suve Cash $4,500 $20,000 Accounts Receivable 26,000 30,000 Inventory 100,000 80,000 Investment in Suve 87,500 Cost of Goods Sold 60,000 40,000 Operating Expenses 22,000 37,000 Dividends 15,000 10,000 $315,000 $217,000 Liabilities $47,000 $27,000 Capital stock, $10 par value 100,000 70,000 Additional Paid-in Capital 10,000 Retained Earnings 31,000 30,000 Sales Revenue 120,000 90,000 Dividend Income 7,000 0 $315,000 $217,000 During 2011, Platt made only two journal entries with respect to its investment in Suve. On January 1, 2011, it debited the Investment in Suve account for $87,500 and on November 1, 2011, it credited Dividend Income for $7,000. Required: 1. Prepare a consolidated income statement and a statement of retained earnings for Platt and Subsidiary for the year ended December 31, 2011. 2. Prepare a consolidated balance sheet for Platt and Subsidiary as of December 31, 2011.

Q: The following are all of the accounts of Flaherty Company that have a balance at the end of August. All accounts have normal balances:a. Calculate net income.b. Determine the amount of owner's equity to be shown on the August 31 balance sheet.

Q: The addition to total costs associated with the production of one more unit of output is referred to asA) average cost. B) marginal cost. C) opportunity cost. D) overhead cost.

Q: The balances for the accounts of Mike's Maintenance Co. for the year ended December 31 are shown below. Each account shown had a normal balance.Calculate the correct balance for Cash and prepare a trial balance.

Q: Flagship Company has the following information collected in order to prepare a cash flow statement and uses the indirect method for Cash Flow from Operations. The annual report year end is December 31, 2011. Noncontrolling Interest Dividends Paid $17,000 Undistributed Income of Equity Investees 7,000 Depreciation Expense 80,000 Controlling Interest Share of Consolidated Net Income 325,000 Increase in Accounts Payable 26,000 Amortization of Patent 10,000 Decrease in Accounts Receivable 57,000 Increase in Inventories 72,000 Gain on sale of equipment 45,000 Noncontrolling Interest Share 27,000 Required: 1. Prepare the Cash Flow for Operations part of the cash flow statement for Flagship for the year ended December 31, 2011.

Q: The theory that there are no predictable trends in securities prices that can be used to ʺget rich quickʺ is theA) dartboard theory. B) random walk theory.C) Wall Street theory. D) inefficient market hypothesis.

Q: After preparing an (unadjusted) trial balance at year-end, G. Chu of Chu Design Company discovered the following errors:1. Cash payment of the $225 telephone bill for December was recorded twice.2. Cash payment of a note payable was recorded as a debit to Cash and a debit to Notes Payable for $1,000.3. A $900 cash withdrawal by the owner was recorded to the correct accounts as $90.4. An additional investment of $5,000 cash by the owner was recorded as a debit to G. Chu, Capital and a credit to Cash.5. A credit purchase of office equipment for $1,800 was recorded as a debit to the Office Equipment account with no offsetting credit entry.Using the form below, indicate whether the error would cause the trial balance to be out of balance by placing an X in either the yes or no column.Would the error cause the trial balance to be out of balance?Would the error cause the trial balance to be out of balance?

Q: Parakeet Company has the following information collected in order to prepare a cash flow statement and uses the direct method for Cash Flow from Operations. The annual report year end is December 31, 2011. Noncontrolling Interest Dividends Paid $20,000 Dividends Received from Equity Investees 17,000 Cash Paid to Employees 37,000 Cash Paid for Other Operating Activities 34,000 Cash Paid for Interest Expense 22,300 Cash Proceeds from the Sale of Equipment 70,000 Cash Paid to Suppliers 192,700 Cash Received from Customers 412,600 Required: 1. Prepare the Cash Flow for Operations part of the cash flow statement for Parakeet for the year ended December 31, 2011.

Q: For each of the following errors, indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit) will have the larger total as a result of the error.a. $100 debit to Cash was debited to the Cash account twice.b. $1,900 credit to Sales was posted as a $190 credit.c. $5,000 debit to Office Equipment was debited to Office Supplies.d. $625 debit to Prepaid Insurance was posted as a $62.50 debit.e. $520 credit to Accounts Payable was not posted.

Q: Pecan Incorporated acquired 80% of the voting stock of Shew Manufacturing for $800,000 on January 2, 2011 when Shew had outstanding common stock of $600,000 and Retained Earnings of $300,000. The book value and fair value of Shew's assets and liabilities were equal except for equipment. The entire fair value/book value differential is allocated to equipment and is fully depreciated on a straight-line basis over a 5-year period.During 2011, Shew borrowed $80,000 on a short-term non-interest-bearing note from Pecan, and on December 31, 2011, Shew mailed a check for $20,000 to Pecan in partial payment of the note. Pecan deposited the check on January 4, 2012, and recorded the entry to reduce the note balance at that time.Required:Complete the consolidation working papers for the year ended December 31, 2011.

Q: A business owned by two or more joint owners, or partners, who share the responsibilities and the profits of the firm and are individually liable for all the debts is a(n)A) corporation. B) entrepreneur. C) proprietorship. D) partnership.

Q: List the steps in recording transactions.

Q: Puddle Corporation acquired all the voting stock of Soggi Company for $500,000 on January 1, 2011 when Soggi had Capital Stock of $300,000 and Retained Earnings of $150,000. The book value of Soggi's assets and liabilities were equal to the fair value except for the plant assets. The entire cost-book value differential is allocated to plant assets and is fully depreciated on a straight-line basis over a 10-year period.During 2011, Puddle borrowed $25,000 on a short-term non-interest-bearing note from Soggi, and on December 31, 2011, Puddle mailed a check to Soggi to settle the note. Soggi deposited the check on January 5, 2012, but receipt of payment of the note was not reflected in Soggi's December 31, 2011 balance sheet.Required:Complete the consolidation working papers for the year ended December 31, 2011.

Q: An indifference map showsA) that money income is constant, but product prices may change.B) that utility is at a maximum at the origin.C) that curves closer to the origin represent higher levels of utility.D) that curves further from the origin represent higher levels of utility.

Q: Montgomery Marketing Co. had assets of $475,000; liabilities of $275,500; and equity of $199,500. Calculate its debt ratio.

Q: Powell Corporation acquired 90% of the voting stock of Santer Corporation on January 1, 2010 for $11,700 when Santer had Capital Stock of $5,000 and Retained Earnings of $4,000. The amounts reported on the financial statements approximated fair value, with the exception of inventories, which were understated on the books by $500 and were sold in 2010, land which was undervalued by $1,000, and equipment with a remaining useful life of 5 years under the straight-line method which was undervalued by $1,500. Any remainder was assigned to goodwill.Financial statements for Powell and Santer Corporations at the end of the fiscal year ended December 31, 2011 appear in the first two columns of the partially completed consolidation working papers. Powell has accounted for its investment in Santer using the equity method of accounting. Powell Corporation owed Santer Corporation $100 on open account at the end of the year. Dividends receivable in the amount of $450 payable from Santer to Powell is included in Powell's net receivables.Required:Complete the consolidation working papers for Powell Corporation and Subsidiary for the year ended December 31, 2011.

Q: As an individual consumes more of a particular commodity, the total level of utility derived from that consumption usuallyA) increases at a constant rate. B) increases at an increasing rate. C) increases at a decreasing rate. D) decreases at an increasing rate.

Q: A company had total assets of $350,000 and total liabilities of $101,500 and total equity of $248,500. Calculate its debt ratio.

Q: Packo Company acquired all the voting stock of Sennett Corporation on January 1, 2010 for $90,000 when Sennett had Capital Stock of $50,000 and Retained Earnings of $8,000. The excess of fair value over book value was allocated as follows: (1) $5,000 to inventories(sold in 2010), (2) $16,000 to equipment with a 4-year remaining useful life(straight-line method of depreciation) and (3) the remainder to goodwill.Financial statements for Packo and Sennett at the end of the fiscal year ended December 31, 2011 (two years after acquisition), appear in the first two columns of the partially completed consolidation working papers. Packo has accounted for its investment in Sennett using the equity method of accounting.Required:Complete the consolidation working papers for Packo Company and Subsidiary for the year ending December 31, 2011.

Q: When the price of chicken is $2.00 per pound, consumers buy 50 pounds of hamburger. When the price of chicken rises to $3.00 per pound, 60 pounds of hamburger are purchased. The cross price elasticity of demand between chicken and hamburger is approximately equal toA) +0.04. B) -0.45. C) +2.20. D) +0.45.

Q: Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:If Josephine invested an additional $12,000 in the business and withdrew $5,000 during the year, what was the amount of net income earned by Josephine's Bakery?

Q: On December 31, 2011, Paladium International purchased 70% of the outstanding common stock of Sennex Chemical. Paladium paid $140,000 for the shares and determined that the fair value of all recorded Sennex assets and liabilities approximated their book values, with the exception of a customer list that was not recorded and had a fair value of $10,000, and an expected remaining useful life of 5 years. At the time of purchase, Sennex had stockholders' equity consisting of capital stock amounting to $20,000 and retained earnings amounting to $80,000. Any remaining excess fair value was attributed to goodwill. The separate financial statements at December 31, 2012 appear in the first two columns of the consolidation workpapers shown below.Required:Complete the consolidation working papers for Paladium and Sennex for the year 2012.Paladium

Q: The word best associated with price elasticity of demand isA) relative. B) total. C) absolute. D) cumulative.

Q: Parrot Corporation acquired 90% of Swallow Co. on January 1, 2011 for $27,000 cash when Swallow's stockholders' equity consisted of $10,000 of Capital Stock and $5,000 of Retained Earnings. The difference between the fair value and book value of Swallow's net assets was allocated solely to a patent amortized over 5 years. The separate company statements for Parrot and Swallow appear in the first two columns of the partially completed consolidation working papers.Required:Complete the consolidation working papers for Parrot and Swallow for the year 2011.

Q: According to economic analysis, the optimal quantity of pollution exists at the point at which the A) total benefit of pollution control is equal to the total cost. B) marginal benefit of pollution control is equal to the marginal cost. C) level of pollution is at zero. D) level of pollution is acceptable to the society.

Q: When preparing the consolidation workpaper for a company and its controlled subsidiary, which of the following would be used for the entities being consolidated? A) Post-closing trial balances B) Adjusted trial balances C) Unadjusted trial balances D) The adjusted trial balance for the parent and the unadjusted trial balance for all controlled subsidiaries

Q: Which of the following groups of U.S. residents would likely qualify for SSI benefits?A) college students B) incarcerated murderersC) the disabled D) new federal retirees

Q: When preparing consolidated financial statements, which of the following is a subtraction in the calculation of cash flows from operating activities under the indirect method? A) The change in the balance sheet of the common stock account B) Noncontrolling interest dividends paid C) Noncontrolling interest share D) Undistributed income of equity investees

Q: In a bilateral monopoly, the wage rate that is determined in the marketA) is equal to MFC. B) is equal to MRP. C) is indeterminate.D) is the same as in a perfectly competitive market.

Q: Maria Sanchez began business as Sanchez Law Firm on November 1. Record the following November transactions by making entries directly to the T-accounts provided. Then, prepare a trial balance, as of November 30.a) Sanchez invested $15,000 cash and a law library valued at $6,000.b) Purchased $7,500 of office equipment from Johnson Bros. on credit.c) Completed legal work for a client and received $1,500 cash in full payment.d) Paid Johnson Bros. $3,500 cash in partial settlement of the amount owed.e) Completed $4,000 of legal work for a client on credit.f) Sanchez withdrew $2,000 cash for personal use.g) Received $2,500 cash as partial payment for the legal work completed for the client in (e).h) Paid $2,500 cash for the legal secretary's salary.

Q: In contrast with single entity organizations, consolidated financial statements include which of the following in the calculation of cash flows from operating activities under the indirect method? A) Cash paid to employees B) Noncontrolling interest dividends paid C) Noncontrolling interest share D) Proceeds from the sale of land

Q: Collective bargaining in the United States typically involves negotiations betweenA) the government and management over the minimum wage law.B) the management of a company and the leaders of the union over the wages and fringe benefits to be offered.C) an individual and her boss over the appropriate salary level. D) union and nonunion employees regarding work rules.

Q: Which of the following statements is not true with respect to the statement of cash flows for a consolidated entity? A) The statement may be prepared using either the direct or the indirect method. B) Noncontrolling interest share will be added back to cash flows from operating activities under the indirect method. C) Payment of dividends from the subsidiary to the parent will appear on the statement of cash flows as a financing activity. D) If the subsidiary does not use the same method (direct or indirect) as the parent, they must convert their separate statement of cash flows first to the same method that the parent uses, and then the two statements are consolidated.

Q: Leonard Matson completed these transactions during December of the current year:Prepare general journal entries to record these transactions.

Q: Suppose that in a computer factory, if there is 1 worker, 80 computers are produced per week.If there are 2 workers, 150 computers are produced per week. If there are 3 workers, 210 computers are produced per week. Given this information and the fact that the firm receives $200 per computer, the marginal revenue product of the third worker isA) $4,200. B) $12,000. C) $10,000. D) $14,000.

Q: Flora Accounting Services completed these transactions in February:a. Purchased office supplies on account, $300.b. Completed work for a client on credit, $500.c. Paid cash for the office supplies purchased in (a).d. Completed work for a client and received $800 cash.e. Received $500 cash for the work described in (b).f. Received $1,000 from a client for accounting services to be performed in March.Prepare journal entries to record the above transactions. Explanations are not necessary.

Q: Which one of the following will increase consolidated retained earnings? A) An increase in the value of goodwill associated with a subsidiary subsequent to the parent's date of acquisition B) The amortization of a $10,000 excess in the fair value of a note payable over its recorded book value C) The depreciation of a $10,000 excess in the fair value of equipment over its recorded book value D) The sale of inventory by a subsidiary that had a $10,000 excess in fair value over recorded book value on the parent's date of acquisition

Q: Suppose OSHA requires a factory to install specific safety equipment to reduce the number of injuries in the factory. Would the number of accidents necessarily decline? Why or why not?

Q: Krenz Car Care, owned and operated by Karl Krenz, began business in September of the current year. Karl, a master mechanic, had no experience with keeping a set of books. As a result, Karl entered all of September's transactions directly to the ledger accounts. When he tried to locate a particular entry he found it confusing and time consuming. He has hired you to improve his accounting procedures. The accounts in his General Ledger follow:Prepare the general journal entries, in chronological order (a) through (e), from the T-account entries shown. Include a brief description of the probable nature of each transaction.

Q: On consolidated working papers, a subsidiary's net income is A) deducted from beginning consolidated retained earnings. B) deducted from ending consolidated retained earnings. C) allocated between the noncontrolling interest share and the parent's share. D) only an entry in the parent company's general ledger.

Q: Refer to the above payoff matrix for the profits (in $ millions) of two firms (X and Y) and two product formats (A and B) in an industry. A possible outcome of the dominant strategy is:A) Both firm X and firm Y choose product format A. B) Both firm X and firm Y choose product format B.C) Firm X would be willing to choose product format A as long as firm Y simultaneously would be willing to choose format A.D) Firm X would be willing to choose product format A, while firm Y simultaneously would be willing to choose format B.

Q: Pigeon Corporation acquired an 80% interest in Statue Company on January 1, 2011, for $90,000 cash when Statue had Capital Stock of $60,000 and Retained Earnings of $40,000. The fair value/book value differential was attributable to equipment with a 10-year (straight-line) life. Statue suffered a $10,000 net loss in 2011 and paid no dividends. At year-end 2011, Statue owed Pigeon $18,000 on account. Pigeon's separate income for 2011 was $150,000. Controlling interest share of consolidated net income for 2011 was A) $140,000. B) $141,000. C) $142,000. D) $150,000.

Q: On February 5, Textron Stores purchased a van that cost $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.

Q: Which of the following is NOT a common characteristic of oligopoly? A) strategic dependence among firms in the industry B) product differentiation C) barriers to entry D) marginal cost pricing.

Q: A parent company uses the equity method to account for its wholly-owned subsidiary, but has applied it incorrectly. In each of the past four full years, the company adjusted the Investment account when it received dividends from the subsidiary but did not adjust the account for any of the subsidiary's profits. The subsidiary had four years of profits and paid yearly dividends in amounts that were less than reported net incomes. Which one of the following statements is correct if the parent company discovered its mistake at the end of the fourth year, and is now preparing consolidation working papers? A) The parent company's Retained Earnings will be increased by the cumulative total of four years of subsidiary profits. B) The parent company's Retained Earnings will be increased by the cumulative total of the first three years of subsidiary profit, and the Subsidiary Income account will be increased by the profit for the current year. C) The parent company's Subsidiary Income account will be increased by the cumulative total of four years of subsidiary profits. D) A prior period adjustment must be recorded for the cumulative effect of four years of accounting errors.

Q: On December 3, the Matador Company paid $5,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

Q: Advertising is used by firms in a monopolistic competitive industry to A) differentiate their product from those of competitors. B) increase brand loyalty. C) increase demands for their individual products. D) all of the above

Q: At the beginning of 2011, Parling Food Services acquired a 90% interest in Simmons' Orchards when Simmons' book values of identifiable net assets equaled their fair values. On December 26, 2011, Simmons declared dividends of $50,000, and the dividends were unpaid at year-end. Parling had not recorded the dividend receivable at December 31. A consolidated working paper entry is necessary to A) enter $50,000 dividends receivable in the consolidated balance sheet. B) enter $45,000 dividends receivable in the consolidated balance sheet. C) reduce the dividends payable account by $45,000 in the consolidated balance sheet. D) eliminate the dividend payable account from the consolidated balance sheet.

Q: PQTC$1310$8$1215$30$1120$68$1025$128$930$208$835$308Refer to the above table. Given the demand and cost schedules, what is the profit -maximizing price for this monopolist?A) $13 B) $12 C) $11 D) $10

Q: A business paid $100 cash to Karen Smith (the owner of the business) for her personal use. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Q: When performing a consolidation, if the balance sheet does not balance, A) that indicates that the Investment in Subsidiary account on the parent's books should not be adjusted to -0-, because there is excess value represented in the investment. B) it is usually because of the noncontrolling interest, as these amounts do not appear on the companies' general ledgers. C) the debit and credit totals of the adjusting/eliminating columns of the consolidation working paper should be checked to confirm that they balance, and if so, then there is no need to check the individual line items. D) the amount that it is "off" will always equal the noncontrolling interest in the current year net income of the subsidiary.

Q: If a firm is earning short-run economic profits shown in the above figure, in the long runA) firms exit the industry, the market supply curve shifts rightward, and the market price falls.B) firms enter the industry, the market supply curve shifts rightward, and the market price falls.C) firms exit the industry, the market supply curve shifts leftward, and the market price falls.D) firms enter the industry, the market supply curve shifts rightward, and the market price rises.