Bart's Brewskies saw sales of $50,000 in December-primarily due to New Year's Eve celebrations. Bart determined that 30% of his sales are paid in cash, while the rest are billed for their brewskies. Of the money owed, 40% is paid December, while the remaining is paid the following month. What is the increase of Accounts Receivable on New Year's Eve?
(A)$21,000
(B)$14,000
(C)$15,000
(D)$35,000
(E)$50,000
Jim's Jeans is being sued by a former employee for $100,000. The employee is claiming age discrimination. She is twenty-four and was terminated when Jim decided that he wanted all employees to be over the age of sixty-five. Jim's attorney has told him that the employee has a strong case and will probably win. How does this impact Jim's accounting records? Mark one answer:
(A)A note is made on the Balance Sheet regarding the lawsuit. (B)There is no impact on the financial statement unless the employee wins the suit. (C)A loss of $100,000 appears in the owner's equity section on the balance sheet. (D)An entry will appear on the statement of cash flows. (E)A contingent liability of $100,000 appears on the income statement as an expense.
Correct Answer: E
Which one of the following would constitute a highly inflationary economy when determining the functional currency of a foreign entity?
(A)20% inflation for each of the past 5 years. (B)30% inflation for each of the past 3 years. (C)35% inflation for each of the past 3 years. (D)20%, 35%, and 40% inflation, respectively, for each of the past 3 years.
Correct Answer: C
What are the number of shares Jet should use to calculate Year 1 earnings per share?
(A)40,000 (B)45,000 (C)50,000 (D)54,000
Correct Answer: B
More CPA Exam Questions
- 1If Jenny's Bakery purchased an insurance policy, assuming the accrual accounting method is still being used, when would the company report the cost of the policy as an expense?
- 2What are the number of shares Jet should use to calculate Year 1 earnings per share?
- 3Jim's Jeans is being sued by a former employee for $100,000. The employee is claiming age discrimination. She is twenty-four and was terminated when Jim decided that he wanted all employees to be over the age of sixty-five. Jim's attorney has told him that the employee has a strong case and will probably win. How does this impact Jim's accounting records? Mark one answer:
- 4In AICPA professional standards, the word should indicates an (a)
- 5Which one of the following would constitute a highly inflationary economy when determining the functional currency of a foreign entity?