Question

13. Owl Investment Co. (a public company) should record supply expense when: a. Owl orders the supplies on the internet b. Owl receives the supplies FOB destination c. Owl uses the supplies in operations d. Owl mails a check to pay for the supplies

14. On February 28, 2018, Fox Co. buys a $500,000 building by putting 35% cash down and by signing a 6%, 20-month note, interest payable at maturity. What are the total amounts regarding this loan that would appear in Fox’s 12/31/2018 balance sheet line item, Current Liabilities? a. $517,875 b. $16,250 c. $17,875 d. $341,250

15. Which depreciation method would result in the highest earnings per share for the last year of the useful life of a machine? a. Straight-Line b. Double Declining Balance d. 150% Declining Balance e. All depreciation methods result in the same depreciation expense in the last useful life year.

Answer 1

13. Owl Investment Co. (a public company) should record supply expense when: c. Owl uses the supplies in operations

14. On February 28, 2018, Fox Co. buys a $500,000 building by putting 35% cash down and by signing a 6%, 20-month note, interest payable at maturity. What are the total amounts regarding this loan that would appear in Fox’s 12/31/2018 balance sheet line item, Current Liabilities?

d. $341,250

[500000*65%+500000*65%*6%*10/12 = 341250]

15. Which depreciation method would result in the highest earnings per share for the last year of the useful life of a machine?

b. Double Declining Balance (as the depreciation amount would be the least for the last year).