1. Equipment with an estimated market value of $26,602 is acquired for $11,589 in cash and a note payable of $34,047 due in 30 days. The equipment should be recorded in the accounting records at the following amount:

Select the correct answer.

$11,589

$38,191

$26,602

$45,636

2.

What is the major difference between a periodic and perpetual inventory system?

a. Under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory.

b. Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the month.

c. Under the periodic inventory system, the purchase of inventory will be debited to the Purchases account.

d. All of these choices are correct.

3.

What is the major difference between a periodic and perpetual inventory system?

a. Under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory.

b. Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the month.

c. Under the periodic inventory system, the purchase of inventory will be debited to the Purchases account.

d. All of these choices are correct. 4.

Allowance for Doubtful Accounts has a debit balance of $341 at the end of the year (before adjustment), and Bad Debt Expense is estimated at 3% of net sales. If net sales are $564,699, the amount of the adjusting entry to record the estimate of the uncollectible accounts is

$16,600

$341

$17,282

$16,941 5.

A fixed asset with a cost of $23,329 and accumulated depreciation of $20,996 is traded for a similar asset priced at $59,222. Assuming a trade-in allowance of $5,960, the cost basis of the new asset in a transaction with commercial substance is

Select the correct answer.

$3,627

$59,222

$17,369

$5,960