Question 3 Cullumber Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $21 per year. During November 2019, Cullumber sells 12,000 subscriptions beginning with the December issue. Cullumber prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. Prepare the entry in November for the receipt of the subscriptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Nov. 30 LINK TO TEXT Prepare the adjusting entry at December 31, 2019, to record sales revenue recognized in December 2019. Omit the cost of goods sold entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 LINK TO TEXT Prepare the adjusting entry at March 31, 2020, to record sales revenue recognized in the first quarter of 2020. Omit the cost of goods sold entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Mar. 31 Question 4 Blue Spruce's gross earnings for the week were $2,000, his federal income tax withholding was $340, and his FICA total was $153. What was Blue Spruce's net pay for the week? Blue Spruce's net pay for the week $ LINK TO TEXT Journalize the entry for the recording of his pay in the general journal. (Note: Use Salaries and Wages Payable: not Cash.) (Credit accounts titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit LINK TO TEXT Record the issuing of the check for Blue Spruce's pay in the general journal. (Credit accounts titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Question 5 Pharoah Company receives $288,000 when it issues a $288,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2019. The terms provide for annual installment payments of $48,000 on December 31. Prepare the journal entries to record the mortgage loan and the first two payments. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Dec. 31, 2021 Question 6 Suppose the following financial data were reported by 3M Company for 2018 and 2019 (dollars in millions). 3M Company Balance Sheets (partial) 2019 2018 $1,869 3,135 Current assets Cash and cash equivalents Accounts receivable, net Inventories Other current assets Total current assets Current liabilities $ 3,034 3,250 2,636 1,874 $10,794 $ 4,897 3,036 1,535 $9,575 $5,818 (a) Calculate the current ratio and working capital for 3M for 2018 and 2019. (Round current ratio to 2 decimal places, e.g. 1.25 : 1.) Current ratio 2018 :1 2019 :1 Working capital 2018 million $ 2019 million $ (b) Suppose that at the end of 2019, 3M management used $240 million cash to pay off $240 million of accounts payable. How would its current ratio and working capital have changed? (Round current ratio to 2 decimal places, e.g. 1.25 : 1.) Current ratio Working capital million Question 2 In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Sheffield Corp. enters sales and sales taxes separately in its cash register. On April 10, the register totals are sales $38,000 and sales taxes $1,900. 2. Oriole Company does not segregate sales and sales taxes. Its register total for April 15 is $23,220, which includes a 8% sales tax. Prepare the entry to record the sales transactions and related taxes for each client. Omit the cost of goods sold entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Debit Credit Account Titles and Explanation Sheffield Corp. 1. Oriole Company 2
