20.Sloane, Inc. purchased equipment in 2015 at a cost of $600,000. Two years later the undiscounted future cash flows of the equipment was $360,000. The book value of the asset is $320,000 and it is estimated that the fair value is $300,000. The entry to record the impairment is:

Select one:

a.

b.

c. No Entry Necessary

d.

e.

1.

Pillar Company purchases a machine and will make five annual payments to the vendor; the first payment is on the date of purchase. Indicate which computation is appropriate to determine the recorded cost of the machine.

Select one:

a. Future value of ordinary annuity

b. Future value of annuity due

c. Present value of annuity due

d. Present value of ordinary annuity

2.

F.O.B. Shipping Point indicates that:

Select one:

a. Merchandise should be included in the seller's inventory as of the date it is shipped by the seller.

b. The buyer should record sales revenue as soon as the merchandise has been shipped

c. Title to the merchandise passes to the buyer only upon receipt at the buyer's warehouse.

d. Title to the merchandise passes to the buyer upon shipment by the seller.

e. The seller should not record sales revenue until the merchandise is received at the buyer's warehouse.

3.In a periodic inventory system, purchases of merchandise on account are recorded by crediting:

Select one:

a. Cost of Goods Sold

b. Accounts Payable

c. Purchases

d. Inventory

e. Cash

4.

The Packard Company fails to record depreciation at year-end. Indicate the error on the Asset Book Value and Retained Earnings, respectively.

Select one:

a. No error, Overstated

b. No error, Understated

c. Overstated, Overstated

d. Overstated, No error

e. Overstated, Understated

Retained Earnings 40,000 Accumulated Depreciation - Equipment 40,000 Loss on Impairment of Equipment 20,000 Reserve for Loss on Impairment of Equipment 20,000 Loss on Impairment of Equipment 20,000 Accumulated Depreciation - Equipment 20,000 Loss on Impairment of Equipment 40,000 Accumulated Depreciation - Equipment 40,000