26. Morgan Company\'s 201 is as follows: 17 income statement reported cost of go

Question

26. Morgan Company's 201 is as follows: 17 income statement reported cost of goods sold as $135,000. Additional information December 31, 2017 $30, 000 13,000 Inventory Accounta Payabi $22, 500 19,500 If Morgan uses the direct method, what amount should Morgan report as cash paid to suppliers in its 2017 statement of cash flows? a. $134,000 b. $121,000 c. $149,000 d. $136,000 27. A Company showed a large restructuring charge on its income statement in 2011 and has experienced a constantly rising earnings trend since that time. This would most nearly represent an example of a. big bath accounting. b. creative acquisition accounting. c. cookie jar reserves d. using immaterial transactions to increase reported earnings to meet analysts expectations. 28. Which of the following is the SEC authorized by Congress to do? L. Monitor the standard-setting process of the FASB II. Set accounting standards IIl. Investigate and punish cases of deceptive financial reporting a. I, II, and II b. I and II c. I and III d. Only III Recording as an asset expenditures that have no future economic benefit is an example of a. change in methods or estimates with full disclosure. b. strategic matching. c. a fictitious transaction. d. non-GAAP accounting Which of the following is true? a. 29. 30. Earnings under the accrual basis is superior to cash flow data in predicting short-term performance of an entity Earnings under the accrual basis is superior to cash flow data in predicting long-term performance of an entity Cash flow data is superior to earnings under the accrual basis in predicting both short- and long-term performance of an entity Cash flow data is superior to earnings under the accrual basis in predicting long-term performance of an entity. b. c. d.

Explanation / Answer

Only first question per submision is allowed to be answered.

Solution 26:

Closing stock          30,000 Cost of goods sold       135,000 Less opening stock       (22,500) Purchased during the year       142,500 Opening accounts payable          19,500 Add New Purchases       142,500 Less Closing accounts payable       (13,000) Payable paid during the year       149,000 So option C is correct

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