Question 9

Cameron Company sells 2,000 units of its product for $500 each in 2017. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $100 per unit. In 2017, warranty contracts are honoured on 40 units for a total cost of $4,000. What amount should Cameron Company accrue on December 31, 2017 for estimated warranty expense?

$6,000

$4,000

$2,000

$30,000

Question 10

Jill Cole's regular rate of pay is $10 per hour with one and one-half times her regular rate for any hours which exceed 44 hours per week. She worked 52 hours last week. Therefore, her gross wages were

$520.

$440.

$560.

$880

Question 11

On October 1, Jacob's Auto Service borrows $75,000 from Provincial Bank on a $75,000, 3-month, 6% note. The entry by Jacob's Auto Service to record payment of the note and accrued interest on January 1 is:

Notes Payable

76,125Cash

76,125

Notes Payable75,000Interest Payable1,125Cash76,125

Notes Payable75,000Interest Payable4,500Cash79,500

Notes Payable

75,000Interest Expense

1,125Cash76,125

Question 12

On December 31, 2017, Indiglow Company has a five-year note payable of $450,000. Of that balance, $90,000 will be paid within one year from the balance sheet date. How much of the note payable should Indiglow Company report as a long term liability when they prepare the December 31, 2017 statement of financial position?

$360,000

$450,000

$90,000

$540,000

Question 13

A cash register tape shows cash sales of $1,000 and HST of $130. The journal entry to record this information is:

Cash1,000Sales

1,000

Cash1,130

Sales Tax Revenue

130

Sales

1,000

Cash

1,000

Sales Tax Expense

130

Sales

1,130

Cash1,130Sales

1,000HST Payable130

Question 14

Acme borrows $100,000 on July 1 and is issued a 6% one-month note payable. Interest is payable at maturity. On August 1, Acme repays the note and interest. The August 1 journal entry is

debit Interest Payable $6,000, debit Note Payable $100,000 and credit Cash $106,000.

debit Interest Expense and credit Interest Payable for $6,000.

debit Interest Expense $500, debit Note Payable $100,000 and credit Cash $100,500.

debit Interest Payable and credit Interest Expense for $500.

Question 15

Muffin Company issued a five-year, interest-bearing note payable for $50,000 on January 1, 2017. Each January the company is required to pay $10,000 on the note. How will this note be reported on the December 31, 2018 balance sheet?

Long-term debt, $50,000

Long-term debt, $40,000

Long-term debt, $30,000; Long-term debt due within one year, $10,000

Long-term debt of $40,000; Long-term debt due within one year, $10,000