ACCT 2101 Exams

A company purchased factory equipment on April 1, 2015 for $160,000. It is estimated that the equipment will have a $20,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2015 is

$10,500

Lifetime sells softball equipment. On November 14, they shipped $3,000 worth of softball uniforms to Palos Middle School, terms 2/10, n/30. On November 21, they received an order from Tinley High School for $1,800 worth of custom printed bats to be produced in December. On November 30, Palos Middle School returned $300 of defective merchandise. Lifetime has received no payments from either school as of month end. What amount will be recognized as net accounts receivable on the balance sheet as of November 30?

$2,700

Bacher Company developed the following reconciling information in preparing its September bank reconciliation: Cash balance per bank, 9/30-$6,160 Note receivable collected by bank-3,360 Outstanding checks-3,200 Deposits in transit-2,520 Bank service charge-42 NSF check- 672 Using the above information, determine the cash balance per books (before adjustments) for the Bacher Company.

$2834

A company purchased factory equipment for $700,000. It is estimated that the equipment will have a $70,000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be

168,000

A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is

40%

Nicholson Company purchased equipment on January 1, 2013, for $80,000 with an estimated salvage value of $20,000 and estimated useful life of 8 years. On January 1, 2015, Nicholson decided the equipment will last 12 years from the date of purchase. The salvage value is still estimated at $20,000. Using the straight-line method the new annual depreciation will be:

4500= (80000-20000) x 2/8= 15000; (80000-15000-20000)/ (12-2)= 4500

Presto Company purchased equipment and these costs were incurred: Cash price-$65,000 Sales taxes-3,600 Insurance during transit-640 Installation and testing-860 Total costs-$70,100 Presto will record the acquisition cost of the equipment as

70100

Dewitt Company gathered the following information in preparing its bank reconciliation on May 31: Cash balance per books, May 31, $3,500; deposits in transit, $1,150; note and interest collected by the bank, $850; bank service charge, $20; outstanding checks, $2,500; NSF check, $170. The adjusted cash balance per books at May 31 is

Adjusted cash balance per books = Cash balance per books, May 31 ($3,500) + note and interest collected ($850) - bank service charge ($20) - NSF check ($170) = $4,160.

Haven Company uses the percentage of sales method for recording bad debt expense. For the year, cash sales are $600,000 and credit sales are $2,700,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Haven Company make to record the bad debt expense?

Dr. Bad Debt Expense- 27000 Cr Allowance For Doubtful Accounts - 27000

Which of the following assets does not decline in service potential over the course of its useful life?

Land

Which of the following would require a compound journal entry?

To record collection of accounts receivable when a cash discount is taken.

If a check written and paid by the bank for $638 is incorrectly recorded on the company's books at $683, the appropriate treatment on the bank reconciliation would be to

add $45 to the book's balance.

Under the allowance method, writing off an uncollectible account

affects only balance sheet accounts.

The balance in the Accumulated Depreciation account represents the

amount charged to expense since the acquisition of the plant asset.

The book value of an asset is equal to the

asset's cost less accumulated depreciation.

Trade accounts receivable are valued and reported on the balance sheet

at net realizable value.

The principles of internal control include all of the following except:

combining of duties.

Depreciation is a process of

cost allocation.

A petty cash fund of $200 is replenished when the fund contains $5 in cash and receipts of $190. The entry to replenish the fund would

debit Cash Over and Short for $5.

An aging of a company's accounts receivable indicates that $14,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a

debit to Bad Debt Expense for $12,900.

In a bank reconciliation, a bank service charge is

deducted from the book balance.

Two methods of accounting for uncollectible accounts are the

direct write-off method and the allowance method

Entries are made to the Petty Cash account when

establishing the fund. The entry to establish the Petty Cash account includes a debit to Petty Cash and a credit to Cash.

A debit balance in the Allowance for Doubtful Accounts

is the normal balance for that account.

Each of the following items affect the cash balance per books except

outstanding checks