ACCT110 exam 3

Which of the following statements is correct?

If a business is to earn a net income, the gross profit on sales must be greater than operating expenses.

On January 1, 2020, Johnson Consulting purchased a truck for $18,000. The truck is expected to last 60 months and have no salvage value. Calculate the book value of the truck on December 31, 2021

$10.800

Samantha Rodriguez had gross earnings of $5,915 for the pay period ending 12/15. Her total gross earnings as of 11/30 were $130,130. Social Security taxes are 6.2% on a maximum earnings of $132,900 per year. The Social Security tax due by her employer from her 12/15 paychecks is:

$171 74

Rick O'Shea, the only employee of Hunter Furniture Company, makes $40,800 per year and is paid once a month. For the month of July, his federal income taxes withheld are $270, state income taxes withheld are $46, social security tax is 6.2%, Medicare tax is 1.45%, State Unemployment Tax is 5.4%, and Federal Unemployment tax is 0.8%. What is Rick's net pay for July?

$2,823.90

Constantine Corporation reported Net Income of $22,660 for the year ended December 31. Then it was discovered that the entry to pay the rent for December in the amount of $1,400 was not journalized and posted. What is the Net Income after the missed journal entry is journalized and posted?

$21,260

At the end of the first month of operations for Jackson's Catering Service, the business had the following accounts: Cash, $20,500; Prepaid Rent, $500; Equipment, $7,500 and Accounts Payable $4,000. By the end of the month, Jackson's had earned $33,800 of Revenues, and used $1,940 of Utilities Expenses, $4,300 of Rent Expense and $3,680 of Salaries Expenses. Net income to be reported by the company for this first month is

$23 880

For the current fiscal year, Purchases were $260,000, Purchases Returns and Allowances were $4,100 and Freight In was $20,000. If the beginning merchandise inventory was $165,000 and the ending merchandise inventory was $86,000, the Cost of Goods Sold is:

$354 900

A company reported gross profit of $85,000, total operating expenses of $45,500 and interest expense of $3,000. What is the net income from operations?

$39,500

Shown above is a partial adjusted trial balance for Monkey Business Inc. What is the amount of current liabilities?

$4.305

Shown above is a partial adjusted trial balance for Monkey Business Inc. What is the amount of current assets?

$42 366

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week. In the payroll register, the employer should record the employee's total earnings as

$460.

At the end of the year Stan Still Stationery Store had the following balances: Sales $485,000; Sales Discounts $2,540; Sales Returns and Allowances $14,280; Sales Salaries Expense $54,000. Net Sales for the year is

$468 180

At the end of its first year of operations, Shapiro's Consulting Services reported net income of $32,200. They also had account balances of: Cash, $19,600; Office Supplies, $3,200, Equipment, $26,200 and Accounts Receivable, $8,000. The owner's total investment for this first year was $21,600 and the owner withdrew $2,500 for personal use. The ending Owner's Capital account balance at the end of the first year of operations is

$51.300

An asset costs $33,000. It has an expected useful .life of 5 years and an expected salvage value of $3,000. Depreciation expense for the first year of the asset's life using the straight-line method is

$6,000

If the beginning capital balance for William's Consulting Service is $23,000, net income is $4,000, and the ending capital balance is $20,000, what were the withdrawals for the period?

$7,000

The beginning capital balance shown on a statement of owner's equity is $84,000. Net income for the period is $34,000. The owner withdrew $42,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

$76.000.

In reconciling a bank statement, the bank statement balance is $1,000 and the balance per books is $1,205. A bank service charge is $15; a deposit in transit totals $500, and outstanding checks total $310. The reconciled book balance is

1190

If the following are the only accounts of Jones Supply Company, what is the missing Supplies balance? Cash: $9.130 Supplies: ????? Accounts Payable: $4,000 John Smith, Capital: $10,430

5300

Shown above is a partial adjusted trial balance for Monkey Business Inc. What is the amount of total assets?

61366

Alfred Spindle earned gross wages of $1,850 for the week ended June 21. His gross wages year to date, prior to this paycheck, were $6,200. He had $136 withheld from his pay for federal income taxes, and $86 for health insurance. Social Security and is 6.2% and Medicare tax is 1.45%; the federal unemployment tax rate is 0.6% and the state unemployment tax rate is 4.2%, both on a maximum of $7,000 per each employee's annual earnings. What amount of Alfred's current earnings are subject to FUTA tax?

800

On April 1, Java Brewers created a petty cash fund starting with $100. On April 30, there was only $5 remaining in the petty cash box. The custodian of the fund presented vouchers to the company accountant for Supplies of $55 and Delivery Expenses of $40. The journal entry on April 30, to replenish the fund is

ACCOUNT TITLE Delivery Expense debit 40 Supplies debit 55 Cash credit 95

NJW Company provided $5,000 of legal services. The client paid $2,000 up front and agreed to pay the remaining $3,000 in two weeks. The journal entry to record this transaction is

Account Name Debit Credit Cash debit 2,000 Accounts Receivable debit 3,000 Fees Income credit 5,000

January 1, ABC Catering purchased an oven for $5,000. The oven is ected to last five years and have no salvage value. Select the adjusting ry made on December 31, to record the depreciation of the oven for one ar.

Account Name Depreciation expense debit 1000 Accumulated depreciation-Equipment credit 1000

During the week ended June 15, Wiley Automotive's employees earned gross wages of $3,280. The wages were subject to $428 federal income tax, 6.2% social security, and 1.45% medicare. All of their employees had already earned over $7,000 of gross wages for the year so none of their wages were subject to FUTA or SUTA tax. The journal entry to record Payroll Tax Expense for the pay period is:

Account Name Payroll Taxes Expense debit 250.92 Social Security Tax Payable credit 203.36 Medicare Tax Payable credit 47.56

Jackson Autos has one employee. As of March 30, their employee had already earned $6,300. For the pay period ending April 15, their employee earned an additional $2,000 of gross wages. Only the first $7,000 of annual earnings are subject to FUTA of 0.6% and SUTA of 5.4%. The journal entry to record the employer's unemployment payroll taxes for the period ending April 15 is

Account Name Payroll Taxes Expense debit 42.00 Federal Unemployment Tax Payable credit 4.20 State Unemployment Tax Payable credit 37.80

On May 1, Brown's Antiques paid $30,000 for 12 months of advance rent on its store and immediately debited the asset account Prepaid Rent for the full amount. The adjusting entry on December 31 is

Account Name Debit Credit Rent Expense debit 20,000 Prepaid Rent credit 20.000

A total of $8,000 in supplies was purchased during the year. By the end of the year, the company had used up $5,300 of the supplies. The adjusting entry needed at the end of the year is:

Account Name Debit Credit Supplies Expense debit 5,300 Supplies credit 5,300

Which of the following accounts will appear on the postclosing trial balance?

Accumulated Depreciation

Identify the entry below that records the payment of an amount owed as a result of the purchase of equipment two months earlier.

Debit Accounts Payable Credit Cash

Bertrand Incorporated performed services for clients in the amount of $2,350 on credit. If this transaction had been posted in error to the Cash account instead of the Accounts Receivable account, what correcting entry would be necessary?

Debit Accounts Receivable $2,350; credit Cash $2,350

A business purchases equipment costing $9,200. They pay $1,200 right away and charge the remaining amount. To record this transaction, the business would:

Debit Equipment $9,200; Credit Cash $1,200 and Credit Accounts Payable $8.000

Which of the following would cause the Trial Balance to be out of balance?

Placing the Accounts Receivable balance in the Credit column

Which of the following groups of accounts will have zero balances after the closing process is completed?

Purchases and Purchases Returns and Allowances

Which of the following accounts begins each new period with a zero balance?

Supplies expense

Which of the following groups of accounts all have the same normal balance?

accounts receivable, rent expense, John Smith, drawing

The account numbers from the ledger are recorded in the Posting Reference column of the general journal:

after each amount is posted.

What type of account is listed first within the chart of accounts?

balance sheet accounts

The journal entry to record the collection of the amount due on an interest- bearing promissory note from a customer would a

credit to Notes Receivable.

To look up an employee's federal income tax using a wage-bracket table, which of the following pieces of information is not needed?

cumulative earnings to-date

Cash Sales from the cash register tapes totaled $882. There is a change fund of $100. The cash count indicates that $984 is in the cash drawer. What journal entry would be required?

debit Cash for $884; credit Revenues for $882, and Cash Short and Over for $2

The business receives cash from a customer who received services in the month prior. The journal entry to record this transaction is

debit Cash, and credit Accounts Receivable

Select the correct closing entry that RB Auto would make to close temporary accounts with debit balances at the end of the accounting period.

debit Income Summary $9,000 and credit Salary Expense $4,000; credit Rent Expense $3,000; credit Purchases $2,000

Select the closing entry that RB Auto would make at the end of the accounting period to close temporary accounts with credit balances.

debit Sales $15,000; debit Purchase Returns and Allowances $200 and credit Income Summary for $15,200

The entry to record the payment of social security, medicare and federal income taxes to the taxing authority is

debit one or more liability accounts and credit an asset account.

The journal entry to record a payment made in January for rent for the months of February and March is a

debit to Prepaid Rent and a credit to Cash.

Lila Harrison is the sole employee of ABC Grocers. Her gross pay for the week was $400. She had deductions of $50 for federal income tax, $24.80 for social security tax, and $5.80 for Medicare tax. The journal entry to record the payroll includes a

debit to Salaries Expense for $400.00

A check issued for $680 to pay a vendor on account was recorded in the firm's records as $860; the canceled check was properly listed on the bank statement at $680. The journal entry for this reconciliation item includes a:

debit to cash for $180

For which of the following taxes is there no limit on the amount of annual earnings subject to the tax?

federal income tax

Which of the following is not a section on a Classified Balance Sheet:

selling expenses

Lisa Ramos has a regular hourly rate of $10.80. In a week when she worked 40 hours and had deductions of $55.30 for federal income tax, $26.80 for social security tax, and $6.30 for Medicare tax, her net pay was

＄343.60