Question 1. J.P. Restaurant maintains its records on the cash basis. During this past year J.P.'s collected $43,500 in tailoring fees, and paid $12,500 in expenses. Depreciation expense totaled $1,800. Accounts receivable increased $1,050, supplies increased $3,200, and accrued liabilities increased $2,300. J.P.'s accrual basis net income was:
$31,150.
$27,250.
$35,750.
$22,650.
Question 2. Hanover Clothing reported cost of goods sold of $2,600,000 this year. The inventory account increased by $130,000 during the year to an ending balance of $445,000. What was the cost of merchandise that Hanover's purchased during the year?
$2,470,000.
$2,730,000.
$3,045,000.
$2,155,000.
Question 3. On December 31, 2016, the end of Mack's Motors first year of operations, the accounts receivable was $52,700. The company estimates that $3,200 of the year-end receivables will not be collected. Accounts receivable in the 2016 balance sheet will be valued at:
rev: 09_29_2014_QC_54890
$55,900.
$52,700.
$3,200.
$49,500.
Question 4. Ailsa Corp. purchased a two-year fire and extended coverage insurance policy on August 1, 2016, and charged the $4,560 premium to Insurance expense. At its December 31, 2016, year-end, Ailsa would record which of the following adjusting entries?
Scoop Deck borrowed $6,600 at 6% interest on May 1, 2016, with principal and interest due on October 31, 2017. The company's fiscal year ends June 30, 2016. What adjusting entry is necessary on June 30, 2016?
Prepaid interest 66
Interest payable 66
No entry.
Interest expense 132
Interest payable 132
Interest expense 66
Interest payable 66
Insurance expense 950
Prepaid insurance 3,610
Insurance payable 4,560
Insurance expense 950
Prepaid insurance 950
Prepaid insurance 950
Insurance expense 950
Prepaid insurance 3,610
Insurance expense 3,610
Question 5. In its first year of operations Excalibur Corp. had income before tax of $370,000. Excalibur made income tax payments totaling $89,000 during the year and has an income tax rate of 30%. What is the balance in income tax payable at the end of the year?
$ 22,000 debit.
$ 22,000 credit.
$89,000 credit.
$111,000 credit.