Question 1
The following information pertains to Crane Video Company.
1. Cash balance per bank, July 31, $8,035.
2. July bank service charge not recorded by the depositor $34.
3. Cash balance per books, July 31, $8,056.
4. Deposits in transit, July 31, $1,886.
5. Bank collected $1,286 note for Crane in July, plus interest $42, less fee $26. The collection has not been recorded by Crane, and no interest has been accrued.
6. Outstanding checks, July 31, $597.
Prepare a bank reconciliation at July 31.
CRANE VIDEO COMPANY
Bank Reconciliation
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Journalize the adjusting entries at July 31 on the books of Crane Video Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Question 2
Information related to Mingenback Company for 2014 is summarized below.
Total credit sales $2,481,000
Accounts receivable at December 31 916,000
Bad debts written off 34,600
(a) What amount of bad debt expense will Mingenback Company report if it uses the direct write-off method of accounting for bad debts?
(b) Assume that Mingenback Company estimates its bad debt expense to be 2% of credit sales. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts credit balance of $3,900?
(c) Assume that Mingenback Company estimates its bad debt expense based on 6% of accounts receivable. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts credit balance of $2,700?
(d) Assume that Mingenback Company estimates its bad debt expense based on 6% of accounts receivable. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts debit balance of $2,700?
Question 3
On January 1, 2014, Evers Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $50,100. Related expenditures included: sales tax $1,900, shipping costs $140, insurance during shipping $80, installation and testing costs $60, and $190 of oil and lubricants to be used with the machinery during its first year of operations. Evers estimates that the useful life of the machine is 5 years with a $5,700 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B: The recorded cost of this machine was $177,600. Evers estimates that the useful life of the machine is 4 years with a $9,900 salvage value remaining at the end of that time period.
Prepare the following for Machine A. (Round answers to 0 decimal places, e.g. $2,125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
1. The journal entry to record its purchase on January 1, 2014.
2. The journal entry to record annual depreciation at December 31, 2014.
Calculate the amount of depreciation expense that Evers should record for machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to 0 decimal places, e.g. $2,125.)
(1) Evers uses the straight-line method of depreciation.
(2) Evers uses the declining-balance method. The rate used is twice the straight-line rate.
(3) Evers uses the units-of-activity method and estimates that the useful life of the machine is 168,300 units. Actual usage is as follows: 2014, 60,300 units; 2015, 46,500 units; 2016, 33,500 units; 2017, 28,000 units.
Question 4
If a check correctly written and paid by the bank for $427 is incorrectly recorded on the company's books for $472, the appropriate treatment on the bank reconciliation would be to
deduct $45 from the bank's balance.
add $45 to the bank's balance.
deduct $427 from the book's balance.
add $45 to the book's balance.
Question 5
Jukebox Company had checks outstanding totaling $10,800 on its June bank reconciliation. In July, Jukebox Company issued checks totaling $77,800. The July bank statement shows that $76,600 in checks cleared the bank in July. A check from one of Jukebox Company's customers in the amount of $1,000 was also returned marked "NSF." The amount of outstanding checks on Jukebox Company's July bank reconciliation should be
$11,000.
$1,200.
$12,000.
$13,000.
Question 6
Each of the following items affect the cash balance per books except
NSF checks.
notes collected by the bank.
bank service charges.
outstanding checks.
Question 7
A customer charges a treadmill at Annie's Sport Shop. The price is $4,000 and the financing charge is 6% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 days and a finance charge is added to the customer's account.
What is the amount of the finance charge?
$8
$80
$20
$240
Question 8
A customer charges a treadmill at Annie's Sport Shop. The price is $4,000 and the financing charge is 9% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 days and a finance charge is added to the customer's account.
The accounts affected by the journal entry made by Annie's Sport Shop to record the finance charge are
Accounts Receivable
Cash
Cash
Finance Receivable
Accounts Receivable
Interest Payable
Accounts Receivable
Interest Revenue
Question 9
Syfy Company on July 15 sells merchandise on account to Eureka Co. for $5,000, terms 2/10, n/30. On July 20 Eureka Co. returns merchandise worth $2,000 to Syfy Company. On July 24 payment is received from Eureka Co. for the balance due. What is the amount of cash received?
$2,940
$2,900
$3,000
$5,000
Question 10
An aging of a company's accounts receivable indicates that $5,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 credit balance, the adjustment to record bad debts for the period will require a
debit to Allowance for Doubtful Accounts for $4,100.
debit to Bad Debt Expense for $5,000.
credit to Allowance for Doubtful Accounts for $5,000.
debit to Bad Debt Expense for $4,100.
Question 11
The cost of a purchased building includes all of the following except
all of these are included.
real estate broker's commission.
closing costs.
remodeling costs.
Question 11
The cost of a purchased building includes all of the following except
all of these are included.
real estate broker's commission.
closing costs.
remodeling costs.
Question 11
The cost of a purchased building includes all of the following except
all of these are included.
real estate broker's commission.
closing costs.
remodeling costs.
Question 12
A company purchased land for $90,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at
$107,000.
$90,000.
$102,000.
Question 13
Hull Company acquires land for $86,000 cash. Additional costs are as follows:
|
Removal of shed
|
|
$
|
300
|
|
Filling and grading
|
|
|
1,500
|
|
Salvage value of lumber of shed
|
|
|
120
|
|
Broker commission
|
|
|
1,130
|
|
Paving of parking lot
|
|
|
10,000
|
|
Closing costs
|
|
|
560
|
Hull will record the acquisition cost of the land as
$89,370.
$96,000.
$87,690.
$89,610.
Question 14
All of the following factors in computing depreciation are estimates except
residual value.
useful life.
salvage value.
cost.
Question 15
Angie's Blooms purchased a delivery van for $40,000. The company was given a $4,000 cash discount by the dealer, and paid $2,000 sales tax. Annual insurance on the van is $1,000. As a result of the purchase, by how much will Angie's Blooms increase its van account?
$39,000
$38,000
$40,000
$36,000
List Of Accounts
Close
Question 1
Accounts Payable
Accounts Receivable
Accumulated Depreciation-Buildings
Accumulated Depreciation-Equipment
Buildings
Cash
Cash Over and Short
Charitable Contribution Expense
Cost of Goods Sold
Delivery Expense
Depreciation Expense
Entertainment Expense
Freight-In
Freight-Out
Insurance Expense
Interest Revenue
Inventory
Land
Maintenance and Repairs Expense
Miscellaneous Expense
Notes Payable
Notes Receivable
Owner's Capital
Owner's Drawings
Petty Cash
Postage Expense
Prepaid Insurance
Salaries and Wages Expense
Salaries and Wages Payable
Sales Discounts
Sales Returns and Allowances
Sales Revenue
Service Revenue
Supplies
Supplies Expense
Travel Expense
Utilities Expense