Reference no: EM132644193

Questions -

1- Dave's Duds reported cost of goods sold of $1,200,000 this year. The inventory account increased by $150,000 during the year to an ending balance of $445,000. What was the cost of merchandise that Dave's purchased during the year?

2- 1. Disclosure notes would not include:

Depreciation methods used and estimated useful life.

Definition of cash equivalents.

Details of pension plans.

Data to adjust the financial statements so that they are not misleading.

Explain.

3- 1. A subsequent event for an entity with a December 31, 2021, year-end would not include:

A change in the estimated useful lives of equipment in January 2022.

An issuance of bonds in January 2022.

An acquisition of another company in January 2022.

A major uncertainty at December 31, resolved in January 2022.

Explain.

4- 1. When the amount of revenue collected in advance decreases during an accounting period:

Accrual-basis revenues exceed cash collections from customers.

Accrual-basis net income exceeds cash-basis net income.

Accrual-basis revenues are less than cash collections from customers.

Accrual-basis net income is less than cash-basis net income.

Explain why.

5- 1. Janson Corporation Co.'s trial balance included the following account balances at December 31, 2021:

Accounts receivable $12,100

Inventory 41,000

Patent 13,600

Investments 31,500

Prepaid insurance 7,700

Notes receivable, due 2024 50,000

Investments consist of treasury bills that were purchased in November, 2021, and mature in January, 2022. Prepaid insurance is for two years. What amount should be included in the current assets section of Janson's December 31, 2021, balance sheet?