Question

48. The salary of a corporate treasurer would be included on the Income Statement in which...

48. The salary of a corporate treasurer would be included on the Income Statement in which of the following cost categories?

a. Selling Expense

b. Cost of Goods Sold

c. 'Other' (non-operating) Expense

d. Administrative Expense

49. Edson Co. purchased 100 shares of treasury stock for $50 per share. The company later sold the shares for $55 per share. The entry to record the sale of the shares would include a

a. credit to Paid-in Capital from Treasury Stock for $500.

b. credit to Gain on Sale of Treasury Stock for $500.

c. credit to Treasury Stock for $5,500.

d. debit to Cash for $5,000.

Jacobs Co. owns a fleet of vehicles that are used by its salespersons and administrators for business travel. The company does not plan to sell any of the vehicles for at least three years. On Jacobs' Balance Sheet, the vehicles would be included in which of the following asset classifications?

a. investments

b. current assets

c. intangible assets

d. property, plant, & equipment

51. Burke Company sold 5,000 widgets this month. The widgets have a warranty for free replacement. In the past, an average of 10% of widgets sold were eventually replaced under the warranty. The cost of producing a widget is $25. This month, 420 widgets were actually replaced under the warranty. How much should Burke Company record as Warranty Expense for the current month?

a. $1,500

b. $1,050

c. $12,500

d. $10,500
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Homework Answers

Answer #1
48
The salary of a corporate treasurer is a part of Administrative Expense
Option D is correct
49
Debit to Cash = 100*55 = $5500
Credit to Treasury Stock = 100*50 = $5000
Credit to Paid-in Capital from Treasury Stock = 100*(55-50) = $500
credit to Paid-in Capital from Treasury Stock for $500.
Option A is correct
50
The vehicles would be included in property, plant, & equipment.
Option D is correct
51
Warranty Expense = 5000*10%*25= $12,500
Option C is correct
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