CUMULATIVE TEST Learning Goals 1-6, continued 20. Joliet Company purchased $4.800 of spare parts supplies on September 3 and properly recorded the purchase as the asset Spare Parts Supplies. At the end of the fiscal year, on October 31, an inventory of parts shows 15% of the parts purchased are still remaining. The adjusting entry on October 31 for the unrecorded expense is: a. Supplies Expense Spare Parts Supplies 720 720 b. Spare Parts Supplies 4,080 Supplies Expense 4,080 c. Supplies Expense 4,080 Spare Parts Supplies 4,080 d none of the above 21. On March 1, 2018, Oakton, Inc. sold a truck that had cost the company $22,000 and had an estimated $4,000 residual value. The truck had been purchased on January 2, 2017 and had an a estimated five-year economic life. What was the balance in the Accumulated Depreciation account when the truck was sold? a $7,800 h $10,800 c. $9,000 d. some other amount 22. Parkland Enterprises failed to prepare an adjusting entry for advertising expense that had been incurred but not yet paid. This will result in: Assets a no effect b. overstated c. no effect d. no effect Liabilities overstated no effect overstated understated Net Income understated overstated understated overstated 23. On January 5, 2018, the Illinois Central Research Company recorded the following transaction: Accounts Payable Repairs Expense Cash 4,000 1,500 5,500 If there were no other accrued expenses in 2017, how much repairs expense did the company accrue at year end, December 31, 2017? a. $4,000 b. $1,500 c. $5,500 d. some other amount 24. Southern Union Company made these adjustments at December 31, year end: (A) Repairs Expense 900 Accounts Payable 900 (B) Unearned Service Revenue 2,000 Service Revenue 2,000 The entries above indicate what situations had created the need for adjustments? a. Entry A: accrued expense; entry B: accrued revenue b. Entry A: deferred (prepaid) expense; entry B: accrued revenue Entry A: deferred (prepaid) expense; entry B: deferred revenue d. Entry A: accrued expense; entry B: deferred revenue 797