• Which intangible asset is recorded only when an acquiring company purchases another company?
• Goodwill
• Patent
• Copyright
• Franchise
• Which accounting principal dictates whether the cost of a repair should be expensed?
• Cost principle
• Matching principle
• Conservatism
• A company replaced an engine on a vehicle and debited the amount to repairs expense, rather than debiting the fixed asset account. Which of the following would occur because of this error?

A. The asset vehicle would be overstated.

• B. The net income would be overstated.

C. The asset vehicle would be understated.

• On January 1, 2010, Bear Corporation purchased a piece of equipment for $244,787. At that time, they estimated that the useful life of the equipment was 6 years and the salvage value was $22,708. Bear Corporation uses straight-line depreciation. What is the net book value of the equipment at December 31, 2012 after all AJEs? (round final answer to the nearest dollar)

• A company started with A/R of $51,993 and an allowance for uncollectible accounts of $206,183. During the year, they had credit sales of $823,518, cash sales of $4,622 and wrote-off accounts receivable of $4,773. At year end, the company had A/R of $53,015. What were cash collections from customers on account? (hint, try to draw a T-account)

• Which of the following best describes the allowance for doubtful accounts?

:	Contra-Asset account Asset account Liability account

• Nick Company has cash of $33,000; net accounts receivable of $41,000; short-term investments of $15,000 and inventory of $25,000. It also has $30,000 in current liabilities and $50,000 in long-term liabilities. The quick ratio for Nick Company is: ______.

• On January 1, 2015, Company A sold 5,000 ? $500 bonds to finance their purchase of a new factory. These are term bonds with a stated rate of 9% and a maturity date of December 31, 2025, that pay out semiannually. Assume that the market rate is 9%
• Prepare the JE for the issuance of the bond.
• Prepare the JE for the first semiannual interest payment
• Prepare the JE to account for the principal repayment when we reach the maturity date.
• Beginning gross accounts receivable balance 200,000
• Beginning ADA balance (credit) 5,000
• Credit sales during the period 600,000
• Collections of Accounts Receivable 300,000
• Historical uncollectible rate on credit sales 3%
• Using percentage of sales method, show the journal entry of making bad debt expense.

• Using aging method, the company estimate that 19,000 of accounts receivable will default (not pay). Show the adjusting entry of making bad debt expense.
• What are the net A/R values under two different methods?

EXAM 3 PRACTIVE EXAM Jiacheng Yuan MON 7:00 - 7:50 BA 253 TUE 4:00 - 4:50 HAV-F-101 WED 7:00 - 7:50 BA 253 1. Which intangible asset is recorded only when an acquiring company purchases another company? A. Goodwill B. Patent C. Copyright D. Franchise 2. Which accounting principal dictates whether the cost of a repair should be expensed? A. Cost principle B. Matching principle C. Conservatism 3. A company replaced an engine on a vehicle and debited the amount to repairs expense, rather than debiting the fixed asset account. Which of the following would occur because of this error? A. The asset vehicle would be overstated. B. The net income would be overstated. C. The asset vehicle would be understated. 4. On January 1, 2010, Bear Corporation purchased a piece of equipment for $244,787. At that time, they estimated that the useful life of the equipment was 6 years and the salvage value was $22,708. Bear Corporation uses straight-line depreciation. What is the net book value of the equipment at December 31, 2012 after all AJEs? (round final answer to the nearest dollar) 5. A company started with A/R of $51,993 and an allowance for uncollectible accounts of $206,183. During the year, they had credit sales of $823,518, cash sales of $4,622 and wrote-off accounts receivable of $4,773. At year end, the company had A/R of $53,015. What were cash collections from customers on account? (hint, try to draw a T-account) 6. Which of the following best describes the allowance for doubtful accounts? : A. Contra-Asset account B. Asset account C. Liability account 7. Nick Company has cash of $33,000; net accounts receivable of $41,000; short-term investments of $15,000 and inventory of $25,000. It also has $30,000 in current liabilities and $50,000 in long-term liabilities. The quick ratio for Nick Company is: ______. 8. On January 1, 2015, Company A sold 5,000 - $500 bonds to finance their purchase of a new factory. These are term bonds with a stated rate of 9% and a maturity date of December 31, 2025, that pay out semiannually. Assume that the market rate is 9% a. Prepare the JE for the issuance of the bond. b. Prepare the JE for the first semiannual interest payment c. Prepare the JE to account for the principal repayment when we reach the maturity date. 9. Beginning gross accounts receivable balance 200,000 Beginning ADA balance (credit) 5,000 Credit sales during the period Collections of Accounts Receivable Historical uncollectible rate on credit sales 600,000 300,000 3% a. Using percentage of sales method, show the journal entry of making bad debt expense. b. Using aging method, the company estimate that 19,000 of accounts receivable will default (not pay). Show the adjusting entry of making bad debt expense. c. What are the net A/R values under two different methods