1: In preparing its bank reconciliation for the month of April 2013, Flip, Inc. has available the following information.
Balance per bank statement, 4/30/13 $39,300
NSF check returned with 4/30/13 bank statement 470
Deposits in transit, 4/30/13 5,000
Outstanding checks, 4/30/13 5,200
Bank service charges for April 30
What should be the adjusted cash balance at April 30, 2013?
a. $38,630.
b. $38,800.
c. $39,010.
d. $39,100.
2: If a check correctly written and paid by the bank for $591 is incorrectly recorded on the company's books for $519, the appropriate treatment on the bank reconciliation would be to
a. deduct $72 from the book's balance.
b. add $72 to the book's balance.
c. deduct $72 from the bank's balance.
d. deduct $591 from the book's balance.
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3: Flip Company had net credit sales during the year of $1,200,000 and cost of goods sold of $720,000. The balance in accounts receivable at the beginning of the year was $180,000, and the end of the year it was $120,000. What was the accounts receivable turnover ratio?
a. 5.0
b. 6.7
c. 8.0
d. 10.0
4: The financial statements of Flip Manufacturing Company report net sales of $400,000 and accounts receivable of $80,000 and $40,000 at the beginning and end of the year, respectively. What is the average collection period for accounts receivable in days?
a. 40 days
b. 50 days
c. 54.7 days
d. 80 days
5: Flip Company purchases a new delivery truck for $60,000. The sales taxes are $4,000. The logo of the company is painted on the side of the truck for $1,600. The truck license is $160. The truck undergoes safety testing for $290. What does Flip record as the cost of the new truck?
a. $66,050
b. $65,890
c. $64,000
d. $65,600
6: A company purchased factory equipment on April 1, 2012 for $80,000. It is estimated that the equipment will have an $10,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2012 is
a. $8,000.
b. $7,000.
c. $5,250.
d. $6,000.
7: Flip's Boutique has total receipts for the month of $30,660 including sales taxes. If the sales tax rate is 5%, what are Flip's sales for the month?
a. $29,127
b. $29,200
c. $32,193
d. It cannot be determined.