16 When originally purchased, a vehicle costing $25,380 had an estimated useful life of 8 years and an estimated salvage value of $2,900. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals: 015405 Multiple Choice $2.810.00 $11,240.00 $2.978.00 $5.78800 15.620.00 17 Marlow Company purchased a point of sale system on January 1 for $6,900. This system has a useful life of 10 years and a salvage value of $1,150. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method? 015355 Multiple Choice $1,040 $1150 $304 $575 $1300 18 015345 Ryan Company deposits all cash receipts on the day they are received and makes all cash payments by check. Ryan's June bank statement shows $27,361 on deposit in the bank. Ryan's comparison of the bank statement to its cash account revealed the following: Deposit in transit 3,250 Outstanding checks 1,323 Additionally, a $45 check correctly written and recorded by the company was recorded by the bank as a $54 deduction. The adjusted cash balance per the bank records should be: Multiple Choice $29.288 $31.943 $22.797 19 In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: Net income for the year was $62,000 Accounts payable decreased by 23,000 Accounts receivable increased 30,000 015336 by Inventories increased by 10,000 Depreciation expense was 40,000. Net cash provided by operating activities was: Multiple Choice $65,000 $105.000 $85,000 20 If a check correctly written and paid by the bank for $623 is incorrectly recorded in the company's books for $632, how should this error be treated on the bank reconciliation? 015327 Multiple Choice Add $9 to the bank's balance. Subtract $9 from the bank's belance Add $9 to the book balance Subtract $3 hom the bank's balance and add $45 to the book's beence Subtract 50 on the book balance 21 Lima Enterprises purchased a depreciable asset for $29,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four- year useful life. Assuming the asset's salvage value is $3,400, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? 2017 Multiple Choice $6.400 $5.333 $25,000 $17.600 $21333 22 A machine with a cost of $134,000 and accumulated depreciation of $87,000 is sold for $54,000 cash. The amount that should be reported in the operating activities section reported under the direct method is: 015308 Multiple Choice $7,000. Zero. This is an investing activity $47,000 Zere. This is a financing activity $54,000 23 A company recorded 2 days of accrued salaries of $2,300 for its employees on January 31. On February 9, it paid its employees $8,800 for these accrued salaries and for other salaries earned through February 9. Assuming the company does not prepare reversing entries, the January 31 and February 9 journal entries are: 01.52.56 Multiple Choice 1/31 Salaries Expense 2,300 Salaries Payable 2,300 2/9 Salaries Expense Salaries Payable 6,500 2,300 Cash 8,000 Salaries Expanse 2,900 Salaries Payable 2,300 279 Salaries Expence Cash 8,900 5/31 Galeries Payable 3,300 Salarion Expense 3,300 24 Refer to the following selected financial information from McCormik, LLC. Compute the company's accounts receivable turnover for Year 2. Year 2 Year 1 2015245 Cash Short-tern investments Accounts receivable, $ 39,000 $ 33,750 105,000 67,500 93,000 87,000 net Merchandise inventory 128,500 132,500 Prepaid expenses 13,600 11,200 Plant assets 395,500 345,500 Accounts payable 105,900 115,300 Net sales 718,500 683,500 Cost of goods sold 397,500 382,500 Multiple Choice 5.59. 773 25 2012 On September 12, Vander Company sold merchandise in the amount of $7,000 to Jepson Company, with credit terms of 3/10, n/30. The cost of the items sold is $5,200. Vander uses the periodic inventory system and the gross method of accounting for sales. The journal entry or entries that Vander will make on September 12 is: Multiple Choice Sales 7,000 Accounts receivable 7,000 Accounts receivable Sales 5.200 5,200 Accounts receivable Sales 7,000 7,000 Sales 7,000 Accounts receivable 7,000 Cost of goods sold 5,200 Merchandian Inventory 5.2001 26 The following data were reported by a corporation: Authorized shares 33,000 Issued shares 28,000 0152:27 Treasury shares 10,000 The number of outstanding shares is: Multiple Choice 23.000 33.000 43.000 27 A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $26,250 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $725. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? 2 Multiple Choice Accounts Receivable Bad Debts Expense 26,250 725 Sales 26,975 Bad Debts Expense Allowance for Doubtful Accounts 26,250 26,250 Accounts Receivable 36,975 Allowance for Doubs Ful Account 24,975 had este Expenaw Allowanes for tubul Accounts 257925 25,525 28 A corporation issued 200 shares of its $5 par value common stock in payment of a $2.800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include: 2012.08 Multiple Choice A $2.800 debit to Legal Expenses A $2,800 credit to Cash A SU800 credit to Paid-in Capital in Excess of Par Value Common Stock A $1000 debit to Organization Expenses A $2,800 crean to Common Stock 29 A company had a beginning balance in retained earnings of $43,400. It had net income of $6,400 and paid out cash dividends of $5,725 in the current period. The ending balance in retained earnings equals: Multiple Choice O $5,725 $42,725 $55.525 $12325 544,075 30 015150 A company sold equipment that originally cost $140,000 for $70,000 cash. The accumulated depreciation on the equipment was $70,000. The company should recognize a Multiple Choice $70,000 gain $35.000 gain $0 gain or loss $70.000 loss $35,000 31 A corporation sold 12,500 shares of its $10 par value common stock at a cash price of $12 per share. The entry to record this transaction would include: 2014 Multiple Choice A credit to Common Stock for $150,000 A credit to Paid-in Capital in Excess of Par Value, Common Stock for $150.000 A credit to Common Stock for $125.000 A debit to Cash for $125,000. A debit to Paid in Capital in Excess of Par Valur, Cammon Shock for $25,000 32 Smiles Entertainment had the following accounts and balances at December 31: 015130 Cash Account Accounts Receivable Prepaid Insurance Supplies Accounts Payable Common Stock Retained Earnings Service Revenue Salaries Expense Utilities Expense Totals Debit Credit $11,000 2,200 2,800 1,200 $ 5,500 4,500 1,000 8,000 600 1,200 $19,000 $19,000 Using the information in the table, calculate the company's reported net income for the period. Mutiple Choice $6,200 $1.300 33 On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $98,700; Allowance for Doubtful Accounts, credit balance of $1,111. What amount should be debited to Bad Debts Expense, assuming 6% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible? Multiple Choice $1111 $7033 $3.999 O $4.811 $5.922 34 Cushman Company had $846,000 in net sales, $370,125 in gross profit, and $211,500 in operating expenses. Cost of goods sold equals: Multiple Choice 01511 $370,125 $211.500 $846,000 $475.875 $264.375 35 A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable $345,000 debit 015102 Allowance for uncollectible accounts Net Sales 700 debit 790,000 credit All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? Multiple Choice $2,770 $1,370 $4040 On January 1, Parson Freight Company issues 8.0%, 10-year bonds with a par value of $3,200,000. The bonds pay interest semiannually. The market rate 36 of interest is 9.0% and the bond selling price was $2,991,873. The bond issuance should be recorded as: 019034 Multiple Choice Debit Cash $2.991,873; debit Discount on Bonds Payable $208127, credit Bonds Payable $3,200,000 Debit Cash $2.991873, debit interest Expense $208,327: credit Bonds Payable $3,200.000 Debit Cash $2.991873 credit Bonds Pwyeble $2.991873 Debit Cash $3,200,000 credit Bonds Prystle $1,200,000 Debit Cash $3,200,000 credit Bonds Payable $2.991873; creat Discount on Bands Payati 120812