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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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