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AD AED A Font Paragraph $ question. i) The following information is available for Birch Company at December 31: Money market fund balance $ 2800 Certificate of deposit maturing June 30 of next year $ 15,100 Postdated checks from customers 1500 Cash in bank account $ 22,531 NSF checks from customers returned by bank 660 Cash in petty cash fund $ 210 Inventory of postage stamps $ 19 U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year $ 10,100 Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of. 1) A) $40,660 B) $50,741 C) $35,641 D) $37.801 E) $36,481 2) The following information is taken from Reagan Company's December 31 balance sheet: Cash and cash equivalents $ 10,019 Accounts receivable 78,422 Merchandise inventories 68,362 Prepaid expenses 5700 Accounts payable $ 16,550 Notes pavable 94,638 Other current liabilities 11,100 If net sales for the current year were 5603,500, the firm's days' sales uncollected for the year is: (Use 365 days a year.) 2) A) 159 4 days B) 69.5 days C) 47.4 days D) 41.3 days E) 79.7 days 3) Spencer Co. has a $290 petty cash fund. At the end of the first month the accumulated recept represent $S2 for delivery expenses $163 for merchandise inventory, and $21 for mucellaneous expenses. The fund has a balance of $54. The journal entry to record the reimbursement of the account includes a 3) A Credit to Cash for $236 B) Debit to Cash oser and Short for 554 C) Credit to Inventory for $163 D) Debit to Petty Cash for 5290 E) Credit to Cash Ose and short for $54 4) Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $20,162. Franklin's August bank statement shows $19,837 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 6600 Outstanding checks $ 5300 Bank service fees, not yet recorded by company $ 120 The bank collected on a note receivable, not yet recorded by the company $ 1095 The adjusted cash balance should be: 4) A) $21,257 B) $20,042 C) $26,437 D) $21,137 E) $14,537. 5Two clerks sharing the same cash register is a violation of which internal control principle? 5). A) Bond key employees. B) Apply technological controls. C) Maintain adequate records. D) Establish responsibilities. E) Insure assets. 6) The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the: 6). A) Receiving report B) Invoice. C) Purchase requisition D) Purchase order E) Invoice approval TRUE FALSE. Write 'T' if the statement is true and F if the statement is false. 7) A company has $80,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible. The current debit balance before adjustments) in the allowance for doubtful accounts is $1.200. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for $6,000. 7) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 8) A 90-day note issued on April 10 matures on: S) A) July 12 B) July C) July 10 D) July 13 E) July 11 O Find BbCcDd AaBbC AaBbcc AaBbC AaBbCcDAoBbCcDd c Replace Ho Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Select Styles Editing 1.2345 u 12. D) Suyy. Duly IU. L13 11. 9) A company receives a 10%, 120-day note for $1,500. The total interest due on the maturity date is: (Use 36 days a year.) 9). A) $75.00 B) $150.00 C) $8750. D) $50.00 E) $37.50 2,000 Allowance for Doubtful Accounts Cash Accounts Receivable-A. Hopkins 2.000 2,000/ 2,000 E) Allowance for Doubtful Accounts Accounts Receivable- A Hopkinse Accounts Receivable-A. Hopkins Cash 2,000 2,000 2,000 14) 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 $95,250, Allowance for Doubtful Accounts, credit balance of $921 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? 14) A) $5,715. B) 55,660 C) $4,794 D) $5,770 E) $6,636 15) Depreciation 15) A) Measures physical deterioration of an asset B) Is applied to land C) Measures the decline in market value of an asset Dy is an outflow of cash from the use of a plant asset E) is the process of allocating the cost of a plant asset to expense 16) A machine originally had an estimated useful life of 6 years, but after 4 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining 16) A) 10 years B) 6 years C) 16 years. D) 2 years E) 4 years. 17) Peavey Enterprises purchased a depreciable asset for $22,000 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 $2,000, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? 17) A) $5,000 B) $20,000 C) $15,000 D) $13.750 E) $15,125 18) Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price Real estate commissions 185,000 15.000 I 24) Portia Grant is an employee who is paid monthly. For the month of January of the current year, she cared a total of $8,260. The FICA tax for social security is 6.2% of the first $128,400 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her carnings was $1,325.17. Her net pay for the month is: (Round your intermediate calculations to two decimal places.)24) A) S6, 246.94 B) $6,422.71 C) SS.868.94 D) $7.194.11 E) $6.302 04 25) The current FUTA tax rate is 0.6, and the SUTA tax rate is 5.4Both taxes are applied to the first $7.000 of an employee's pay. Assume that an employee camed total wages of 59.900. What is the amount of total unemployment taxes the employer must pay on this employee's wages! A $534.60 B) 5336,00 C 5420.00 D) $544,00 E) $0.00 10) A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a: 10) A) Debit to Cash of $43,200, a debit to Factoring Fee Expense of $1,800, and a credit to Accounts Receivable of $45,000 B) Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000. c) Debit to Cash of $45,000 and a credit to Notes Payable of $45,000. D) Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800. E) Debit to Cash of $45,000, a debit to Factoring Fee Expense of $1,800, and a credit to Accounts Receivable of $46,800. 11) A company has net sales of $1,200,000 and average accounts receivable of $400,000. What is its accounts receivable turnover for the period? 11) A) 73.0 B) 5.00 C) 20.0 D) 3.0 E) 0.33 12) Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year. Betterman's turnover was 9.3 for this year and 9.3 for last year. These results imply that: 12) A) Axle's credit policies are too loose. B) Betterman's turnover is improving. Betterman is collecting its receivables more quickly than Axle in both years. D) Betterman has the better turnover for both years. E) Axle has the better tumover for both years. 13) Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins, On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is: 13). A) Cash 2,000 Accounts Receivable-A. Hopkins 2.000 B) Cash Bad debts expense 2,000 2,000 2,000 Accounts ReceivableA. Hopkins Bad debts expense Cash Accounts Receivable--A. Hopkins 2,000 2.000 2,000 D Accounts Receivable-A. Hopkins 2,000 Legal fees Expenses of clearing the land Expenses to remove old building 700 2,000 4,000 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building? 18). A) $185.000 to Land: $21,700 to Building B) $200,700 to Land $6,000 to Building C) $200,000 to Land $6.700 to Building D) $187. 100 to Land: S19 000 to Building E) $206,700 to Land: 50 to Building E) $206,700 to Land: $0 to Building. 19) A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. In the first year, 15,000 bolts were produced. In the second year, production increased to 19,000 units. Using the units-of-production method, what is the amount of accumulated depreciation at the end of the second year? 19) A) $45,600. B) $81,600. C) $23,750. D) $48,133. E) $86,133. 20) An asset's book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record: 20) A) Neither a gain or loss is recognized on this type of transaction. B) A loss on sale of $2,000. C) A gain on sale of $2,000. D) A gain on sale of $1,000 E) A loss on sale of $1,000. 21) Amounts received in advance from customers for future products or services: 21) A) Are not allowed under GAAP. B) Require an outlay of cash in the future C) Are revenues. D) Are liabilities E) Increase income 22) If a company has advance ticket sales totaling $2,000,000 for the upcoming football season, the receipt of cash would be journalized as: 22). A) Debit Unearned Revenue, credit Cash. B) Debit Cash, credit Ticket sales payable. C) Debit Sales, credit Unearned Revenue. D) Debit Unearned Revenue, credit Sales E) Debit Cash, credit Unearned Revenue 23) On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.) 23) A) $0 B) $225 C) $300 D) $900 E) 875 4) Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $20,162 Franklin's August bank statement shows $19,837 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 6600 Outstanding checks $ 5300 Bank service fees, not yet recorded by company $ 120 The bank collected on a note receivable, not yet recorded by the company $ 1095 The adjusted cash balance should be: 4) A) $21,257 B) $20,042 $26,437 D) $21,137 E) $14,537. Two clerks sharing the same cash register is a violation of which internal control principle? 5). A) Bond key employees. B) Apply technological controls. C) Maintain adequate records. D) Establish responsibilities. E) Insure assets. 6) The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the: 6). A) Receiving report B) Invoice. C) Purchase requisition D) Purchase order. E) Invoice approval TRUE FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 7) A company has $80,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible. The current debit balance before adjustments) in the allowance for doubtful accounts is $1.200. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for $6,000 7) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 8) A 90-day note issued on April 10 matures on: S A) Jul 12 B July 9. C) July 10 D) July 13 E) July 11 9) A company receives a 10%, 120-day note for $1,500. The total interest due on the maturity date is: (Use days a year.) 9). A) $75.00 B) $150.00. C) $87.50. D) $50.00 E) $37.50. 2,000 Allowance for Doubtful Accounts Cash |Accounts Receivable-A. Hopkins 2,000 2,000 2.000 E) Allowance for Doubtful Accounts Accounts Receivable-A. Hopkinse Accounts Receivable-A. Hopkins Cash 2,000 2,000 2,000 14) 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 595,250, Allowance for Doubtful Accounts, credit balance of $921. 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? 14) A) $5,715 B) $5,660 C) S4,794 D) $5,770 E) $6,636. 15) Depreciation: A) Measures physical deterioration of an asset B) Is applied to land C) Measures the decline in market value of an asset D) Is an outflow of cash from the use of a plant asset. E) Is the process of allocating the cost of a plant asset to expense 15) 16) A machine originally had an estimated useful life of 6 years, but after 4 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining. 16) A) 10 years B) 6 years C) 16 years. D) 2 years E) 4 years 17) Peavey Enterprises purchased a depreciable asset for $22.000 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 $2,000, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? 17) A) $5,000 B) $20,000 C) $15,000 D) $13,750 E) $15,125 18) Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price Real estate commissions 185,000 15,000 I 24) Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% of the first $128,400 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,325.17. Her net pay for the month is: (Round your intermediate calculations to two decimal places.)24) A) $6.246.94 B) $6,422.71 C) $5.868.94 D) $7,194.11 E) $6.302 04 25) The current FUTA tax rate is 0.6, and the SUTA tax rate is 5.4. Both taxes are applied to the first $7.000 of an employee's pay. Assume that an employee earned total wages of 59.900. What is the amount of total unemployment taxes the employer must pay on this employee's wages 253 ATS534.60 B5336,00 C5420.00 Dy $594.00 ES0.00 10) A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a: 10) A) Debit to Cash of $43,200, a debit to Factoring Fee Expense of $1,800, and a credit to Accounts Receivable of $45,000 B) Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000. C) Debit to Cash of $45,000 and a credit to Notes Payable of $45,000. D) Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800. E) Debit to Cash of $45,000, a debit to Factoring Fee Expense of $1,800, and a credit to Accounts Receivable of $46,800. 11) A company has net sales of $1,200,000 and average accounts receivable of $400,000. What is its accounts receivable turnover for the period? 11) A) 73.0 B) 5.00 C) 20.0 D) 3.0 E) 0.33 12) Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year. Betterman's turnover was 9.3 for this year and 9.3 for last year. These results imply that: 12) A) Axle's credit policies are too loose. B) Betterman's turnover is improving. Betterman is collecting its receivables more quickly than Axle in both years. D) Betterman has the better turnover for both years. E) Axle has the better tumover for both years. 13) Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins. On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is: 13). 2,000 Cash Accounts Receivable-A. Hopkins 2,000 B) Cash Bad debts expense 2,000 2,000 2,000 Accounts ReceivableA. Hopkins Bad debts expense Cash Accounts Receivable--A. Hopkins 2,000 2,000 2,000 D Accounts Receivable-A. Hopkins 2,000 Legal fees Expenses of clearing the land Expenses to remove old building 700 2,000 4,000 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the net building? 18) A) $185.000 to Land: 521,700 to Building B) $200,700 to Land: $6,000 to Building C) $200,000 to Land: $6,700 to Building D) $187.700 to Land: S19.000 to Building B) $206,700 to Land: $0 to Building E) $206,700 to Land: $0 to Building. 19) A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. In the first year, 15,000 bolts were produced. In the second year, production increased to 19,000 units. Using the units-of-production method, what is the amount of accumulated depreciation at the end of the second year? 19) A) $45,600. B) $81,600. C) $23,750. D) $48,133. E) $86,133. 20) An asset's book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record: 20) A) Neither a gain or loss is recognized on this type of transaction. B) A loss on sale of $2,000. C) A gain on sale of $2,000. D) A gain on sale of $1,000. E) A loss on sale of $1,000. 21) Amounts received in advance from customers for future products or services: 21) A) Are not allowed under GAAP. B) Require an outlay of cash in the future. C) Are revenues D) Are liabilities E) Increase income. 22) If a company has advance ticket sales totaling $2,000,000 for the upcoming football season, the receipt of cash would be journalized as: 22) A) Debit Unearned Revenue, credit Cash. B) Debit Cash, credit Ticket sales payable. C) Debit Sales, credit Unearned Revenue. D) Debit Unearned Revenue, credit Sales E) Debit Cash, credit Uneamed Revenue 25) 23) On December 1, Victoria Company signed a 90-day, 6% note pavable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.) A) $0 B) $225 C) $300 D) $900 E) 875 9) A company receives a 10%, 120-day note for $1,500. The total interest due on the maturity date is: (Use days a year.) 9). A) $75.00 B) $150.00 C) $87.50. D) $50.00 E) $37.50. 2,000 Allowance for Doubtful Accounts Cash Accounts Receivable-A. Hopkins 2.000 2,000 2.000 E Allowance for Doubtful Accounts Accounts Receivable-A Hopkinse Accounts Receivable-A. Hopkins Cash 2.000 2,000 2,000 14) 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 595,250, Allowance for Doubtful Accounts, credit balance of $921. 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? 14) A) $5.715. B) $5,660. C) S4,794 D) $5,770. E) $6,636. 15) Depreciation: A) Measures physical deterioration of an asset. B) Is applied to land C) Measures the decline in market value of an asset D) is an outflow of cash from the use of a plant asset. E) Is the process of allocating the cost of a plant asset to expense 15)