When a corporation is formed, if the sole shareholder receives stock in exchange for property subject to a liability, the shareholder will recognize a gain.
Answer the following statement true (T) or false (F)
False
Gain is only recognized if the relief of liability is greater than the transferor's basis in the property.
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What specific internal control procedure would prevent an increase in sales returns since salesmen were placed on commission?
Owner's equity accounts normally have credit balances
Indicate whether the statement is true or false
Mary's Fine Fashions Mary's Fine Fashions manufactures and sells various types of women's clothing. At the end of 2011, Mary had estimated for the production and sale of 25,000 short-sleeve shirts. Each shirt has a standard calling for 2.5 yards of direct material at a standard rate of $1.25 per yard and 12 minutes of direct labor time at a standard rate of $.20 per minute. During 2012, the
company actually produced and sold 23,000 shirts. These 23,000 shirts had an actual direct materials cost of $77,142 (59,340 yards at $1.30 per yard) and an actual direct labor cost of $63,250 (253,000 minutes at $.25 per minute). Each shirt sells for $20. Refer to the Mary's Fine Fashions information above. What is Mary's flexible budget variance? A) $14,475 F B) $28,950 U C) $42,267 F D) $13,317 U
A process costing system:
a. uses a separate work in process account for every department. b. uses one work in process account for the whole company. c. uses a separate work in process account for each type product. d. does not use work in process accounts. e. None of the answers are correct.