103 the following information relates to peter company in thousands additional inves 4313944

103 the following information relates to peter company in thousands additional inves 4313944

103.The following information relates to Peter Company (in thousands):

Additional investment by Mr. Peter

$ 15

Sales revenue

150

Net assets, beginning of year

1,100

Distribution to Mr. Peter

110

Cost of goods sold

125

Net assets, end of year

1,180

 

Required:

Compute net income, using the capital maintenance approach.

104.Listed below are the three expense recognition principles followed by a series of expense items.

a.

association of cause and effect

b.

systematic and rational allocation

c.

immediate recognition

____

1.

Amortization

____

2.

Sales commissions

____

3.

Cost of goods sold

____

4.

Administrative salaries

____

5.

Allocation of prepaid insurance

____

6.

Utilities

____

7.

Product warranty costs

____

8.

Depreciation

____

9.

Transportation-out

____

10.

Travel and entertainment

Required:
Match the expense recognition principles to their corresponding expenses by placing the appropriate letter in the space provided.

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