1. A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. The property included land appraised at $87,500, land improvements appraised at $35,000, and a building appraised at $52,500. What should be the allocation of this property's costs in the company's accounting records?
Land $75,000; Land Improvements, $30,000; Building, $45,000.
Land $75,000; Land Improvements, $30,800; Building, $46,200.
Land $82,750; Land Improvements, $33,100; Building, $49,650.
Land $80,250; Land Improvements, $32,100; Building, $48,150.
Land $77,500; Land Improvements, $31,000; Building, $46,500.
2. Gaston owns equipment that cost $90,500 with accumulated depreciation of $61,000. Gaston asks $30,000 for the equipment but sells the equipment for $26,000. Which of the following would not be part of the journal entry to record the disposal of the equipment?
Debit Accumulated Depreciation $61,000.
Credit Equipment $90,500.
Debit Loss on Disposal of Equipment $3,500.
Credit Gain on Disposal of Equipment $3,500.
Debit Cash $6,000.
3. On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note?
$0
$75
$900
$225
$300
4. A company purchased a delivery van for $28,000 with a salvage value of $3,000 on September 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?
$5,000.
$1,667.
$1,400.
$1,250.
$2,067.
5. A company issued 60 shares of $100 par value common stock for $7,000 cash. The journal entry to record the issuance is:
Debit Cash $7,000; credit Common Stock $7,000.
Debit Investment in Common Stock $7,000; credit Cash $7,000.
Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000.
Debit Common Stock $6,000; debit Investment in Common Stock $1,000; credit Cash $7,000.
Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000; credit Common Stock $1,000.
6. Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,325.17. Her net pay for the month is:
$6,422.71
$6,246.94
$6,302.94
$5,868.94
$7,194.11
7. If a company has advance ticket sales totaling $2,000,000 for the upcoming football season, the receipt of cash would be journalized as:
Debit Sales, credit Unearned Revenue.
Debit Unearned Revenue, credit Sales.
Debit Cash, credit Unearned Revenue.
Debit Unearned Revenue, credit Cash.
Debit Cash, credit Revenue.
8. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $9,900. What is the amount of total unemployment taxes the employer must pay on this employee's wages?
$336.00.
$420.00.
$534.60.
$594.00.
$0.00.
9. On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is:
Debit Retained Earnings $750,000; credit Common Stock Split Distributable $750,000.
Debit Retained Earnings $750,000; credit Common Stock $750,000.
Debit Retained Earnings $250,000; credit Common Stock $250,000.
Debit Retained Earnings $250,000; credit Stock Split Payable $250,000.
No entry is made for this transaction.
10. An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $117,000. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee's annual FICA taxes amount is:
$2,294.00.
$536.50.
$2,830.50.
$1,757.50.
$8,950.50.
11. A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:
A $1,800 credit to Common Stock.
A $300 debit to Organization Expenses.
A $1,300 credit to Paid-in Capital in Excess of Par Value, Common Stock.
A $1,800 debit to Legal Expenses.
A $1,800 credit to Cash.