Reference no: EM13757936
1) Viva Inc. had bought machine X for $15,500 two years ago. The machine had no residual value and had an estimated useful life of 10 years. If the company uses the straight line depreciation method, calculate the current book value of the machine.
2) Henry Tax Planning Service bought production equipment for $9,600 on January 1, 2015. It has an estimated useful life of 5 years and zero residual value. Henry uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2015, the book value of this equipment shown on Henry's balance sheet will be:
3) Real Weight Losers, a diet magazine, collected $480,000 in subscription revenue in May. Each subscriber will receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. Provide the adjusting entry needed on June Assume the magazine initially records a liability for the subscription revenue.
4) On July 1, Alpha Company prepaid rent for a small equipment storage area. They paid $20,000 to rent the area for the period of July 1 through the end of the year. Provide the journal entry needed on July 1 when the payment is made. Assume the prepaid expense is initially recorded as an asset.
5) Luminous Electrical Repair performed services costing $8,000 on January 24 and invoiced the customer. Luminous received the $8,000 on January 31. Provide the journal entry on January 31 when the cash was received.
6) On January 1, 2015, the Accounts Receivable of Linda Company had a debit balance of $20,000. During January, the company provided services for $600,000 on account. The company collected $250,000 from its customers on account in January. What was the ending balance in the Accounts Receivable account at the end of January?
7) A company received $5,000 for 100 one-year subscriptions on July 1. The journal entry to record this is
8) On July 1, Alpha Company paid rent of $15,000 for a small equipment storage area for the period of July 1 till December 31. Provide the adjusting journal entry on July 31. Assume the prepaid expense is initially recorded as an asset.
9) ABC Company signed a one-year $48,000 note payable at 8% interest on May 1, 2014. If ABC only adjusts their accounts once a year at year-end, how much interest expense was accrued on December 31, 2014?
10) The balances of select accounts of Sandra Company as at December 31, 2015 are given below:
Debit Credit
Building $120,000
Cash 5,000
Office Supplies 700
Furniture 3,000
Prepaid Insurance 450
Accumulated Depreciation-Furniture $1,000
Land 35,000
Accumulated Depreciation-Building 4,800
Accounts Receivable 2,500
The insurance has been prepaid for the next half year. What are the total current assets that would be shown on the balance sheet?
11) Education for All sells tickets in advance for their weekly productions and records the proceeds as Unearned Revenue. At the end of each month, Education for All makes an adjusting entry to account for the tickets used during the month (ticket revenue.) On March 1, the Unearned Revenue account had a credit balance of $4,000. During March, they sold 300 tickets at $20 each and 250 tickets were used during the month. What is the balance in Unearned Revenue at the end of March?
12) Golden Oak Antique Shop had the following account balances at the end of the current accounting period:
Beginning inventory $73,000
Net purchases 58,250
Net sales revenue 87,500
The normal gross profit for the company is $45%. What was the company's estimated cost of goods sold for the accounting period?
13) Samson Company had the following balances and transactions during 2014:
Beginning Merchandise Inventory 10 units at $95
March 10 Sold 8 units
June 10 Purchased 20 units at $100
October 30 Sold 15 units
What is the amount of the company's Merchandise Inventory, as disclosed in the December 31, 2014 balance sheet as per the periodic first-in, first-out (FIFO) costing method?
14) Collins Computers stored its inventory in a warehouse which suffered a fire in late November, 2014. Their sales office was at a different location. In order to file a claim with the insurance company, the owners ask you to estimate the inventory in the warehouse. The following information is available:
Beginning inventory for November $375,500
Purchases through November 30 470,250
Net sales revenue through November 31 793,000
The company's gross profit has historically been 40% of Net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.
15) The Allowance for Bad Debts account has a credit balance of $2,000. The company's management estimates that 2% of net credit sales will be uncollectible for the year 2015. Net credit sales for the year amounted to $250,000. What will be the amount of Bad Debts
16) Art Parrish, the sole employee of Parrish Sales, has gross salary for March of $4,000. The entire amount is under the OASDI limit of $110,100, and thus subject to FICA. He is also subject to federal income tax at a rate of 18%. Art has a deduction of $320 for health insurance and $80 for United Way.
Provide the journal entry to record salaries expense and payroll withholdings. (Assume a FICA-OASDI Tax of 4.2% and FICA-Medicare Tax of 1.45%.)
17) A $35,000, two-month, 7% note payable was issued on December 1, 2015. What is the amount of interest expense recorded in the year 2016?
18) The following information is needed to reconcile the cash balance for Fire Steel Inc.
• A deposit of $5,800 is in transit.
• Outstanding checks total $1,500.
• The book balance is $6,800 at February 28, 2013.
• The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent.
• The bank balance at February 28, 2013 was $18,000.
• A deposit of $400 was credited by the bank for $4,000.
• A customer's check for $3,700 was returned for nonsufficient funds.
• The bank service charge is $60.
Based on this information, prepare a bank reconciliation for Fire Steel Inc. as of February 28, 2013.