Abbey Co. sold merchandise to Gomez Co. on account, $27,800, terms 2/15, net 45. The cost of the goods sold was $13,745. Abbey Co. issued a credit memo for $3,300 for merchandise returned that originally cost $1,003. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?

a.$3,300

b.$12,742

c.$11,268

d.$14,502

Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 1531.

Gross payroll	$10,000		Federal income tax withheld	$1,800
Social security rate	6%		Federal unemployment tax rate	0.8%
Medicare rate	1.5%		State unemployment tax rate	5.4%

Assuming that all wages are subject to federal and state unemployment taxes, the employer's payroll tax expense would be

a.$620

b.$2,870

c.$750

d.$1,370

Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $386,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 4% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,600 before adjustment?

a.

Bad Debt Expense	11,840
Allowance for Doubtful Accounts		11,840

b.

Bad Debt Expense	13,840
Allowance for Doubtful Accounts		13,840

c.

Bad Debt Expense	12,340
Allowance for Doubtful Accounts		12,340

d.

Bad Debt Expense	12,840
Allowance for Doubtful Accounts		12,840

Jones Jewels Company paid cash to creditors on account. What journal entry records the transaction?

Accounts Receivable, debit; Cash, credit Accounts Payable, debit; Cash, credit Accounts Payable, debit; Accounts Receivable, credit Cash, debit; Common Stock, credit