Reference no: EM13868649 , Length: Q 7 to 9
Q 1 and Q2 On July 1, 2014 Linked Up Inc. acquired a new machine at a cost of $15,000 with a residual value of $3,000. The estimated useful life is 5 years and 100,000 units. For the year ending June 30, 2015 the machine produced 15,000 units. For the
year ending June 30, 2016, the machine produced 10,000 units.
1. Using the three depreciation methods (straight line, units of production, and double decline balancing) calculate the depreciation for the year ending 6/30/15 and present each of the three journal entries in proper form.
A. Straight Line
B. Units of Production
C. Double Declining
2. On July 1, 2016 the machine is sold for $10,000. Complete the journal entry in proper form based on your calculations under each of the three depreciation methods (see item
1 in this problem). You will present three separate, independent journal entries.
A. Straight Line
B. Units of Production
C. Double Declining
Q3 Sale and Disposal of Assets - SEE EXCEL WORKSHEET United Beverage Company owns a delivery truck with an original
cost of $50,000 and an accumulated depreciation value of $20,000. The estimated residual value remains $4,000. Consider each of the independent situations below and present the required journal entry to record the sale or disposal of the truck, using proper
format.
A. Sold for $30,000
B. Sold for $26,000
C. Sold for $34,000
D. Is totaled in a collision with no scrap value and no insurance (no proceeds will be received)
Q4 Accounts Receivable and Uncollectible Accounts - SEE EXCEL WORKSHEET Logistics Incorporated
uses the direct write off method. Their customer, Software Sales, has declared bankruptcy with no assets to pay off creditors. Present the journal entry, in proper format to record the necessary adjustment for the $22,000 remaining in the Accounts Receivable
Subsidiary ledger from Software Sales.
Q5 Accounts Receivable and Uncollectible Accounts - SEE EXCEL WORKSHEET US Weekly uses the allowance method for accounts receivable uncollectible accounts. Carnival Cruise Company has closed its business, left no forwarding
address, and has not made any payments on account for over two years. Present the journal entry, in proper form, to write off the remaining accounts receivable of $34,000.
Q6 Accounts Receivable and Uncollectible Accounts - SEE EXCEL WORKSHEET Left Field Inc.
uses the allowance method for uncollectible accounts. A former customer, John Madden Sports, is seeking to return to good standing and begin doing business with the company again. As part of the agreement, on March 31, 2015, John Madden Sports paid Left Field
Inc. the $64,500 balance due (Left Field Inc. wrote this value off three years ago). Present the required journal entry or entries to record this transaction.
Q7 Management of Cash Functions and other issues of Internal Control - ESSAY You are president of
your local division, responsible for cash receipts and disbursements. The bank made a presentation to you and suggests your division use electronic processing for cash transactions. Accounts payable payments would be processed using the bank's system with
an interface into your accounting system to meet your needs. Your invoices would reference a post office box managed by the bank who would open all mail. The cash receipts (checks from the customers) would be retained and processed, with copies provided to
you electronically. All non cash receipt mail would be forwarded to you based on the advice of your legal counsel. Your paragraph should explain the pros and cons of this system, as it relates to cash receipts and cash disbursements. RESPONSE:
Q8 Petty Cash
- ESSAY The auditors arrived to check the petty cash balance in your office. The account has a balance of $85 and the receipts not yet presented for reimbursement total $62. The Petty Cash Fund was issued several years ago for $150. How would you explain the
current situation to the auditor? What might cause the balance to be off? RESPONSE: