Debt securities: Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock , corporate bonds etc. Equity securities: Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well. Short-term investments: Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash. Long-term investments: Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term. To choose: The term that is not used for debt securities.

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Question 4

Answer 1

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Chapter A2, Problem 4MCQ

To determine

Concept introduction:

Debt securities:

Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock, corporate bonds etc.

Equity securities:

Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well.

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To choose:

The term that is not used for debt securities.

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Belle Garments manufactures customized T-shirts for football teams. The business uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The business operates at a profit margin of 33% on sales. Belle Garments expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2025. At the end of December 2024, Belle Line Garments reported work in process inventory of $93,980 - Job FBT 101 - $51,000 & Job FBT 102 - $42,980 The following events occurred during January 2025. i) Purchased materials on account, $388,000. The purchase attracted freight charges of $4,000 ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing. Job # FBT 101 FBT 102 FBT 103 FBT 104 Direct Materials $70,220 97,500 105,300 117,000 iv) Issued indirect materials to production, $30,000. Direct Labour $61,200…