Your Questions About Invest In Gold Mines

Charles asks…

How or where can I buy Gold and Gold Stocks?

What website or place do I go to to buy ounces of gold?

Justin answers:

The cheapest way to buy gold is with the exchange traded fund GLD. One share is 1/10 ounce of gold. There are quite a few gold stocks that you can buy. The largest company is ABX. That is the ticker. Others are NEM, GG, UXG. There are also mutual funds that invest in gold and silver mining companies. Fidelity Canada fund hold some gold stocks. Ticker FICDX. Select Gold Portfolio is all gold mining stocks I think. Ticker FSAGX. There are several gold mining index funds also. GDX is one. PSAU another.

You must open a broker account to buy any of these. Scottrade is an inexpensive on line broker.

James asks…

Do you think the Americans astronauts were the first to land on the moon?

Some experts suggest this was a hoax.
Other people feel the Russians were the first to land on the moon. What are your feelings about this and do you think the government should invest more money in the space program?

Justin answers:

1. The Soviet Union did not claim to send cosmonauts to the moon. Only the United States of America has made that claim. Thus, it is clear that the people who “feel the Russians were the first…” don’t even understand the facts. Feelings, like “wishing” the Russians had been there first, no matter how strongly held, won’t make it so.

2. Yes, I know the American astronaut Neil Armstrong was the first man from Earth to set foot on the moon, and he came home again, too.

3. Incredible technology came from the push we (and the Russians and others) invested in the “Space Race” … How many channels of TV do you have at home? That’s because of the space race. Do you get a fairly accurate weather forecast? How about GPS navigation, Internet access anywhere in the world, safety of ships and aircraft, and so much more. Here’s a story about an indirect benefit I know about…

Before sending men into orbit and then on to the moon, we needed to know how many meteorites there were out there. We built a huge spacecraft (well, it had a huge, wing like detector on it. This wing had lots of tiny microphones to detect impact of space dust. OK, so what came of this?

These tiny microphones, it turns out, can detect the beating of a chicken heart in an egg only 3 days after being laid. So, many drug safety tests were sped up enormously. New medicines would be injected into eggs, and the eggs were set on these microphones. Significant changes in the timing of when the chick’s heartbeat began were a clue that the medicine could cause genetic changes or other problems.

Do I expect the space investment to pay off, for example, by finding a gold mine on Mars or the moon? No, but the investment we make in the science and technology has enormous implications for our future.

I don’t think the government spends enough on space and science!

Paul asks…

What’s the best form of silver to invest in?

Whether it be rounds, bars, bullion or even mining company’s stocks? Also do you find this to be one of the wisest forms of investment out there right now?

Justin answers:

Please read the following sites:

http://silverprice.org/buy-silver/2009/08/tips-on-buying-silver.html

Precious metals are a wise investment now due to currency crises in many countries. Gold is also equally good. Gold market is larger than silver market.

William asks…

Is it possible to invest in 401k using precious metal commodity?

With the news of uncertainty about the state of financial market in terms of stability, and when it does hit the market hard, the banks facing the catastrophe will not allow withdrawal of cash from the individual and business accounts, will the holding of precious metal in the deposit of the trustworthy holder (mutual fund company or other) allow APY (annual percentage yield) in compound interest on precious metal and jewelry (lucrative gems & rare minerals) holding depending on the current market demand for precious metals (fine gold, silver, platinum, etc)? Or does compound interest apply only to paper currency in saving and investment?

Justin answers:

It’s improbable that your 401k plan is going to offer something like that. Few people invest in precious metal funds, so your employer isn’t going to spend money to offer it. I’m not sure that they’re even allowed to offer direct purchases of precious metals.

You may be able to do it through an IRA and you can definitely do it through a taxable account. Check with some IRA providers and see if anyone offers a brokerage option that includes precious metals.

The bulk of your question is difficult to understand. (Try a little punctuation, please!) However, I think that you’re asking how returns work on precious metals as compared to savings accounts.

Precious metals do not pay interest and nothing is compounded. You buy them at the current market price and sell them at the market price in effect at the time of the sale. If the price has gone up when you sell, you’ve made a profit. If the price has gone down, you’ve lost money. Precious metal mutual funds usually invest in mining companies, not the actual metals. Returns work similarly except that you will likely have capital gains distributions and possibly dividends.

If you want compound interest, open a savings account or buy some CDs.

By the way, precious metals are speculative. If you need to ask how price appreciation works, you may want to think twice about buying these. They’re best suited for sophisticated investors with risk capital.

David asks…

Can someone please give me a brief yet informative overview of the entire stock market?

Im new to it all.. and i am interested in investing and i have no real idea of how it really works.. If someone could explain the stock market and how to buy and trade stock, it would really help me out. Thanks!

Justin answers:

Generally speaking the Stock Market refers to equities where actually stocks and derivatives are traded. In the U.S.A. We think the Stock Market is New York City. In fact there are major Stock Markets in Hong Kong, Hamburg, London, Paris, Canada, Japan and others that influence one another and impact the world Stock Market.

The New York Stock Exchange may have stocks listed that are listed on other major Stock Markets. A company headquartered in Amsterdam may be listed on multiple stock exchanges. Many foreign organized companies are listed on the New York Stock Exchange. There is a tremendous value for foreign companies to be listed on an exchange in the U.S. The exposure and knowledge of a foreign company has a face on the New York Stock Market.

An example would be a China stock Baidu. These information and search technology company has grown in leaps and bounds since it was introduced on the New York Market. Sometimes all it takes is making a good impression to stock analysts and a good review by key people to give the foreign company a boost.

The reality of the Stock Market today is its world wide integration of investors, companies and alliances that create an unprecedented dynamic. Thus far this United Nations of the financial markets has produced an unspoken treaty of like minds. The main objective is to create a win-win scenario for all of the world players in the Stock Market.

Any investor wherever located may hold a substantial stake in any given equity no matter where the equity is traded. The Stock Market is a very large private club that anyone can join with the only admission ticket is the price of a single share of stock.

Most people are aware of American companies utilizing off shore manufacturing of their products. It may be not as well known that some traditional American brand companies are owned by foreign companies. Other American brand companies have a significant multi-national presence with significant stock ownership by foreign banks and investors.

The term equity should be broadly interpreted. There are equities that involve the manufacturing of products and goods, but a product can be intellectual or an entity like insurance. Banks are equities and financial brokers are all traded on the various exchanges. An investor may own gold stocks, mining companies and equities that package these equities into a corporate entity. The only limitation is that if the investor is interested in owning the commodity or trading in the futures market the Chicago Mercantile or other commodities exchanges is the investing tool.

In other words you may own a bank as an equity who may have bonds and other commercial paper that may trade on the commodities exchanges, but you can’ t buy a commodity as a stock. If you want a commodity like wheat, currency, corn, gold, silver or the like you need to look to the commodities exchange.

In the United States the New York Stock Market is comprised of the NASDAQ, NYSE and the newly created combination of the NYSE Group with Euronext in April, 2007. The Euronext holding company is a phenomenal synergy between Paris and the NYSE whose history goes back to 1792.

The Euronext is a combination of derivatives, currency and equities to name a sample of products. There are other exchanges that include the AMEX. There are listing requirements for each of the exchanges. The Stock Market is basically a place where buyers and seller of a piece of a company come together and in the process the company hopefully raises some cash or other value.

Check out my free Youtube video for more information:

Michael asks…

Besides precious metals, what else can I buy that would be a good investment for the future?

I want to buy something that will gain value as time goes by but I don’t want to do the whole gold and silver thing like everyone else. Is there anything else?

Justin answers:

The thing about investments is you want to invest in something that increases more than inflation. A dollar now is worth less than a dollar in 1990 and less than a dollar in 1960. So by that definition, almost anything whose value increases more than the inflation rate would be a good investment

If you have the money to invest, a great option right now is real estate. In the long run real estate will go up (excluding any unforeseen disasters). For the most part it will go up along with inflation, but with how low the housing market is right now, any investment you make should increase more than the inflation of the dollar. Between July 2010 and May 2012 I have purchased 4 houses in Southern California. The good thing about real estate is on top of the ability of it to hold it’s value, you can collect rental income from it. For a combined price (two of the rented properties) of $156k I collect $2k monthly which is all profit.

I would still say that precious metals is the way to go. I have a friend who lost his job 2 months ago and is still floating just fine due to his investments in precious metals. He not only invests in gold and silver, but in exploration mining companies. The companies are very high risk, but he gets dividends from them.

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Your Questions About Stocks And Bonds Basics

Ken asks…

How to invest for beginners?

could someone tell me about the basics of invest like for someone who is totally clueless, and what you need to get started etc. Especially stuff like stocks, bonds, IPO’s, etc. Just like a basic run through of everything

financi4 answers:

If you are new to the stock market, some research is necessary to be done on your part.

Try the below url:
http://www.sogotrade.com/help/faq.aspx…

For New visitors, it has extensive information available like:
How do I get started?
How do I fund my account to buy stock?

And Investing section gives information like:
How does the stock market work?
What are the risks and advantages of investing in the stock market?
How do I choose what to buy?
What are some tips for beginning investors?

The following tutorials might be helpful to you:
Definitions: http://www.sogotrade.com/Help/Glossary.aspx
http://ezinearticles.com/?Stock-Investing-for-a-Beginner&id=828865
http://ezinearticles.com/?Things-to-Know-Before-Investing-In-Stock-Market&id=866386
http://ezinearticles.com/?How-To-Buy-Stocks-Online&id=734725

Daniel asks…

Where can I go to learn the very basics of stocks?

I’ve been pretty interested in stocks for awhile now but I have never really gotten into learning more about trading and buying/selling stocks. I have some really basic knowledge about ET Fs, bonds, mutual funds and things like that but I feel like I barely know anything about actually using a site like etrade to begin. It may seem silly but I borrowed Investing For Dummies from my friend.

Anyway, if you guys could give me some sites or maybe even books to really help me get started, that’d be amazing. Also, I’d like you to know I’m 17 years old so I don’t think I’d actually be able to invest some real money into stocks as of now, I’d just like to know a little bit more about the whole idea.

Thanks in advance

financi4 answers:

It’s nice to start out young and you should get a lot of information to give you a bird’s eye view as early as now. You may want to look into penny stocks which range from $1-$5 give or take. It’s not really lucrative in real time but at least you get a hands on feel of trading. You can also look out for trading software’s that will also help you analyze stock data, predict the market etc.

Its always best to consult a professional broker or financial adviser to get an experienced advice and knowledge on the matter. What ever investment option you take would involve risk so get as much possible information for you to come up with an informed decision.

Good luck in your investment endeavor.

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Investing 101: 7 Utilities Companies with Encouraging AR's and Dividends …

Investing 101: 7 Utilities Companies with Encouraging AR's and Dividends …

For investors, there's nothing better than getting a dividend from your prized asset every quarter. A dividend in the profitable but safe range of 3-7% is even better. With droughts across America this summer and oil prices especially volatile during
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Fewer Taxes for Businesses Investing in Solar

Fewer Taxes for Businesses Investing in Solar

Fewer Taxes for Businesses Investing in Solar. By Matt Porter. January 3, 2013 Updated Jan 3, 2013 at 6:20 PM EST. Binghamton, NY (WBNG Binghamton) Wes Ernsberger helped his church become solar powered two years ago. Using the computer, he can
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Your Questions About In Which Journal Is The Return Of Supplies Purchased On Account Recorded

James asks…

Record the January transactions in the appropriate journal—sales, purchases, cash receipts, cash payments, and?

General Ledger
Account Number
Account Title
January 1 Opening Balance
101
Cash
$33,750
112
Accounts Receivable
13,000
115
Notes Receivable
39,000
120
Merchandise Inventory
20,000
125
Office Supplies
1,000
130
Prepaid Insurance
2,000
157
Equipment
6,450
158
Accumulated Depreciation
1,500
201
Accounts Payable
35,000
301
I. Packard, Capital
78,700

Accounts Receivable
Subsidiary Ledger

Accounts Payable
Subsidiary Ledger
Customer
January 1 Opening Balance

Creditor
January 1 Opening Balance
R. Draves
$1,500

S. Kosko
$ 9,000
B. Hachinski
7,500

R. Mikush
15,000
S. Ingles
4,000

D. Moreno
11,000

Jan. 3
Sell merchandise on account to B. Remy $3,100, invoice no. 510, and J. Fine $1,800, invoice no. 511.
5
Purchase merchandise on account from S. Yost $3,000 and D. Laux $2,700.
7
Receive checks for $4,000 from S. Ingles and $2,000 from B. Hachinski.
8
Pay freight on merchandise purchased $180.
9
Send checks to S. Kosko for $9,000 and D. Moreno for $11,000.
9
Issue credit of $300 to J. Fine for merchandise returned.
10
Summary cash sales total $15,500.
11
Sell merchandise on account to R. Draves for $1,900, invoice no. 512, and to S. Ingles $900, invoice no. 513.

Post all entries to the subsidiary ledgers.
12
Pay rent of $1,000 for January.
13
Receive payment in full from B. Remy and J. Fine.
15
Withdraw $800 cash by I. Packard for personal use.
16
Purchase merchandise on account from D. Moreno for $15,000, from S. Kosko for $13,900, and from S. Yost for $1,500.
17
Pay $400 cash for office supplies.
18
Return $200 of merchandise to S. Kosko and receive credit.
20
Summary cash sales total $17,500.
21
Issue $15,000 note to R. Mikush in payment of balance due.
21
Receive payment in full from S. Ingles.

Post all entries to the subsidiary ledgers.
22
Sell merchandise on account to B. Remy for $3,700, invoice no. 514, and to R. Draves for $800, invoice no. 515.
23
Send checks to D. Moreno and S. Kosko in full payment.
25
Sell merchandise on account to B. Hachinski for $3,500, invoice no. 516, and to J. Fine for $6,100, invoice no. 517.
27
Purchase merchandise on account from D. Moreno for $12,500, from D. Laux for $1,200, and from S. Yost for $2,800.
28
Pay $200 cash for office supplies.
31
Summary cash sales total $22,920.
31
Pay sales salaries of $4,300 and office salaries of $3,600.

Justin answers:

What???

John asks…

Comprehensive Problem-Perpetual?

If the Working Papers that accompany this textbook are not being used, omit this problem.) You have just taken over the accounting for Choi Enterprises, whose annual accounting period ends December 31. The company’s previous accountant journalized its transactions through December 15 and posted all items that required posting as individual amounts (see the journals and ledgers in the Working Papers). The company’s transactions beginning on December 16 follow (terms for all its credit sales are 2_10, n_30):
Dec. 16 Sold merchandise on credit to Hanna Seppa, Invoice No. 916, for $7,700 (cost is $4,600).
17 Received a $1,040 credit memorandum from Funk Company for the return of merchandise received on December 15.
17 Purchased $615 of office supplies on credit from KK’s Supply Company, invoice dated December 16, terms n_10 EOM.
18 Received a $40 credit memorandum from KK’s Supply Company for the return of office supplies received on December 17.
20 Issued a $500 credit memorandum to Bo Brown for defective (worthless) merchandise sold on December 15 and returned for credit.
21 Purchased $6,700 of store equipment on credit from KK’s Supply Company, invoice dated December 21, terms n_10 EOM.
22 Received payment from Hanna Seppa for the December 12 sale less the discount.
23 Issued Check No. 623 to Crossland Company in payment of its December 15 invoice less the discount.
24 Sold merchandise on credit to Shilo Jones, Invoice No. 917, for $1,200 (cost is $600).
24 Issued Check No. 624 to Funk Company in payment of its December 15 invoice less the return and the discount.
25 Received payment from Bo Brown for the December 15 sale less the return and the discount.
26 Purchased $8,100 of merchandise from Crossland Company, invoice dated December 25, terms 2_10, n_60.
29 Sold a neighboring merchant five boxes of file folders (office supplies) at their cost of $50 cash.
30 Ken Choi, the sole owner of Choi Enterprises, used Check No. 625 to withdraw $2,500 in cash from the business for personal use.
31 Issued Check No. 626 to Jamie Inman, the company’s only sales employee, in payment of her $2,020 salary for the last half of December.
31 Issued Check No. 627 to Access Electric Company in payment of its $710 December electric bill.
31 Cash sales for the last half of the month are $29,600 (cost is $11,200). (Cash sales are recorded daily but are recorded only twice in this problem to reduce repetitive entries.)
Required
1. Record these transactions in the journals provided in the working papers.
2. Verify that amounts that should be posted as individual amounts to the general ledger accounts have been posted, including posting to the customer and creditor accounts. (Such items are immediately posted.) Foot and crossfoot the journals and make the month-end postings.
3. Prepare a December 31 trial balance and prove the accuracy of the subsidiary ledgers by preparing schedules of both accounts receivable and accounts payable.

Justin answers:

To do this assignment, be guided by Larson?Wild?Chiappetta: Fundamental Accounting Principles, Seventeenth Edition, chapter 7.

Thomas asks…

I NEED HELP WITH SPECIAL JOURNALS?

H I have a comprehensive project I am trying to complete. I have completed the majority and got most answers correct. Unfortunately my worksheet is not balancing. I would really appreciate some help or pointers with this, thanks!!!
May 1 Issued Check No. 3410 to S&P Management Co. in payment of the May rent, $3,710. (Use
two lines to record the transaction. Charge 80% of the rent to Rent Expense—Selling Space
and the balance to Rent Expense—Office Space.)
2 Sold merchandise on credit to Hensel Company, Invoice No. 8785, for $6,100 (cost is $4,100).
2 Issued a $175 credit memorandum to Knox, Inc., for defective (worthless) merchandise sold
on April 28 and returned for credit. The total selling price (gross) was $4,725.
3 Received a $798 credit memorandum from Peyton Products for the return of merchandise
purchased on April 29.
4 Purchased the following on credit from Gear Supply Co.: merchandise, $37,072; store supplies,
$574; and office supplies, $83. Invoice dated May 4, terms n_10 EOM.
5 Received payment from Knox, Inc., for the balance from the April 28 sale less the May 2
return and the discount.
8 Issued Check No. 3411 to Peyton Products to pay for the $7,098 of merchandise purchased
on April 29 less the May 3 return and a 2% discount.
9 Sold store supplies to the merchant next door at their cost of $350 cash.
10 Purchased $4,074 of office equipment on credit from Gear Supply Co., invoice dated May
10, terms n_10 EOM.
11 Received payment from Hensel Company for the May 2 sale less the discount.
11 Purchased $8,800 of merchandise from Garcia, Inc., invoice dated May 10, terms 2_10,
n_30.
12 Received an $854 credit memorandum from Gear Supply Co. for the return of defective office
equipment received on May 10.
15 Issued Check No. 3412, payable to Payroll, in payment of sales salaries, $5,320, and office
salaries, $3,150. Cashed the check and paid the employees.
15 Cash sales for the first half of the month are $59,220 (cost is $38,200). (Cash sales are
recorded daily but are recorded only twice here to reduce repetitive entries.)
15 Post to the customer and creditor accounts. Also post individual items that are not included
in column totals at the end of the month to the general ledger accounts. (Such items are
posted daily but are posted only twice each month because they are few in number.)
16 Sold merchandise on credit to Hensel Company, Invoice No. 8786, for $3,990 (cost is
$1,890).
17 Purchased $13,650 of merchandise from Fink Corp., invoice dated May 14, terms 2_10,
n_60.
19 Issued Check No. 3413 to Garcia, Inc., in payment of its May 10 invoice less the discount.
22 Sold merchandise to Lee Services, Invoice No. 8787, for $6,850 (cost is $4,990), terms
2_10, n_60.
23 Issued Check No. 3414 to Fink Corp. in payment of its May 14 invoice less the discount.
24 Purchased the following on credit from Gear Supply Co.: merchandise, $8,120; store supplies,
$630; and office supplies, $280. Invoice dated May 24, terms n_10 EOM.
25 Purchased $3,080 of merchandise from Peyton Products, invoice dated May 23, terms 2_10,
n_30.
26 Sold merchandise on credit to Crane Corp., Invoice No. 8788, for $14,210 (cost is $8,230).
26 Issued Check No. 3415 to Perennial Power in payment of the May electric bill, $1,283.
29 The owner of Colo Company, Jenny Colo, used Check No. 3416 to withdraw $7,000 cash
from the business for personal use.
30 Received payment from Lee Services for the May 22 sale less the discount.
30 Issued Check No. 3417, payable to Payroll, in payment of sales salaries, $5,320, and office
salaries, $3,150. Cashed the check and paid the employees.
31 Cash sales for the last half of the month are $66,052 (cost is $42,500).
31 Post to the customer and creditor accounts. Also post individual items that are not included
in column totals at the end of the month to the general ledger accounts. Foot and crossfoot
the journals and make the month-end postings.
Required
1. Enter these transactions in a sales journal, a purchases journal, a cash receipts journal, a cash disbursements
journal, or a general journal as illustrated in this chapter. Post when instructed to do
so. Assume a perpetual inventory system.
2. Prepare a trial balance in the Trial Balance columns of the work sheet form provided with the working
papers. Complete the work sheet using the following information for accounting adjustments:
a. Expired insurance, $553.
b. Ending store supplies inventory, $2,632.
c. Ending office supplies inventory, $504.
d. Depreciation of store equipment, $567.
e. Depreciation of office equipment, $329.
Prepare and post adjusting and closing entries.

Justin answers:

To do this assignment, be guided by Larson?Wild?Chiappetta: Fundamental Accounting Principles, Seventeenth Edition, chapter 7.

Ken asks…

Help with my final review in accounting?

1. On the basis of the following data, what is the proper adjusting entry at Dec. 31, the end of the fiscal year; supplies account balance before adjustment, $550; supplies physical inventory on Dec. 31, $170

2. For the current fiscal year sales were 625,000, sales returns and allowances were 20,000, purchases were 450,000, and purchases discounts were 7,000. Merchandise inventory at the beginning of the year was 110,000 and at the end of the year it was 120,000. What was the amound of the cost of goods sold?
a. 440000
b. 433000
c. 460000
d. 453000
e. none of the above

3. Under which of the cost flows are the most recent costs assigned to inventory?
a. FIFo
b. LIFO
c. weighted average
d. moving average
e. none of the above

4. Which of the following would be included in the initial cost of plant assets?
a. insurance on the asset wile in transit
b. cost of special foundation for the asset
c. cost to install the asset
d. all of the above

5. tangible assest used in the business that are of a relatively fixed or permanent nature are called
a. plant assets
b. current assets
c. accounts payable
d. accounts rec.
e. none of the above

6. which of the following accounts in the ledger will appear in the post closing trial balance?
a. depreciation exp
b. morgage note payable
c. dividends
d. all of the above
e. none of the above

7. The verification that the debits and credits in the ledger are equal is called
a. ledger
b. trial balance
c. posting
d. journal
e. none of the above

8. the term applied to the periodic cost expiration resulting from a decline in the utility of intangible assests is
a. depreciation
b. depletion
c. amortization
d. all of the above
e. none of the above

9. the controlling account in the general ledger that summarizes the debits and credits to the individual accounts in the creditors ledger is entitiled:

10. if total assets decreased by 5000 during a period of time and capital increased by 15,000 during the same period, the amount and direction (increase/decrease) of the periods change in total liabilites is

11. A series of entries journalized at the end of the accounting period to remove the balances form the temporary accounts so that they will be ready for use in accumulating data for the following accounting perid are termed

12. the balance in the prepaid insurance account before adjustment at the end of the year is 1740 and the amount of insurance expired during the year is 620. the adjusting entry required is

13. if merchandise inventory is being valued at cost and price level is consistently rising, which method of costing will yield the smallest net income

14. the current ratio is a
a. liquidity ratio
b. profitablity ratio
c. long term solvency ratio
d. market strength ratio

15. a purchase invoice included the following info; mercahndise price 500, transportation 25, FOB shipping point 2/10, n/30. If the invoice is paid within the discount period, what is the correct amount of the payment

16. What is considered to be the sales price of an item of merchandise with a list price of $500, subject to a trade discount of 30% and with terms of 2/10, n/30

Justin answers:

1. On the basis of the following data, what is the proper adjusting entry at Dec. 31, the end of the fiscal year; supplies account balance before adjustment, $550; supplies physical inventory on Dec. 31, $170

Debit Supplies Expense $380
Credit Supplies Account $380

2. For the current fiscal year sales were 625,000, sales returns and allowances were 20,000, purchases were 450,000, and purchases discounts were 7,000. Merchandise inventory at the beginning of the year was 110,000 and at the end of the year it was 120,000. What was the amount of the cost of goods sold?

B. 433000

($450,000 – $7,000) + $110,000 – $120,000

3. Under which of the cost flows are the most recent costs assigned to inventory?

A. FIFO

4. Which of the following would be included in the initial cost of plant assets?

D. All of the above

5. Tangible assets used in the business that are of a relatively fixed or permanent nature are called

a. Plant assets

6. Which of the following accounts in the ledger will appear in the post closing trial balance?

B. Mortgage note payable

7. The verification that the debits and credits in the ledger are equal is called

e. None of the above

Answer = Balancing

8. The term applied to the periodic cost expiration resulting from a decline in the utility of intangible assets is

c. Amortization

9. The controlling account in the general ledger that summarizes the debits and credits to the individual accounts in the creditors ledger is entitled:

Accounts Payable

10. If total assets decreased by 5000 during a period of time and capital increased by 15,000 during the same period, the amount and direction (increase/decrease) of the periods change in total liabilities is:

-$20,000

11. A series of entries journalized at the end of the accounting period to remove the balances from the temporary accounts so that they will be ready for use in accumulating data for the following accounting period are termed

Closing Entries

12. The balance in the prepaid insurance account before adjustment at the end of the year is 1740 and the amount of insurance expired during the year is 620. The adjusting entry required is

Debit Insurance Expense $1,120
Credit Prepaid Insurance $1,120

13. If merchandise inventory is being valued at cost and price level is consistently rising, which method of costing will yield the smallest net income

LIFO

14. The current ratio is a

a. Liquidity ratio

15. A purchase invoice included the following info; merchandise price 500, transportation 25, FOB shipping point 2/10, n/30. If the invoice is paid within the discount period, what is the correct amount of the payment

$525 X 98% = $514.50

16. What is considered to be the sales price of an item of merchandise with a list price of $500, subject to a trade discount of 30% and with terms of 2/10, n/30

$500 X 70% = $350

If they take advantage of the cash discount, the 2% discount would be recorded as a contra revenue for $7. It does not affect the sale price as there is no guarantee that the customer will take the discount.

George asks…

Help with Choi Enterprises?

You have just taken over the accounting for Choi Enterprises, whose annual accounting period ends December 31. The company’s previous accountant journalized its transactions through December 15
and posted all items that required posting as individual amounts (see the journals and ledgers in the Working Papers). The company’s transactions beginning on December 16 follow (terms for all its
credit sales are 2_10, n_30):
Dec. 16 Sold merchandise on credit to Hanna Seppa, Invoice No. 916, for $7,700 (cost is $4,600).
17 Received a $1,040 credit memorandum from Funk Company for the return of merchandise received on December 15.
17 Purchased $615 of office supplies on credit from KK’s Supply Company, invoice dated December 16, terms n_10 EOM.
18 Received a $40 credit memorandum from KK’s Supply Company for the return of office supplies received on December 17.
20 Issued a $500 credit memorandum to Bo Brown for defective (worthless) merchandise sold on December 15 and returned for credit.
21 Purchased $6,700 of store equipment on credit from KK’s Supply Company, invoice dated December 21, terms n_10 EOM.
22 Received payment from Hanna Seppa for the December 12 sale less the discount.
23 Issued Check No. 623 to Crossland Company in payment of its December 15 invoice less the discount.
24 Sold merchandise on credit to Shilo Jones, Invoice No. 917, for $1,200 (cost is $600).
24 Issued Check No. 624 to Funk Company in payment of its December 15 invoice less the return and the discount.
25 Received payment from Bo Brown for the December 15 sale less the return and the discount.
26 Purchased $8,100 of merchandise from Crossland Company, invoice dated December 25, terms 2_10, n_60.
29 Sold a neighboring merchant five boxes of file folders (office supplies) at their cost of $50 cash.
30 Ken Choi, the sole owner of Choi Enterprises, used Check No. 625 to withdraw $2,500 in cash from the business for personal use.
31 Issued Check No. 626 to Jamie Inman, the company’s only sales employee, in payment of her $2,020 salary for the last half of December.
31 Issued Check No. 627 to Access Electric Company in payment of its $710 December electric bill.
31 Cash sales for the last half of the month are $29,600 (cost is $11,200). (Cash sales are recorded daily but are recorded only twice in this problem to reduce repetitive entries.)
Required
1. Record these transactions in the journals provided in the working papers.( I need help with the purchases journal, cash disbursements journal)
2. Verify that amounts that should be posted as individual amounts to the general ledger accounts have been posted, including posting to the customer and creditor accounts. (Such items are immediately
posted.) Foot and crossfoot the journals and make the month-end postings. (I need help with the general ledger and the accounts payable ledger)
3. Prepare a December 31 trial balance and prove the accuracy of the subsidiary ledgers by preparing schedules of both accounts receivable and accounts payable. (I need help with the trial balance)

Justin answers:

I’ve sent the file to that address you gave me.

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