Accounting 2401 Final

Robbins Company has given you the following information from its aging of A/R. CURRENT $24,800 1% uncollectable 31-60 days $7,100 9% uncollectable 61-90 days $4,000 19% uncollectable 91 and up $1,900 34% uncollectable The current balance in ADA is $938 credit.

$1,355

Bargain Electrical Supply, Inc., purchased inventory for $2,100 and paid $135 freight to have inventory delivered. They returned $800 of the goods to the seller and later took a 1% purchase discount. What is the final cost of the inventory that they kept?

$1,422

A company has $255,000 in credit sales. The company uses the allowance method to account for noncollectable accounts. The ADA now has $7450 credit balance. If the company estimates 6% of credit sales will be noncollectable, what will the amount of the journal entry to record estimated noncollectable accounts?

$15,300

RV Wholesale, Inc., paid $1,200 for supplies and purchased additional supplies on account for $1000. RV Wholesale, Inc., also paid $200 of the accounts payable. What is the balance in the supplies account?

$2,200

The wellington winery's stockholders' equity section includes the following information: Preferred stock $16000 Paid-in capital in excess of par-Preferred $6000 Common Stock $16000 Paid-in capital in excess of par-Common $8000 Retained Earnings $9000 What was the total selling price of the c/s?

$24000

During June, Busy Beaver performed $3,500 of services for clients on account. In June, $500 of this amount was collected in cash. The remaining $3,000 was collected in July. How much service revenue should Busy Beaver report for June?

$3500

Lionworks Enterprises has the following inventory data: DATE QUANTITY UNIT COST July 1 Beginning Inventory 5 $52 July 4 Purchase 10 $56 July 7 Sale 12 July 11 Purchase 9 $60 July 14 Sale 8 Assuming FIFO, what is the cost of goods sold for the July 14 sale?

$468

Northwest pluming's bank statement shows a bank balance of $43,267. The statement shows a bank service charge of $90. Northwest plumbing's book balance shows outstanding checks of $5296 and deposits in transit of $9326. The adjusted balance on the bank side of the reconciliation would be:

$47,297

HiTech Industries has 15,000 shares of treasury cost which it purchased for $63/share. It later resold 3,300 of those shares for $82/share. The amount to be credited to Paid-In capital -Treasury stock is:

$62,700

Suppose Green Products, Inc., has cash of $41,000, receivables of $37,000, and furniture and fixtures totaling $174,000. Green products, Inc., owes $64,000 on account and has a $125,000 note payable. How much is the stockholders' equity?

$63,000

Acme, Inc., washed 130 cars this past month. They charge $10 per car for a wash. The company's only expenses during the month were $93 utilities/water, $300 wages and $41 for soap. The wages were paid during the month, but the utility bill and soap bill were not. What is Acme's income or loss for this month?

$866

A building was purchased on 8/1 for $490,000. It has a salvage value of $38,000 and a useful life of 30 years. To the nearest dollar. how much will the depreiation expense for the building be for the first year ended 12/31, using the straight-line method?

(cost-rv)/years * # of months/12 $6,278

Elite electrical has 360,000 shares of $3- par common stock outstanding. They have declared a 6% stock dividend. The current market price of the common stock is $8.50/share. The amount that will be debited is:

1) 360,000 * 8.50 = 3,060,000 * 6% = 183600 2)360,000 * 3 = 1,080,000 *6% = 64800 3)183600 + 64800 = (248400)

Ending assets for CompuHelp equals $650,000, and the beginning retained earnings was $325,000. If net income during the period was $225,000 and the cash dividends paid total $150,000, what is the ending liabilities (assume common stock is zero)?

1)325000+225000-150000= 400000 2)650000-400000= 250000

RV Wholesale, Inc. paid $1,400 cash for supplies and purchased additional supplies on account for $1,300. RV Wholesale, Inc. also paid $200 of the accounts payable.

2700

What are the annual dividends of $22 par preferred 5% stock, if 2,100 shares are authorized and 800 shares have been issued?

800*22*5% $880

A company purchased a computer system on 3/1. Its cost was $55000 and it had an estimated salvage value of $10000. It was expected to have a useful life of 5 years. To the nearest dollar, the depreciation for year 2 using straight-line depreciation will be:

9000

After performing a bank reconciliation, journal entries are required for

All items on the book side of reconcilliation

Expenses paid in advance such as rent and insurance are classified as prepaid expenses. Into what category are they placed?

Assets

Which of the following accounts is depreciated?

Building

Which of the following accounts would NOT be adjusted?

Cash

Which type of organization has stockholders?

Corporations

The account "Notes Payable" began with a zero balance and then had the following changes: increase of $700, increase of $300, decrease of $600, and an increase of $280. The final balance is a:

Credit balance of $680

The unajusted Trial Balance for supplies shows a $634 balance. If $532 of supplies were used during the period, the adjusted balance for supplies would be:

Debit $102

The following transactions occurred during the month of July (first month of operations): The Scolari Corporation received $60,000 cash from sale of common stock, paid $25,000 cash for equipment, and purchased $10,000 of supplies on account. The ending balance in the cash account for the month of July is ________.

Debit $35,000

TNT corporation pays an invoice for $4,500 in time to take a %5 discount. The journal entry to record the payment of this invoice is:

Debit A/P $4500; Credit Inventory $225, Credit Cash $4275

If Holiboards, Inc., returned $2,750 of snowboards to a supplier, which of the following entries would be used to record the transaction?

Debit A/P ; Credit Inventory

Wolfe company purchases goods for resale from Coyote, Inc. The amount of the purchase is $12,500 with terms of 3/10, n/30. Wolfe later returns $500 of the goods. Under the perpetual inventory system, the journal entry to record the return is:

Debit A/P Coyote, Inc. ; Credit Inventory

When a retailer sells merchandise on account, the general entry for the sales price would be:

Debit A/R; Credit Sales Revenue

The entry to record the company's cost of selling merchandise under a perpetual inventory system would be a:

Debit CGS; Credit Inventory

The entry to record TLR, Inc., selling 1200 shares of $6 par common stock at $10 per share would be to:

Debit Cash $1200; Credit C/S $7200; Credit Paid-In capital in excess of par-c/s $4800

On 4/1, the Caesar Coffee Company sold coffee to Charbucks for $300, with credit terms, 2/15, n/30 Charbucks paid Caesar's on April 10. The journal entry that Caesar would make to record the payment would include a:

Debit Cash $294; Debit Sales Discounts $6; Credit A/R - Charbucks $300

The journal entry to record $400,000 of bonds that were issued at 107 would be to:

Debit Cash $428,000; Credit Bond Payable $400,000; Credit Premium on Bonds Payable

A truck costing $56000 has accumulated depreciation of $48000. The truck is sold for $8500. The journal entry to record this transition is to:

Debit Cash for $8500; Debit Accum. Dep. - Trucks $48000 Credit Truck $56000; Credit Gain on Disposal $500

The entry to record the payment of $1,500 rent expense would be which of the following?

Debit Cash; Credit Rent Expense

The journal entry to record $2,750 of depreciation expense for the year would be to:

Debit Depreciation Expense $2,750; Credit Accumulated Expense $2,750

It is determined that a computer's depreciation expense for the year is $3500. The journal entry to record this will be:

Debit Depreciation Expense; Credit Accumulated Expense

On the date of decleration

Debit Dividends; Credit Dividends Payable

On 1/1, Green Autos signed a $270,000, 8%, 30 year mortgage that requires semiannual payments of $11,934 on 6/30 and 12/31 of each year. The journal entry to record the second semiannual payment would be:

Debit Int. Exp. $10,755, Debit Mortgage Payable $1,179; Credit Cash $11,934

Torres, Inc., purchases $4,800 of inventory on account from leo corp. the journal entry to record this purchase for torres under a perpetual inventory system is:

Debit Inventory; Credit A/P - Leo

The journal entry to close the dividends account for $1,500 would be:

Debit R/E; Credit Dividends

Assume that the weekly payroll of ASR, Inc., is $4,500. Employees work five days per week, M-F. December 31, the end of the year, falls on Wednesday, but the company won't pay employees for the full week until its usual payday, Friday. What adjusting entry will ASR, Inc., make on Wednesday, Dec 31?

Debit Salaries Expense 2700; Credit Salaries Payable 2700

Which of the following is NOT a closing entry?

Debit Salaries Payable; Credit R/E

Under a perpetual inventory system, when goods are returned to the retailer from a customer:

Debit Sales returns & allowances; Credit CGS

Posting a $500 purchase of supplies on account appears as which of the following?

Debit Supplies; Credit A/P

Which of the following is the correct journal entry for purchasing $5,000 worth of supplies on account?

Debit Supplies; Credit A/P

Anderson industries purchased 600 shares of the company's issued common stock, paying $14 per share. When the par value is $10 per share, the journal entry to record the purchase is:

Debit Treasury stock $8400; Credit Cash $8400

The end of period adjusting entry for bad debt expense under the allowance method is:

Debit bad debt expense; Credit ADA

Alaska Alehouse purchased a $700 two-year insurance policy for cash. The journal entry would require a:

Debit prepaid insurance; Credit Cash

Sky Co. collected $600 from one of its customers for payment on their account. The journal entry would include:

Debit to Cash; Credit to A/R

Assume that wave rider paid expenses totaling $32,000. How does this transaction affect wave rider's accounting equation?

Decrease both assets and stockholders equity

Illusions, Inc., deposited $1000 into its bank account at the end of the month, but the bank statement does not show the deposit. This $1000 is an example of:

Deposit in transit

Which of the following is the correct journal entry for a purchase of equipment for $50,000 cash?

Equipment 50,000 Cash 50,000

Which of the following indicated that the shipment is free on board and the buyer pays all of the shipping and freight cost?

FOB shipping point

GAAP stands for:

Generally Accepted Accounting Principles

An increase in revenues would have which of the following effects on the accounting equation?

Increase Stockholders' Equity

What does a 10% stock dividend do?

Increases C/S Has no effect on total equity Decreases R/E

Which of the following does NOT describe stockholders' Equity?

Money lent to a business

Which of the following would NOT be considered part of the cost of machinery and equipment?

Repairs and maintenance after start-up

How to calculate net income

Revenue - Expenses

The rate of interest that is printed on the bond is called the __________ rate of interest

Stated

Which of the following is TRUE regarding treasury stock?

Treasury Stock has a debit balance and is recorded at cost

What type of account is allowance of doubtful accounts?

a contra-asset account

An account used by a business for the sale of goods or services in exchange for a promise of a future cash receipt is _______________.

accounts receviable

Recording season ticket monies received in advance as unearned revenue would be an example of:

accrued expense

how to calculate long term assets

add long-term investments, property, plant, equipment, intangible assets, etc.

Deposits in transit are:

added to the bank balance

In accounting, what is the meaning of capitalized?

an asset account is debited (increased) for the cost of an asset.

An economic resource that a business owns and can use to operate the business is called

asset

how to calculate ending retained earnings

beginning retained earnings + net income - dividends

Sue Mason owns a bagel shop as a sole proprietorship. Sue includes her personal home, car, and boat on the books of her business. Which of the following is violated?

business entity principle

A business makes a cash payment of $12,000 to a creditor. Which of the following occurs?

cash is credited for $12,000

What type of business pays taxes on its income?

corporation

Which of the following is legally a separate entity from its owner?

corporation

The depreciation method often used for income tax purposes is the:

double-declining balance method

A loan from the bank _______

increases assets and liabilities

A $30000 bond issue with a stated rate of interest of 6%, when the market rate of interest is 7%, means that the bond will be sold for:

less than $30,000

The Unearned Service Revenue account would appear on the balance sheet as a(n)

liability

how to calculate gross profit

net sales - cost of goods sold

The matching principle in accounting requires the matching of:

revenue earned with the expenses incurred to produce the revenue

Which of the following accounts is a temporary account?

service revenue

Which financial statement shows all of the sources and all of the uses of cash by a business for a specified period of time?

statement of cash flow

How to calculate current assets

the addition of all balance sheet assets that can be converted to cash within one year or less. Current assets include cash, cash equivalents, inventory, accounts receivables, prepaid expenses, and marketable securities.