Plimpton Sales presents income statements for the first three months of this year
Revenues are
$1,000,000 in January, $1,200,000 in February, and $1,400,000 in March, while expenses total
$800,000 in January, $900,000 February, and $1,000,000 in March. Despite the positive net income,
the controller believes Plimpton Sales needs to arrange short-term financing of $300,000 to make
payroll the next month. Which of the following statements is MOST correct?
A) The controller must have made a mistake since the company's net income for the three
months is $900,000.
B) The company's accounts receivable balance has increased and the accounts payable balance
has decreased over the past three months.
C) The company's accounts receivable balance has decreased over the past three months.
D) The company's accounts payable balance has increased over the past three months.
B
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Bison Corp. purchased 25,000 shares of its $2 par common stock at a cost of $12 per share on April 30, 2012. The stock was originally issued at $10 per share. The entry to record the purchase of the stock should include a debit to:
a. Common Stock for $50,000. b. Treasury Stock for $50,000. c. Common Stock for $300,000. d. Treasury Stock for $300,000.
Acquisition involves the purchase of a whole company, a patent, or a license to produce someone else's product
Indicate whether the statement is true or false