Part 1: MacKenzie Company sold $540 of merchandise to a customer who used a Regional Bank credit card. Regional Bank charges a 1.5% fee for sales on its credit cards. The journal entry to record this sales transaction would be:

Multiple Choice

• Debit Cash of $540 and credit Sales $540.

• Debit Cash of $540 and credit Accounts Receivable $540.

• Debit Accounts Receivable $540 and credit Sales $540.

• Debit Cash $531.90; debit Credit Card Expense $8.10 and credit Sales $540.

• Debit Cash $531.90 and credit Sales $531.90.

Part 2: Jervis sells $3,600 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 3% factoring fee. What entry should Jervis make to record the transaction?

Multiple Choice

• Debit Cash $3,492; debit Factoring Fee Expense $108; credit Accounts Receivable $3,600

• Debit Accounts Receivable $3,492; debit Factoring Fee Expense $108; credit Cash $3,600.

• Debit Cash $3,600; credit Factoring Fee Expense $108; credit Accounts Receivable $3,600

• Debit Cash $3,492; credit Accounts Receivable $3,492

Part 3: Mohr Company purchases a machine at the beginning of the year at a cost of $33,000. The machine is depreciated using the straight-line method. The machines useful life is estimated to be 5 years with a $6,000 salvage value. The book value of the machine at the end of year 2 is:

Multiple Choice

• $5,400.

• $10,800.

• $16,200.

• $22,200.

• $27,000.

Part 4: Spears Co. had net sales of $47,404 million. Its average total assets for the period were $15,702 million. Spears' total asset turnover equals:

Multiple Choice

• 4.74.

• 3.02.

• 0.33.

• 1.57.

• 0.47.

Part 5: On May 22, Jarrett Company borrows $8,700, signing a 90-day, 8%, $8,700 note. What is the journal entry made by Jarrett Company to record the transaction?

Multiple Choice

• Debit Cash $8,700; credit Accounts Payable $8,700.

• Debit Accounts Payable $8,700; credit Notes Payable $8,700.

• Debit Cash $8,874; credit Notes Payable $8,874.

• Debit Cash $8,700; credit Notes Payable $8,700.

• Debit Notes Receivable $8,700; credit Cash $8,700.