ACCT 121: Exam 3 Practice CH. 7-10
Payment by check is an important internal control over cash payments because
A. before signing the check, the official reviews the invoice supporting the payment. B. the check must be signed by an authorized official. C. Both a and b
Which cost is not recorded as part of the cost of a building?
Annual building maintenance
On June 15, 2023, Family Furniture discarded equipment that had a cost of $27,000, a residual value of $0, and was fully depreciated. Journalize the disposal of the equipment. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
June 15 Accumulated Depreciation—Equipment | Debit: 27,000 Equipment | Credit: 27,000 Explanation: Discarded fully depreciated equipment.
A copy machine cost $40,000 when new and has accumulated depreciation of $39,000. Suppose Print and Photo Center discards this machine and receives nothing. What is the result of the disposal transaction?
Loss of $1,000
A copy machine cost $50,000 when new and has accumulated depreciation of $40,000. Suppose Print Center sold the machine for $10,000. What is the result of this disposal transaction?
No gain or loss
6. Select the missing information concerning how companies control cash received by mail. a. The ____ opens the mail and sends customer checks to the treasurer. b. The ____ deposits the customer checks in the bank. c. The ____ uses the remittance advices to record the journal entries for cash receipts. d. The ____ compares the bank deposit to the journal entry for cash receipts.
a. mailroom employee b. treasurer (or cashier) c. accounting department d. controller
When recording credit card or debit card sales using the net method,
cash received equals sales minus the fee assessed by the card processing company.
If Intervale Railway invests $100,000 in 5% bonds at face value that the company intends to hold until the bond maturity date, the interest revenue recognized when each semiannual interest payment is received would be recorded as a
credit to Interest Revenue, $2,500.
If a company owns 25% of the voting stock of Pink Co. and can exercise significant influence, dividends received will be
credited to Equity Investments—Pink Co.
Encryption
rearranges messages by a special process.
Ghani's 2024 financial statements reported the following items—with 2023 figures given for comparison: Net income for 2024 was $3,890, and interest expense was $340. Compute Ghani's rate of return on total assets for 2024. (Round to the nearest percent.) Ghani, Inc. Balance Sheet As of December 31, 2024 and 2023 2024 2023 Total Assets: $38,380 | $35,760 Total Liabilities: 20,500 | 20,360 Total Stockholders' Equity (all common): 17,880 | 15,400 Total Liabilities and Stockholders' Equity: $38,380 | $35,760
( Net income + Interest Expense ) ÷ Average total assets = Rate of Return on Total Assets ( $3,890 + $340 ) ÷ $37,070 = 11%
An United Trans Service jet costs $42,000,000 and is expected to fly 350,000,000 miles during its 8-year life. Residual value is expected to be zero because the plane was used when acquired. If the plane travels 53,000,000 miles the first year, how much depreciation should United Trans Service record under the units-of-production method? (Round the depreciation per unit to two decimal places.)
((cost - residual value) / useful life in units) x current year usage = $42,000,000 - 0) / 350,000,000) x 53,000,000 $6,360,000
Liberty Corporation reported beginning and ending total assets of $25,000 and $22,000, respectively. Its net sales for the year were $18,800. What was Liberty's asset turnover ratio?
0.80
Match the key term to the scenario. Key Term | Scenario 1. Available-for-sale investments 2. Controlling interest equity investments 3. Trading debt investments 4. Held-to-maturity debt investments 5. Significant interest equity investments 6. No significant interest equity investments
1. Available-for-sale investments c. Jeannie owns a debt security in Cricket, Inc. and plans on selling the debt after one year. 2. Controlling interest equity investments a. Jane owns 53% of Richard's Roses' voting stock. 3. Trading debt investments f. Jim owns a debt security in Tag, Inc.'s and plans on holding the debt for only a week. 4. Held-to-maturity debt investments b. Joe owns a debt security in Bones, Inc. and intends to hold it until maturity. 5. Significant interest equity investments e. Jacob owns 24% of Pay, Inc.'s voting stock and has the ability to exert influence over Pay, Inc. 6. No significant interest equity investments d. Jimenez owns 5% of Delgado, Inc.'s voting stock but does not have the ability to participate in the decisions of Delgado, Inc.
Match the accounting terminology to the definitions. Term | Definition 1. Factoring receivables 2. Debtor 3. Accounts receivable 4. Maturity date 5. Receivable 6. Pledging receivables
1. Factoring receivables f. Selling receivables to a finance company or bank. 2. Debtor b. The party to a transaction who takes on an obligation/payable. 3. Accounts receivable d. The right to receive cash in the future from customers for goods sold or for services provided. 4. Maturity date e. The date when a note is due. 5. Receivable a. A monetary claim against a business or an individual. 6. Pledging receivables c. Using receivables as security (collateral) for a loan.
Match the accounting terminology to the definitions. 1. Sarbanes-Oxley Act 2. Internal control 3. Encryption 4. Separation of duties 5. Internal auditors
1. Sarbanes-Oxley Act d. Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports. 2. Internal control a. Organizational plan and all the related measures adopted by an entity to safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting records. 3. Encryption c. Rearranging plain-text messages by a mathematical process—the primary method of achieving security in e-commerce. 4. Separation of duties e. Dividing responsibilities between two or more people. 5. Internal auditors b. Employees of the business who ensure that the company's employees are following company policies and meeting legal requirements and that operations are running efficiently.
At year-end, Schultz, Inc. has cash of $11,600, current accounts receivable of $48,900, merchandise inventory of $37,900, and prepaid expenses totaling $5,100. Liabilities of $55,900 must be paid next year. What is Schultz's acid-test ratio? (Round your answer to two decimal places.)
1.08
Which of the following investments is most likely classified as a held-to-maturity debt investment?
10-year bonds
Delhi Company reported the following information on its financialstatements: Total Assets, December 31, 2024: Ap$460,000 Total Assets, December 31, 2025: 540,000 Interest Expense For Year Ended December 31, 2025: 14,000 Net Income For Year Ended December 31, 2025: 61,000 What is Delhi's rate of return on total assets?
15.0%
At December 31 year-end, Color Corporation has a $9,600 note receivable from a customer. Interest of 8% has accrued for 8 months on the note. What will Color's income statement for the year ended December 31 report for this situation?
Interest revenue of $512
Sahara Company's Cash account shows an ending balance of $650. The bank statement shows a $29 service charge and an NSF check for $150. A $240 deposit is in transit, and outstanding checks total $420. What is Sahara's adjusted cash balance?
$471
Blended Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $800. During the year Blended wrote off uncollectible receivables of $2,200. Blended recorded Bad Debts Expense of $3,400. What is Blended's year-end balance in Allowance for Bad Debts?
$2,000
The Cash account of Baylor Associates at February 28, 2025, follows: Cash Beg. Bal. 3,995 400 Feb. 3 Feb. 6 800 3,100 Feb. 12 Feb. 15 1,800 1,100 Feb. 19 Feb. 23 1,100 500 Feb. 25 Feb. 28 2,400 900 Feb. 27 End. Bal. 4,095 Baylor Associates received the following bank statement on February 28, 2025: BANK OF TOMORROW BANK STATEMENT 123 PETER PAN RD, KISSIMMEE, FL 34747 Baylor Associates CHECKING ACCOUNT 136-213734 14 W Gadsden St Pensacola, FL 32501 February 28, 2025 BEGINNING BALANCE TOTAL DEPOSITS TOTAL WITHDRAWALS SERVICE CHARGES ENDING BALANCE $3,995 4,715 5,630 10 $3,070 TRANSACTIONS DEPOSITS DATE AMOUNT Deposit 02/07 800 Deposit 02/15 1,800 EFT—Collection of note 02/17 1,000 Deposit 02/24 1,100 Interest 02/28 15 CHARGES DATE AMOUNT Service Charge 02/28 10 CHECKS Number Amount Number Amount Number Amount 102 400 103 1,100 101 3,100 OTHER DEDUCTIONS DATE AMOUNT EFT—EZ Rent 02/01 330 NSF Check 02/13 700 Additional data: Baylor deposits all cash receipts in the bank and makes all payments by check. Requirement 1. Prepare the bank reconciliation of Baylor Associates at February 28, 2025. Prepare the bank portion of the reconciliation, followed by the book portion of the reconciliation. Requirement 2. Journalize the entries based on the bank reconciliation. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin with the EFT collection of the note. Review the bank reconciliation. Journalize the interest earned on the company's cash balance. Review the bank reconciliation. Journalize the service charge. Review the bank reconciliation. Journalize the NSF check returned from a customer. Review the bank reconciliation. Journalize the EFT payment to EZ rent. Review the bank reconciliation.
Bank: Balance, February 28, 2025 | | $3,070 Add: Deposit in transit | | 2,400 ----------------------------5,470 Less: Outstanding checks -> issued on February 27 | $900 -> issued on February 25 | 500 | 1,400 Adjusted bank balance, February 28, 2025 | | $4,070 Books: Balance, February 28, 2025 | | $4,095 Add: Bank collection of note receivable: $1,000 -> Interest revenue earned on bank balance: 15 | 1,015 --------------------5,110 Less: Service charge | 10 -> EFT—Rent expense | 330 -> NSF check | 700 | 1,040 Adjusted book balance, February 28, 2025 | | $4,070 Requirement 2. Date Feb. 28 Cash Debit: 1,000 Notes Receivable Credit: 1,000 Explanation: Note receivable collected by bank. Feb. 28 Cash Debit: 15 Interest Revenue Credit: 15 Explanation: Interest earned on bank balance. Feb. 28 Bank Expense Debit: 10 Cash Credit: 10 Explanation: Bank service charge. Feb. 28 Accounts Receivable Debit: 700 Cash Credit: 700 Explanation: NSF check returned by bank. Feb. 28 Rent Expense Debit: 330 Cash Credit: 330 Explanation: Monthly rent expense.
16. The Scott Sun & Shade Company had the following financial data at December 31, 2024: Cash and cash equivalents: $60,000 Total current liabilities: 75,000 What is the cash ratio as of December 31, 2024, for Scott Sun & Shade? Determine the formula, then calculate the cash ratio. (Enter the cash ratio to two decimal places, X.XX.)
Cash and cash equivalents ÷ Total current liabilities = Cash ratio $60,000 ÷ $75,000 = 0.80
9. On August 20, 2024, Micco, Co. decides to invest excess cash of $3,200 by purchasing Robin, Inc. bonds. At year-end, December 31, 2024, the market price of the bonds was $2,600. The investment is categorized as available-for-sale debt. Journalize the adjusting entry needed at December 31, 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date | Accounts and Explanation | Debit | Credit 2024 Dec. 31 Unrealized Holding Loss—Available-for-Sale Debit: 600 Fair Value Adjustment—Available-for-Sale Credit: 600 Explanation: Adjusted available-for-sale debt investments to market value.
How should you record a capital expenditure?
Debit an asset
4. Amplify Petroleum holds huge reserves of oil. Assume that at the end of 2023, Amplify Petroleum's cost of oil reserves totaled $80,000,000, representing 100,000,000 barrels of oil. Suppose Amplify Petroleum removed and sold 20,000,000 barrels of oil during 2024. Journalize depletion expense for 2024. (Assume no residual value. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Depletion Expense—Oil Reserves | Debit: 16,000,000 Accumulated Depletion—Oil Reserves | Credit: 16,000,000 Explanation: To record depletion.
A company invested $45,000 in Yale Co. stock. The investment represented 5% of the voting stock of Yale Co. If the Yale Co. stock investment paid dividends, what account would be credited?
Dividend Revenue
Which method almost always produces the most depreciation in the first year?
Double-declining-balance
Which intangible asset is recorded only as part of the acquisition of another company?
Goodwill
League Up & Co. owns vast amounts of corporate bonds. Suppose League Up buys $1,400,000 of BloomCo bonds at face value on January 2, 2024. The BloomCo bonds pay interest at the annual rate of 4% on June 30 and December 31 and mature on December 31, 2028. League Up intends to hold the investment until maturity. Requirements 1. Journalize any required 2024 entries for the bond investment. 2. How much cash interest will League Up receive each year from BloomCo? 3. How much interest revenue will League Up report during 2024 on this bond investment? Requirement 1. Journalize any required 2024 entries for the bond investment. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing League Up's investment on January 2, 2024. Next, journalize the receipt of cash interest on June 30, 2024. Next, journalize the receipt of cash interest on June 30, 2024. Now journalize the receipt of cash interest on December 31, 2024. Requirement 2. How much cash interest will League Up receive each year from BloomCo? Cash interest League Up will receive each year from BloomCo = Requirement 3. How much interest revenue will League Up report during 2024 on this bond investment? Interest revenue League Up will report during 2024 on this bond investment =
Requirement 1 Semiannual Interest Payment Received = Face (par) value * Annual Stated Rate * (6 Months / 12) = $28,000 Semiannual Interest Payment Received = $1,400,000 * 4% * (6 / 12) = $28,000 Semiannual Interest Revenue = Semiannual Interest Payment, because the bonds were purchased at face (par) value, rather than at a discount or premium. Requirement 2 & 3 Total Cash Interest Received Each Year = Face (par) value * Annual Stated Rate Total Cash Interest Received Each Year = $1,400,000 * 4% = $56,000 Requirement 1. Date: 2024 Jan. 2 Held-to-Maturity Debt Investment Debit: 1,400,000 Cash Credit: 1,400,000 Explanation: Purchased investment in bonds. Date: 2024 Jun. 30 Cash Debit: 28,000 Interest Revenue Credit: 28,000 Explanation: Received cash interest. Date: 2024 Dec. 31 Cash Debit: 28,000 Interest Revenue Credit: 28,000 Explanation: Don't KNow ? Requirement 2. $56,000 Requirement 3. $56,000
Shawna Valley is an attorney in Los Angeles. Shawna Valley uses the directwrite-off method to account for uncollectible receivables. At April 30, 2024, Valley's accounts receivable totaled $19,000. During May, she earned revenue of $22,000 on account and collected $15,000 on account. She also wrote off uncollectible receivables of $1,100 on May 31, 2024. Requirement 1. Use the direct write-off method to journalize Valley's write-off of the uncollectible receivables. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Requirement 2. What is Valley's balance of Accounts Receivable at May 31, 2024? Start by selecting the labels and then enter the amounts to calculate the balance in Accounts Receivable at May 31, 2024.
Requirement 1. May 31 Bad Debts Expense Debit: 1,100 Accounts Receivable Credit: 1,100 Explanation: Wrote off an uncollectible account. Requirement 2. Apr. 30 Bal.: 19,000 | 15,000 :Collections Net credit sales: 22,000 | 1,100 :Write-offs Bal.: 24,900
Which of the following is not part of the definition of internal control?
Separation of duties
At December 31 year-end, Crain Corporation has an $8,400 note receivable from a customer. Interest of 10% has accrued for 10 months on the note. What will Crain's financial statements report for this situation at December 31?
The balance sheet will report the note receivable of $8,400 and interest receivable of $700.
Highland Clothing purchasedland, paying $96,000 cash and signing a $300,000 note payable. In addition, Highland paid delinquent property tax of $1,100, title insurance costing $600, and $4,600 to level the land and remove an unwanted building. Record the journal entry for purchase of the land. Begin by determining the cost of the land. Record the journal entry for purchase of the land. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Work Solution: -> = Tab/Indent Purchase Price of Land | $396,000 Add Related Cost: ->Property Taxes in Arrears $1,100 ->Title Insurance $600 ->Removal of Building $4,600 | $6,300 -------------------------------------------- Total Cost of Land | $402,300 Cash = Cash Paid + Related Cost = $96,000 + $6,300 = $102,300 Purchase Price of Land = Cash Paid + Note Payable = $96,000 + $300,000 = $396,000 Purchase price of land | | $396,000 Add related costs: ->Property taxes | $1,100 ->Title insurance | 600 ->Removal of building | 4,600 | 6,300 Total cost of land | $402,300 Land Debit: 402,300 Cash Credit: 102,300 Notes Payable Credit: 300,000 Explanation: To record purchase of land with cash and note payable.
Mission Printers (MP) manufactures printers. Assume that MP recently paid $250,000 for a patent on a new laser printer. Although it gives legal protection for 20years, the patent is expected to provide a competitive advantage for only ten years. Requirement 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) (a) Record the purchase of the patent. (b) Record the amortization for the first full year. Requirement 2. After using the patent for five years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 6, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of seven years. Record amortization for Year 6. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Work Solution: Requirement 1 Amortization Expense = (Cost - Residual Value) ÷ Useful Life Amortization Expense = ($250,000 - $0) ÷ 10 yrs = $25,000 Requirement 2 Accumulated Amortization After 5 yrs = $25,000 per yr * 5 yrs = $125,000 Book Value After 5 yrs = (Cost - Accumulated Amortization) Book Value After 5 yrs = $250,000 - $125,000 = $125,000 Revised Amortization = (Book Value - Revised Residual Value) ÷ Revised Useful Life Remaining Revised Amortization = ($125,000 - $0) ÷ 2 yrs = $62,500 per yr Requirement 1. (a) Record the purchase of the patent. Patent Debit: 250,000 Cash Credit: 250,000 Explanation: To record purchase of patent. (b) Record the amortization for the first full year. Amortization Expense—Patent Debit: 25,000 Patent Credit: 25,000 Explanation: To record amortization of patent. Requirement 2. Amortization Expense—Patent Debit: 62,500 Patent Credit: 62,500 Explanation: To record amortization of patent.
Restaurants do a large volume of business by credit and debit cards. Suppose European Caviar Importers restaurant had these transactions on January 28, 2024: National Express credit card sales: $10,700 ValueCard debit card sales: 7,000 Requirement 1. Suppose European Caviar Importers' processor charges a 4% fee and deposits sales net of the fee. Journalize these sale transactions for the restaurant. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Journalize the credit sales net of the fee, first. Requirement 2. Suppose European Caviar Importers' processor charges a 4% fee and deposits sales using the gross method. Journalize these sale transactions for the restaurant. (For purposes of this problem, only record the sales revenue portion of these transactions using the gross method. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) First journalize the credit sales using the gross method. Lastly, journalize the debit sales using the gross method.
Work Solution: Requirement 1 Credit Card Expense ($10,700 * 4%) = $428 Cash ($10,700 - 428) = $10,272 Credit Card Expense ($7,000 * 4%) = $280 Cash ($7,000 - $280) = $6,720 Requirement 1. Cash Debit: 10,272 Credit Card Expense Debit: 428 Sales Revenue Credit: 10,700 Explanation: Recorded credit card sales, net of fee. Cash Debit: 6,720 Credit Card Expense Debit: 280 Sales Revenue Credit: 7,000 Explanation: Recorded debit card sales, net of fee. Requirement 2. Cash Debit: 10,700 Sales Revenue Credit: 10,700 Explanation: Recorded credit card sales. Cash Debit: 7,000 Sales Revenue Credit: 7,000 Explanation: Recorded debit card sales.
Postage People Corporation generated excess cash and invested in securities as follows: 2024 Jul. 2 Purchased 3,500 shares of Luma, Inc. common stock at $14.00 per share. Postage People plans to sell the stock within three months, when the company will need the cash for normal operations. Postage People does not have significant influence over Luma. Aug. 21 Received a cash dividend of $0.30 per share on the Luma stock investment. Sep. 16 Sold the stock for $15.10 per share. Oct. 1 Purchased a Ronco bond for $30,000 at face value. Postage People classifies the investment as trading and short-term. Dec. 31 Received a $200 interest payment from Ronco. Dec. 31 Adjusted the Ronco bond to its market value of $35,000. Requirement 1. Classify each of the investments made during 2024. (Assume the investments represent less than 20% of ownership of outstanding voting stock.) Requirement 2. Journalize the 2024 transactions. Explanations are not required. (Record debits first, then credits. Exclude explanations from journal entries. If no entry is required, select "No entry required" on the first line of the Accounts column and leave the remaining cells blank.) Jul. 2: Purchased 3,500 shares of Luma, Inc. common stock at $14.00 per share. Postage People plans to sell the stock within three months, when the company will need the cash for normal operations. Postage People does not have significant influence over Luma. Aug. 21: Received a cash dividend of $0.30 per share on the Luma stock investment. Sep. 16: Sold the Luma stock for $15.10 per share. Oct. 1: Purchased a Ronco bond for $30,000 at face value. Postage People classifies the investment as trading and short-term. Dec. 31: Received a $200 interest payment from Ronco. Dec. 31: Adjusted the Ronco bond to its market value of $35,000. Requirement 3. Prepare T-accounts for the investment assets and show how to report the investments on Postage People's balance sheet at December 31, 2024. Begin by preparing T-accounts for the investment assets that are remaining at December 31, 2024. (Select the investment account first, then the fair value adjustment account. If no fair value account is needed, leave that T-account heading and the remaining cells blank.) Use the partial balance sheet below to show how to report the investments on Postage People's balance sheet at December 31, 2024. (If a box is not used in the balance sheet, leave the box empty; do not select a label or enter a zero.) Requirement 4. Where is the unrealized holding gain or loss associated with the trading debt investment reported? The unrealized holding gain (loss) associated with the trading debt investment is included in the
Work Solution: Requirement 2 Jul. 2: Total Cost = # of Shares × Price per Share Total Cost = 3,500 Shares × $14 per Share = $49,000 Aug. 21: Total Dividend Received = # of Shares × Dividend per Share Total Dividend Received = 3,500 Shares × $0.30 per share = 1,050 Sep. 16: Total Cash Received= # of Shares × Cash Received per Share Total Cash Received = 3,500 Shares × $15.10 per share = $52,850 Gain on Disposal = Total Cash Received - Total Cost of Stock Disposed Gain on Disposal = $52,850 - $49,000 = 3,850 Oct. 8: Total Cost = # of Shares × Price per Share Total Cost = 100 Shares × $20 per share = $30,000 Dec. 31: Total Fair Value = # of Shares × Market Price (Fair Value) per Share Total Fair Value = 100 Shares × $7.00 per share = $35,000 Unrealized Holding Gain (loss) = Total Fair Value - Total Cost Unrealized Holding Gain (loss) = $35,000 - $30,000 = $5,000 Requirement 1. Classification | Reason Luma stock: No significant influence equity investment | Ownership is less than 20% of total oustanding stock. Ronco bond: Trading Debt Investment | Intent is to hold for less than a year. Requirement 2. Jul. 2 Equity Investments Debit: 49,000 Cash Credit: 49,000 Date: Aug. 21 Cash Debit: 1,050 Dividend Revenue Credit: 1,050 Sep. 16 Cash Debit: 52,850 Equity Investments Credit: 49,000 Gain on Disposal Credit: 3,850 Oct. 1 Trading Debt Investments Debit: 30,000 Cash Credit: 30,000 Dec. 31 Cash Debit: 200 Interest Revenue Credit: 200 Dec. 31 Fair Value Adjustment—Trading Debit: 5,000 Unrealized Holding Gain—Trading Credit: 5,000 Requirement 3. Trading Debt Investments Oct. 1 | 30,000 Bal. | 30,000 Fair Value Adjustment—Trading Dec. 31 | 5,000 Bal. | 5,000 Current Assets: Trading Debt Investments (at fair value) | $35,000 Long-Term Assets: Nothing Goes here Requirement 4. other income and (expenses) section on the income statement.
On September 30, 2023, Logan Services purchased a copy machine for $47,500. Logan Services expects the machine to last for five years and to have a residual value of $2,500. Compute depreciation expense on the machine for the year ended December 31, 2023, using the straight-line method. Begin by selecting the formula to calculate the company's depreciation expense on the machine for the year ended December 31, 2023. Then enter the amounts and calculate the depreciation expense. (Abbreviation used: Acc. = accumulated. Do not round intermediary calculations. Only round the amount you input for straight-line depreciation to the nearest dollar.)
[(Cost - Residual Value ) ÷ Useful Life ] × ( Number of Months ÷ 12 ) = Straight-Line Depreciation [( $47,500 - $2,500 ) ÷ 5 ] × ( 3 ÷ 12 ) = $2,250
The petty cash fund had an initial imprest balance of $100. It currently has $16 and petty cash tickets totaling $75 for office supplies. The entry to replenish the fund would contain
a debit to Cash Short & Over for $9.
