between the current ratio and working capital, assume that a company’s balance sheet reports current assets of $60,000 and current liabilities of $40,000. These amounts result in the following: Current ratio is 1.5 to...
between the current ratio and working capital, assume that a company’s balance sheet reports current assets of $60,000 and current liabilities of $40,000. These amounts result in the following: Current ratio is 1.5 to...
of inventory and $1,000 of supplies and prepaid expenses. These amounts result in the following: Current ratio is 1.5 to 1 (1.5:1, or simply 1.5). This is the result of dividing $60,000 by $40,000. Quick ratio is 0.6 to...
(or current ratio) is one indicator of a company’s ability to pay its current obligations. Example of Working Capital Ratio If a company has $600,000 of current assets and has $400,000 of current liabilities, its...
to Advertising Expense. Example of Advertising as an Asset and as an Expense Let’s assume that in December a corporation paid $15 million to prepare an ad and to book a time for it to be shown during the Super Bowl...
$0, the project is earning exactly the interest rate used to discount the future cash amounts. In other words, if a project has an internal rate of return of 15%, and you discount the project’s future cash amounts by...
, the calculation is: beginning book value of $60,000 X 40% = $24,000. Continue until the accumulated depreciation reaches $90,000. Download our Double-Declining-Balance Method Form and Template....
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
a gross profit ratio of 20% will have a mark-up ratio that is __________% of its cost of goods. 14. Selling, general and administrative (SG&A) expenses account for the difference between __________ profit and...
profit). Example of Gross Profit Method Assume you need to estimate the cost of a company’s July 31 inventory. The last time the inventory was calculated was seven months earlier on December 31 when it had a cost of...
Occurring twice per month. For example, if salaried personnel are paid on the 15th and the last day of the month, we would say they are paid semimonthly. People paid semimonthly will receive 24 paychecks during a year....
Usually means every two weeks. For example, if an employee is paid every other Thursday, the employee is paid biweekly. The person paid biweekly will receive 26 paychecks per year. (People paid two times per month...
in arrears will be $15,000 at the end of the current year. (The $15,000 = the remaining $5,000 of dividends in arrears + the $10,000 current year preferred dividend that is being omitted.) Join PRO to Track Progress...
Depreciation is $55,000. By crediting the account Accumulated Depreciation instead of crediting the Equipment account, the balance sheet at the end of the year can easily report both the equipment’s cost of $70,000...
times $100,000). Add the cost of the goods purchased since the last inventory to that inventory amount. Let’s assume that previous inventory amount was $15,000 and that there were purchases of $75,000. That means the...
of $48,000 ($4,000 per month multiplied times 12 months in a year). A person with a semimonthly salary of $3,000 is earning an annualized salary of $72,000 ($3,000 multiplied times 24 semimonthly pay periods). A company...
to be $800,000 for the new year. The company produces similar products and it expects to use 20,000 machine hours. Based on this information, the company’s plant-wide overhead rate will be $40 per machine hour. If...
: $40 million of long-term debt with an after-tax cost of 4% $10 million of 7% preferred stock $50 million of common stock and retained earnings with an estimated cost of 15% The corporation’s weighted-average,...
. However, the company’s loss (or profit) depends on the actual sales mix. What if the actual sales indicates that 15% of 95,000 units sold were the very-low-profit units, 45% of the sales were the medium-profit units...
, the company purchases a new machine for $300,000 that is expected to have no salvage value at the end of its 10-year useful life. If the company uses the straight-line method of depreciation, the depreciation expense...
. The accounting rule requires inventory to be reported at the lower of its cost or its net realizable value (NRV). The amount of the inventory write-down is reported on the current income statement. To illustrate,...
of $__________ $1,469. FV of 1 = PV x FV of 1 factor for n = 5 years, i = 8% compounded annually FV of 1 = $1,000 x 1.469 FV of 1 = $1, 469 on December 31, 2028 (or January 1, 2029) if it is invested at 8% per year and...
A word that means to add column totals across to see if the sum will equal the grand total. In the table below each of the columns A through Total was “footed” (added or summed) in order to get each...
rate increases from 3.75% to 3.90%, the increase is 15 basis points. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at...
What does it mean to check the extensions and to foot an invoice? To check the extensions on a purchase invoice means to verify that the number of units of each item multiplied by its unit cost agrees with the total...
This could be the difference between cost and the selling price. For example, a retailer may markup its cost by 50% to arrive at a selling price. In the retail method of costing inventory, markup is used to mean the...
A technique used to determine the variable rate (slope of a total cost line) of an independent variable and the fixed amount by using just two points: the highest point and the lowest point. For example, if at the...
) are 15,000 miles, the expected total annual expense is the fixed expense $5,000 + the variable expense of $0.20 X 15,000 = $5,000 + $3,000 = $8,000. If the miles driven are 10,000 miles, the expected total annual...
__________cost to the point of transfer plus the company’s opportunity cost. Select... fixed incremental total 10. Residual income is expressed as a __________. Select... dollar amount percentage 11. A potential...
slightly less than the specified rate. For instance, if the specified rate of 16% was used for discounting the cash flows, a slightly negative net present value could mean that the project is expected to earn slightly...
. Instead, XYZ remove’s the equipment’s cost of $210,000 and the related accumulated depreciation of $195,000. Therefore, the book value of $15,000 is being removed from the general ledger accounts and cash of...
Accounts Receivable and Bad Debts Expense(Quick Test #2) Download PDF After you have answered all 15 questions, click "Grade This Quick Test" at the bottom of the page to view your grade and receive feedback on...
representatives (reps) who earn a 10% commission. The commissions are paid on the 15th day of the month following the calendar month of the sales. For instance, if the company has $60,000 of sales in December, the...
receivable is $92,000. Adjustments to the Allowance account are reported on the income statement as bad debts expense. Now, let’s assume that a company’s inventory has a cost of $15,000. However, at the end of the...
the reported amount of net income. SCF Adjustment for an Increase in Accounts Payable To illustrate, assume that the income statement reports $20,000 of revenues, $15,000 of expenses, and the resulting net income of...
an Additional Medicare Tax of 0.9% that applies to highly-paid employees. FICA FICA is the acronym for Federal Insurance Contributions Act. FICA refers to the combination of the Social Security tax and the Medicare tax....
increased steadily from $100,000 at the beginning of the year to $150,000 at the end of the year. What is the accounts receivable turnover ratio for the year? Select... 8 times 10 times 12 times 15 times 13. If a...
A multi-column listing of the amounts needed to eliminate a balance in a systematic manner over the life of the item. For example, an amortization schedule for a 15-year mortgage loan would show the 180 payments. The...
that during a recent year a company’s income statement reported net sales of $2,100,000. During the same period, the company’s total assets reported on its 12 monthly balance sheets averaged $1,400,000. The...
and maintenance expenses on a church that was constructed 15 years ago. However, the current depreciation expense on the church is not an out-of-pocket cost. The current period’s depreciation is also referred to as a...
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