Assignment Questions

Brief Exercise 7-2

Restin Co. uses the gross method to record sales made on credit. On June 1, 2014, it made sales of $69,000 with terms 4/15, n/45. On June 12, 2014, Restin received full payment for the June 1 sale.

Prepare the required journal entries for Restin Co. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
June 1
June 12

At the time of his death, Norton was involved in the following transactions.

Owned land in joint tenancy with Emily. The land is worth $600,000 and was purchased by Norton 15 years ago for $150,000.

Owned land in a tenancy by the entirety with his wife Amy. The land is worth $800,000 and was purchased by Norton five years ago for $450,000.

Owned land in an equal tenancy in common with Noah. The land is worth $400,000 and was purchased by Norton four years ago for $300,000.

Owned City of Dayton bonds worth $500,000.

What amount is included in Norton’s gross estate? Describe your analysis. Which properties added to the value of his gross estate? Which properties were not included, and why?

Your description should be between 1/2-1 page in length.

Legal Environment of business

True or False

9) Judges in civil law courts find themselves obligated to follow precedents. 9) _______ 10) Disadvantages of case law do not destroy the benefits of certainty, predictability, and stability provided by case law and stare decisis. 10) ______ 11) According to Adam Smith, leading a good life means being solely concerned about the fortunes of oneself. 11) ______ 12) Stakeholder theory suggests that through its managers, an ethical corporation avoids risks to stakeholders which, if explained, would be clearly unacceptable. 12) ______ 13) In a modern corporation, the very nature of corporate structure gives managers the opportunity to abuse and misappropriate corporate resources owned ultimately by shareholders. 13) ______ 14) One of the observations made by the Spanish journal Boletin Circulo is that profits and business ethics are contradictory. 14) ______