1.)On January 1, 2011, Ace Electronics paid $400,000 cash for a computer that would be used to store and process its accounting information. The computer has a 5 year useful life, after which it will be worthless because it will be obsolete. How much depreciation expense should Ac Electronics record for the year ended December 31, 2013, using double-declining balance method?
A.) $57600
B.) $160000
C.) $80000
D.) $40000
2.) Team Shirt issued a 10% stock dividend. The balance in retained earnings just before the dividend was $45000. There were 15000 shares outstanding on the day of the dividend. The $1 par value stock had a market price of $17.25 on the day of the dividend. Total shareholders equity will increase (decrease) by_____.
A.) $4500
B.) $1500
C.) $0
D.) $25875
3.) Hen House, Inc. collects all subscription revenue in advance. At December 31, 2011, the company owed $50,000 to customers for unearned revenue. During 2012, the company received $150,000 in advance from its customers and delivered $190000 magazines to its customers. How much subscription revenue will Hen House, Inc report on its income statement for the year end Dec 31, 2012?
A.) $10000
B. $200000
C.) $210000
D.) $190000
4.) Horseshoe Bend Company purchases $25000 of merchandise from a vendor with credit terms 2/10, n/30. On February 15, Horseshoe Bend Company returns $5000 of the goods because they are defective. If Horseshoe bend pays the vendor the full amount due on February 20, the amount of the payment is ______________
A.) $19600
B.) $25000
C.)$18000
D.) $20000
5.) In February, Ira Roth, Public Accountant, accepted $500 in cash from a customer exchange for a tax return he promised to prepare in APril. Which of the following statement is true?
A.) Ira has record Cash of $500 in April when the return is prepared.
B.) Ira has a $500 liability in February
C.)Ira has earned $500 in February
D.) Ira does not need to record anything in February. He can wait until April.