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Accounting Few Problem Questions

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Question;Question 1Brainiac Company purchased a delivery truck for $30,000 on January 1, 2011. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2011 and 12,000 in 2012.Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method. (Round cost per mile to 2 decimal places, e.g. 10.50. Use rounded amount for future calculations. Round final answers to 0 decimal places, e.g. 125.) 2011 2012Straight-line $ Units-of-Activity $ Double-declining Balance $ Assume that Brainiac uses the straight-line method. (1) Prepare the journal entry to record 2011 depreciation. (2) Show how the truck would be reported in the December 31, 2011, balance sheet. (Enter all amounts as positive amounts and subtract where necessary.)Account/Description Debit Credit $ Less: $ Question 2Don Walls's gross earnings for the week were $1,780, his federal income tax withholding was $301.63, and his FICA total was $135.73.What was Walls's net pay for the week? (Round answer to 2 decimal places, e.g. 10.50.)$ Journalize the entry for the recording of his pay in the general journal. (Note: Use Salaries Payable, not Cash.) (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2. Round answers to 2 decimal places, e.g. 10.50.)Account/Description Debit Credit Record the issuing of the check for Walls's pay in the general journal. (Round answers to 2 decimal places, e.g. 10.50.)Account/Description Debit Credit Question 3On January 1, Neuer Company issued $500,000, 10%, 10-year bonds at par. Interest is payable semiannually on July 1 and January 1.Prepare journal entries to record the following.The issuance of the bonds.Date Account/Description Debit CreditJan. 1 The payment of interest on July 1, assuming that interest was not accrued on June 30.Date Account/Description Debit CreditJuly 1 The accrual of interest on December 31.Date Account/Description Debit CreditDec. 31 Question 4On January 1, Flory Company issued $300,000, 8%, 5-year bonds at face value. Interest is payable semiannually on July 1 and January 1.Prepare journal entries to record the following events.The issuance of the bonds.Date Account/Description Debit CreditJan. 1 The payment of interest on July 1, assuming no previous accrual of interest.Date Account/Description Debit CreditJuly 1 The accrual of interest on December 31.Date Account/Description Debit CreditDec. 31 Question 5Leoni Co. receives $240,000 when it issues a $240,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2011. The terms provide for semiannual installment payments of $20,000 on June 30 and December 31.Prepare the journal entries to record the mortgage loan and the first two installment payments. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)Date Account/Description Debit Credit2011 Dec. 31 2012 June 30 2012 Dec. 31 Question 6Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2011, for $562,613. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize bond premium or discount.Prepare the journal entries to record the following. (Round answers to 0 decimal places, e.g. 125. Use rounded amounts for future computations.)The issuance of the bonds. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)Date Account/Description Debit CreditJan. 1 The payment of interest and the discount amortization on July 1, 2011, assuming that interest was not accrued on June 30. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)Date Account/Description Debit CreditJuly 1 Question 7Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note on December 31, 2010. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for semiannual installment payments, exclusive of real estate taxes and insurance, of $29,433. Payments are due June 30 and December 31.Complete the installment payments schedule for the first 2 years. (Round answers to 0 decimal places, e.g. 125. Use rounded amounts for future calculations.)SemiannualInterest Period Cash Payment Interest Expense Reductionof Principal Principal BalanceIssue Date $ Prepare the entries for (1) the loan and (2) the first two installment payments. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2. Round answer to 0 decimal places, e.g. 125.)Date Account/Description Debit Credit2010 Dec. 31 2011 June 30 Dec. 31 Show how the total mortgage liability should be reported on the balance sheet at December 31, 2011. (Round answer to 0 decimal places, e.g. 125.)Current liabilities 12/31/11 Long-term liabilities Question 8Elkins Company sold $2,500,000, 8%, 10-year bonds on July 1, 2011. The bonds were dated July 1, 2011, and pay interest July 1 and January 1. Elkins Company uses the straight-line method to amortize bond premium or discount. Assume no interest is accrued on June 30. Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2011, assuming that the bonds sold at 104. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)Date Account/Description Debit CreditJuly 1 Prepare journal entries as in the previous part of the question assuming that the bonds sold at 98. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)Date Account/Description Debit CreditJuly 1 Show balance sheet presentation for each bond issue at December 31, 2011. (Enter all amounts as positive amounts and subtract where necessary.)Premium Long-term Liabilities

 

Paper#42149 | Written in 18-Jul-2015

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