Question 6 (4 points)

Costco Wholesale Corporation collects annual non-refundable membership fees from customers. When should Costco recognize revenue for these membership fees?

Question 6 options:

a) Evenly over the membership year b) Evenly over the current fiscal year c) Pro rata over the customer's actual purchasing pattern d) At the end of the membership year when Costco has discharged its obligation to the customer e) Immediately when cash is received because the fees are nonrefundable

Question 7 (4 points)

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Aiello Inc. had the following inventory in fiscal year. The company uses the LIFO method of accounting for inventory.

Beginning Inventory, January 1: 104 units @ $15.00

Purchase 160 units @ $18.00

Purchase 40 units @ $13.50

Purchase 88 units @ $15.75

Ending Inventory, December 31: 96 units

The company's cost of goods sold for fiscal year is:

Question 7 options:

a) None of these are correct b) $4,872.00 c) $1,440.00 d) $4,244.60 e) $4,926.00

Question 8 (4 points)

Which of the following are included in current assets?

Question 8 options:

a) Taxes payable b) None of these are correct. c) Automobiles d) Common stock e) Prepaid rent

Question 9 (4 points)

Cash collected on accounts receivable would produce what effect on the balance sheet?

Question 9 options:

a) Increase assets and decrease assets b) Increase liabilities and decrease equity c) None of these are correct d) Decrease assets and decrease liabilities e) Decrease liabilities and increase equity

Question 10 (4 points)

The financial statements of Calico Corporation, for the May 31, year-end, included the following information relating to their allowance for doubtful accounts: Balance in allowance at the beginning of the year $360 million, accounts written off during the year of $151 million, balance in allowance at the end of the year $351 million.

What did Calico Corporation report as bad debt expense for the year?

Question 10 options:

a) $142 million b) $200 million c) None of these are correct d) $160 million e) $209 million