ACCT 504 help A Guide to career/ ACCT 504 help A Guide to career/ - Page 19

$30,100 $29,400 $28,700 $30,800 4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____. (Points : 5) sales under $1,000,000 no accountants on staff insignificant receivables and payables all sales and purchases on account 5. (TCO D) In a period of increasing prices, which inventory cost flow assumption will result in the lowest amount of income tax expense? (Points : 5) FIFO LIFO The average cost method Income tax expense for the period will be the same under all assumptions. 6. (TCOs A, E) Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salv age value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be _____. (Points : 5) $14,160 $11,760 $9,840 $9,600 7. (TCOs D, G) Lopez Corporation issues 500 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 96. The journal entry to record the issuance will show a _____. (Points : 5) debit to Cash of $500,000 credit to Discount on Bonds Payable for $20,000 credit to Bonds Payable for $480,000 debit to Cash for $480,000