Problem 1) Receiving a cash dividend from an available-for-sale investment requires the following journal entry:
A) a debit to Cash and a credit to Dividend Revenue.
B) a debit to Cash and a credit to Unrealized Gain on Investments.
C) a debit to Unrealized Gain on Investment and a credit to Dividend Revenue.
D) no journal entry. Investor makes a memorandum entry in the accounting records.
Problem 2) Estimated warranty payable are reported on the balance sheet as:
A) administrative expenses.
B) a long-term liability.
C) a current liability.
D) part of cost of goods sold.
Problem 3) The accounting principle requiring that a company record the warranty expense in the same period that it records sales revenue is the:
A) going concern principle.
B) matching principle.
C) conservatism principle.
D) consistency principle.
Problem 4) Omaha Bank lends Nebraska Paper Company $100,000 on January 1. Nebraska Paper Company signs a $100,000, 8%, 6-month note. The entry made by Nebraska Paper Company on January 1 to record the proceeds and issuance of the note:
Problem 5) Monthly sales were $200,000. Warranty costs are estimated at 4% of monthly sales. In the month of sale, the company should record :