Flask Company reports net sales of $1,650 million; cost of goods sold of $1,490 million; net income of $300 million; and average total assets of $1,360 million. Compute its total asset turnover.
Multiple Choice
1.10.
1.21.
1.11.
0.82.
0.91.
8. During August, Boxer Company sells $348,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a credit balance of $12,000 before adjustment. Customers returned merchandise for warranty repairs during the month that used $8,600 in parts for repairs. The entry to record the customer warranty repairs is:
Multiple Choice
Debit Estimated Warranty Liability $17,400; credit Parts Inventory $17,400.
Debit Warranty Expense $17,400; credit Estimated Warranty Liability $17,400.
Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000.
Debit Estimated Warranty Liability $8,600; credit Parts Inventory $8,600.
Debit Warranty Expense $8,600; credit Estimated Warranty Liability $8,600.
9. A company's old machine that cost $58,000 and had accumulated depreciation of $46,200 was traded in on a new machine having an estimated 20-year life with an invoice price of $69,800. The company also paid $59,200 cash, along with its old machine to acquire the new machine. If this transaction has commercial substance, the new machine should be recorded at:
Multiple Choice
$68,600.
$71,000.
$69,800.
$58,000.
$11,800.
10. Mohr Company purchases a machine at the beginning of the year at a cost of $37,000. The machine is depreciated using the straight-line method. The machine’s useful life is estimated to be 8 years with a $6,000 salvage value. The book value of the machine at the end of year 2 is:
Multiple Choice
$3,875.
$7,750.
$23,250.
$29,250.
$31,000.
