23.An accelerated depreciation method: Depreciates an asset over a shorter life
ID: 2380343 • Letter: 2
Question
23.An accelerated depreciation method:
Depreciates an asset over a shorter life than does the straight-line method.
Recognizes more depreciation expense in the early years of an asset's useful life and less in the later years.
Results in reporting higher earnings every year.
Is required for assets that become technologically obsolete before they physically wear out.
25.Busch, Inc. is a successful company, but has a lower inventory turnover rate than the industry average. Of the following, the most likely explanation is that Busch
Has a just-in-time inventory system.
Uses LIFO (assume rising purchase costs).
Offers its customers an unusually large selection of merchandise.
Sells unusually popular items.
SB Midwest Office Products uses the retail meth...
Midwest Office Products uses the retail method to estimate ending inventory in its monthly financial statements. The following information is available for the month ended May 31:
28. Determine the cost ratio that should be used in estimating the May 31 inventory using the retail method.
66.0%.
68.4%.
63.8%.
69.4%
29.Estimate the cost of the May 31 inventory using the retail method.
$116,964.
$150,425.
$204,000.
$137,400.
30.Estimate the cost of goods sold for May using the retail method.
$150,400.
$319,600.
$137,400.
$205,236.
32. Joe Costello handles cash receipts from customers and also has responsibility for issuing credit memoranda, writing off uncollectible accounts, and maintaining the accounts receivable records. When customers pay their accounts, Costello occasionally issues a credit memorandum and steals the cash received from the customer. This fraud should come to light if an employee other than Costello:
Reconciles credit memoranda for sales returns to returned merchandise accepted by the receiving department.
Reconciles the bank statement to the accounting records.
Reconciles the accounts receivable subsidiary ledger to the accounts receivable controlling account.
Investigates weekly all accounts written off as uncollectible.
As of December 31, 2011, Chippewa Company has $26,440 cash in its checking account, as well as several other items listed below:
What amount should be shown in Chippewa's December 31, 2011, balance sheet as "Cash and cash equivalents"?
$139,640.
$30,040.
$209,640.
$59,640.
Depreciates an asset over a shorter life than does the straight-line method.
Recognizes more depreciation expense in the early years of an asset's useful life and less in the later years.
Results in reporting higher earnings every year.
Is required for assets that become technologically obsolete before they physically wear out.
Explanation / Answer
23
Recognizes more depreciation expense in the early years of an asset's useful life and less in the later years.
25
Offers its customers an unusually large selection of merchandise.
28
63.8%.
29
$204,000.
30
$150,400.
32
Reconciles credit memoranda for sales returns to returned merchandise accepted by the receiving department.
$30,040.
Recognizes more depreciation expense in the early years of an asset's useful life and less in the later years.
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