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1. Produce the journal entry to reimburse Petty Cash, using the following data Petty Cash Bank balance 1/1/11 $250.00 Petty cash was used to pay

1. Produce the journal entry to reimburse Petty Cash, using the following data
Petty Cash Bank balance 1/1/11 $250.00
Petty cash was used to pay for the following items:
Postage $37.00
Office Supplies $60.00
Misc. Expense $24.00
Petty Cash Bank balance 1/31/11 $130.00
Date Account Debit Credit
2. Please complete a bank reconciliation using the following information:
Outstanding checks $55,970
Deposits in transit $23,200
Bank Service Charge not recorded on books $15
Interest earned on bank account $226
Balance per the Bank Statement $33,291
Cash balance per the general ledger $310
Bank Balance $33,291 Book Balance
3. The following is a partial trial balance for Dewey, Cheatem & Howe, Inc., which uses the percent of
sales method for estimating bad debt expense. History shows that 5% of sales will be uncollectible.
What is the amount of bad debt expense for the period? Cirlce the correct multiple choice answer.
Accounts Receivable 150,000
Allowance for Doubtful Accounts 0
Sales 260,000
A. 2,375
B. 13,000
C. 7,500
D. 925
4. The Big Dog company records bad debt expense using the Allowance Method.
The balance in Accounts Receivable at the end of the period is $66,000. History suggests that 3.5%
of receivables will be uncollectible. The Allowance for Doubtful Accounts has a credit balance of $1,400.
What is the correct entry to record estimated bad debt expense for the period? Cirlce the correct multiple choice answer.
A. Credit Bad Debt Expense for $2,310, and debit the Allowance for Doubtful Accounts for $2,310
B. Debit Bad Debt Expense for $910, and credit the Allowance for Doubtful Accounts for $910
C. Debit Bad Debt Expense for $910, and credit Accounts Receivable for $910
D. Debit Bad Debt Expense for $2,310 and credit Accounts Receivable for $2,310
5. The Big Dog company is notified that one of it's customers (Jones) is filing for bankruptcy. The Accounts
Receivable balance of the Jones account is $120, the total of which is uncollectible and will be written off.
The Big Dog company uses the Allowance Method for recording bad debts. Writing off the Jones account
will: Cirlce the correct multiple choice answer.
A. Increase Accounts Receivable
B. Decrease Accounts Receivable
C. Increase Bad Debt Expense
D. Decrease Bad Debt Expense
6. Katz Co. made a $250 sale to a customer paying with a VISA credit card. Katz must remit the credit
card sale to the credit card company and wait for payment. A 2% service fee is charged on all
credit card sales. To record this sale, Katz will: Cirlce the correct multiple choice answer.
A. Increase Sales by $245
B. Increase Accounts Receivable by $245
C. Increase Cash by $245
D. Increase Accounts Receivable by $250
7. Chicken Little Inc. receives a $23,000, 6%, 90 day note from the Henny Penny Co. as a promise to pay
for goods Henny Penny purchased from Chicken Little. When Henney Penny pays the note at maturity,
Chicken Little will record interest of: Cirlce the correct multiple choice answer.
A, Interest Expense of $345
B. Interest Revenue of $1,380
C, Interest Expense of $1,380
D, Interest Revenue of $345
8. On November 1, 2011 Nehigh company takes a 12 month note from the local bank. The note has a face
value of $35,000 and and interest rate of 4.5%. On December 31, 2011, Nehigh would record interest
of: Cirlce the correct multiple choice answer.
A. Interest Expense of $262.50
B. Interest Expense of $1,575.00
C. Interest Payable of $262.50
D. Both A and C
9. Sassy, Inc. has a 12 month, 4% Note Payable with a face value of $150,000, dated December 1, 2010
On 12/1/2011, when Sassy Inc. pays the full amount of the note, the Interest Payable account has
a balance of $5,500. Please use the space provided below to record the journal entry on 12/1/2011
when the note is paid in full.
Date Debit Credit
10. The following is information from the September 1, 2011 purchase of equipment:
Equipment Cost 500,000
Installation Cost 5,200
Salvage Value 20,000
Useful Life 4
What is the amount of straight line depreciation that will be reported on December 31, 2011? Round to the nearest whole dollar
Cirlce the correct multiple choice answer.
A. 40,000
B. 120,000
C. 121,300
D. 40,433
11. If it was determined that the equipment from (10) above actually has a useful life of 5 years
instead of 4 years, what would be the annual depreciation expense amount
for each of the remaining two years? (Assume three full years of depreciation have already
been recorded.) Cirlce the correct multiple choice answer.
A. 68,050
B. 181,950
C. 70,650
D. 60,650
12. On January 1, 2011 Level Company purchases a machine for $440,000 with an estimated
useful life of 10 years and a salvage value of $30,000. What amount of depreciation expense
will be recorded on December 31, 2011 if the Level company uses the Double Declining Balance
method? Cirlce the correct multiple choice answer.
A. 44,000
B. 41,000
C. 82,000
D. 88,000
13. Using the information from (12) above, what is the book value of the machine on January 1, 2012?
A. 440,000
B. 396,000
C. 352,000
D. 358,000
14. Using the information from (12) above, what is the amount of depreciation expense that should
be reported for 2012?
A. 70,400
B. 88,000
C. 72,600
D. 79,500
15. Mooney's Inc. owns a trailer that cost $30,000, with an estimated useful life of 3 years and a
salvage value of $1,500. Total Accumulated Depreciation of $24,000 was recorded on the day
the trailer was sold for $7,000. What is the gain or loss on the sale of the trailer?
A. Neither a Gain or Loss
B. Gain of $500
C. Gain of $1,000
D. Loss of $1,000
16. Mooney's Inc. owns a second trailer that cost $30,000. They want to trade the trailer for a newer
model. The new trailer costs $28,000, but the dealer will give Mooney a $2,000 trade-in
allowance on the old trailer. Accumulated Depreciation totals $27,000 at the time of the
trade-in. What is the amount of gain or loss on the trade-in of the old trailer?
A. Loss of $1,000
B. Gain of $1,000
C. Gain of $2,000
D. Loss of $8,000
17. Using the information from (16) above, please produce the journal entry to record the
transaction, assuming Mooney paid cash for the new trailer.
Debit Credit

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