Angus Company agreed to sell goods for Longhorn Company on consignment, but wasn't willing to take ownership of the goods in case they were difficult to sell. Which of the following statements is true? Multiple Choice Angus owns the inventory and should report it on its balance sheet. Longhorn owns the inventory, but should not report it on its balance sheet because Angus actually holds the inventory. Angus owns the inventory, since possession is nine tenths of the law, but should not report it on its balance sheet. Longhorn owns the inventory and should report it on its balance sheet.

Angus Company agreed to sell goods for Longhorn Company on consignment, but wasn't willing to take ownership of the goods in case they were difficult to sell. Which of the following statements is true? Multiple Choice Angus owns the inventory and should report it on its balance sheet. Longhorn owns the inventory, but should not report it on its balance sheet because Angus actually holds the inventory. Angus owns the inventory, since possession is nine tenths of the law, but should not report it on its balance sheet. Longhorn owns the inventory and should report it on its balance sheet.

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter3: Internal Control Issues

Section3.5: Goodner Brothers, Inc.

Problem 4Q

See similar textbooks

Similar questions

Rustic Company has recognized an impairment loss on the value of inventory. If the inventory's value subsequently recovers, under which accounting standards may Rustic revalue the inventory upward and recognize a gain? A) Neither IFRS nor U.S. GAAP allows a recovery in inventory value to be recognized as a gain. B) IFRS allows a recovery in inventory value to be recognized as a gain, but U.S. GAAP does not. c) U.S. GAAP allows a recovery in inventory value to be recognized as a gain, but IFRS does not.
AAA Ltd sells and delivers goods to XXX Ltd on 13 March. Both parties agree that XXX Ltd will hold the goods on consignment to be sold to third parties. XXX Ltd is not required to pay AAA Ltd for the goods until they are sold to a third party. Which of the following statements is incorrect? a. AAA Ltd retains the risks and rewards of ownership of the goods after delivery to XXX Ltd. b. At the time of delivery of the goods to XXX Ltd there is no probability that future economic benefits will flow to AAA Ltd. c. AAA Ltd does not recognise any revenue until XXX Ltd has on-sold goods to a third party. d. AAA Ltd recognises revenue on 13 March for the sale of goods to XXX Ltd.
Jahmeelah Ltd is a publicly owned company founded by Jam Spencer. Jahmeelah owns and operates retail stores in Ontario, Nova Scotia, and Quebec. The company has decided to dispose of a low performing store in Quebec City. The board authorized a sale of the assets, and has been in discussion with a potential buyer. The Quebec City store qualifies as a disposal group, to be classified as held for sale. The net assets of the Quebec location can be summarized as follows: Cash Accounts receivable Inventory Land Buildings Equipment and furnishings Accounts payable Cost 665,000 125, 000 (46, 000) Carrying value 30 November 20X4 recoverable amount 15,000 26, 000 33, 000 485, 000 306, 000 42, 000 (46, 000) 861, 000 Estimate 15, 000 18,000 25,000 520, 000 290,000 24, 000 (46, 000) 846, 000 Required: Prepare the journal entry to record the disposal group as held for sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
The following transactions were entered into by Keppel Corp. for the current year: Sold goods to Shang Co. amounting to P 200,000. In the sales contract, there is a clause that the seller has an obligation for unsatisfactory performance, which is not governed by normal warranty provisions; Shipped machinery invoiced at P 300,000 to a destination specified by the buyer. A significant part of the transaction involves installation that has not been fulfilled by Keppel Corp.; Sold at P 500,000 a machinery to Aboitiz Corp, where Aboitiz has the right to cancel the purchases for a reason not specified in the contract of sale and the seller is uncertain about the outcome. How much should be recognized by Keppel Corp as revenue from the above transactions? * A. P 0 B. P 1, 000, 000 C. P 700, 000 D. P 500, 000
Huling Associates plans to transfer $300,000 of accounts receivable to Mitchell Inc. in exchange for cash. Huling has structured the arrangement so that it retains substantially all the risks and rewards of ownership but shifts control over the receivables to Mitchell. Assuming all other criteria are met for recognizing the transfer as a sale, how would Huling account for this transaction under IFRS? Under U.S. GAAP?
15 One of the following is not a transaction deemed sale and is therefore not subject to VAT. Which is it? Group of answer choices Distribution or transfer to creditors of goods or properties of a VAT-registered person in payment of debt. Transfer, use or consumption not in the ordinary course of business of goods or properties originally intended for sale or for use in the course of business. Consignment of goods if actual sale is not made within 30 days following the date such goods were consigned. Distribution or transfer to stockholders or investors of goods or properties as share in the profits of a VAT-registered person.
In the current year, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. Item 1. Net sales 2. Gain on state's condemnation of company property 3. Cost of goods sold 4. Income tax expense 5. Depreciation expense 6. Gain on sale of wholesale business segment, net of tax 7. Loss from operating wholesale business segment, net of tax 8. Loss of assets from meteor strike Debit $1,474,897 227,000 232,500 474,000 636,000 Credit $2,890,000 257,000 795,000 Prepare the December 31 year-end income statement. (Loss amounts should be indicated with a minus sign.)
This assignment is based on the case, Seal Polymer Industries v. Med-Express, Inc., 725 S.E.2d 5 (N.C.App. 2012)]. I this case, Seal Polymer Industries sold two freight containers of latex gloves to Med-Express, Inc., a company based in North Carolina. When Med-Express failed to pay the $104,000 owed for the gloves, Seal Polymer sued in an Illinois court and obtained a judgment against Med-Express. Med-Express argued that it did not have minimum contacts with Illinois and therefore the Illinois judgment based on personal jurisdiction was invalid. Med-Express stated that it was incorporated under North Carolina law, had its principal place of business in North Carolina, and therefore had no minimum contacts with Illinois. Was this statement alone sufficient to prevent the Illinois judgment from being collected against Med-Express in North Carolina? Why, or why not? Support your answer by citing authority from your reading assignment.
Braxton Inc. is considering the write-off of a limited-life intangible because of its lack of profitability. Explain to the management of Braxton how to determine whether a write-off is permitted.
1.If Company Abee holds consigned goods from Company XyXy, which statement is true? Group of answer choices Neither company will report the consigned inventory as their asset. Both companies will report the consigned inventory as their asset. Company XyXy will report the consigned inventory as their asset. Company Abee will report the consigned inventory as their asset. 2. Inventory that is in transit between the supplier and purchaser should: Group of answer choices not be included in either party's inventory balance. be recorded as inventory by whichever party has paid for the transportation costs as dictated by the FOB terms. be included in the supplier's inventory balance always. be included in the purchaser's inventory balance always. 3. If costs are rising, which inventory costing method will result in the highest ending inventory balance for the period? Group of answer choices Specific identification LIFO FIFO Weighted average 4. If costs are rising, which…
Foremost Manufacturing wants to buy $50,000 of sheet metal from Ore Industries on credit. Before agreeing to the sale, Ore decides to evaluate Foremost’s financial status. Of the following potential findings, which would lead Ore to refuse to sell the metal on credit? Foremost’s current liabilities are $450,000 and its current assets are $475,000. Foremost’s accounts receivable are $22,000 and its accounts payable are $21,000. Foremost’s current assets are $450,000 and its current liabilities are $475,000. Foremost’s accounts payable are $22,000 and its accounts receivable are $21,000.
In the current year, Randa Merchandising Incorporated sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. A listing of the major sections of an income statement follows. Item 1. 2. 3. 4. 5. 6. 7. 8. 1. Net sales 2. Gain on state's condemnation of company property 3. Cost of goods sold 4. Income tax expense 5. Depreciation expense 6. Gain on sale of wholesale business segment, net of tax 7. Loss from operating wholesale business segment, net of tax 8. Loss of assets from meteor strike Exercise 13-17A (Algo) Income statement categories LO A2 Debit Section $ 1,888,000 277,000 296,000 566,000 817,000 Credit $ 3,700,000 293,000 Indicate where each of the following income-related items for this company appears on its current year income statement by selecting the appropriate section in the drop down beside each item. 989,000 Item Net sales Gain on state's condemnation of company…