ACC510 – Final Exam – Copy of 10 PDC – Week 15

On September 30 the Cash account of Value Company had a normal balance of $6400. During September the account was debited for a total of $13600 and credited for a total of $12900. What was the balance in the Cash account at the beginning of September?
A $7100 debit balance.
A $0 balance.
A $5700 debit balance.
A $5700 credit balance.
A $7100 credit balance.
On April 30 Holden Company had an Accounts Receivable balance of $18900. During the month of May total credits to Accounts Receivable were $52900 from customer payments. The May 31 Accounts Receivable balance was $13900. What was the amount of credit sales during May?
$5000.
$57900.
$32800.
$52900.
$47900.
A $140 credit to Office Equipment was credited to Fees Earned by mistake. By what amounts are the accounts under- or overstated as a result of this error?
Office Equipment overstated $280; Fees Earned understated $140.
Office Equipment overstated $140; Fees Earned overstated $140.
Office Equipment understated $280; Fees Earned overstated $140.
Office Equipment understated $140; Fees Earned overstated $140.
Office Equipment overstated $140; Fees Earned understated $140
On June 30 of the current calendar year Apricot Co. paid $8900 cash for management services to be performed over a two-year period. Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31 for Apricot would include:
A debit to an expense for $6675.
A debit to a prepaid expense for $6675.
A debit to an expense for $2225.
A debit to a prepaid expense for $2225.
A credit to a liability for $2225.
Prior to recording adjusting entries the Office Supplies account had a $341 debit balance. A physical count of the supplies showed $123 of unused supplies available. The required adjusting entry is:
Debit Office Supplies $123 and credit Office Supplies Expense $123.
Debit Office Supplies Expense $123 and credit Office Supplies $123.
Debit Office Supplies Expense $218 and credit Office Supplies $218.
Debit Office Supplies $218 and credit Office Supplies Expense $218.
Debit Office Supplies $123 and credit Supplies Expense $218.
On January 1 a company purchased a five-year insurance policy for $2250 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account and the company records adjustments only at year-end the adjusting entry at the end of the first year is:
Debit Prepaid Insurance $2250; credit Cash $2250.
Debit Prepaid Insurance $1800; credit Insurance Expense $1800.
Debit Prepaid Insurance $450; credit Insurance Expense $450.
Debit Insurance Expense $450; credit Prepaid Insurance $450.
Debit Insurance Expense $1800; credit Prepaid Insurance $1800.
On April 30 a three-year insurance policy was purchased for $22500 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company’s income statement for the year ended December 31?
$625.
$5000.
$7500.
$17500.
$22500.
The balance in the prepaid insurance account before adjustment at the end of the year is $6400 which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is:
Debit Insurance Expense $3200; credit Prepaid Insurance $3200.
Debit Prepaid Insurance $3200; credit Insurance Expense $3200.
Debit Insurance Expense $1600; credit Prepaid Insurance $1600.
Debit Prepaid Insurance $1600; credit Insurance Expense $1600.
Debit Cash $6400; Credit Prepaid Insurance $6400.
On October 1 Haslip Company rented warehouse space to a tenant for $3100 per month. The tenant paid five months’ rent in advance on that date. The payment was recorded to the Unearned Rent account. The company’s annual accounting period ends on December 31. The adjusting entry needed on December 31 is:
Debit Rent Receivable $15500; credit Rent Earned $15500.
Debit Rent Receivable $9300; credit Rent Earned $9300.
Debit Unearned Rent $9300; credit Rent Earned $9300.
Debit Unearned Rent $6200; credit Rent Earned $6200.
Debit Unearned Rent $15500; credit Rent Earned $15500.
Alex Company has 10 employees who earn a total of $1800 in salaries each working day. They are paid on Monday for the five-day workweek ending on the previous Friday. Assume that year ended December 31 is a Wednesday and all employees will be paid salaries for five full days on the following Monday. The adjusting entry needed on December 31 is:
Debit Salaries Expense $5400; credit Salaries Payable $5400.
Debit Salaries Expense $3600; credit Salaries Payable $3600.
Debit Salaries Expense $9000; credit Salaries Payable $9000.
Debit Salaries Payable $5400; credit Salaries Expense $5400.
Debit Salaries Expense $5400; credit Cash $5400.
The Unadjusted Trial Balance columns of a company’s work sheet shows a balance in the Office Supplies account as $910. The Adjustments columns show that $505 of these supplies were used during the period. The amount shown as Office Supplies in the Balance Sheet columns of the work sheet is:
$405 debit.
$405 credit.
$505 debit.
$910 debit.
$910 credit
A company’s ledger accounts and their end-of-period balances before closing entries are posted are shown below. What amount will be posted to Tricia DeBarre Capital in the process of closing the Income Summary account? (Assume all accounts have normal balances.)
Tricia De Barre Capital $ 6500
Tricia De Barre Withdrawals 11100
Revenue 36500
Rent expense 5100
Salaries expense 8700
Insurance expense 1070
Depr. Expense-equipment 650
Accum depr.-equipment 1950
$20980 debit.
$9880 credit.
$20980 credit.
$22930 credit.
$27480 credit.
Use the information in the adjusted trial balance presented below to calculate the current ratio for Jones Company:
Account Title Dr. Cr.
Cash 26400
Accounts receivable 17700
Prepaid insurance 8300
Equipment 117000
Accumulated Depreciation – Equipment 58500
Land 112000
Accounts payable 20400
Interest payable 4100
Unearned revenue 6700
Long-term notes payable 23000
J. Jones Capital 168700
________________________________________ ________________________________________
Totals 281400 281400
________________________________________________________________________________ ________________________________________________________________________________
1.68.
.60.
3.55.
1.58.
1.41.
Using the following year-end information for Breanna Boutique calculate the current ratio and acid-test ratio for the Boutique (Round your answer to 2 decimal places):
Cash $ 51400
Short-term investments 12600
Accounts receivable 52200
Inventory 322000
Prepaid expenses 16300
Accounts payable 109500
Other current payables 28000
1.7 and 0.95
1.79 and 1.33
2.54 and 1.33
3.31 and 0.85
None of these
Benson Company had cash sales of $99675 credit sales of $88850 sales returns and allowances of $3500 and sales discounts of $5275. Benson’s net sales for this period equal:
$188525.
$179750.
$185025.
$99675.
$183250.
A company has inventory of 18 units at a cost of $22 each on June 1. On June 3 it purchased 32 units at $24 each. 22 units are sold on June 5. Using the FIFO periodic inventory method what is the cost of the 22 units that were sold?
$506.
$516.
$492.
$496.
$484.
A company that has operated with a 30% average gross profit ratio for a number of years had $101000 in sales during the first quarter of this year. If it began the quarter with $18100 of inventory at cost and purchased $72100 of inventory during the quarter its estimated ending inventory by the gross profit method is:
$18100.
$21210.
$27300.
$30300.
$19500.
Jackson Company has sales of $313000 and cost of goods available for sale of $271300. If the gross profit ratio is typically 30% the estimated cost of the ending inventory under the gross profit method would be:
$52200
$177400
$41700
$93900
Impossible to determine from the information provided.
If sales for the period were $313000 and the company’s typical gross profit ratio is 30% gross profit would be approximately $93900. That means that cost of goods sold must have been $219100. Subtracting cost of goods sold of $219100 from the $271300 of cost of goods available for sale yields ending inventory of $52200.
On July 24 of the current year The Georgia Peach Company experienced a natural disaster that destroyed the company’s entire inventory. At the beginning of July the company reported beginning inventory of $227750. Inventory purchased during July (until the date of the disaster) was $198800. Sales for the month of July through July 24 were $643500. Assuming the company’s typical gross profit ratio is 50% estimate the amount of inventory destroyed in the natural disaster.
$104800
$321750
$216950
$213275
$158288
On July 24 of the current year The Georgia Peach Company experienced a natural disaster that destroyed the company’s entire inventory. At the beginning of July the company reported beginning inventory of $227750. Inventory purchased during July (until the date of the disaster) was $198800. Sales for the month of July through July 24 were $643500. Assuming the company’s typical gross profit ratio is 50% estimate the amount of inventory destroyed in the natural disaster.
$104800
$321750
$216950
$213275
$158288
The following information is available for Holland Company at December 31:
Money market fund balance $ 2840
Certificate of deposit maturing June 30 of next year $ 15500
Postdated checks from customers $ 1600
Cash in bank account $ 22931
NSF checks from customers returned by bank $ 700
Cash in petty cash fund $ 250
Inventory of postage stamps $ 23
U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year
$ 10500
Based on this information Holland Company should report Cash and Cash Equivalents on December 31 of:
$38821
$36521
$41544
$37421
$52021
At the end of the day the cash register’s record shows $1252 but the count of cash in the cash register is $1246. The correct entry to record the cash sales is
Debit Cash $1246; debit Cash Over and Short $6; credit Sales $1252.
Debit Cash Over and Short $6 credit Sales $6.
Debit Cash $1246; Credit Sales $1246.
Debit Cash $1252; credit Sales $1252.
Debit Cash $1252; credit Sales $1246 credit Cash Over and Short $6.
Martha Company has an established petty cash fund in the amount of $500. The fund was last reimbursed on November 30. At the end of December the fund contained the following petty cash receipts:
December 4 Freight charge for merchandise purchased $ 53
December 7 Freight charge for delivery to customer $ 77
December 12 Purchase of office supplies $ 42
December 18 Donation to charitable organization $ 61
If in addition to these receipts the petty cash fund contains $257.25 of cash the journal entry to reimburse the fund on December 31 will include:
A credit to Office Supplies of $77.
A debit to Transportation-In of $95.
A credit to Cash Over and Short of $9.75.
A debit to Transportation-Out of $95.
A debit to Cash Over and Short of $9.75.
A company had net sales of $630000 total sales of $780000 and an average accounts receivable of $76500. Its accounts receivable turnover equals (Round your final answer to two decimal places):
0.81
10.20
8.24
0.10
0.12
A company uses the percent of sales method to determine its bad debts expense. At the end of the current year the company’s unadjusted trial balance reported the following selected amounts:
Accounts receivable $ 359000 debit
Allowance for uncollectible accounts 540 credit
Net sales 804000 credit
All sales are made on credit. Based on past experience the company estimates 0.6% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
Debit Bad Debts Expense $5364; credit Allowance for Doubtful Accounts $5364.
Debit Bad Debts Expense $4824; credit Allowance for Doubtful Accounts $4824.
Debit Bad Debts Expense $2694; credit Allowance for Doubtful Accounts $2694.
Debit Bad Debts Expense $2154; credit Allowance for Doubtful Accounts $2154.
Debit Bad Debts Expense $4284; credit Allowance for Doubtful Accounts $4284.
The amount due on the maturity date of a $6400 45-day 9% note receivable is (Use 360 days a year. Do not round intermediate calculations):
$6328.
$6472.
$6976.
$5824.
$6400.
Teller purchased merchandise from TechCom on October 17 of the current year and TechCom accepted Teller’s $11700 90-day 8% note. What entry should TechCom make on December 31 to record the accrued interest on the note? (Use 360 days a year. Do not round intermediate calculations.)
Debit Cash $234; credit Interest Revenue $195; credit Interest Receivable $39.
Debit Cash $39; credit Notes Receivable $39.
Debit Cash $195; credit Notes Receivable $195.
Debit Interest Receivable $39; credit Interest Revenue $39.
Debit Interest Receivable $195; credit Interest Revenue $195.
MixRecording Studios purchased $8400 in electronic components from TechCom. MixRecording Studios signed a 120-day 10% promissory note for $8400. If the note is dishonored what is the amount due on the MixRecording Studios? (Use 360 days a year. Do not round intermediate calculations.)
$280
$8680
$8730
$8400
$8650
Hankco accepts all major bank credit cards including Omni Bank’s which assesses a 2% charge on sales for using its card. On June 28 Hankco had $3700 in Omni Card credit sales. What entry should Hankco make on June 28 to record the deposit?
Debit Cash $3700; credit Sales $3700.
Debit Cash $3626; debit Credit Card Expense $74; credit Sales $3700.
Debit Accounts Receivable $3626; debit Credit Card Expense $74; credit Sales $3700.
Debit Accounts Receivable $3700; credit Sales $3700.
Debit Cash $3774; credit Credit Card Expense $74; credit Sales $3700.
On November 19 Hayes Company receives a $20400 60-day 5% note from a customer as payment on his account. What adjusting entry should be made on the December 31 year-end? (Use 360 days a year. Do not round intermediate calculations.)
Debit Interest Revenue $170; credit Interest Receivable $170.
Debit Interest Receivable $119; credit Interest Revenue $119.
Debit Interest Receivable $170; credit Interest Revenue $170.
Debit Interest Revenue $119; credit Interest Receivable $119.
Debit Interest Receivable $51; credit Interest Revenue $51.
Thomas Enterprises purchased a depreciable asset on October 1 Year 1 at a cost of $160000. The asset is expected to have a salvage value of $16500 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method the asset’s book value on December 31 Year 3 will be (Do not round intermediate calculations):
$51840
$31320
$34560
$144000
$46980
Lomax Enterprises purchased a depreciable asset for $23000 on March 1 Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset’s salvage value is $2200 what will be the amount of accumulated depreciation on this asset on December 31 Year 4? (Do not round intermediate calculations. Round your final answer to two decimal places.)
$5200.00
$20800.00
$19933.33
$17333.33
$4333.33
The following information is available on a depreciable asset owned by First Bank & Trust:
Purchase date October 1 Year 1
Purchase price $80500
Salvage value $10300
Useful life 9 years
Depreciation method straight-line
The asset’s book value is $64900 on October 1 Year 3. On that date management determines that the asset’s salvage value should be $5300 rather than the original estimate of $10300. Based on this information the amount of depreciation expense the company should recognize during the last three months of Year 3 would be (Do not round intermediate calculations. Round your final answer to two decimal places):
$1760.71
$2061.61
$2128.57
$2418.75
$2317.86
Marble Company purchased a machine costing $131000 terms 3/10 n/30. The machine was shipped FOB shipping point and freight charges were $3100. The machine requires special mounting and wiring connections costing $11100. When installing the machine $2400 in damages occurred. Materials costing $2600 are used in testing and adjusting the machine to produce a satisfactory product. Compute the cost recorded for this machine assuming Marble paid within the discount period.
$146270.
$150200.
$141470.
$140770.
$143870.
A company had fixed interest expense of $7800 its income before interest expense and any income taxes is $19200 and its net income is $9600. The company’s times interest earned ratio equals:
0.81.
2.46.
2.00.
0.41.
1.23.
On December 1 Martin Company signed a 90-day 6% note payable with a face value of $9600. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)
$96
$0
$576
$48
$144
An employee earned $43800 during the year working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee’s annual FICA taxes amount is:
$635.10.
$2715.60.
Zero since the employee’s pay exceeds the FICA limit.
$3350.70.
$6701.40.
An employee earns $6150 per month working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.8% and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7000 of an employee’s pay. The employee has $208 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $176 and contributes $88 to a retirement plan each month. What is the amount of net pay for the employee for the month of January? (Round your intermediate calculations and final answer to two decimal places.)
$4826.22
$4875.42
$5158.32
$5207.52
$5296.70
An employee earns $5750 per month working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is .8% and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7000 of an employee’s pay. The employee has $192 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $160 and contributes $80 to a retirement plan each month. What is the amount the employer should record as payroll taxes expense for the employee for the month of January? (Round your intermediate calculations and final answer to two decimal places.)
$439.88
$750.38
$485.88
$988.38
$796.38
During August Arena Company sells $351000 in product that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a balance of $11300 before adjustment. Customers returned product for warranty repairs during the month that used $7900 in parts for repairs. The entry to record the estimated warranty expense for the month is:
Debit Estimated Warranty Liability $17550; credit Warranty Expense $17550.
Debit Warranty Expense $14150; credit Estimated Warranty Liability $14150.
Debit Estimated Warranty Liability $7900; credit Warranty Expense $7900.
Debit Warranty Expense $17550; credit Estimated Warranty Liability $17550.
Debit Warranty Expense $6250; credit Estimated Warranty Liability $6250
Web Services is organized as a limited partnership with David White as one of its partners. David’s capital account began the year with a balance of $45000. During the year David’s share of the partnership income was $7500 and David received $4000 in distributions from the partnership. What is David’s partner return on equity?
15.5%
8.9%
16.7%
16.0%
8.6%
Trump and Hawthorne have decided to form a partnership. Trump is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership. The following information regarding the asset to be contributed by Trump is available:
Historical cost of the asset $88000
Accumulated depreciation on the asset $46000
Note payable secured by the asset* $31000
Agreed-upon market value of the asset $51000
*will be assumed by the partnership
Based on this information Trump’s beginning equity balance in the partnership will be:
$88000
$42000
$20000
$51000
$31000
The partnership agreement for Smith Wesson & Davis a general partnership provided that profits be shared between the partners in the ratio of their financial contributions to the partnership. Smith contributed $130000 Wesson contributed $78000 and Davis contributed $26000. In the partnership’s first year of operation it incurred a loss of $238500. What amount of the partnership’s loss should be absorbed by Smith? (Do not round your intermediate calculations and round your final answer to the nearest whole dollar amount.)
$59625