There are total 20 questions under the files.It is all about accouting 5110

Accounting 5110 - Fall 2015 Review Assignment 2 Due November 3, 2015 Section 1 by 8:40 am Section 2 by 3:10 pm Section 3 by 10:15 am PLEASE ANSWER THE QUESTIONS AND COMPLETE THE PROBLEMS ON THE FOLLOWING PAGES. WHEN COMPLETED, YOU WILL SUBMIT YOUR ANSWERS ON CANVAS. DO NOT ACCESS THE LINK UNTIL YOU ARE READY WITH ALL OF YOUR ANSWERS. THIS IS A REQUIRED ASSIGNMENT. This homework assignment is worth 25 points that will be awarded based on the following: Points QUESTIONS 1-6, 8-9, 11-13, 15-16, 19-20 1 POINT EACH 15 QUESTIONS 7, 10, 14, 17-18 2 POINTS EACH 10 TOTAL 25 1 1. (1 point) During the year, Dervish Company recovered $1,900 of receivables previously written off. They also made an entry to write off a $5,700 uncollectible account. Before these entries were made, the balance in accounts receivable was $54,000 and the balance in the allowance for doubtful accounts was $9,300. The net realizable value of accounts receivable after the write-off and recovery entries was a. $44,700. b. $48,500. c. $48,300. d. $52,100. e. $46,400. f. $42,800. g. $39,000. h. None of the above. 2. (1 point) Under the Gregory Inc. deferred compensation plan, payments made at the end of each year accumulate up to retirement. The plan allows the retiree to specify over how many years payments are to be received. Assume Mark Green has had $5,750 deposited at the end of each year for 30 years, and that the long-term interest rate has been 3%. If Mark retires in 30 years, how much will he be able to withdraw each year if he elects to receive payments for 10 years, beginning on the day he retires? Round all calculations to the nearest dollar. a. $17,250. b. $31,135 c. $27,356. d. $33,032. e. $32,069. f. $28,177. g. $23,000. h. None of the above 2 3. (1 point) Burkes, Inc. reports the following aging schedule for accounts receivable at December 31, 2015. Probability Days outstanding Amount of collection 0 - 30 $87,500 98% 31 - 60 $13,500 68% 61 - 90 $9,300 30% over 91 $2,400 5% During 2015 gross sales were $210,000. Seventy five percent of gross sales were credit sales. Management estimates that 5% of credit sales will be uncollectible. The current balance in the Allowance for Doubtful Accounts is $10,500 (credit). What amount of bad debt expense should Burkes record at the end of the year using the percentage of sales method? a. $7,875 b. $4,360 c. $14,860 d. $6,985 e. $2,625 f. $18,375 g. $10,500 h. None of the above. 4. (1 point) Batworthy Corp. made a sale on account for $8,700 with the following terms: 2/15, n/30 on June 12. If the company uses the gross method to record credit sales, which of the following would be included in the journal entry to record payment on June 25? a. A credit to Accounts Receivable for $8,874. b. A debit to Cash for $8,700 and a credit to Sales Revenue for $174. c. A credit to Accounts Receivable for $8,526. d. A debit to Cash for $8,526 and a debit to Sales Discounts for $174. e. A credit to Accounts Receivable for $8,874 and a debit to Sales Revenue for $174. f. A debit to Cash for $8,874 and a credit to Allowance for Sales Discounts for $174. g. A credit to Accounts Receivable for $8,526 and a credit to Interest Revenue for $174. h. None of the above. 3 5. (1 point) On January 1, 2015, Spirit Company sold goods to Dash Corporation. Dash signed a noninterest-bearing note requiring payment of $17,100 annually for eight years. The first payment was made on January 1, 2015. The prevailing rate of interest for this type of note at date of issuance was 7%. What amount of revenue will Spirit Company record on January 1, 2015 related to this sale? a. $187,724 b. $102,109 c. $109,257 d. $116,905 e. $115,708 f. $175,443 g. $136,800 h. None of the above 6. (1 point) Flora Inc has the following items at year-end: Cash in First Bank $12,000 Postdated checks $350 Bank overdraft at Second Bank $900 Treasury bills maturing in 2 months $1,700 Petty cash on hand $300 Cash in Third Bank (bond sinking fund) $7,500 Customer checks waiting to be deposited $650 Flora should report cash and cash equivalents of a. $14,100 b. $12,900 c. $12,050 d. $13,750 e. $14,000 f. $13,450 g. $11,400 h. None of the above. 7. (2 points) On September 1, 2016, Shutterfly Inc. factored (sold) receivables with a carrying amount of $230,000 to Pippin Company. Pippin Company retains 10% of the receivables and assesses a finance charge of 4% of the receivables. Assume that the receivables were sold with recourse. If the retained receivables have a fair value of $16,000 and the recourse obligation has a fair value of $2,700, what is the loss to be reported on September 1, 2016 by Shutterfly Inc.? a. $9,700. b. $18,900. c. $16,200. d. $7,000. e. $9,200. f. $18,700. g. $25,700. h. None of the above. 4 8. (1 point) During 2015, Weasley Inc.'s credit sales and collections were $258,000 and $261,000, respectively. The company wrote off $650 related to accounts that were deemed not collectible during the year. On December 31, 2015, Weasley estimates uncollectible accounts will be 5% of the ending balance of accounts receivable. What was the balance of accounts receivable on January 1, 2015, the allowance for uncollectible accounts had a credit balance of $1,400 on December 31, 2015? a. $28,000. b. $31,000. c. $25,650. d. $24,350. e. $30,250. f. $25,000. g. $31,650. h. None of the above. Use the following information to answer the next two questions. On 1/1/2015 Gladrags Company issued a 5-year bond payable with a face value of $50,000 and an annual stated interest rate of 6%. Interest payments are made semi-annually on each June 30 and December 31, starting 6/30/2015. The market interest rate on similar bonds is 4%. Round all calculations to the nearest dollar. 9. (1 point) On 1/1/2015, Gladrags will record the following: a. Premium on Bond Payable of $4,452 b. Premium on Bond Payable of $9,427 c. Premium on Bond Payable of $2,498 d. Premium on Bond Payable of $2,357 e. Premium on Bond Payable of $4,491 f. Premium on Bond Payable of $4,761 g. Premium on Bond Payable of $4,986 h. None of the above. 10. (2 points) What amount of interest expense will Gladrags record on 6/30/2016 for the bond issued on 1/1/2015? Round to the nearest dollar. a. $1,500 b. $1,069 c. $1,073 d. $1,090 e. $2,180 f. $1,065 g. $2,145 h. None of the above. 5 11. (1 point) On July 13 of the current year, SubZero Company sold materials to a customer for $13,500 with credit terms 2/10, n/30. SubZero uses the net method of accounting for cash discounts. Prepare the entry SubZero would make on July 27, assuming the correct payment was received on that date. The entry would include: a. A credit to interest revenue for $270 b. A debit to cash for $13,230 c. A credit to accounts receivable for $13,500 d. A debit to allowance for sales discounts for $270 e. A credit to discount revenue for $270 f. A debit to cash for $13,770 g. A credit to sales discounts for $270 h. None of the above 12. (1 point) Alicia's friend presented her with an investment opportunity. If Alicia deposits an amount in the investment now, she will receive annual payments of $10,000 for 15 years, beginning 5 years from today. What is the maximum Alicia should deposit in the investment if she requires a 6% return? Round all calculations to the nearest dollar. a. $72,576. b. $81,546. c. $102,950. d. $97,122. e. $66,103. f. $76,930. g. $112,089. h. None of the above. 13. (1 point) Flimflam Corp had sales to customers of $475,000 during 2015. The company has consistently experienced a 35% gross profit percentage and estimates that 5% of all sales will be returned. During 2015, customers returned merchandise for credit of $18,000 to their accounts. The balance in the allowance for sales returns account at the beginning of 2015 was $24,000. What is the balance in the allowance for sales returns account at the end of 2015? Round all calculations to the nearest dollar. a. $47,750 b. $29,750. c. $6,000. d. $21,438. e. $23,750. f. $18,250. g. $23,450. h. None of the above. 6 14. (2 points) Stan Shunpike will make five annual deposits of $10,000 beginning 1/1/15 into a savings account. He will then make 10 annual deposits of $15,000 beginning 1/1/20 into the same account. How much will be in his account after his last deposit on 1/1/29 if he estimates he can earn 3%? Round all calculations to the nearest dollar. a. $225,050. b. $250,608. c. $258,308. d. $357,947. e. $230,208. f. $245,449. g. $243,308. h. None of the above 15. (1 point) Stowe Inc. acquired equipment from the manufacturer on 11/1/15 and gave a noninterest-bearing note in exchange. Stowe is obligated to pay $504,700 on 5/1/16 to satisfy the obligation in full. If Stowe accrued interest expense of $4,900 on the note in its 12/31/2015 financial statements, what is its imputed annual interest rate? Round to the nearest whole percent. a. 1% b. 3% c. 4% d. 5% e. 6% f. 8% g. 10% h. None of the above is correct. 16. (1 point) On January 1, 2015, Paul's Cauldron Company had a balance in the Allowance for Doubtful Accounts of $24,300. During 2015, the company wrote off $7,400 of accounts receivable and collected $1,500 on accounts previously written off. The balance in Accounts Receivable was $285,300 at January 1, 2015 and $320,800 at December 31, 2015. At December 31, 2015, Paul's estimates that 90% of accounts receivable will prove to be collectible. What is Bad Debt Expense for 2015? a. $13,680. b. $32,080. c. $28,530. d. $5,900. e. $18,400. f. $7,400. g. $3,550. h. None of the above. 7 Use the following information to answer the next two questions. On December 31, 2015, Cumulus Corporation sold an old machine to Stratus Inc. Cumulus accepted a $55,000 note payable and cash down payment of $10,000. The note payable is due December 31, 2019 with interest paid annually, beginning December 31, 2016, at a stated rate of 5%. The old machine had an original cost of $105,000 and a book value of $58,570. The market rate on similar notes is 6%. 17. (2 points) What is the gain or loss that Cumulus Corporation will record on December 31, 2015 on the sale of the equipment? Round all calculations to the nearest dollar. a. $6,430 gain. b. $3,570 loss. c. $4,524 gain. d. $5,476 loss. e. $16,664 gain. f. $6,664 gain. g. $4,500 gain. h. None of the above. 18. (2 points) What is the carrying value of the notes receivable for Cumulus Corporation on December 31, 2016 after recording the interest payment (rounded to the nearest dollar)? a. $52,658. b. $55,000. c. $53,094. d. $53,312. e. $53,189. f. $53,530. g. $49,909. h. None of the above 8 19. (1 point) Monacle Inc. factors $1,800,000 of its accounts receivables without recourse. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments and charges a finance fee of 3%. Monacle estimates the fair value of the last 10% of accounts receivable at $145,000. Record the journal entry for the transfer if the criteria for a sale are met. What is the debit to Receivable from Factor? a. $126,000. b. $54,000. c. $89,000. d. $35,000. e. $145,000. f. $91,000. g. $180,000. h. None of the above 20. (1 point) During 2015, Scribb Company's customers returned merchandise for a credit of $17,750 to their accounts. Sales and cash collections from customers during the year were $425,000 and $390,000, respectively. Scribb Company began 2015 with a credit balance of $35,000 in the allowance for sales returns account. If the ending balance in the allowance for sales returns is $38,500, what percentage of sales is expected to be returned? Round our answer to the nearest whole percent. a. 1% b. 8% c. 9%. d. 7%. e. 5%. f. 4%. g. 3% h. None of the above. 9