SOLUTION MANUAL FOR Intermediate Accounting
IFRS 4th Edition by Donald E. Kieso, Jerry J.
Weygandt, Terry D. Warfield
Consider the following: Cash in Bank - checking account of $13,500, Cash on hand
of $500, Post-dated checks received totaling $3,500, and Certificates of deposit
totaling $124,000. How much should be reported as cash in the statement of
financial position?
a. $ 13,500.
b. $ 14,000.
c. $ 17,500.
d. $131,500. - ANSWER b
88. On January 1, 2010, Lynn Company borrows $2,000,000 from National Bank at
11% annual interest. In addition, Lynn is required to keep a compensatory balance of
$200,000 on deposit at National Bank which will earn interest at 5%. The effective
interest that Lynn pays on its $2,000,000 loan is
a. 10.0%.
b. 11.0%.
c. 11.5%.
d. 11.6%. - ANSWER d
89. Kennison Company has cash in bank of $10,000, restricted cash in a separate
account of $3,000, and a bank overdraft in an account at another bank of $1,000.
Kennison should report cash of
a. $9,000.
b. $10,000.
c. $12,000.
d. $13,000. - ANSWER b
90. Kaniper Company has the following items at year-end:
Cash in bank $20,000
Petty cash 300
Commercial paper with maturity of 2 months 5,500
Postdated checks 1,400
Kaniper should report cash and cash equivalents of
a. $20,000.
b. $20,300.
c. $25,800.
d. $27,200. - ANSWER c
91. Lawrence Company has cash in bank of $15,000, restricted cash in a separate
account of $4,000, and a bank overdraft in an account at another bank of $2,000.
Lawrence should report cash of
a. $13,000.
b. $15,000.
, c. $18,000.
d. $19,000. - ANSWER b
92. Steinert Company has the following items at year-end:
Cash in bank $30,000
Petty cash 500
Commercial paper with maturity of 2 months 8,200
Postdated checks 2,100
Steinert should report cash and cash equivalents of
a. $30,000.
b. $30,500.
c. $38,700.
d. $40,800. - ANSWER c
93. If a company purchases merchandise on terms of 1/10, n/30, the cash discount
available is equivalent to what effective annual rate of interest (assuming a 360-day
year)?
a. 1%
b. 12%
c. 18%
d. 30% - ANSWER c
94. AG Inc. made a $10,000 sale on account with the following terms: 1/15, n/30. If
the company uses the net method to record sales made on credit, how much should
be recorded as sales revenue?
a. $ 9,800.
b. $ 9,900.
c. $10,000.
d. $10,100. - ANSWER b
95. AG Inc. made a $10,000 sale on account with the following terms: 1/15, n/30. If
the company uses the gross method to record sales made on credit, what is/are the
debit(s) in the journal entry to record the sale?
a. Debit Accounts Receivable for $9,900.
b. Debit Accounts Receivable for $9,900 and Sales Discounts for $100.
c. Debit Accounts Receivable for $10,000.
d. Debit Accounts Receivable for $10,000 and Sales Discounts for $100. - ANSWER
c
96. AG Inc. made a $10,000 sale on account with the following terms: 2/10, n/30. If
the company uses the net method to record sales made on credit, what is/are the
debit(s) in the journal entry to record the sale?
a. Debit Accounts Receivable for $9,800.
b. Debit Accounts Receivable for $9,800 and Sales Discounts for $200.
c. Debit Accounts Receivable for $10,000.
d. Debit Accounts Receivable for $10,000 and Sales Discounts for $200. - ANSWER
a
97. Rosalie Co. uses the gross method to record sales made on credit. On June 10,
2011, it made sales of $100,000 with terms 2/10, n/30 to Finley Farms, Inc. On June
IFRS 4th Edition by Donald E. Kieso, Jerry J.
Weygandt, Terry D. Warfield
Consider the following: Cash in Bank - checking account of $13,500, Cash on hand
of $500, Post-dated checks received totaling $3,500, and Certificates of deposit
totaling $124,000. How much should be reported as cash in the statement of
financial position?
a. $ 13,500.
b. $ 14,000.
c. $ 17,500.
d. $131,500. - ANSWER b
88. On January 1, 2010, Lynn Company borrows $2,000,000 from National Bank at
11% annual interest. In addition, Lynn is required to keep a compensatory balance of
$200,000 on deposit at National Bank which will earn interest at 5%. The effective
interest that Lynn pays on its $2,000,000 loan is
a. 10.0%.
b. 11.0%.
c. 11.5%.
d. 11.6%. - ANSWER d
89. Kennison Company has cash in bank of $10,000, restricted cash in a separate
account of $3,000, and a bank overdraft in an account at another bank of $1,000.
Kennison should report cash of
a. $9,000.
b. $10,000.
c. $12,000.
d. $13,000. - ANSWER b
90. Kaniper Company has the following items at year-end:
Cash in bank $20,000
Petty cash 300
Commercial paper with maturity of 2 months 5,500
Postdated checks 1,400
Kaniper should report cash and cash equivalents of
a. $20,000.
b. $20,300.
c. $25,800.
d. $27,200. - ANSWER c
91. Lawrence Company has cash in bank of $15,000, restricted cash in a separate
account of $4,000, and a bank overdraft in an account at another bank of $2,000.
Lawrence should report cash of
a. $13,000.
b. $15,000.
, c. $18,000.
d. $19,000. - ANSWER b
92. Steinert Company has the following items at year-end:
Cash in bank $30,000
Petty cash 500
Commercial paper with maturity of 2 months 8,200
Postdated checks 2,100
Steinert should report cash and cash equivalents of
a. $30,000.
b. $30,500.
c. $38,700.
d. $40,800. - ANSWER c
93. If a company purchases merchandise on terms of 1/10, n/30, the cash discount
available is equivalent to what effective annual rate of interest (assuming a 360-day
year)?
a. 1%
b. 12%
c. 18%
d. 30% - ANSWER c
94. AG Inc. made a $10,000 sale on account with the following terms: 1/15, n/30. If
the company uses the net method to record sales made on credit, how much should
be recorded as sales revenue?
a. $ 9,800.
b. $ 9,900.
c. $10,000.
d. $10,100. - ANSWER b
95. AG Inc. made a $10,000 sale on account with the following terms: 1/15, n/30. If
the company uses the gross method to record sales made on credit, what is/are the
debit(s) in the journal entry to record the sale?
a. Debit Accounts Receivable for $9,900.
b. Debit Accounts Receivable for $9,900 and Sales Discounts for $100.
c. Debit Accounts Receivable for $10,000.
d. Debit Accounts Receivable for $10,000 and Sales Discounts for $100. - ANSWER
c
96. AG Inc. made a $10,000 sale on account with the following terms: 2/10, n/30. If
the company uses the net method to record sales made on credit, what is/are the
debit(s) in the journal entry to record the sale?
a. Debit Accounts Receivable for $9,800.
b. Debit Accounts Receivable for $9,800 and Sales Discounts for $200.
c. Debit Accounts Receivable for $10,000.
d. Debit Accounts Receivable for $10,000 and Sales Discounts for $200. - ANSWER
a
97. Rosalie Co. uses the gross method to record sales made on credit. On June 10,
2011, it made sales of $100,000 with terms 2/10, n/30 to Finley Farms, Inc. On June
