Part -1:
Q1. Unadjusted net income equals $7,000. Calculate what net income will be after the followingadjustments:
1.Salaries payable to employees, $510
2. Interest due on note payable at the bank, $310
3. Unearned revenue that has been earned, $650
4. Supplies used, $216
Adjusted net income amounts to $ ______.
Q2. Sales are $580,000 and cost of goods sold is $320,000. Beginning and ending inventories are $28,000and $34,000, respectively. How many times did the company turn its inventory over during this period?
Part -2:
SHOW JOURNAL ENTRY.
Q1. FedEx collected $8,700 of accounts receivable on March 25. If the bookkeeper mistakenly recorded the$8,700 cash as $7,800, write the necessary reconciling journal entry to the book side balance.
Q2. All America Bank, the nationwide banking company, owns many types of investments. Assume that onDec. 5, All America Bank paid $850,000 for trading securities. At Dec. 22, All America Bank receiveda $36,000 cash dividend. At Dec. 31, these trading securities were quoted at a market price of $847,000. Write necessary journal entries for Dec. 5, Dec. 22, and Dec. 31.
Q3. On Jan. 1, 2012, Planet Communications purchased a new piece of equipment that cost $30,000. Theestimated useful life is five years and the estimated residual value (salvage value) is $2,500. Planet usesthe straight-line method of depreciation. Assume that Planet sells the equipment for $13,000 on Jan. 1,2016.
a. Calculate the annual depreciation for this equipment.
b. Write the journal entry for depreciation expense at Dec. 31, 2012.
c. What is the gain (loss) from the sale of the equipment?
d. Write the journal entry for the sale of the equipment