Question 5 (1.5 points)

On a machine that cost $90,000 and has a useful life of 10 years, $10,000 residual value and was purchased at the beginning of the year, what amount of depreciation should be recorded in year 1 using the straight-line method with no half year convention?

Question 5 options:

1)

$9,000

2)

$8,000

3)

$4,000

4)

$10,000

Question 6 (1.5 points)

The following purchases of widgets by Loopy Company took place during the 1st Quarter of 2020:

Date

Units

Cost

01/20/2020

110

$30/each

02/15/2020

90

$32/each

03/12/2020

100

$33.50/each

If Loopy uses the moving or weighted average inventory assumption with regard to widgets, what is the cost of goods sold for a sale of 60 widgets on March 20, 2020 if it is the only sale during the quarter? (round to the nearest dollar)

Question 6 options:

1)

$2,010

2)

$1,906

3)

$1,920

4)

$1,800

Question 7 (1.5 points)

Archaic First National Bank loaned Customer B $50,000 on December 1, 2020. The interest rate on the loan was 6% per year. As of December 31, 2020 Customer B has made no payments whatsoever on the loan. What adjusting entry should be recorded by Customer B to reflect accrual accounting at year end December 31, 2020?

Question 7 options:

1)

Debit Interest Expense $250 credit Interest Payable $250

2)

Debt Interest Revenue $500 credit Interest Receivable $500

3)

Debit Interest Payable $250 credit Note Receivable $250

4)

Debit Interest Expense $500 credit Interest Revenue $500

Question 8 (1.5 points)

When a corporation sells stock to shareholders in exchange for cash, the journal entry to record this transaction will include which of the following?

Question 8 options:

1)

Credit to Additional Paid In Capital

2)

Debit to Common Stock

3)

Credit to Cash

4)

Debit to Dividends Payable

Question 9 (1.5 points)

Buck, Inc. sells inventory to customers with a two year embedded warranty that is not sold separately. During 2020 Buck sold 94,000 units of the products under warranty. Based on past experience Buck expects that 5% of the products will be returned for work that is covered during the 2 years and the average cost to fix these units will be $37 each. The adjusting entry for this embedded warranty for 2020 will be:

Question 9 options:

1)

Debit Warranty Expense $173,900 credit Warranty Liability $173,900

2)

Debit Warranty Expense $ 86,950 credit Warranty Liability $86,950

3)

Debit Warranty Liability $173,900 credit Warranty Expense $173,900

4)

Debit Warranty Liability $86,950 credit Cash $86,950

Question 10 (1.5 points)

The following purchases of widgets by Loopy Company took place during the 1st Quarter of 2020:

Date

Units

Cost

01/20/2020

110

$30/each

02/15/2020

90

$32/each

03/12/2020

100

$33.50/each

If the only product Loopy sold during the first quarter was widgets and the only sale took place on February 18th of 150 widgets for a sales price of $100 per unit, what was Happys gross profit for the first quarter using the FIFO assumption for inventory?

Question 10 options:

1)

$10,500

2)

$ 9,975

3)

$10,420

4)

$10,200