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ACC 221 Quiz III: Ch. 7-9 (2014)

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Question;Quiz InstructionsQuestion 14 ptsThe Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balancehas been determined to likely be uncollecttible. The entry to write off this account would be which of the following?:debit Bad Debt Expense, credit Accounts Receivabledebit Sales Returns and Allowance, credit Accounts Receivabledebit Bad Debt Expense, credit Allowance for Doubtful Accountsdebit Allowance for Doubtful Accounts, credit Accounts ReceivableQuestion 24 ptsAfter the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $460,000 and Allowance for Doubtful Accounts hasa balance of $30,000. What is the net realizable value of the accounts receivable?$30,000$460,000$430,000$490,000Question 34 ptsWhat is the type of account and normal balance of Allowance for Doubtful Accounts?Asset, debitContra asset, debitContra asset, creditAsset, creditQuestion 44 ptsTanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An agingof accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if theAllowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?Bad Debt Expense15,000Allowance for Doubtful Accounts15,000Bad Debt Expense17,000Allowance for Doubtful Accounts17,000https://nmsu.instructure.com/courses/885327/quizzes/1010469/take10/28/2014Quiz: Quiz III: Ch. 7-9Page 2 of 7Bad Debt Expense20,000Allowance for Doubtful Accounts20,000Bad Debt Expense13,000Allowance for Doubtful Accounts13,000Question 54 ptsAn aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $2,000. If Allowance for Doubtful Accounts has a $200 creditbalance, the adjustment to record the bad debt expense for the period will require acredit to Allowance for Doubtful Accounts for $3,000.debit to Bad Debt Expense for $1,800.debit to Bad Debt Expense for $2,000.debit to Bad Debt Expense for $2,200.Question 64 ptsAllowance for Doubtful Accounts has a debit balance of $500 at the end of the year (before adjustment), and bad debt expense is estimated at 4% of net creditsales. If net credit sales are $600,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is$24,000cannot be determined$24,500$23,500Question 74 ptsA 60-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is$9,800$10,200$10,000$11,200Question 84 ptsA $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event isdebit Notes Receivable, $6,060, credit Accounts Receivable, $6,060debit Accounts Receivable, $6,120, credit Notes Receivable, $6,000, Credit Interest Revenue, $120debit Accounts Receivable, $6,120, credit Notes Receivable, $6,000, Credit Interest Receivable, $120debit Cash, $6,120, credit Notes Receivable, $6,120https://nmsu.instructure.com/courses/885327/quizzes/1010469/take10/28/2014Quiz: Quiz III: Ch. 7-9Page 3 of 7Question 94 ptsPaper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts receivable. What entry will PaperCompany make upon receiving the note?Notes ReceivableAccounts Receivable?Dame Company6,0906,090Notes Receivable6,090Accounts Receivable?Dame CompanyInterest Revenue6,00090Notes ReceivableAccounts Receivable?Dame Company6,0006,000Notes ReceivableInterest RevenueAccounts Receivable?Dame CompanyInterest Receivable6,000906,00090Question 104 ptsWhich of the following should be included in the acquisition cost of a piece of equipment?installation costsall are correcttesting costs prior to placing the equipment into productiontransportation costsQuestion 114 ptsWhich of the following is included in the cost of constructing a building?insurance costs during constructioncost of removing the demolished building existing on the land when it was purchasedcost of paving parking lotcost of repairing vandalism damage during constructionQuestion 124 ptsA new machine with a purchase price of $94,000, with transportation costs of $8,000, installation costs of $5,000, and special acquisition fees of $2,000, wouldhave a cost basis of$102,000$ 99,000$107,000$109,000Question 13https://nmsu.instructure.com/courses/885327/quizzes/1010469/take4 pts10/28/2014Quiz: Quiz III: Ch. 7-9Page 4 of 7Which of the following below is an example of a capital expenditure?tune-up for a company truckreplacing an engine in a company carcleaning the carpet in the front roomreplacing all burned-out light bulbs in the factoryQuestion 144 ptsA machine with a cost of $80,000 has an estimated residual value of $5,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-ofproduction method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?$26,667$15,000$5,000$25,000Question 154 ptsEquipment with a cost of $130,000 has an estimated residual value of $10,000 and an estimated life of 5 years or 12,000 hours. It is to be depreciated by thestraight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours?$32,500$33,000$24,000$35,750Question 164 ptsA machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation forthe second full year, using the double declining-balance method?$16,667$18,750$17,500$37,500Question 174 ptsOn December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of$185,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $55,000. What is theamount of the gain or loss on this transaction?Gain of $55,000https://nmsu.instructure.com/courses/885327/quizzes/1010469/take10/28/2014Quiz: Quiz III: Ch. 7-9Page 5 of 7No gain or lossGain of $25,000Cannot be determinedQuestion 184 ptsWhich intangible assets are amortized over their useful life?all of the abovepatentsgoodwilltrademarksQuestion 194 ptsThe exclusive right to use a certain name or symbol is called afranchisetrademarkcopyrightpatentQuestion 204 ptsWhich one of the following below is not an element of internal control?information and communicationmonitoringbehavior analysisrisk assessmentQuestion 214 ptsWhen a firm uses internal auditors, it is adhering to which one of the following internal control elements?separating responsibilities for related operationsmonitoringproofs and security measuresrisk assessmentQuestion 22https://nmsu.instructure.com/courses/885327/quizzes/1010469/take4 pts10/28/2014Quiz: Quiz III: Ch. 7-9Page 6 of 7A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. This item would be included on the bank reconciliation as a(n)deduction to the balance per bank statementaddition to the balance per bank statementaddition to the balance per company's recordsdeduction to the balance per company's recordsQuestion 234 ptsAccompanying the bank statement was a debit memo for bank service charges. What entry is required in the company's accounts?debit Miscellaneous Administrative Expense, credit Cashdebit Cash, credit Other Incomedebit Accounts Payable, credit Cashdebit Cash, credit Accounts PayableQuestion 244 ptsThe amount of the outstanding checks is included on the bank reconciliation as a(n)addition to the balance per company's recordsdeduction from the balance per bank statementaddition to the balance per bank statementdeduction from the balance per company's recordsQuestion 254 ptsMeredith Company gathered the following reconciling information in preparing its May bank reconciliation:Cash balance per books, 5/31$2,500Deposits in transit150Notes receivable and interest collected by bank650Bank charge for check printingOutstanding checksNSF check401,800140The adjusted cash balance per books on May 31 is$3,120$1,320$5,280$2,970

 

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