Listed as follows are nine technical terms used in this chapter. Liquidity Adequate disclosure Income Summary Nominal accounts After-closing trial balance Interim financial statements Real accounts Closing entries Dividends Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer "None" if the statement does not describe any of the items. a. The accounting principle intended to assist users in interpreting financial statements. b. A term used to describe a company's ability to pay its obligations as they come due. C. A term used in reference to accounts that are closed at year-end. d. e. A term used in reference to accounts that are not closed at year-end. A document prepared to assist management in detecting whether any errors occurred in post- ing the closing entries. f. A policy decision by a corporation to distribute a portion of its income to stockholders. g. The process by which the Retained Earnings account is updated at year-end. h. Entries made during the accounting period to correct errors in the original recording of com- plex transactions.

Exercise 4.9 "Among the ledger accounts used by Rapid Speedway are the following: Prepaid Rent, Rent Expense, Unearned Admissions Revenue, Admissions Revenue, Prepaid Printing, Printing Expense, Con- cessions Receivable, and Concessions Revenue. For each of the following items, provide the jour-nal entry (if one is needed) to record the initial transaction and provide the adjusting entry, if any, required on May 31, assuming the company makes adjusting entries monthly. Question a. - On May 1, borrowed $600,000 cash from National Bank by issuing a 9 percent note payable due in three months. Question b. - On May 1, paid rent for six months beginning May 1 at $14,400 per month. Question c. - On May 2, sold season tickets for a total of $720,000 cash. The season includes 60 racing days: 15 in May, 20 in June, and 25 in July. Question d. - On May an agreement was reached with Snack-Bars, Inc., allowing that company to sell refreshments at the track in return for 10 percent of the gross receipts from refreshment sales."

Exercise 4.3a "Gunflint Adventures operates an airplane service that takes fishing parties to a remote lake resort in northern Manitoba, Canada. Individuals must purchase their tickets at least one month in advance during the busy summer season. The company adjusts its accounts only once each month. Selected balances appearing in the company's June 30 adjusted trial balance appear as follows"

6.2 Shown as follows are selected transactions of Konshock's, a retail store that uses a perpetual inven- tory system. a. Purchased merchandise on account. b. Recognized the revenue from a sale of merchandise on account. (Ignore the related cost of goods sold.) c. Recognized the cost of goods sold relating to the sale in transaction b. d. Collected in cash the account receivable from the customer in transaction b. e. Following the taking of a physical inventory at year-end, made an adjusting entry to record a normal amount of inventory shrinkage. Indicate the effects of each of these transactions on the elements of the company's financial state- ments shown. Organize your answer in tabular form, using the column headings given. (Notice that the cost of goods sold is shown separately from all other expenses.) Use the code letters I for increase, D for decrease, and NE for no effect.

6.3 PC Connection is a leading mail-order retailer of personal computers. A recent financial report issued by the company revealed the following information.

This exercise stresses the relationships between the information recorded in a periodic inventory system and the basic elements of an income statement. Each of the five lines represents a separate set of information. You are to fill in the missing amounts. A net loss in the right-hand column is to be indicated by placing brackets around the amount, for example as in line e <15,000>.

1. Your firm is contemplating the purchase of a new $500,000 computer-based order entry system. The system will be depreciated using the MACRS 3-year depreciation schedule. It will be worth $50,000 at the end of the project in 5 years. You will save $50,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $70,000. You will also increase sales by $100,000 per year for the first year and this number will increase by 3% per year. If the tax rate is 30 percent, and the required rate of return is 10%, what is the NPV of this project?

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended June 30, 2021 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From

2. project? Run a scenario analysis for the above problem using the following scenarios. (Assume the answers from question 1 represent the base scenario)

3. Calculate the max loss at the 5% confidence level using the standard deviation of NPV 4. Run a sensitivity analysis on savings to NPV, sales growth rate to NPV, and taxes to NPV. 5. Write up your results from q1-q4 and explain if you would accept the project and what risks should be further examined