MR. ABC acquired his business for P3 million. The Fair Market value of the business is P5 million. Will it be more useful if accounting records were adjusted corresponding to the fair market value amount of the business?

2.Wildhorse Co. reported net sales $920,000; cost of goods sold $598,000; operating expenses $241,500; and net income $78,200. Calculate the profit margin and gross profit rate.

3.A man bought a car in installment basis. If he pays P10,000 per month at a rate of 15% compounded monthly for 3 years, find the cash price and the accumulated amount of money for the car.

4.On January 1, 2020, total assets for Books Inc. were $100,000; on January 31, 2020, total assets were $110,000. On January 1, 2020, total liabilities were $60,000. Book Inc. earned $20,000 in earnings during January. There were no dividends or changes in common shares during January. 

What is the change in Book Inc.s' liabilities for January 2020?

5.Candy and Barr form a partnership called 'Candy‐Barr' to combine their assets and liabilities. Candy's assets are worth R480 000. Her liabilities are R14 000.Barr's assets are worth R672 000. Her liabilities are R216 000. Calculate the value of the partnership assets.

6.Say a single filer has 2019 wages of $50,000 and LT capital gains of $10,000. Would I use $60,000 to determine my capital gains tax rate or $47,800 ($60,000 less the 2019 standard deduction)? I realize that both of these amounts would result in a 15% capital gains tax rate.

7.Accounting Equation Shannon Cook is the stockholder and operator of You're A Star LLC , a motivational consulting business. At the end of its accounting period, December 31, 20Y2, You're A Star has assets of $777,000 and liabilities of $186,000. Using the accounting equation determine the following amounts:

 A. Stockholders equity as of December 31, 20Y2 .

 B. Stockholders equity as of December 31, 20Y3 , assuming that assets decreased by $148,000 and Tables decreased by $45,000

8.On June 25, Repair Service extended an offer of $141,000 for land that had been priced for sale at $161,000, On July 9, AAA Repair Service accepted the seller's counter offers of $153,900. On October 1 the was assessed at a value of $230,000 for property tax purposes. On December 22, AAA Repair Service was offered $245,000 for the land by a national retail chain.

At what value should the land be recorded in AAA Repair Service's records?

9.Bull Built, a design/build engineering company that has always given year-end bonuses in the amount of $4,000 to each of its engineers, is having cash flow problems. The president said that although Bull Built couldn't give bonuses this year, next year's bonus would be large enough to make up for this year's omission. If the interest rate is 10% per year, what is the equivalent bonus that engineers should receive next year?

10.In view of the difficulty in estimating future events, would you recommend that accountants wait until collections are made from customers before recording sales revenue? 

Should they wait until known accounts prove to be uncollectible before charging an expense account?

Answer rating: 100% (QA)

1 Adjusting the accounting records to reflect the fair market value of the business can provide more useful information for financial reporting purposes By adjusting the records to the fair market val... View the full answer