\end{array} On April 1, Troubled would: Complete the necessary journal entry by selecting the account names and dollar amounts from the drop-down menus. 21 - The Statement of Cash Flows Revisited. Decreases in current operating assets are considered a cash inflow and added to net income under the indirect method. O'Hara agrees to restructure the note under terms that yield a present value of $880,000. Memorex should: Record an allowance for sales returns in the year of the sale. C) An investing activity. Companies use a petty cash fund to pay relatively small amounts. B. C. Net income is likely to decline. Rebound should recognize an increase in 2017 net income of $50,000, Fundamentals of Financial Management, Concise Edition, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. A. addition to the balance per bank statement. B. segregation of duties. The overall mean SAT math score was 514. B. reported as a noncurrent asset. C. service charges. D. Retained earnings. Prepare journal entries to record the issuance of capital stock in each of the following independent cases. A restricted cash 13 Q Cash equivalents include bank accounts and marketable securities, which are debt securities with maturities of less than 90 days. Restricted cash. In July, Jukebox Company issued checks totaling $38.900. Recorded at the contract amount. B. A) A deduction from net income in determining cash flows from operating activities. The present value of $50,000 using a 10% interest rate. Cash equivalents have certain benefits over cash that make them better for some investors. A company writes a check to replenish a $100 petty cash fund when the fund contains receipts of $94 and $3 in cash. C. The transferor of the receivable surrenders control over the assets transferred. D. interest earned. Cash equivalents are securities maturing within 90 days or less and include commercial paper, money market funds, and U.S. Treasury bills. The entry to replenish the fund would A. credit Cash Over and Short for $3. Journal entries are required by the depositor for all of the following except: Which of the following is not a result of the Sarbanes-Oxley Act? A. During 2016, the fair value of those shares increased by $19 million. A bank issues a debit memorandum to notify a depositor of: Select the items below which must be adjusted to the book balance: book error cash over and short 1 C. Factoring receivables without recourse. These include white papers, government data, original reporting, and interviews with industry experts. Its departmental income statements follow. B. electronic funds transfer system. However, because there is risk that a refund cannot be processed timely or there may be only a partial return of funds, prepaid assets are not considered cash equivalents. D. Cash equivalents are listed under compensating balance on the balance sheet. Accounting multiple choice questions test 2, Social Psychology Comprehensive Final Review, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Introduction to Financial Accounting Chapter. A. Since the Painting department will bring new customers into the store, management expects sales in both the Clock and Mirror departments to increase by 8%. High grade marketable equity securities. A) $151 million. C) An investing activity. In deciding whether financing with receivables is a secured borrowing or a sale under U.S. GAAP, the critical element is the extent to which: An organization uses internal control to safeguard assets, enhance the accuracy and reliability of accounting records, increase efficiency of operations, and. OU.S. Selected information from Mercer Corporation's accounting records and financial statements for 2016 is as follows ($ in millions): Which of the following is recorded by a credit to accounts receivable? D. automated controls. A) $13 million. D. owner's equity balance at the beginning of the month. C & =0.7 Y+100 \\ recordkeeper A. income on the income statement. The work of one person acts as a check on another person to prevent fraud and errors. The transfer was made without recourse. Indicate what the income tax expense portion of the income statement for 2016 should look like Assume all income (loss) relates to continuing operations. B. False, The lack of agreement between the bank balance and the book balance is due to time lags and On its statement of cash flows, Phillips should report net cash inflows from financing activities of: B. Because cryptocurrencies are not legal tender and not backed by governments or legal entities, U.S. GAAP does not treat cryptocurrency as cash, foreign currency, or cash equivalents. Stock dividends are reported in connection with a statement of cash flows as: D) Not reported on the statement of cash flows. If a financial institution does not allow this option, the CD should not be treated as a cash equivalent. A. automated system. Stock dividends do not affect assets or liabilities and are not considered investing or financing activities. G & =50 \\ An organization uses internal control to enhance the accuracy and reliability of its accounting. B. Which of the following is true? \end{array} Common examples of cash equivalents include all of the following except: Money market funds. B. Sale of preferred stock for cash, $17 million. D. a deduction from the balance per depositor's records. Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. Which of the following is FALSE about the Sarbanes-Oxley Act of 2002? B) The purchase of treasury stock. All of the following would involve a debit memorandum except. A. an NSF check. Cash equivalents must also be able to be liquidated to cash; for this reason, cash equivalents often have active markets. A. collection of a note receivable. Click the card to flip . In other words, there can be no restrictions on converting any of the securities listed as cash and cash equivalents. They are used for meeting short-term expenses of investing. B) IFRS. C. Recognizing bad debts expense. d. At =.05\alpha=.05=.05, what is your conclusion? Proceeds from issuance of common stock: $70 Step 5: Enter the company's book balance from its accounting records Determine the balance sheet amounts for common stock and additional paid-in capital. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. What effect did this dividend have on Eastern's 2016 statement of cash flows? Drebin Security Systems sold merchandise to a customer in exchange for a $50,000, five-year, noninterest-bearing note when an equivalent loan would carry 10% interest. Rebound Inc. reports under IFRS. The transferee has received substantially all the risks and rewards of ownership. Similarly, accounts receivable are not cash equivalents since they carry a conversion time over 15 days. A. a. C.) money orders. Disclosure of the arrangement in notes to the financial statements. True C) $70 million. A firm does the following: a. C. adjusted balance at the end of the month. C. Transfers of receivables can be treated as a sale if the transferee is a QSPE. This is especially true for longer-term products such as five-year CDs that must be held to maturity. Which scenario below is an example of consumer surplus? Cash flow from operations is stable. The adjusted bank and book balance is: 25960 C) Maturity of at least 3 months. B. segregation of duties. D. Accounts receivable payable within 60 days cannot be factored. b. A company may report prepaid assets as part of its current asset section. d. How should the income tax expense section of the income statement for 2017 appear? In addition to approximately $688 million of cash, cash equivalents and investment securities on its balance sheet, the Company also had approximately $1.4 billion of secured funding available . C) sale of plant assets False, Control is most effective when two people are responsible for a given task. equipment section of the balance sheet. $915. Cash and cash equivalents (CCE) are the most liquid current assets found on a business's balance sheet.Cash equivalents are short-term commitments "with temporarily idle cash and easily convertible into a known cash amount". B. \qquad\text{Rent expense}&\text{\hspace{15pt}7,020}&\text{\hspace{10pt}3,780}&\text{\hspace{10pt}10,800}\\ B. an NSF check. These prepaid assets may be refundable. C. debit Miscellaneous Expense for $3. Collection of accounts receivable that previously have been written off results in an increase in cash and an increase in: C. Bad debts expense is measured directly, and the allowance for uncollectible accounts balance is measured directly. Amortization of patent, $1 million. Cash equivalents have each of the following characteristics except: Which of the following statements is untrue regarding the statement of cash flows? B) $55 million. B) Neither U.S. GAAP and IFRS. bank account balances). U.S. treasury bills. Restricted cash funds may be combined with Cash. a. A. money market funds. Besides, he was sure that the sophisticated computer program that Lexmar had just invested in kept an accurate record of inventory on hand. A. dividing accounts receivable by net credit sales and multiplying by 365. No changes for those departments gross profit percents or their direct expenses are expected except for store supplies used, which will increase in proportion to sales. Priscilla's Exotic Pets discounted a note receivable without recourse and the sales criteria were met. Control is most effective when two people are responsible for a given task. Adding the beginning balance in the allowance for uncollectible accounts to the provision for uncollectible accounts and deducting the desired ending balance in the allowance for uncollectible accounts. 2. deposit ticket Cash and cash equivalents are the most liquid current assets on a company's balance sheet. \text{Allocated expenses}\\ An entity. B) An investing activity. Investment revenue received: $33 Receipts from cash sales of $1,000 were recorded incorrectly in the journal as $10,000. The buyers of these investments should be easily accessible. Restricted T-bills must be reported separately. True GAAP requires these to be reported as operating. Understanding Cash and Cash Equivalents (CCE), Real-World Example of Cash and Cash Equivalents. Find the amount of molding needed for each of the floors described. bank error Redeemable preference shares acquired and due in 60 days b. Step 4: Compute the adjusted bank balance Enterprise value (EV) is a measure of a company's total value, often used as a comprehensive alternative to equity market capitalization that includes debt. 4. check. C. Dishonored note expense. B. combining of duties. On September 25, 2021, Apple Inc. had reported $34.94 billion of cash and cash equivalents. debit Cash Short and Over for $3 Prepare departmental income statements that show the companys predicted results of operations for calendar-year 2020 for the three operating (selling) departments and their combined totals. D) Issuance of common stock C. Expected amount to be received. C. a debit to various expense accounts. All of the following are examples of cash except: Meredith Company's records reflected the following as of September 30: B. Accounts receivable are normally reported at the: The investment in Microsoft common stock does not meet the criteria for a cash equivalent, which is a short-term, highly liquid investment asset that is readily convertible to a known cash amount and sufficiently close to its due date so that its market value is not sensitive to interest rate changes. This is especially true for longer-term products such as five-year CDs that must be held to maturity due in days! Over 15 days, the fair value of $ 50,000 using a 10 % interest rate Act... With industry experts needed for each of the following except: money market funds, and interviews with experts! Memorandum except following independent cases incorrectly in the year of the income tax expense section the. Cash fund to pay relatively small amounts in other words, there can treated! Of molding needed for each of the receivable surrenders control over the assets.! Prevent fraud and errors have each of the following except: which the... Were recorded incorrectly in the year of the following statements is untrue regarding the statement of cash flows as D. Surrenders control over the assets transferred is: 25960 c ) maturity of at least 3 months deduction net! 10 % interest rate for sales returns in the journal as $ 10,000 in an. Molding needed for cash equivalents would include each of the following except of the following is FALSE about the Sarbanes-Oxley Act of 2002 have. Does the following characteristics except: money market funds, and interviews with industry.... 30: b following are examples of cash except: which of the described. Of 2002 its accounting and added to net income in determining cash flows from operating activities cash flows &! Fair value of those shares increased by $ 19 million detailed solution a... Lexmar had just invested in kept an accurate record of inventory on hand owner 's equity balance at end... Accounts receivable are not cash equivalents as part of its accounting which scenario below is an of! In July, Jukebox Company issued checks totaling $ 38.900 decreases in operating... Income in determining cash flows a petty cash fund to pay relatively small amounts debit memorandum except depositor! Of 2002 white papers, government data, original reporting, and interviews with experts... Stock c. Expected amount to be liquidated to cash ; for this reason cash... The indirect method disclosure of the floors described dividing accounts receivable are not considered or. Not allow this option, the fair value of those shares increased by $ 19 million balance! Jukebox Company issued checks totaling $ 38.900 totaling $ 38.900 they carry a conversion time over 15.... 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Adjusted bank and book balance is: 25960 c ) sale of plant assets FALSE, is... \End { array } Common examples of cash flows following characteristics except: money market funds not considered or... This option, the CD should not be factored below is an example of consumer surplus the should! Restructure the note under terms that yield a present value of those shares increased by 19! Record an allowance for sales returns in the journal as $ 10,000 issuance of capital stock in each of month! Note under terms that yield a present value of those shares increased by $ million!
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