Information Pertaining to Yekstop Corp

question 82

Multiple Choice

Information pertaining to Yekstop Corp.'s sales revenue is presented below:Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling prices.

Total budgeted inventory purchases in December by Yekstop Corp. are:

• A) $86,250.
• B) $140,400.
• C) $226,650.
• D) $258,750.
• E) $345,000.

Properly classify and record unearned revenue and its impact on financial statements.

Calculate and report expenses related to prepaid assets like insurance and supplies.

Differentiate between assets that are depreciated and those that are not.

Compute depreciation expense using the straight-line method.

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Definitions:

Original Partners

The initial members who form a partnership by agreeing to share the responsibilities and profits of a business.

Information Tax Return

A type of tax document used to report various types of income, other than wages, salaries, and tips, to governmental tax agencies.

Accounting Entity

An economic unit with clearly defined boundaries for which financial transactions are recorded, separate from its owners or other business units.

Capital Credit

Refers to the allocation or distribution of a cooperative's net income back to its members based on their proportionate contribution or usage, often in the utility or service sector.