On December 31, Year 1, Kardashian Company recorded an adjusting entry to recognize $5,710 of uncollectible accounts expense. Which of the following shows how this entry will affect Kardashian’s financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenues−Expenses=Net IncomeA.$ (5,710)= +$ (5,710) −$ 5,710=$ (5,710)$ (5,710) OAB.$ (5,710)= +$ (5,710) −$ 5,710=$ (5,710) C.$ (5,710)= +$ (5,710) −$ 5,710=$ (5,710)$ (5,710) FAD.$ (5,710)=$ (5,710)+ −$ 5,710=$ (5,710)

A machine with a book value of $38,000 is sold for $32,000. Which of the following answers would accurately represent the effects of the sale on the financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenue or Gain−Expense=Net IncomeA.38,000= +38,00038,000− =38,00038,000 IAB.(6,000)= +(6,000) −6,000=(6,000)6,000 OAC.(6,000)= +(6,000) −6,000=(6,000)6,000 IAD.(6,000)= +(6,000) −6,000=(6,000)32,000 IA

Glasgow Enterprises started the period with 80 units in beginning inventory that cost $1.90 each. During the period, the company purchased inventory items as follows: PurchaseNumber of ItemsCost1400$2.402100$2.50360$2.90 Glasgow sold 265 units after purchase 3 for $7.80 each.What is Glasgow’s ending inventory under LIFO?

At the end of the current accounting period, Ringgold Company recorded depreciation of $15,000 on its equipment. What is the effect of this event on the company’s balance sheet?

Recording an adjustment for product warranties is a claims exchange transaction.

On January 1, Year 5, Raven Limo Service, Incorporated sold a used limo that had cost $80,000 and had accumulated depreciation of $44,000. The limo was sold for $32,400 cash. Which of the following shows how the sale of the limo would affect Raven’s financial statements? Balance SheetIncome StatementStatement of Cash Flows Assets=Liabilities+EquityCash+Book Value of LimoGain−Loss=Net IncomeA.32,400+(36,000)= +(3,600)3,600− =(3,600)32,400 IAB.32,400+(36,000)= +3,6003,600− =3,6003,600 IAC.32,400+(36,000)= +(3,600) −3,600=(3,600) D.32,400+(36,000)= +(3,600) −3,600=(3,600)32,400 IA

The total amount of uncollectible accounts expense recognized over the life of a business will be the smallest under the

On January 1, Year 1 Residence Company issued bonds with a 67,000% face value. The bonds were issued at 96 resulting in a 4% discount. They had a 20-year term and a stated rate of interest of 7%. Which of the following shows how the bond issue will affect Residence’s financial statements on January 1, Year 1? Balance SheetIncome StatementStatement of Cash FlowsAssets=Carrying Value Bond Liability+EquityRevenues−Expenses=Net IncomeA.67,000=64,320+2,680 − = 64,320 FAB.64,320=64,320+ − = 64,320 FAC.69,680=69,680+ − = 69,680 FAD.67,000=69,680+ − = 67,000 FA

On January 1, Year 1, Gemstone Mining Company (GMC) paid $10,555,000 cash to purchase the rights to extract raw stone from a surface pit estimated to hold 50,000 pounds of useable material. GMC extracted 15,500 pounds of stone in Year 1, 27,700 pounds of stone in Year 2, and 30,500 pounds of stone in Year 3. The rights to the surface pit were expected to have a $555,000 salvage value at the end of Year 3. Which of the following statements models shows how recognizing depletion expense will affect GMC’s Year 1 financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityCash+Stone ReservesRevenue−Expenses=Net IncomeA. +$(3,100,000)= +$(3,100,000) −$3,100,000=$(3,100,000) B. +$(3,100,000)= +$(3,100,000) −$3,100,000=$(3,100,000)$(3,100,000) OAC. +$(3,100,000)= +$(3,100,000) − = D. +$(3,100,000)= +$(3,100,000) − = $(3,100,000) OA

Which of the following shows how recognizing uncollectible accounts expense under the direct write-off method would affect the financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityCash+Accounts Receivable=Accounts Payable+Common Stock+Retained EarningsRevenue−Expense=Net IncomeA. +Decrease= + +Decrease −Increase=DecreaseDecrease OAB. +Decrease= + +Decrease −Increase=Decrease C.Increase+Decrease= + +Decrease −Increase=DecreaseIncrease OAD. + =Increase+ +Decrease −Increase=Decrease