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The following information pertains to Crane Video Company...Ques1-15

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Question;Question 1;The following information pertains to Crane Video Company.;1.;Cash balance per bank, July 31, $7,893.;2.;July bank service charge not recorded by the depositor $35.;3.;Cash balance per books, July 31, $7,914.;4.;Deposits in transit, July 31, $1,815.;5.;Bank collected $1,215 note for Crane in July, plus interest $43;less fee $27. The collection has not been recorded by Crane, and no interest;has been accrued.;6.;Outstanding checks, July 31, $598.;Prepare a bank reconciliation at July 31.(List items that increase cash balance first.)Journalize the adjusting entries at July 31 on the books of Crane;Video Company.(Credit account titles are automatically indented;when amount is entered. Do not indent manually.)Question 2;Information related to Mingenback Company for 2014 is summarized;below.;Total credit sales;$2,478,000;Accounts receivable at December 31;844,000;Bad debts written off;32,200;(a);What amount of bad debt expense will Mingenback Company report;if it uses the direct write-off method of accounting for bad debts?;(b);Assume that Mingenback Company estimates its bad debt expense to;be 3% of credit sales. What amount of bad debt expense will Mingenback;record if it has an Allowance for Doubtful Accounts credit balance of $4,400?;$;(c);Assume that Mingenback Company estimates its bad debt expense;based on 5% of accounts receivable. What amount of bad debt expense will;Mingenback record if it has an Allowance for Doubtful Accounts credit balance;of $3,200? $;(d);Assume that Mingenback Company estimates its bad debt expense;based on 5% of accounts receivable. What amount of bad debt expense will;Mingenback record if it has an Allowance for Doubtful Accounts debit balance;of $3,200? $;Question 3;On January 1, 2014, Evers Company purchased the following two;machines for use in its production process.;Machine A;The cash price of this machine was $47,600. Related expenditures;included: sales tax $2,500, shipping costs $130, insurance during shipping;$80, installation and testing costs $60, and $130 of oil and lubricants;to be used with the machinery during its first year of operations. Evers;estimates that the useful life of the machine is 5 years with a;$5,700 salvage value remaining at the end of that time period. Assume;that the straight-line method of depreciation is used.;Machine B;The recorded cost of this machine was $160,000. Evers estimates;that the useful life of the machine is 4 years with a;$8,900 salvage value remaining at the end of that time period.;Prepare the following for Machine A.(Round answers to 0 decimal places, e.g. $2,125. Credit account;titles are automatically indented when amount is entered. Do not indent;manually.);1.;The journal entry to record its purchase on January 1, 2014.;2.;The journal entry to record annual depreciation at December 31;2014.Calculate the amount of depreciation expense that Evers should;record for machine B each year of its useful life under the following;assumptions.(Round depreciation cost per unit to 2 decimal;places, e.g. 12.25. Round final answers to 0 decimal places, e.g. $2,125.);(1);Evers uses the straight-line method of depreciation.;(2);Evers uses the declining-balance method. The rate used is twice;the straight-line rate.;(3);Evers uses the units-of-activity method and estimates that the;useful life of the machine is 126,900 units. Actual usage is as follows;2014, 48,700 units, 2015, 37,100 units, 2016, 23,500 units;2017, 17,600 units.;="msonormal">;Question 4;If a check correctly written and paid by the bank for $427 is;incorrectly recorded on the company's books for $472, the appropriate treatment;on the bank reconciliation would be to;add $45 to the bank's balance.;add $45 to the book's balance.;deduct $427 from the book's balance.;deduct $45 from the bank's balance.;Warning;Question 5;Jukebox Company had checks outstanding totaling $10,800 on its;June bank reconciliation. In July, Jukebox Company issued checks totaling;$77,800. The July bank statement shows that $76,600 in checks cleared the bank;in July. A check from one of Jukebox Company's customers in the amount of;$1,000 was also returned marked "NSF." The amount of outstanding;checks on Jukebox Company's July bank reconciliation should be;$11,000.;$1,200.;$12,000.;$13,000.;Question 6;Each of the following items affect the cash balance per books except;NSF checks.;outstanding checks.;bank service charges.;notes collected by the;bank.;Question 7;A customer charges a treadmill at Annie's Sport Shop. The price;is $4,000 and the financing charge is 6% per annum if the bill is not paid in;30 days. The customer fails to pay the bill within 30 days and a finance;charge is added to the customer's account.;What is the amount of the finance charge?;$240;$80;$8;$20;Warning;Question 8;A customer charges a treadmill at Annie's Sport Shop. The price;is $4,000 and the financing charge is 9% per annum if the bill is not paid in;30 days. The customer fails to pay the bill within 30 days and a finance;charge is added to the customer's account.;The accounts affected by the journal entry made by Annie's Sport Shop to;record the finance charge are;Accounts Receivable;Interest Revenue;Accounts Receivable;Cash;Cash;Finance Receivable;Accounts Receivable;Interest Payable;Warning;Question 9;Syfy Company on July 15 sells merchandise on account to Eureka;Co. for $5,000, terms 2/10, n/30. On July 20 Eureka Co. returns merchandise;worth $2,000 to Syfy Company. On July 24 payment is received from Eureka Co.;for the balance due. What is the amount of cash received?;$3,000;$5,000;$2,940;$2,900;Question;10;An aging of a company's;accounts receivable indicates that $5,000 are estimated to be;uncollectible. If Allowance for Doubtful Accounts has a $900 credit;balance, the adjustment to record bad debts for the period will require a;debit to Allowance;for Doubtful Accounts for $4,100.;debit to Bad Debt;Expense for $4,100.;credit to Allowance;for Doubtful Accounts for $5,000.;debit to Bad Debt Expense for $5,000.;Question;11;The cost of a;purchased building includes all of the following except;closing costs.;real estate;broker's commission.;remodeling costs.;all;of these are included.;Question;12;A company purchased;land for $90,000 cash. Real estate brokers' commission was $5,000 and;$7,000 was spent for demolishing an old building on the land before;construction of a new building could start. Under the historical cost;principle, the cost of land would be recorded at;$102,000.;$107,000.;$90,000.;Warning;Question;13;Hull Company;acquires land for $86,000 cash. Additional costs are as follows;Removal of shed;$;300;Filling and grading;1,500;Salvage value of;lumber of shed;120;Broker commission;1,130;Paving of parking;lot;10,000;Closing costs;560;Hull will record;the acquisition cost of the land as;$89,610.;$89,370.;$96,000.;$87,690.;Warning;Question;14;All of the;following factors in computing depreciation are estimates except;residual value.;salvage value.;useful life.;cost.;Warning;Question;15;Angie?s Blooms;purchased a delivery van for $40,000. The company was given a $4,000;cash discount by the dealer, and paid $2,000 sales tax. Annual;insurance on the van is $1,000. As a result of the purchase, by how;much will Angie?s Blooms increase its van account?;$38,000;$36,000;$40,000;$39,000

 

Paper#37879 | Written in 18-Jul-2015

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