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Trans report as cost of goods sold on its income statement for the month
of January?
Question 14
At December 31, 2004, Kale Co. had the following balances in the
accounts it maintains at First State Bank: Kale classifies investments
with original maturities of three months or less as cash equivalents. In its
December 31, 2004 balance sheet, what amount should Kale report as
cash and cash equivalents?
Question 15
Gar Co. factored its receivables without recourse with Ross Bank. Gar
received cash as a result of this transaction, which is best described as a
Question 16
A material overstatement in ending inventory was discovered after the
year-end financial statements of a company were issued to the public.
What effect did this error have on the year-end financial statements?
Question 17
The following costs pertain to Den Co.'s purchase of inventory: What
amount should Den record as the cost of inventory as a result of this
purchase?
Question 18
Loft Co. reviewed its inventory values for proper pricing at year-end.
The following summarizes two inventory items examined for the lower
of cost or market: What amount should Loft include in inventory at year-
end, if it uses the total of the inventory to apply the lower of cost or
market?
Question 19
On January 1, 2004, Card Corp. signed a three-year, noncancelable
purchase contract, which allows Card to purchase up to 500,000 units of
a computer part annually from Hart Supply Co. at $.10 per unit and
guarantees a minimum annual purchase of 100,000 units. During 2004,