ACC 201 iClicker

In preparing the financial statements for January, the accountant for Team Shirts has compiled the following information: accounts receivable are $5,000; the amount estimated to be uncollectible is 3% of the sales for the month; sales for the month were $43,000; and the balance in the allowance for uncollectible accounts is $1,000. Using the % of sales method, the amount of bad debts expense for January is ______.

$1,290

Team Shirts had a balance in its allowance for uncollectible accounts of $(200). Aging the accounts receivable showed that the allowance should be $(1,800). Bad debts expense should be ______.

$1,600

In December, 2010, Bob Cratchit worked for Scrooge & Marley and earned $1,000. Federal income tax withholding is 10%. The FICA rate is 6.2% and the Medicare tax is 1.45%. How much cash will Scrooge & Marley pay the government for FICA because of Bob's December earnings?

$124.00

On January 1, 2011, Ace Electronics paid $400,000 cash for a computer that would be used to store and process its accounting information. The computer has a 5-year useful life, after which it will be worthless because it will be obsolete. Ace Electronics uses the straight-line method to depreciate its assets. At December 31, 2012, Ace will have accumulated depreciation of _________.

$160,000

On January 1, 2011, Ace Electronics paid $400,000 cash for a computer that would be used to store and process its accounting information. The computer has a 5-year useful life, after which it will be worthless because it will be obsolete. Ace Electronics uses the straight-line method to depreciate its assets. The book value of the computer at December 31, 2013 is ________.

$160,000

Horse Creek Company had beginning inventory of $900,000, purchases of $2,000,000, and ending inventory of $800,000. What was the cost of goods sold?

$2,100,000

On January 1, 2011, Ace Electronics paid $400,000 cash for a computer that would be used to store and process its accounting information. The computer has a 5-year useful life, after which it will be worthless because it will be obsolete. Ace Electronics uses the straight-line method to depreciate its assets. The book value of the computer at December 31, 2012 is ________.

$240,000

XYZ Company owns an asset with historical cost of $75,000, estimated useful life of 10 years, and salvage value of $5,000. As of December 31, 2011, the asset has accumulated depreciation of $49,000 after adjustment. The company still owes $20,000 in liabilities from the purchase of the asset years ago. What is the asset's book value on December 31, 2011?

$26,000

On January 1, Wok 'n' Roll, Inc. issued $50,000 worth of 8%, 20 year bonds for $52,950. What is the amount of the first year's interest payment?

$4,000,000

In preparing the financial statements for January, the accountant for Team Shirts has compiled for the following information: accounts receivable are $5,000; the amount estimated to be uncollectible is 10% of receivables; sales for the month were $43,000 and the beginning balance in the allowance for uncollectible accounts before adjustment is ($100). Using the accounts receivable allowance method, the amount of bad debts expense for January is ________.

$400

Beau Brentley earned $60,000 from his job at Bridgestone Tires. He had 15% of his gross pay withheld for federal income taxes, 6.2% withheld for FICA Social Security taxes, and 1.45% withheld for Medicare taxes. What was Beau's net pay?

$46,410

On November 1, 2011, Frigate Shipping Company bought equipment that cost $400,000, with an estimated useful life of 8 years and an estimated salvage value of $28,000. The company uses the straight-line method of depreciation and has a fiscal year ending on October 31. For the year ended October 31, 2012, Frigate Company will report depreciation expense of __________.

$46,500

RET Company uses the activity (units-of-production) method to depreciate long-term assets. The company owns a truck that cost $24,000. The truck is estimated to have a salvage value of $2,000 and a useful life of 200,000 miles. How much depreciation expense would be reported on the income statement in a year in which the truck is driven 50,000 miles?

$5,500

On January 1, 2011, Ace Electronics paid $400,000 cash for a computer that would be used to store and process its accounting information. The computer has a 5-year useful life, after which it will be worthless because it will be obsolete. How much depreciation expense should Ace Electronics record for the year ended December 31, 2013, using the double-declining balance method?

$57,600

Beau Brentley earned $60,000 in 2011 from his job at Bridgestone Tires. He had 15% of his gross pay withheld for federal income taxes, 6.2% withheld for FICA Social Security taxes, and 1.45% withheld Medicare taxes. What amount will Bridgestone Tires report as salary expense for 2011?

$60,000

Cranberry Company purchased two pieces of equipment from a Canadian vendor for $400,000. If the assets had been purchased separately, the company would have paid $90,000 for the first piece of equipment and $360,000 for the second piece of equipment. What amount should be recorded for the FIRST piece of equipment?

$80,000

On January 1, 2011, Ace Electronics paid $400,000 cash for a computer that would be used to store and process its accounting information. The computer has a 5-year useful life, after which it will be worthless because it will be obsolete. Ace Electronics uses the double-declining balance method to depreciate its assets. The book value of the computer at December 31, 2013 is ________.

$86,400

On December 31, IOU Corporation issued $100,000 of 10 year, 8% bonds at 98. The bonds pay interest annually on December 31. How much cash did IOU Corporation receive when the bonds were issued?

$98,000

On January 1, 2011, Petrel Shipping Company bought equipment that cost $55,000 with an estimated useful life of 4 years and an estimated salvage value of $5,000. The company uses the straight-line method of depreciation. At what rate will the equipment depreciate in 2011?

25%

On January 1, Wok 'n' Roll, Inc. issued $50,000 worth of 8%, 20 year bonds for $52,950. These bonds sold at ________.

A premium

When a bond sells for 103, the bond is selling at ___________.

A premium (Below 100 is discount, above 100 is premium)

Which of the following is NOT a definitely determinable liability?

Accumulated depreciation

Which of the following items from Kash Kow's bank reconciliation requires an adjusting entry on Kash Kow's books?

Bank service charges

Fargo Engines Incorporated sells part number 45G to toy manufacturers around the world. Information about part number 45G is contained in the table below. Fargo uses a LIFO periodic inventory system. ------------------------------# of units-----unit cost-----total cost Beginning inv. 2,000 $8.00 $16,000 Purchase 3,000 $8.20 $24,600 Purchase 5,000 $8.60 $43,000 ---Totals 10,000 $83,600 Determine the cost of goods sold and ending inventory cost of part 45G if 3,000 units remain unsold in inventory at the end of the accounting period.

Cost of goods sold is $59,400 and ending inventory is $24,200

Fargo Engines Incorporated sells part number 45G to toy manufacturers around the world. Information about part number 45G is contained in the table below. Fargo uses a weighted-average periodic inventory system. ------------------------------# of units-----unit cost-----total cost Beginning inv. 2,000 $8.00 $16,000 Purchase 3,000 $8.20 $24,600 Purchase 5,000 $8.60 $43,000 ---Totals 10,000 $83,600 Determine the cost of goods sold and ending inventory cost of part 45G if 2,000 units remain unsold in inventory at the end of the accounting period.

Cost of goods sold is $66,880 and ending inventory is $16,720

Residual (salvage) value means the _______.

Estimated value an asset will have at the end of its useful life

When a bond sells at less than its face amount, the market rate of interest is _________.

Greater than the bond's stated rate of interest

Which of the following costs should be included in the inventory account when inventory is purchased FOB shipping point?

Insurance while the merchandise is in transit

Which of the following is NOT correct when preparing a bank reconciliation?

Outstanding checks are added to the balance per books.

Which of the following expenditures should NOT be capitalized?

The costs of changing the oil in the company's fleet of delivery trucks

When a bond sells for 99, the bond is selling at _________.

a discount

Net accounts receivable are _______.

accounts receivable minus the allowance for uncollectible accounts

Discount on bonds payable is a(n) ___________.

contra-liability

Amortizing a bond premium will _______.

decrease the unamortized bond premium and decrease the carrying value of the bond

First Bank charged Team Shirts $100 in services charges for September. On the bank reconciliation, the $100 should be _______.

deducted from the balance per books

The March bank statement for Jem's Jewelers showed an NSF check for $125. On the bank reconciliation, the amount of the check should be _______.

deducted from the balance per books