ACCO 310 Study Guide - Midterm Guide: Current Liability, Gross Profit, Accounts Payable
23 Sep 2015
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Correct error of gain from retail value of cars purchased. 1- the inventory costing method should be disclosed. 2- the amount of cars and equipment gross and the amount of their respective accumulated depreciation must be disclosed. (this can be done in the balance sheet) 3- the depreciation method for cars (straight line, 3 years, residual 30% of cost) and equipment (declining balance, 5 years, ,000 residual) must be disclosed. 4- the bank loan is secured by the cars held for resale. 5-the terms of the bank and shareholder loans (maturity, interest, nature) should also be disclosed. 6-common shares 40,000 authorized and issued and how many outstanding should be disclosed. (this can be done in the balance sheet: the incident should not be recognized but should be disclosed in the 2015 financial statements. Since the fire occurred after the 2015 year-end (i. e. , after cutoff), the inventory value at december 31, 2015 would not be adjusted .
