Exam 2 and 3

A company sold equipment that originally cost 280,000 for 140,000 cash. The accumulated depreciation on the equipment was 140,000. The company should recognize it as:

0 fain or loss

A machine originally had an estimated useful life of 11 years, but after 3 complete years it was decided tat the original estimate of useful life should have been 15 years. At the point the remaining cost to be depreciated should be allocated over the remaining:

12 years

A company purchases a delivery van for 28,000 with a salvage value of 3000 on October 1 year 1. It has an estimated useful life of 5 years. Using the straight line method, how much depreciation expense should the company recognize on December 31, year 1?

1250

The credit terms 2/10, n/30 are interpreted as:

2% cash discount if the amount is paid within 10 days, or the full balance due in 30 days

A company's inveatory records indicate the following data for the month of Janary. (Chart question)

22,040

A company purchased property for 100,00. The property included a building, a parking lot, and land. The buildign was appraised at 52,000; the land at 53,00 and the parking lot at 20,000. Land should be recorded in the accounting records with an allocated cost of:

42,400

Eastview Company uses a perpetual a FIFO inventory system, and has the following purchases and sales:

440

A company purchased a weaving machine for 332,970. The machine has a useful life of 8 years and a salvage value of 18,500. It is estimated that the machine could produce 767,000 bolts of woven fabric over its useful life. In the first year 113,00 bolts were produced. in the second year 117,500 units. Using units-of-production method, what is the amount of depreciation expense that should be recorded for the second year.

48,175

A company had the following purchases and sales during is first month of operations:

59.00

Marlow Company purchased a point of sale system on January 1 for 5400. This system has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the first year of its useful life using the double declining balance method

680

Purchase Date- January 1 year 1 Purchase Price- $80,000 Salvage Value- $10,000 Useful- 10 years Depreciation Method- Straight Line The asset's book life is 66,000 on January 1 year 3. On that date, management decides the asset value is 5000. Based on this info, the amount of depreciation expense should recognize year 3 as:

7625.00

AN asset's book value is 18,400 on December 31 year 5. Assuming the asset is sold on December 31 year 5 for 14,600, the company should record

A loss on sale of 3800.

On May I, Shilling company sold merchandise in the amount of $5800 lo Anderson,with credit terms of 2/10, n/30. The cost of the items sold is 1000. Shilling uses the perpetual inventory system and the gross method. The journal entry or entries that Shilling will make on may 1st is/are:

Accounts receivable ➡️debit 5800 Sales ➡️credit 5800 Cost of goods sold ➡️debit 4000 Merchandise inventory➡️credit 4000

The total cost of an asset minus accumulated depreciation

Book Value

On February 3, Smart Company seid merchandise in the amount of $4,100 to Kennedy Company, with credit terms of 2/10, n/30. The cost of the items sold is $2,830. Smart uses the perpetual inventory system and the grous method. Kennedy pays the invoice on February 8 and takes the appropriate discount. The joural entry that Start makes on February 8 is:

Cash ➡️ debit 4018 Sales discount ➡️ debit 82 Accounts receivable➡️ credit 4100

A company purchased $2,200 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $400 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is:

Debit Accounts Payable $1,800; credit Merchandise Inventory S36; credit Cash $1,764.

A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise retur on July 7 is:

Debit Accounts Payable $200; credit Merchandise Inventory $200.

On April 12, Hong Company agrees to accept a 60-day 10% 5500 note from Indigo Company to extend the due date in an overdue account payable. What is the journal entry made by Indigo Company to record the transacion?

Debit Accounts Payable-5500 Credit Notes Payable- 5500

Carson Company sells sporting tickets in advance of the event for 500,000. The journal entry to record the receipt of cash is:

Debit Cash 500,00; Credit Unearned Revenue 500,000

On May 22, Jarret Company borrows $9400, signing a 90 day, 8% 9400 note. What is the journal entry made by Jarret Company to record the transaction?

Debit Cash 9400; Credit Notes Payable 9400

If a company has advance ticket sales totalling 2,000,000 for the upcoming football season, the journal entry to record the receipt of cash would consist of a

Debit Cash; Credit Unearned Revenue

Victory Company purchases equipment at the beginning of the year at a cost of $15,000. The equipment is depreciated using the straight-line method and has a useful life estimated to be 7 years with a $1,000 salvage value. The journal entry to record the first year's depreciation is:

Debit Depreciation Expense 2000, Credit Accumulated Depreciation 2000

A company purchased 51,500 of merchandise on July 5 with terms 2/10, m/30. On July 7, it returned $200 worth of merchandise. On july 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, The correct journal entry to record the purchase on July 5 is:

Debit Merchandise Inventory S1,800; credit Accounts Payable $1,800.

On April 12 Hong Company agrees to accept a 60-day 6% $5100 note from Indigo Company to extend the due date on an overdue account. What is the journal entry that Indigo Company would make when it records payment of the note on the maturity date?

Debit Noted Payable 5100; Debit Interest Expense 51; Credit Cash 5151

On May 22, Jarret Company borrows 9200, signing a 90-day, %7 9200 note. What is the journal entry made by Jarret Company to record the payment of the note on the maturity date?

Debit Notes Payable 9200; Debit Interest Expense 161; Cash 9361

A merchandiser:

Earns net income by buying and selling merchandise

Multiple-step income statements

Have three main parts: gross profit, income from operations, and net income.

Cost of goods sold:

Is the term used for the expense of buying and preparing merchandise for sale.

obligations due after one year

Long Term Liabilities

A company sold a tractor that originally cost 132,000 for 27,000 cash. The accumulated depreciation on the tractor was 66,300. The company should recognize:

Loss of 38,700

Beginning inventory plus net purchases is:

Merchandise available for sale.

Sales less sales discounts, less sales returns and allowances equals:

Net sales

A company has ner sales of $8I7700 and cost of goods sold of $590700. Its net income is $33280. The company's gross margin and operating expenses, respectively, are:

S227,000 and $193,720

On July 1 ferb Company sold merchandise in the amount of $5,800 to Tracey Company, with credit terms of 2/10, a/30, The cost of the items sold is $4,000. Ferb uses the perpetual inventory system and the gross method. On july 5, Tracey returns some of the merchandise. The selling price of the merchandise is $500 ad the cost of the merchandise returned is $350. The entry or entries that ferb must make on July 5 is (are)

Sales returns & allowances➡️debit 500 Accounts receivable➡️credit 500 Merchandise inventory➡️debit 350 Cost of goods sold➡️credit 350