Acct

On June 16, 2018, Evergreen Inc. wrote off the $200 receivable from customer M. Simmons. On October 14, 2018, Evergreen unexpectedly receives $200 cash from M.Simmons. How should Evergreen record the $200 payment from M. Simmons? Evergreen uses the allowance method.

Debit Accounts Receivable - M. Simmons and credit Allowance for Bad Debts; debit Cash and credit Accounts Receivable - M. Simmons

Which of the following is true when the estimate of an asset's useful life is changed?

The asset's remaining depreciable book value will be spread over the asset's remaining life.

Specialty Foods, Inc. maintains a separate accounts receivable account for each customer. Regarding this accounting treatment, which of the following statements is incorrect?

When a customer makes a payment on account (payment for previous credit purchase), a debit is posted to the accounts receivable subsidiary account as well as to the accounts receivable control account.

Motor Sales sold its old office furniture for $6500. The original cost was $20,000, and at the time of sale, accumulated depreciation was $17,000. What is the effect of this transaction?

gain of $3500

Which of the following is true of the acid-test ratio?

it measures a company's ability to pay its current liabilities

At the beginning of 2019, Elliott, Inc. has the following account balances: Accounts Receivable $41,000 (debit balance) Allowance for Bad Debts $500 (credit balance) Bad Debts Expense $0 During the year, credit sales amounted to $820,000. Cash collected on credit sales amounted to $780,000, and $15,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-receivables method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts is

$1650

On October 1, 2019, Fashion Jewelers accepted a 5-month, 11% note for $7500 in settlement of an overdue account receivable. The accounting period ends on December 31. Calculate the accrued interest on the note at December 31, 2019. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

$206

On January 1, 2018, Jordan, Inc. acquired a machine for $1,100,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $61,000. Calculate the depreciation expense per year using the straight-line method.

$207,800

Accounts Receivable has a balance of $32,000, and the Allowance for Bad Debts has a credit balance of $3000. The allowance method is used. What is the net realizable value of Accounts Receivable before and after a $2100 account receivable is written off?

$26,900; $26,900

An asset was purchased for $28,000 on January 1, 2019. The asset's estimated useful life was five years, and its residual value was $10,000. The straight-line method of depreciation was used. Calculate the gain or loss if the asset is sold for $20,000 on December 31, 2019, the last day of the accounting period.

$4400 loss

Carpenters, Inc., a manufacturing company, acquired equipment on January 1, 2017 for $510,000. Estimated useful life of the equipment was seven years and the estimated residual value was $12,000. On January 1, 2020, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight-line method of depreciation. Calculate depreciation expense for 2020. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

$47,429

On October 1, 2019, Springfield, Inc. made a loan to one of its customers. The customer signed a 6-month note for $140,000 at 15%. How much interest revenue did the company record in 2020 for this note? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

$5250

What is the maturity value of a 6-month, 11% note for $60,000? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

$63,300

On June 30, 2018, Clooney Printers purchased a printer for $59,000. It expects the printer to last for four years and have a residual value of $6000. Compute the depreciation expense on the printer for the year ended December 31, 2018, using the straight-line method. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

$6625

Which of the following is NOT included as furniture and fixtures?

Computer

Regarding impairment of intangible assets, which of the following statements is incorrect?

If any impairment occurs, the company records a loss in the period in which the intangible asset was acquired.

Customer G. Smith owed Stonehollow Electronics $425. On April 27, 2018, Stonehollow determined this account receivable to be uncollectible and wrote off the account. The company uses the direct write-off method. On July 15, 2018, Stonehollow received a check for $425 from the customer. How should the July 15, 2018 transaction be recorded?

July 15 Accounts Receivable - G. Smith 425 Bad Debt Revenue 425

Newell Corp. has acquired land and paid $500 as a brokerage commission to acquire the land. However, the company's accountant has recorded the $500 as a revenue expenditure. What is the effect of this error?

Net income is understated by $500.

Which of the following statements regarding receivables is correct?

Receivables occur when a business loans money to another party.

Alltech Company maintains a separate accounts receivable account for each customer. On June 18, Alltech provides $6300 of services on account to customer Anthony and $1200 of services on account to customer Walker. How will these two transactions affect the control and subsidiary accounts?

The control account, Accounts Receivable, will be increased with a debit of $7500.

On October 1, 2019, ABC Company loaned A. Jenkins $9000 at an annual interest rate of 5% with a maturity date of April 1, 2020. On October 1, 2019, ABC Company will record

a debit to Notes Receivable - A. Jenkins of $9000

When a plant asset is disposed of, the business must

bring the depreciation up to date

Which of the following is an expense that results from the usage of a natural resource?

depletion

Intangible assets

convey special rights from patents, copyrights, trademarks, and other creative works

Westin Delivery Service, Inc. owns a delivery truck. Which of the following costs, associated with the truck, will be treated as a revenue expenditure?

oil change and lubrication

Two methods of estimating uncollectible receivables are

the aging-of-accounts-receivable method and the percent-of-sales method

When a company uses the allowance method to measure bad debts, ________.

the amount of bad debts expense is estimated at the end of the accounting period

Jayson Enterprises uses the allowance method to account for uncollectible receivables. When an uncollectible account is written off, ________.

the write off has no effect on net income

Brandy Enterprises discarded a computer that was fully depreciated and had no residual value. As a result of this transaction, Brandy will

zero out the Computer and Accumulated Depreciation - Computer accounts.