Hi could you please help me with the following attachment. They are multiple choice and you don't have to give the explanation just the answer.

Thanks

CH-6 1. At the end of the month of July you close the books of your company and received the bank statement. You are ready to start with the Adjusting journal entries and realized that a bank reconciliation must be performed. First you collect the data from June 30th reconciliation as follows: Balance per Bank add: Deposits in Transit deduct: Outstanding Cheques Balance per Books $10,000 $1,800 $(2,200) $9,600 Second you close your update your Cash and bank account with all transactions recorded before AJE and you have: Balance July 31 $12,000 Deposits $7,300 Cheques $4,800 Third you look at the bank statement provided by your bank and you see the following: Balance July 31 $12,430 Deposits $6,000 Cheques $4,000 Note collected $1,000 Bank service charge $20 NSF cheque $150 Interest received $200 Autowithdrawals $500 Which of the following adjusting journal entries is required after the bank reconciliation has been prepared? a) None of the others alternatives are correct b) Dr. Cash $20 Cr. bank fees $20 (to reflect bank fees for the month) c) Dr Cash $150 Cr. Accounts Receivables $150 (to reflect the NSF cheque) d) Dr. Interest revenue $200. Cr. Cash $200 (to reflect interest earned on bank balance). e) Dr. Cash $500 Cr. Phone Expenses $500 (to reflect the automatic payment of the phone - autowithdraw). 2.At the end of the month of July you close the books of your company and received the bank statement. You are ready to start with the Adjusting journal entries and realized that a bank reconciliation must be performed. First you collect the data from June 30th reconciliation as follows: Balance per Bank add: Deposits in Transit deduct: Outstanding Cheques Balance per Books $10,000 $1,800 $(2,200) $9,600 Second you close your update your Cash and bank account with all transactions recorded before AJE and you have: Balance July 31 $12,000 Deposits $7,300 Cheques $4,800 Third you look at the bank statement provided by your bank and you see the following: Balance July 31 $12,430 Deposits $6,000 Cheques $4,000 Note collected $1,000 Bank service charge $20 NSF cheque $150 Interest received $200 Autowithdrawals $500 What is the amount of deposits made in July? a) None of the others alternatives are correct b) $4,200 c) $1,800 d) $6,000 e)$7,300 3.The following data was extracted from the accounting records of Wise Company: Adjusting journal entries made by Wise after preparing the December bank reconciliation were as follows: dr Cash 1,995.00 dr Bank Service Charges 5.00 cr Notes Receivable 2,000.00 dr Cash 27.00 cr Advertising Expense 27.00 dr Accounts Receivable 450.00 cr Cash 450.00 dr Bank Service Charges Expense 42.50 cr Cash 42.50 Other information: - The Balance Per books November 30 was $18,434.27 - Deposits in transit at December 31 were $2,145.40 - An error made by the bank on the December bank statement was detected. It had charged a cheque written by another bank client (Wiese Company) against Wise Company's bank balance. The Bank has been notified and agrees it is indeed their error. The amount was $30.50 - Outstanding cheques were $1,938.53 - There were no other reconciling items not reflected above The most logical explanation for the $27 entry is: a) None of the above b) Wise is an advertising firm and this is payment from a customer Wise is prepaying for some advertising c) Correction of an error - Wise overpaid an advertising company doing work for Wise and has received a refund from that company d) Correction of an error - Wise correctly mailed a cheque for $869.10 but recorded the cheque in its cash disbursement journal in the amount of $896.10 4.In the bank reconciliation there is reference to a deposit in transit of $1,000. It would show in the reconciliation as: a) An addition in the reconciliation (i.e., there is a plus sign in front of the number) b)None of the above c)It doesn't show in the reconciliation. It comes from some other source. d)A deduction in the reconciliation (minus sign in front of the number) e) It shows both as a deduction and as an addition in the reconciliation 5.When doing the monthly bank reconciliation (BR), the automatic payment to the phone company shown on each month bank statement should: a) be deducted from the balance per bank on the BR b) be deducted from the balance per books on the BR c) be added back to the balance per bank on the BR d) be added back to the balance per books on the BR e) not be part of the BR because it was accounted for in the bank statement 6.At the end of the month of July you close the books of your company and received the bank statement. You are ready to start with the Adjusting journal entries and realized that a bank reconciliation must be performed. First you collect the data from June 30th reconciliation as follows: Balance per Bank add: Deposits in Transit deduct: Outstanding Cheques Balance per Books $10,000 $6,300 $(5,000) $9,600 Second you close your update your Cash and bank account with all transactions recorded before AJE and you have: Balance July 31 $11,000 Deposits $8,500 Cheques $6,500 Third you look at the bank statement provided by your bank and you see the following: Balance July 31 $10,280 Deposits $13,000 Cheques $10,000 Note collected $700 Bank service charge $ 50 NSF cheque $1,000 Interest received $180 Autowithdrawals $250 Which of the following adjusting journal entries is required after the bank reconciliation has been prepared? a)Dr. Cash $50 Cr. bank fees $50 (to reflect bank fees for the month) b)Dr Cash $1,000 Cr. Accounts Receivables $1,000 (to reflect the NSF cheque) c)None of the others alternatives are correct d)Dr. Interest revenue $180 Cr. Cash $180 (to reflect interest earned on bank balance). e)Dr. Cash $250 Cr. Phone Expenses $250 (to reflect the automatic payment of the phone autowithdraw). 7.At the end of the month of July you close the books of your company and received the bank statement. You are ready to start with the Adjusting journal entries and realized that a bank reconciliation must be performed. First you collect the data from June 30th reconciliation as follows: Balance per Bank $10,000 add: Deposits in Transit $1,800 deduct: Outstanding Cheques $(2,200) Balance per Books $9,600 Second you close your update your Cash and bank account with all transactions recorded before AJE and you have: Balance July 31 $12,000 Deposits $7,300 Cheques $4,800 Third you look at the bank statement provided by your bank and you see the following: Balance July 31 Deposits Cheques Note collected Bank service charge NSF cheque Interest received $12,430 $6,000 $4,000 $1,000 $20 $150 $200 Autowithdrawals $500 Which of the following items have been added to the Cash and Bank account when doing the reconciliation? a)Notes Collected $1,000 b)Service Charges $20 c)None of the others alternatives are correct d)NSF Cheque $150 e)Autowithdraws $500 8.At the end of the month of July you close the books of your company and received the bank statement. You are ready to start with the Adjusting journal entries and realized that a bank reconciliation must be performed. First you collect the data from June 30th reconciliation as follows: Balance per Bank $10,000 add: Deposits in Transit $6,300 deduct: Outstanding Cheques $(5,000) Balance per Books $9,600 Second you close your update your Cash and bank account with all transactions recorded before AJE and you have: Balance July 31 $11,000 Deposits $8,500 Cheques $6,500 Third you look at the bank statement provided by your bank and you see the following: Balance July 31 $10,280 Deposits $13,000 Cheques $10,000 Note collected $700 Bank service charge $ 50 NSF cheque $1,000 Interest received $180 Autowithdrawals $250 Which of the following adjusting journal entries is required after the bank reconciliation has been prepared? a)Dr. Phone Expenses $250 Cr. Cash $250 (to reflect the automatic payment of the phone autowithdraw). b)Dr. Cash $50 Cr. bank fees $50 (to reflect bank fees for the month) c)Dr. Interest revenue $180 Cr. Cash $180 (to reflect interest earned on bank balance). d)None of the others alternatives are correct e)Dr Cash $1,000 Cr. Accounts Receivables $1,000 (to reflect the NSF cheque) 9.The following information relates to the month of August for XYZ Inc. Prepare the bank reconciliation. 1 2 3 4 5 6 7 8 9 10 Date Aug 31 Aug 31 Aug 28 Aug 27 Aug 31 Aug 31 Aug 1 Information Bank statement balance $3,490 Bank statement reflects bank fees for the month $35 NSF cheque $100 with fee of $10. Bank statement reflects paper statement fee $80 Bank statement reflects interest earned on balance $8 $1,000 note receivable collected by bank and deposited into XYZ's account. Related bank fee is $40. 31 XYZ wrote cheques with total value over $60,000. As of Aug 31 $3,021 of the cheques written have not cleared the bank. Also, $200 cheques written back in June have still not cleared the bank. Aug Deposits in transit $1,450 31 Aug The GL reflects cash sales of $145. The bank statement reflects deposits related to these 31 sales of $154. XYZ incorrectly recorded $145. Aug General ledger cash account reflects $967 31 What is the total amount deducted from the G/L balance to arrive at the Adjusted Balance per Books for August? a)$215 b)$225 c)$977 d)$115 e)$0 10.The Petty Cash Box has 3 vouchers in it (one for taxi fare in the amount of $25, one for courier charges of $18 and one for office treats bought at Tim Hortons for $35. The accountant forgets to make a replenishment entry prior to generating the financial statements for the period. The financial statement implications of this are that: a) Net income is understated by $78 b) Income is correctly stated but assets are understated by $78 c) Net income is overstated by $78 d)There is not enough information provided to assess financial statement impact e)No implications as the replenishment can occur anytime and is independent of financial statement generation CH-7 1.Which of the following is a liability? a) None of the above b) Overpayment by a customer in paying his account balance c) Both (b) and (c) above d) Bank overdraft e) Allowance for Doubtful (Uncollectible) Accounts 2.The following is an Aged Accounts Receivable Listing for Company A at March 31, 2015 Customer Current 0-30 days 30-60 days 60+ % Uncollectible 0% 2% 3% 4% Adele 100,000 40,000 8,000 0 Bart 220,000 10,000 10,000 10,000 Carol 94,000 0 0 7,000 Dustin 80,000 75,000 12,000 4,000 The balance in the Allowance for Doubtful Accounts before any adjustment is $8,630 (the account is in its normal balance). What is the adjustment required to the Allowance for Doubtful Accounts to record provision for credit losses at March 31, 2015? a)$4,390 debit b)$4,610 debit c)None of the other alternatives are correct d)$4,610 credit e)$4,390 credit 3.General Toys Incorporated has an Accounts Receivable balance at year end of $160,000. The Allowance for Doubtful Accounts has a credit balance of $1,200 at year end. Upon review of the Accounts Receivable subsidiary you notice that there is $161,500 of debit balances and $1,500 of credit balances. At year end management prepared the following analysis: Aging Buckets Accounts Receivable Percentage doubtful Current $134,000 1% 0 - 60 days $15,000 5% 61- 180 days $8,000 15% Over 6 months $4,500 35% Total $161,500 How much should be recorded for the provision for credit losses at year end for General Toys Incorporated based on management's analysis? a) $4,865 Cr. to allowance for doubtful accounts b) $3,665 Dr. to allowance for doubtful accounts c) $6,065 Cr. to allowance for doubtful accounts d) None of the other alternatives are correct e) $3,665 Cr. to allowance for doubtful accounts 4.Choose the term that best matches the following description: Recognizes revenue on the basis of cash collection after the delivery of goods. a) Installment Method b) Percentage of Completion Method c) Completed Contract Method d) None of the other alternatives are correct e) Sales (or Cash) Discount 5.Which of the following statement is false when making a comparison between the Direct Write Off Method and the Allowance Method? a) None of the other alternatives are correct b) A specific accounts receivable account may be written off under either method. c) The Direct Write Off Method violates the matching principle. d) There are two methods to use with the Allowance method: Aging and Percentage of Sales. e) The Direct Write Off Method should be used when bad debts are typically negligible at an organization. 6.Guinevere Company has the following data extracted from its Accounts Receivable records at June 30, 2011 Customer Balance Current 31 -75 days Over 75 days A $8,000 $5,000 $2,000 $1,000 B $2,000 $2,000 C $4,000 $4,000 D $9,000 $2,000 $1,000 $6,000 E $3,000 $2,000 $1,000 F $6,000 $6,000 G $7,000 $3,000 $3,000 $1,000 Totals $39,000 $22,000 $8,000 $9,000 - Guinevere's sales terms are 1/15 n/30 and it records sales at the gross amount of the invoice. - Guinevere's year end is June 30 - The unadjusted balance in the Allowance for Doubtful Accounts at June 30 is $8,000 dr. - Guinevere makes average sales of $2,000,000 per year and averages write offs of uncollectible balances of $100,000 per year. - Sales for the year ended June 30, 2010 are $1,400,000 credit sales and $400,000 cash sales - Guinevere has a very conservative receivables management strategy. - No adjusting entries have been recorded at June 30 Assume that Guinevere had always been allowed under Canadian GAAP to use the Direct Write-Off Method because it had never experienced any bad debt losses in its history as a company. There isn't even an Allowance" account in its General Ledger Chart of Accounts. Under this assumption, the adjusting entry June 30 to record the provision for uncollectible accounts would involve: a) No entry to be made b) A credit to Accounts Receivable c) A debit to " Allowance for Uncollectible Accounts" d) A debit to "Uncollectible Accounts Expense" e) A credit to "Uncollectible Accounts Expense" 7.Chocolate Corner Company had the following transactions during the current year: Apr. 8. Received a $7,050, 75-day, 8% note from Lance Armstrong in payment of account. May 24.Wrote off customer Joe Nutella's account against the Allowance for Uncollectible Accounts, $150 June 22. Received payment of Lance Armstrong's note in full. Sept. 10.Gave a $5,600, 90-day, 9% note to Herbert Anson in payment of account. Sept.18. Received payment of Joe Nutella's account, written off May 24. Dec 9. Paid principal and interest due on note to Herbert Anson. Please Note: a 360-day year is standard for many such interest computations - for this course interest is to the nearest month rather than precisely to the day. Round interest to the nearest dollar (no cents). If needed record the above transactions in general journal form. The journal entries on Sep 18th have the following: a) None of the other alternatives are correct b) Dr. Allowance for Uncollectible Accounts $150 c) Cr Cash $150 d) Dr. Notes Receivables - J. Nut $150 e) Cr. Allowance for Uncollectible Accounts $150 8.Hopeful Company is a new company. During its first year of operation: a) Customers ordered $50,000 of goods on account b) $40,000 of the goods ordered were delivered c) Customers paid $34,000 on account (taking advantage of a cash discounts of $1,000 from the invoiced amounts recorded originally in accounts receivable) d) Customers returned damaged goods and were refunded $2,000 The balance of Account Receivable at the end of the year is: a) $16,000 b) $5,000 c) $4,000 d) $3,000 e) None of the other alternatives are correct 9.The following is the Aged Accounts Receivable Listing for XYZ Inc. at January 31, 2016: Customer Name Current 0 - 30 Days 30 - 60 Days 60+ Days % Uncollectible 1% 2% 4% 5% AAA 21,000 42,000 39,000 4,000 BBB 19,000 19,000 19,000 22,000 CCC 5,000 5,000 7,000 9,000 DDD 12,000 5,000 5,000 9,000 The balance in the Allowance for Doubtful Accounts $2,500 debit. What is the appropriate adjustment XYZ Inc. needs to make at January 31, 2016 to update its provision for credit losses? a) $4,480 b) None of the other alternatives are correct c) $6,980 d) $9,480 e) $9,490 10.Chocolate Corner Company had the following transactions during the current year: Apr. 8. Received a $7,050, 75-day, 8% note from Lance Armstrong in payment of account. May 24.Wrote off customer Joe Nutella's account against the Allowance for Uncollectible Accounts, $150 June 22. Received payment of Lance Armstrong's note in full. Sept. 10.Gave a $5,600, 90-day, 9% note to Herbert Anson in payment of account. Sept.18. Received payment of Joe Nutella's account, written off May 24. Dec 9. Paid principal and interest due on note to Herbert Anson. Please Note: a 360-day year is standard for many such interest computations - for this course interest is to the nearest month rather than precisely to the day. Round interest to the nearest dollar (no cents). If needed record the above transactions in general journal form. On Dec 9th cash is paid in the amount of: a) $5,446 b) $5,726 c) $5,754 d) None of the other alternatives are correct e) $5,474 CH-8 1.Albany Addictive Apples counted and valued its inventory using FIFO on December 31, 2013 and on December 31, 2014 and reported the calculated values on each respective balance sheet. Albany Additive Apples had zero consignment inventory on hand at December 31, 2014 and had some consignment on hand at December 31, 2013. If consignment inventory had erroneously been counted and included in inventory in the December 31, 2013 count, which of the following is true? a) None of the other alternatives are correct b) Net income was overstated in 2013 c) Net income was overstated in 2014 d) Inventory was overstated at December 31, 2013 e) Inventory was overstated at December 31, 2014 2.A $15,000 overstatement of the 2005 ending inventory was discovered after the financial statements for 2005 were prepared. How would that inventory error impact the 2005 financial? a) Current assets were understated and net income was overstated. b) Current assets were understated and net income was understated c) Current assets were overstated and net income was understated. d) None of the above e) Current assets were overstated and net income was overstated. 3.The Toy Emporium Inc. has compiled the following information for the year ended December 31, 2015. Item Cost Market Puzzles $27,500 $28,500 Gameboys $16,200 $17,000 Dolls $57,600 $65,200 The Toy Emporium Inc. reviews inventory on an item-by-item basis. What is the total write down of inventory for the year ended December 31, 2015? a) $6,400 b) We need to know the cost flow assumption to calculate if there is a write down c) $8,600 d) There is no write down of inventory required e) $2,200 4.The following information relates to Anne's Bakery Date Transaction Amount March 1 Opening inventory 550 items @ $26/item March 8 Purchases 1,000 items @ $28/item March 19 Sales 1,200 units @ $40/item March 28 Purchases 750 units @ $30/item If Anne's Bakery uses a perpetual inventory system and a FIFO cost flow assumption, what is the cost of goods sold for the month of March? a) $32,550 b) $33,200 c) $35,100 d) $32,500 e)$31,200 5.The rate of inflation in Canada as announced by Stats Canada is 2.8% this year. Cloud Company has just been formed and cash is scarce. It wants to report the lowest profit possible to Canada Revenue Agency to minimize its taxes. Cloud is choosing its accounting policies now. Assuming that all of the following inventory valuation methods were allowed under Canadian GAAP Cloud would adopt: a) Doesn't matter since they all have equal impact on reported profits b) Weighted Average c) FIFO d) LIFO e) Lower of Cost or Market 6.Choose the cost flow assumption in which the costs assigned to the ending inventory are the costs of the earliest units acquired. a) FIFO method b) LIFO method c) None of the other alternatives are correct d) weighted-average method e) specific identification method 7.Use the following information to answer questions (Round to 2 decimal places): The following information has been extracted from the records of Due North Sales (DNS) Co.: January 1 Beginning Inventory 550 units @ $26 each January 9 Bought 1,000 units @ $28 each January 15 Sold 1,200 units @ $40 each January 25 Bought 750 units @ $30 each If Due North Sales (DNS) uses the LIFO cost flow assumption, under a perpetual method, the ending inventory value at January 31st is (Round to 2 decimal places): a) $30,987 b) $32,052 c) $32,300 d) $31,600 e) None of the other alternatives are correct 8.The Deluxe Company sells toothbrushes. The following information has been extracted from the records of Deluxe. Jan 1: Beginning inventory = 10,000 units @ $2 each Jan 10: Buy 10,000 units @ $3 Jan 15: Sell 5000 units @ $5 Jan 30: Buy 4000 units @$4 If Deluxe uses the weighted average method of costing inventory and the periodic inventory method and the market value of inventory on hand January 31 (where market is defined as NRV) is zero: a) ending inventory will be valued at $4.00 per unit in the January financial statements b) the financial statements for January will reflect the market value only c) Deluxe can ignore the market value because the weighted average method already incorporates market information d) ending inventory will be valued at $2.05 per unit in the January financial statements e) the financial statements for January will reflect the cost only 9.The 123 Accounting Company sells accounting videos. The following information has been extracted from the records of 123 Accounting Co. January 1: Opening Inventory is 60 units @$10/each January 10: Bought 100 units @$11 each January 15: Bought 100 units @$13 each January 20: Sold 220 units @$20 each January 25: Bought 40 units @ $15 each If prices are rising during the year (inflation) then 123 Accounting will show the highest net income under: a) All methods will yield the same reported income b) Weighted Average (periodic) c) FIFO d) Weighted Average (perpetual) e) LIFO 10.Use the following information to answer questions (Round to 2 decimal places): The following information has been extracted from the records of Due North Sales (DNS) Co.: January 1 Beginning Inventory 550 units @ $26 each January 9 Bought 1,000 units @ $28 each January 15 Sold 1,200 units @ $40 each January 25 Bought 750 units @ $30 each If Due North Sales (DNS) uses the LIFO cost flow assumption, under a periodic method, the ending inventory value at January 31st is (Round to 2 decimal places): a) $31,600 b) $29,700 c) $30,987 d) None of the other alternatives are correct e) $32,052 CH-9 1.A change in accounting estimate is handled: a) Simultaneously b) At fair market value c) Some other way d) Retroactively e) Prospectively 2.Excelsior Inc. began the year with capital assets of $200,000 and accumulated amortization of $100,000. During the year, capital assets were purchased for $50,000 and capital assets were sold for proceeds of $1,000. Amortization expense for the year was $20,000. At the end of the year, Excelsior had capital assets of $242,000 and accumulated amortization of $115,000. What was the gain/loss on the disposal of capital assets? a) $2,000 loss b) $5,000 loss c) $1,000 gain d) $8,000 gain e) None of the other alternatives are correct 3.200 acres of land is purchased for $40,000. Additional costs include $4,000 brokerage commission, $6,000 for removal of an old building, $3,000 for lighting, and $900 survey fee. What is the cost of the land? a) None of the other alternatives are correct b) $44,900 c) $53,900 d) $50,900 e) $47,900 4.On August 1, 2015, Toy Inc. purchased a new piece of equipment that cost $25000. The estimated useful life is five years and the estimated residual value is $ 2,500. During the five years of useful life the equipment is expected to produce 10,000 units. If Toy Inc. uses the straight line method of depreciation and sells the equipment for $ 9,500 on August 1st, 2018. What will be the realized gain (loss)? a) $ (9,000) b) ($ 2,000) c) None of the other alternatives are correct d) $1,500 e) $ 13,500 5.On August 1, 2015, Toy Inc. purchased a new piece of equipment that cost $25000. The estimated useful life is five years and the estimated residual value is $ 2,500. During the five years of useful life the equipment is expected to produce 10,000 units. If Toy Inc. uses the straight line method for depreciation, what is the depreciation expense for the year ended, December 31st, 2015 None of the other alternatives are correct a) $ 2,083 b) $ 4,500 c) $ 1,875 d) $ 1,500 6.Statfall Ltd. buys a building on April 1, 1995 for $500,000. The building will last for 50 years, but Bigger expects to use the building for 30 years. At the end of 50 years the building will have no disposal value, but is expected to have a $50,000 disposal value at the end of 30 years. Statfall uses the straight-line method of depreciation, The depreciation expense at for the year-ended December 31, 2003 is: a) None of the above b) $7,500 c) $9,000 d) $10,000 e) $15,000 7.Kingston Company purchased a machine on January 1, 2015 for $24,000. There is no salvage value and the machine is expected to last ten years. Management typically records depreciation at year end (December 31). On March 1, 2016 Kingston Company sells the machine for $5,000. What is the appropriate journal entry to record the sale of the machine? a) None of the other alternatives are correct b) Dr. Accumulated depreciation 2,400. Dr. Cash $5,000. Dr. Loss on Disposal $16,600. Cr. Machine $24,000 c) Dr. Accumulated depreciation $2,800. Dr. Machine $24,000. Cr. Loss on disposal $26,800 d) Dr. Accumulated depreciation $2,800. Dr. Cash $5,000. Dr. Loss on Disposal $16,200. Cr. Machine $24,000 e) Dr. Accumulated depreciation $4,800. Dr. Cash $5,000. Dr. Loss on Disposal $14,200 Cr. Machine $24,000 8.Parent Co. acquires Sub Co. for $150,000. Sub Co.'s assets have a market value of $140,000 and Sub Co.'s liabilities have a market value of $15,000. What is the amount of goodwill resulting from this purchase? a) $10,000 b) $135,000 c) $125,000 d) None of the other alternatives are correct e)$25,000 9.Your company pays $620,000 for a patent that has 10 years remaining. Each year, your company should: a) debit intangible assets and credit accumulated amortization for an amount equal to 20% of book value. b) debit amortization expense for $62,000 and credit accumulated amortization for $62,000. c) debit amortization expense for $31,000 and credit intangible assets for $31,000. d) report no amortization expense because patents are not subject to amortization. e) none of the above 10.Amazing Race Incorporated has decided to sell its 2-year-old helicopter, which is currently advertised in a local newspaper and online. The price for the helicopter is set at $70,000 whereas a new helicopter is $85,000. An independent appraiser has confirmed that a price of $70k for the used helicopter is reasonable. Management expects to find a buyer within 12 months. Which of the following is true regarding the potential sale of the helicopter by Amazing Race Incorporated? a) Amazing Race should remove the helicopter from its books. b) Amazing Race Incorporated should ensure the helicopter is the last asset listed on the balance sheet under the heading "Assets". c) Amazing Race Incorporated should stop depreciating the helicopter d) Amazing Race Incorporated can select to show the helicopter on its balance sheet at NRV e) None of the other alternatives are correct CH-10 1. Employees of a company work 160 hours each during March. There are 10 employees and half of them earn $50 per hour and the other half earns $48 per hour. On March 31, all 10 employees are paid $7,500 each for March. How much in wages should be accrued at the end of March for quarterly reporting purposes? a) $3,400 b) None of the other alternatives are correct c) An accrual is not required because all employees were paid in March d) $78,400 e) $75,000 2.On April 1, 2014, Able Co borrows $200,000 for four years from the Toy Company to obtain funds to buy a piece of commercial property. As collateral, Able Co. gives Toy Company a mortgage on the manufacturing plant that it owns and that are on its books at a cost of $50,000. Interest is charged on the unpaid balance of the loan principal at an interest rate of 4 percent per year compounded semiannually. Payments are due on April 1 and October 1 of each year. Able co agrees to make eight payments over the four years of the mortgage so that when the last payment is made on April 1, 2018, the loan and all interest will have been paid. The first seven payments are to be equal. The eighth payment is to be just large enough to discharge the balance of the loan. Able Co. closes its books annually on December 31 and uses the effective interest method. The journal entry related with this mortgage that is done on December 31st 2012 has the following: a) Interest Payable credited b) Mortgage Payable credited c) Cash credited d) None of the other alternatives are correct e) Interest Expense credited 3.On October 1, 2015 Magic Marker Incorporated issued twenty-year bonds with a face value of $1,000,000. The proceeds of the bond issue amounts to $1,060,000. The bonds bear interest at 10% per year, payable semi-annually on April 1 and October 1. The effective interest rate is 9.3% and the company uses the effective interest method. Magic Marker Incorporated has a December 31 yearend date. What is the journal entry that will be recorded on December 31, 2015? a) Dr. Interest expense on bonds $24,645. Cr. Interest Payable $24,645 b) Dr. Interest expense on bonds $26,500. Cr. Interest Payable $26,500 c) Dr. Cash 1,060,000. Cr. Bond payable $1,000,000. Cr. Premium on Bond $60,000 d) Dr. Interest expense on bonds $24,645. Dr. Premium on Bonds $355. Cr. Interest Payable $25,000 e) Dr. Interest expense on bonds $26,500. Cr. Premium on Bonds $1,500. Cr Interest Payable $25,000 4.Company A sells a machine to Company B on September 1 for $27,000. The down payment to be paid by Company B is $3,000. Company B must pay monthly minimum payments of $265. 12% interest rate per annum on the unpaid balance is deducted from each payment and the balance is applied to reduce the principal outstanding. Company B makes the following payments to Company A: October 1 $500 November 1 $500 December 1 $1,000 January 2 $500 Prepare a partial amortization schedule in order to answer the following question. In preparing an amortization schedule, what is the balance at the end of December? a) $22,720 b) $23,480 c) None of the other alternatives are correct d) $23,740 e) $22,712 5.On January 2012, Lower Under Co announced an offer to issue bonds with a $200,000 par value, a 10% annual contract rate with interest payable semi-annually, and with a three-year life to gain some liquidity given the current market conditions. Interest payments are due on April 1 and October 1 of each year. Lower Under agrees to make six payments over the three years of the bond. Bonds are issue on April 1st 2012, maturity date is April 1, 2015 and the market rate on April 1st 2012 is 8%. Lower Under Co. closes its books annually on December 31 and uses the effective interest method. The amortization of the bond premium or discount on period 3 is (round to the nearest dollar): a) $1,710 b) $2,000 c) None of the other alternatives are correct / Not enough data provided to calculate it d) No amortization because bonds were issued at par e) $1,581 6.During one pay period, your company distributes $130,500 to employees as net pay. The income tax withholdings were $19,000 and the Canada Pension Plan withholdings were $5,000. The total compensation expense to the company during this period was Some other amount a) $24,000 b) $130,500 c) $149,500 d) $159,500 7.The existence of a Bond Premium account in a firm's G/L implies that: a) It sold bonds publicly that offered an interest rate higher than the prevailing market rate of interest. b) None of the above c) We cannot ascertain such relationship simply from the existence of such an account d) It sold bonds publicly that offered an interest rate equal to the prevailing market rate of interest. e) It sold bonds publicly that offered an interest rate lower than the prevailing market rate of interest. 8.The allowance method for uncollectible accounts receivable is similar to the allowance method for estimated warranty costs because a) Estimates of future events are made and the cost to the business is charged to income in the period of sale b) The expense is debited directly to Retained Earnings and does not appear on the income statement c) None of the other alternatives are correct d) All the three statements about allowances are correct e) Both the Allowance for Uncollectible Accounts and the Allowance for Warranties are liability accounts 9.On October 1, Year 1, Howell Stores, Inc. issues twenty-year, first mortgage bonds with a face value of $1,000,000. The proceeds of the issue are $1,060,000. The bonds bear interest at the rate of 10 percent per year, payable semiannually at April 1 and October 1. Howell Stores Inc. closes its books annually at December 31. Round amounts to the nearest dollar. Assume that Howell Stores, Inc. uses the straight-line method to recognize interest expense. The amount of interest payable at Dec 31st of the first year is: a) $24,250 b) None of the other alternatives are correct c) $24,645 d) $25,000 e) $50,000 10.Assume that a firm issues bonds at a discount a) Amortization of bond discount using the effective line method results in an equal interest expense each period b) Amortization using the straight line method produces a constant yield on the bonds which will be by definition equal to the market rate c) Amortization of the discount using the effective interest method will result in a smaller reduction of the Bond Discount in each successive period d) Amortization of the discount using the straight line method will decrease the reported interest expense on the income statement e) None of the above statements are correct Appendix B 1.A bank investment of $100 is made by Alpha which provides an annual return of 8% (simple interest) and principle plus interest is left in the bank for 5 years to accumulate. Beta also invests $100 at this bank for a term of 5 years and earns compound interest compounded annually. At the end of 5 years when the investments are cashed in: a) Beta receives more b) Alpha receives more c) Alpha receives $164 d) There is not enough information provided to solve this problem. e) They receive identical amounts 2.If you borrowed $1,000 for a 2 year period, with a simple interest rate of 5% per annum, the total interest to be paid would be a) None of the other alternatives are correct b) $300 c) $1,000 d) $500 e) $100 3.Fred Flintstone is planning to retirement in the next ten years, he has estimated that he requires $200,000 on the date of retirement. Bedrock Bank has a special retirement package in which if you can investment a semi-annual fixed payment for the next 10 years at 12%. How much will Fred need to invest for the next 10 years so he will get $200,000 at retirement? (rounded to 2 decimal places) a) None of the other alternatives are correct b) $ 15,173.59 c) $ 5,734.20 d) $ 17,436.94 e) $ 5,436.91 4.If you borrowed $1,500 for a 5 year period, with a simple interest rate of 10% per annum, the total interest to be paid would be a) None of the other alternatives are correct b) $750 c) $1,500 d) $1,000 e) $1,250 5.Ruthy borrows $60,000 from the Mighty Bank today and the Bank requests her to repay her loan in four equal payments along with 12% interest. Each of the four payments must be paid at the end of the next three years. What is the amount of each payment? a) $24,981 plus 12% interest b) $48,037 c) $20,000 plus 12% interest d) $24,981 e) None of the other alternatives are correct 6.A company is obligated to make annual payments to a pension fund at the end of the next three years. The present value of those payments is to be $100,000. Which of the following amounts is nearest the amount which must be paid annually if the fund is projected to earn interest at the rate of 8% per year? a) $38,803 b) $41,990 c) $26,461 d) $33,333 e) None of the other alternatives are correct 7.If you set yourself a goal of investing X amount today, earning interest at 10%, in order to withdraw $32,321 at the end of each year for the next four years, how much is X? a) $129,284 b) $22,075 c) None of the other alternatives are correct d) $102,454 e) $10,196 8.If you set yourself a goal of investing X amount today, earning interest at 5%, in order to withdraw $10,000 at the end of each year for the next three years, how much is X? a) None of the other alternatives are correct b) Between $25,000 and $26,000 c) $27,232 d) $31,525 e) $30,000 9.Martha borrows $50,000 from the Mighty Bank today and the Bank requests her to repay her loan in four equal payments along with 12% interest. Each of the four payments must be paid at the end of the next four years. What is the amount of each payment? Please round to the nearest whole number. a) $10,462 b) $38,130 plus 12% interest c) $16,462 plus 12% interest d) $16,462 e) $10,462 plus 12% interest 10.Chester borrows $50,000 from the Mighty Bank today and the Bank requests her to repay her loan in four equal payments along with 10% interest. Each of the four payments must be paid at the end of the next two years. What is the amount of each payment? Please round to the nearest whole number. a) $15,106 b) $15,106 plus 10% interest c) $28,810 d) $28,810 plus 10% interest e) None of the other alternatives are correct