Do you know ANYTHING about accounting?

Trying to finish up a study guide and got stuck on a few more questions.

Serious answers and details only please, I'm honestly trying to learn this stuff before my midterm

1. The following are costs associated with a delivery van. Which costs should be capitalized? (More than one can apply)

A. The van is repainted

B. The van's transmission is completely overhauled to extend useful life for two years

C. The van is modified for a specific use.

2. The Spa company purchased land, buildings and equiptment for $830,000. THe land has been appraised at $300,000, the buildings at $510,000 and the equipment at 90,000. The journal entry to record this transaction will include a debit to...

A. building for $470,333

B. land for $470,333

C. equipment for $276,667

D. land for $300,000

Equipment is acquired by issuing a note payable for $57000 and a down payment of $30000. The statement of cash flows will report a...

A. $57000 cash inflow in the financing activities section

B. $57000 inflow in the investing activities section

C. $30000 cash outflow in the investing activities section

D. $30000 inflow in the operating activities section

4. A company has $23000 in cash, $41000 in short term investments, $240000 in net current receivables and $75000 in inventory. The total current liabilities of the firm are 289000. What is the quick ratio of the company?

5. What is the total asset turnover or company Y based on this information...

Net income = $100000

Assets at the beginning of the year = $800000

Assets at the end of the year = $830000

Net sales = $300000

6. Dental Dentistry signed a 12 month, $40000, 8% note on June 1 2012. The amount of interest to be accrued on December 31st, 2012 is... (rounded to the nearest dollar)

4 Answers

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  • JKRB
    Lv 7
    7 years ago
    Best Answer

    1. The following are costs associated with a delivery van. Which costs should be capitalized? (More than one can apply)

    A. The van is repainted

    B. The van's transmission is completely overhauled to extend useful life for two years

    C. The van is modified for a specific use.

    All would be capitalized. Painting the van for a specific purpose increases its usefullness.

    2. The Spa company purchased land, buildings and equiptment for $830,000. THe land has been appraised at $300,000, the buildings at $510,000 and the equipment at 90,000. The journal entry to record this transaction will include a debit to...

    300,000 + 510,000 + 90,000 = $900,000 total appraised value

    300,000/900,000 x 830,000 = $276,667 recorded cost of land

    510,000/900,000 x 830,000 = $470,333 recorded cost of buildings

    90,000/900,000 x 830,000 = $83,000 recorded cost of equipment

    A. building for $470,333

    Equipment is acquired by issuing a note payable for $57000 and a down payment of $30000. The statement of cash flows will report a...

    Only CASH is measured for the statement of cash flows.

    C. $30000 cash outflow in the investing activities section

    4. A company has $23000 in cash, $41000 in short term investments, $240000 in net current receivables and $75000 in inventory. The total current liabilities of the firm are 289000. What is the quick ratio of the company?

    23,000 + 41,000 + 240,000 = $304,000 quick assets

    304,000 / 289,000 = 1.05 quick ratio

    5. What is the total asset turnover or company Y based on this information...

    Net income = $100000

    Assets at the beginning of the year = $800000

    Assets at the end of the year = $830000

    Net sales = $300000

    (800,000 + 830,000) / 2 = $815,000 avg. assets

    300,000 / 815,000 = 0.3681 asset turnover ratio

    6. Dental Dentistry signed a 12 month, $40000, 8% note on June 1 2012. The amount of interest to be accrued on December 31st, 2012 is... (rounded to the nearest dollar)

    Interest has accrued for seven out of the 12 months

    40,000 x 8% x 7/12 = $1,867 accrued interest

    Source(s): Accounting Fan
  • 7 years ago

    1. A capitalization is something that brings value to the company. Simply painting would be considered maintenance, but modifications for specialized use, and overhaul of transmission to extend life are both possible capital assets.

    2. A debit to an asset account will increase the balance: IE: a debit to your bank account is an actual deposit. Land valued at 300,000 would be one of the included journal entries.

    3. The money has "come out", so you want to show it as outflow into the investing activities.

    4. All assets divided by liabilities will give you a ratio.

    5. They are asking only about assets, I'd go with the 30000. since that is the increase in the year end asset total.

    6. 40000 x 8, divided by 365 (days in the year) multiplied by the number of days between June 1 and Dec 31.

    I am only a bookkeeper not an accountant. I've answered to the best of my knowledge and experience.

    Good luck.

  • Wendy
    Lv 4
    4 years ago

    Well- misuse of the terms are very easy to violate- For example on a lot of questions I see answers posted such as : Ex: 2 points - that is not allowed - I mean people ask questions to get answers. Not for people just to go into the question to gain rank. So to answer your question- I think they should send violation notices, and suspend accounts for the people that continue to violate. P.S. Also- the answers that get reported get looked at - and you will only receive a violation warning - IF...... you have violated the terms of use -

  • Y
    Lv 5
    7 years ago

    1. ABC (what if it gets into an accident...it needs to be repainted)

    2. simple math im too lazy to do

    3. wtf

    4. add em up to make a ratio

    5. idk

    6. easy

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