Exam 15: Overhead Application: Variable and Absorbtion Costing

The following information was extracted from the accounting records of Hemingway's Company: Beginning Paid- In Capital \ 87,000 Beginning R etained Earnings \ 211,000 Beginning As sets \ 455,000 During the period assets increased by $150,000, revenues were $200,000, and expenses were $165,000. No additional investments were made by the owners. The amount of Hemingway Company's liabilities at the beginning of the period is:

The accounting convention of means selecting the method of measurement that yields the gloomiest immediate results.

The acquisition of inventory for cash will:

There is no direct relationship between the income statement and balance sheet.

Accounts receivable is omitted when using the cash basis of accounting

A "multiple- step" income statement includes a subtotal for gross profit.

Accrue means to pay off a payable.

Hayden Company had net income during 20X5 of $40,000. During the year, dividends of $27,000 were declared, of which $22,000 had been paid as of year end. At the beginning of 20X5, the Paid- in Capital account had a balance of $31,000 and the Retained Earnings account had a balance of $49,000. Required: Prepare a statement of retained earnings for Hayden Company for the year ended December 31, 20X5.

Listed below are the transactions for Regis Company for the month ended June 20X5. 1. The owners invest $90,000 in Regis Company. 2. The Regis Company purchased equipment costing $15,000, paying $6,000 with the remainder as a note payable. 3. Regis Company acquired inventory costing $9,600 by paying $4,200 cash and the remainder on account. 4. Regis Company paid four months' rent in advance by paying $7,200. 5. Regis Company sold inventory costing $5,100 for $8,700. Of the sales amount, cash sales were $2,700 and the remainder on account. 6. One month's worth of rent was recognized. 7. Regis Company declared a cash dividend of $900. 8. Depreciation on the equipment was $600. Required: Show the journal entries used to record the above transactions.

From the following information, determine the total stockholders' equity ending balance. Dividends \ 8,000 Ending R et ained Earnings 24,000 Net Income 14,000 Paid-in C apital, beginning 29,000 Paid-in C apital, ending 26,000

The group that establishes global GAAP

The predicted sales value of a long- lived asset at the end of its useful life

Liabilities are the entity's economic obligation to owners.

An entry on the right side of an account

discloses the economic resources of the organization and the claims against those resources.

The income statement measures performance over a given period of time not to exceed one year.

A sole proprietorship is a business organized as a separate legal entity and owned by its stockholders.

Identify which one of the following statements is always true.

The matching concept matches .

Materiality is not subjective.