ACC 400 Course Great Wisdom / tutorialrank.com ACC 400 Course Great Wisdom / tutorialrank.com | Page 22

18. Paid-in Capital in Excess of Par Value a. is credited when no-par
stock does not have a stated value. b. is reported as part of paid-in
capital on the balance sheet. c. represents the amount of legal capital.
d. normally has a debit balance.

19. The financial statements of the Bolton Manufacturing Company
reports net sales of $500,000 and accounts receivable of $50,000 and
$30,000 at the beginning of the year and end of year, respectively.
What is the receivables turnover ratio for Bolton? a. 7 times b. 10
times c. 16.7 times d. 12.5 times

20. The following credit sales are budgeted by Rodriguez Company:
February 50,000 March 70,000 April 60,000 The company’s past
experience indicates that 80% of the accounts receivable are collected
in the month of sale, 20% in the month following the sale. The
anticipated cash inflow for the month of April is a. $48,000. b.
$56,000. c. $60,000. d. $62,000.

PART II — TRUE/FALSE 3 points each (39 points)

1. Under an operating lease, both the leased asset and the liability are
shown on the balance sheet. False

2. Certain types of leases, called capital leases, allow the lessee to
account for the transaction as a rental. False

3. The issuance of common stock affects both paid-in capital and
retained earnings. False