I IntermediateAccountingI Midterm 3 1 ABC Companyhascashin bankof 32 Q9q a bankoverdraftin an accountat anotherbank of 2 000 petty cashof Q0 resricte dcashin a separateaccount of 4 000 shod term paperwith maturity of 1 monthof 6 000 post datedchecks receivedtotaling 3 500 andcertificates of deposittotaling 24 000 ABC should reportcashof A 32 soo 38 soo c 42 000 D 62 s00 2 A methodofestimatinguncollectible accounts thatemphasizes assetvaluation ratherthan incomemeasurement is the allowancemethodbasedon A Direct write offs A Grosssales C Agingthereceivables D Credit salesminus retumsand allowances 3 XYZ Co recodeda saleon May I for 6 000andsaleson May 9 and 10for XYZ S credittems are2 10 n 30 The 9 000and 12 000 respectively paymenton the 6 000salewasreceivedMay 10 The 12 000salewaspaidfor on May 15 andthe 9 000salewaspaidfor on May 29 Underthegrossmethod net salesshouldappearat which of the following amountson the May income statement A 26 460 B 26 640 c 26 880 D 27 000 4 A transferor entitymostlikely shouldcontinueto recognizea transfenedfinancial assetif A The transfercrmay rcacquirethe asset andthe assetis readily obtainablein the market B Thetransferce may sellthefull fail valueof the asset C Thetransferorhasan optionto reacquire theasset andthereacquisition price is fair value Thetransferoris entitledandobligatedto rcpurchase theasset andthe transferee receivesa lender srctum 5 n r dayof thecurenryear At year ilfj lf h s00 000 orgood i ilililiil end ji l i o r ui i i9 rlnd dlu urar endingioventory was 160 000 All silersare on credit and FGH hasrecognized n h rt dchr eyn rr r su4 i i jff il fl H 3 fi ll lliS ii jl ofaccounrs receiraUte tor rtrerir rlearoi 1 t j I latance operatons musthavebeen A 90 000 B 135 000 lg 2s0 000 D 320 000 o ac ou n i r cd he ill H ii Jiilyiiiy i ib e f iou rv u rirren o rncr a rrr 1 arro ilil il i i pre D flcrease net Income C Decrease theallowancefbr uncollectible accounts D Haveno eflecton theallowancefor uncollectible accounts 7 ABC Co estinuteits uncollectiblc a A BC Lredirsa esro r i i1i ff3311fi fi i i J j 1 l 1 000 or uncolteurible rucounr ABC saltowaoce foi ii il i i hada l5 000 balance onJanuary r r i o t l il r il a pon asallowance f oruncollecribre accounts XTig H 0 B r s 000 A 20 000 fDl 17 00n 8 Thc followinginfbmration pefiainsto XyZ s accountsreceivableat Decemb r 3 l Y e 2 f2 DaysEstimated 060 6t 120 Over120 Outstanding Amount 70Uncollecrible 240 000 r 80 000 1q 200 000 8l a 620 000 trote off 14 000in receivables andrecovercd 8 000 3 g I t It rhar waswrlttenoff in prior years XyZ s December31 year f ffr j uncollectible accounts was 12 000 Under f gi g rn rfr a i i rrnri shouldXYZ repofiasbaddebrexpense in it O rnt f i i i r stalement A 3 t 000 B 28 000 Q l 22 000 D 18 000 l t t L r r r a L i i tt q A 0r1 V I n yearl ABCCo sotdequipmenr r irha carDingamounr OJll l flIn e change of oJU tX U tbr a g00 01 Yearo tt e e oa n o ll 1 lere bearing notedueJanuar 2 lor rheequipmenr andthemaiket valueofthenoLe cann t l li i lf il i j i f drT lX i i i ilT i f ru o ror tiree perjodsjs 0 75 I i income s i i il r r remen r what 1 B 63 000 c 80 000 l7 ooo 1 t tx i v t t 10 Thefollowinginformadon wasderiv ed lromrie 20l2 accounring records of ABc e gr i gl i rltrcha e 475 000 10 000 Jrcight in Sw 25 ooo purcha ererums j0 000 Endlngrn enlorv 125 000 ABC s2012costofsal swa A 485 000 480 000 8 460 000 D 450 000 I i 17ABCCo s begnningin enroryat Lrnder taled by 52 000 endrn andirs rnvenrory wr o r d b 1tlfly l a J ir 4 uuuA a sold fortheleaiwa y L u resulL ABc s coslofgoods Undersrated by 952 000 underbtared by 156 000 uverstatedby 52 000 J erstared by gJ56 000 4 l ffi t fi ililfiiilTjJ f gs ffi jff iiil lxxlti Tj H T J p A companyfailed to ecorda valid f l idjj ttsj ilTl tii n iilll lf ilfliJfl i i J H ffil 13 According to the net merhod which ot the following items shouldbe included the cost of inventory L6t Purchase DiscountsNot Taken yes Yes No B C D l FreightCosts No Yes No Yes 14 ABC Corp produced1 000unitsof irsproducrrhatir soldfbr cashto XyZ Corp in a relatedtransaction ABC agreedto repurchase the 1 000unitsat a specifiedpriceai a futuredate Thepricespecifiedin theagreement is not subjectto changebasedon rurure marketfluctuations exceptfor fluctuations resultingfrom iinanceandholdingcosts incurred by XYZ ABC shouldaccounl tbr lhe elronsaclion by A Recordingthesalein an ordinarymannerandremovingtheinventoryfrom thebalancesheet B Recordingthesale removingtheinventorytiom thebalancesheet and connitment in thenotesto thef inancial statements disclosingthepurchase Recording a liabiliry and conrinuing to cany the inventory on the booksrather 19 recording a sale rthan qlcontinuing to caffytheinventoryon thebooksandrecordinga valuation accountto be reportedasa reductionto thc inventoryaccounton thebaltrnce sheet ratherthanrecordinga sale 15 ABC Co sinvenroryat December31 year l wasg1 500 000 baserlon a physicalcountpricedat costandbeforeanynecessary adjustrnent fbr the following Merchandise cosring 90 000 shippedFOB shippingpointfrom a vendor on December 30 Ycar I ii recii eOanl oiaefrn irnuffy 5 1ear2 o Goodsin the shippingarerweree cluded from inventoryalthough shipmenlwasnot madeuntil JanuzLry 4 year 2lThe goods billedto the customql FOB shippingpointon Decemtrer 30 year 1 hada costof s o rxro ABC sentan invoiceto a customeron January2 year 2 for goods with a costto ABC of S120 000 thatwerenot includedillhe count The rnvorce laredlhatlhegouJ 4ere enr fOB hinpinppoinl Thegood rerepurin lhe hand of thecalTierotr Dece nbel t year haramountshouldABC repL fl a invenroryl ii Deccmber J I yeirr I balancesheet E c D 1 s00 000 1 rfao 69 1 l t 1 7r0 000 1 740 000 16 ABC Co a distributorof machinery boughta machinefrom themaDufacturcr rn Novemberfor 10 000 On December30 ABC soldthis machineto XYZ for 15 000underthefollowingterms 27odiscountif paidwithin 3Odays l9o discountifpaid after30 daysbut within 60 days or payablein full within 90 days ifnot paidwithin thediscountperiods However XYZ hasthedght to retumthis machineto ABC if XYZ is unableto resellthe machinebeforeexpirationof the 90 daypalrnentperiod in whichcaseXYZ S obligationto ABC is cancelled In ABC s netsalesfor the yearende d December 31 how muchshouldbe included for the saleof this machineto XYZ A 0 B 14 700 p l4 8so 1D ls 0o0 17 Ordinarily whichinventorycostingmethodapproximates mostcloselythe cunentcostfor eachofthe following EndinsInventorv Costof GoodsSold FIFO FIFO LIFO LIFO D 9 FIFO LIFO D