Question

Please correct the asnwer as soon as possible

17. Which of the following is the attribute used to measure many assets that are recognized on a balance sheet, because it is more objective and verifiable?

	a.	Market value
	b.	Historical cost
	c.	Liquidation value
	d.	Current replacement cost

21. Emory Co. operates five days per week with a daily payroll of $4,000. Employees are paid every Saturday for the workweek just completed (Monday through Friday). The last day of the month is Wednesday, March 31. What is the effect of the correct adjustment at March 31?

	a.	Increases stockholders’ equity and Wages Payable by $8,000
	b.	Increases Wages Payable and decreases Cash by $12,000
	c.	Decreases stockholders’ equity and increases Wages Payable by $12,000
	d.	Increases Wages Payable and increases Wages Expense by $8,000

22. Jogg Corp. plant operates five days per week with a daily payroll of $50,000. Employees are paid every Tuesday for the prior week's work (Monday through Friday). The last day of the month is Tuesday, April 30. What effect does the accrual at April 30 have on Pub’s net income?

	a.	Increase by $250,000
	b.	Decrease by $150,000
	c.	Decrease by $100,000
	d.	Increase by $150,000

23. Roman Industries' plant operates five days per week with a daily payroll of $6,000. Employees are paid every Saturday for the workweek just completed (Monday through Friday). The last day of the month is Wednesday, March 31. What is the amount of Wages Expense recorded on the next payday, Saturday, April 3?

	a.	$ -0-
	b.	$ 30,000
	c.	$ 12,000
	d.	$ 18,000

Answer 1

Ans:17. (b)

Ans: 21.(c)

Ans: 22.(c)

Ans: 23.(c)

Notes:

1. Historical costs: promotes compatibility of the financial statements.

2. Three days wages need to be accured as they are not paid until after the end of the month

(Mon/Tue/Wed) = $4,000x3 = $12,000.

Adjustments:

DR Wages expense $12,000 (decreases net income and equity)

CR Wages payable $12,000 ( increases wages payable)

3. (Mon and Tues) = $50,000x2 = $ 100,000 (decreases)

4 . (Thu and Fri) i.e. accured 2days

= $6,000x2 = $12,000