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A company purchased a delivery van for $22,800 with a salvage value of $2,400 on September 1, Year 1. It has an estimated useful life of 6 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1? (Do not round intermediate calculations. Round your final answer to whole dollar amount.)
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Exercise 2-15A Pre paid items on financial statements
Life, Inc., experienced the following events in 2016, its first year of operation:
Required
Based on this information alone:
accounting period.
in 2017?
Exercise 2-19A Supplies, unearned revenue, and the financial statements model
Hart, Attorney at Law, experienced the following transactions in 2016, the first year of
operations:
next 12 months.
hand.
in accordance with Transaction 1.
Required
Show the effects of the events on the financial statements using a horizontal statements model
like the following one. In the Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. Use NA
to indicate accounts not affected by the event. The first event has been recorded as an example.
Event
Assets 5 Liabilities 1 Stk. Equity
No. Cash 1 Supplies 5 Accts. Pay 1 Unearned. Rev. 1 Ret. Earn. Rev. 2 Exp. 5 Net Inc. Cash Flow
Exercise 2-27A Effect of accounting events on the income statement and statement
of cash flows
Required
Explain how each of the following events or series of events and the related adjusting entry will
affect the amount of net income and the amount of cash flow from operating activities reported
on the year-end financial statements. Identify the direction of change (increase, decrease, or NA)
and the amount of the change. Organize your answers according to the following table. The first
event is recorded as an example. If an event does not have a related adjusting entry, record only
Cash Flows from
Net Income Operating Activities
Event/ Direction of Amount of Direction of Amount of
Adjustment Change Change Change Change
a NA NA Decrease $9,000
Adj Decrease $2,250 NA NA
balance in the Supplies account, after adjustment, was $300.
services to start on May 1 and to continue for one year.
Exercise 2-29A Identifying source, use, and exchange transactions
Required
Indicate whether each of the following transactions is an asset source (AS), asset use (AU), asset
exchange (AE), or claims exchange (CE) transaction.
d . Incurred other operating expenses on account.
Exercise 2-30A Identifying asset source, use, and exchange transactions
Required
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“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $2,000. It seems we’re either too high to get the job or too low to make any money on half the jobs we bid.”
Teledex Company manufactures products to customers’ specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year:
Department Fabricating Machining Assembly Total Plant Manufacturing overhead $ 369,250 $ 422,000 $ 94,950 $ 886,200 Direct labor $ 211,000 $ 105,500 $ 316,500 $ 633,000
Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows:
Department Fabricating Machining Assembly Total Plant Direct materials $ 4,100 $ 400 $ 2,500 $ 7,000 Direct labor $ 5,000 $ 700 $ 7,300 $ 13,000 Manufacturing overhead ? ? ? ?
Required:
1. Using the company’s plantwide approach:
a. Compute the plantwide predetermined rate for the current year.
b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job.
2. Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Under these conditions:
a.Compute the predetermined overhead rate for each department for the current year.
b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job.
4. Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead).
a.What was the company’s bid price on the Koopers job using a plantwide predetermined overhead rate?
b.What would the bid price have been if departmental predetermined overhead rates had been used to apply overhead cost?
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Please complete as follow:
. 1) Caprice Corporation is a wholesaler of industrial goods. Data regarding the store’s operations follow: • Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. • Collections are expected to be 80% in the month of sale, 16% in the month following the sale, and 4% uncollectible. • The cost of goods sold is 70% of sales. • The company desires an ending merchandise inventory equal to 60% of the cost of goods sold in the following month. Payment for merchandise is made in the month following the purchase. • The November beginning balance in the accounts receivable account is $78,000. • The November beginning balance in the accounts payable account is $254,000.
. Required: A Prepare a Schedule of Expected Cash Collections for November and December.
. B. Prepare a Merchandise Purchases Budget for November and December.
.
2) Clay Corporation has projected sales and production in units for the second quarter of the coming year as follows:
.
. April May June
. Sales………… 50,000 40,000 60,000
. Production… 60,000 50,000 50,000
.
.
. Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $100,000 per month. The accounts payable balance on March 31 totals $190,000, which will be paid in April. All units are sold on account for $14 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following th month of sale. Accounts receivable on April 1 totaled $500,000 ($90,000 from February’s sales and $410,000 from March’s sales).
. Required: A. Prepare a schedule for each month showing budgeted cash disbursements for Clay Corporation.
. B. Prepare a schedule for each month showing budgeted cash receipts for Clay Corporation.
.
.
3) The Dean Corporation produces and sells a single product. The following data refer to the year just completed:
Beginning Inventory……………………………. 0
Units Produced………………………………….. 20,000
Units Sold………………………………………… 19,000
Selling price per unit……………………………. $350
Selling and administrative expenses:
Variable per unit………………………………… $10
Fixed {total}……………………………………. $225,000
Manufacturing costs:
Direct materials cost per unit………………… $190
Direct labor cost per unit……………………… $40
Variable manufacturing overhead cost per unit…. $25
Fixed manufacturing overhead {total}…………. $250,000
Assume that direct labor is a variable cost.
Required:
A. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.
B.Prepare an income statement for the year using absorption costing.
C. Prepare a contribution format income statement for the year using variable costing.
D. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
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When factory payroll costs are assigned to products in a job cost accounting system:
A. Factory Labor is debited and Work in Process is credited.
B. Work in Process Inventory and Factory Overhead are debited and Factory Labor is credited.
C. Cost of Goods Manufactured is debited and Direct Labor is credited.
D. Direct Labor and Indirect Labor are debited and Factory Labor is credited.
E. Work in Process is debited and Factory Labor is credited.
Canoe Company’s manufacturing accounting system uses direct labor costs to apply overhead to work in process and finished goods inventories. Canoe Company’s manufacturing costs for the year were: direct labor, $30,000; direct materials, $50,000; and manufacturing overhead applied, $6,000. The overhead allocation rate was: 5.0%.
A. 12.0%.
B. 20.0%.
C. 500.0%.
D. 16.7%.
The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company’s overhead allocation rate is: 40%.
A. 50%.
B. 80%.
C. 200%.
D. 220%.
O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. expects to incur $800,000 of overhead during the next period, and expects to use 50,000 labor hours at a cost of $10.00 per hour. What is O.K. Company’s overhead allocation rate? 6.25%.
A. 62.5%.
B. 160%.
C. 1600%.
D. 67%.
If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for $8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale? $8.00.
A. $5.50.
B. $2.50.
C. $1.60.
D. $0.90.
The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applicable to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units?
. $3,750.
A. $2,000.
B. $4,000.
C. $6,000.
D. $9,000.
At the current year-end, Hardly Company found that its overhead was underapplied by $2,500, and this amount was not deemed to be a material amount. Based on this information, Hardly should: Close the $2,500 to Cost of Goods Sold.
A. Close the $2,500 to Finished Goods Inventory.
B. Do nothing about the $2,500, since it is not material, and it is likely that overhead will be overapplied by the same amount next year.
C. Carry the $2,500 to the income statement as “Other Expense”.
D. Carry the $2,500 to the next period.
The amount by which the overhead applied to jobs during a period exceeds the overhead incurred during the period is known as:
Adjusted overhead.
A. Estimated overhead.
B. Predetermined overhead.
C. Underapplied overhead.
D. Overapplied overhead.
If a company applies overhead to production with a predetermined rate, a credit balance in the Manufacturing Overhead account at the end of the period means that:
The bookkeeper has made an error because the debits don’t equal the credits.
A. The balance will be carried forward to the next period as an overhead cost.
B. Actual overhead was less than the overhead amount charged to production.
C. The overhead was underapplied for the period.
D. Actual overhead was greater than the overhead amount charged to production.
Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include: A debit to Cost of Goods Sold for $600.
A. A credit to Manufacturing Overhead for $600.
B. A credit to Finished Goods Inventory for $600.
C. A debit to Work in Process Inventory for $600.
D. A credit to Cost of Goods Sold for $600.
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1) What differentiates “discretionary financing needs” from “external financing needs?”
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31.
Harvel Company is required by law to collect and remit sales taxes to the state. If Havel has $4,500 of cash sales that are subject to an 6% sales tax, what is the journal entry to record the cash sales?
Debit Cash $4,500; credit Sales $4,230; credit Sales Taxes Payable $270.
Debit Accounts Receivable $4,770; credit Sales $4,500; credit Sales Taxes Payable $270.
Debit Sales Taxes Payable $270; debit Cash $4,230; credit Sales $4,500.
Debit Cash $4,770; credit Sales $4,500; credit Sales Taxes Payable $270.
Debit Cash $4,500; credit Sales $4,500; and record the sales tax when paid.
32. On November 1, Carter Company signed a 120-day, 12% note payable, with a face value of $10,800. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)
No journal entry required.
Debit interest expense, $144; credit interest payable, $144.
Debit interest expense, $216; credit interest payable, $216.
Debit interest expense, $288; credit interest payable, $288.
Debit interest expense, $432; credit interest payable, $432.
33. A company purchased a cash register on January 1 for $5,900. This register has a useful life of 5 years and a salvage value of $650. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?
$1,416.
$1,352.
$2,100.
$1,050.
$2,360.
34. A company had average total assets of $950,000. Its gross sales were $1,106,000 and its net sales were $945,000. The company’s total asset turnover equals (Round your final answer to two decimal places):
0.99.
1.14.
1.01.
1.17.
0.86.
34.
A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $57,500; the land at $48,600, and the parking lot at $18,900. Land should be recorded in the accounting records with an allocated cost of (Do not round intermediate calculations):
$44,880.
$9.
$100,000.
$48,600.
$38,880.
35. A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $57,500; the land at $48,600, and the parking lot at $18,900. Land should be recorded in the accounting records with an allocated cost of (Do not round intermediate calculations):
$44,880.
$100,000.
$38,880.
$9.
$48,600.
36.
Phil Phoenix is paid on a monthly basis. For the month of January of the current year, he earned a total of $9,038. FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The amount of Federal Income Tax withheld from his earnings was $1,499.67. What is the amount of the employer’s monthly payroll tax expenses for this employee? (Round your intermediate calculations and final answer to two decimal places.)
$131.05
$560.36
$378.00
$56.00
$1,125.41
37.
Employees earn vacation pay at the rate of one day per month. During July, 23 employees qualify for one vacation day each. Their average daily wage is $98 per day. What is the amount of vacation benefit expense to be recorded for the month of July?
$2,254
$98
$23
$225.40
$22,540
38. On December 1, Martin Company signed a 90-day, 6% note payable, with a face value of $12,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)
$120
$60
$180
$0
$720
39.
A company purchased a delivery van for $14,000 with a salvage value of $2,000 on September 1, Year 1. It has an estimated useful life of 4 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1? (Do not round intermediate calculations. Round your final answer to whole dollar amount.)
$750.
$3,500.
$1,000.
$1,167.
$3,000.
40.
An employee earned $46,800 during the year working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee’s annual FICA taxes amount is:
$3,580.20.
Zero, since the employee’s pay exceeds the FICA limit.
$678.60.
$7,160.40.
$2,901.60.
41. A corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 220 shares to its attorneys in payment of a $4,200 charge for drawing up the articles of incorporation. The entry to record this transaction would include:
A debit to Organization Expenses for $2,200.
A credit to Common Stock for $4,200.
A credit to Paid-in Capital in Excess of Par Value, Common Stock for $4,200.
A debit to Organization Expenses for $4,200.
A debit to Paid-in Capital in Excess of Par Value, Common Stock for $2,000.
42. A company has 30,000 shares of common stock outstanding. The stockholders’ equity applicable to common shares is $382,500, and the par value per common share is $10. The book value per share is:
$10.00.
$38.25.
$0.08.
$12.75.
$2.75.
43. The partnership agreement for Smith Wesson & Davis, a general partnership, provided that profits be shared between the partners in the ratio of their financial contributions to the partnership. Smith contributed $150,000, Wesson contributed $90,000 and Davis contributed $30,000. In the partnership’s first year of operation, it incurred a loss of $256,500. What amount of the partnership’s loss, should be absorbed by Smith? (Do not round your intermediate calculations and round your final answer to the nearest whole dollar amount.)
$128,250
$28,500
$64,125
$85,500
$142,500
44.
Badger and Fox are forming a partnership. Badger contributes a building that has a market value of $366,000; the partnership assumes responsibility for a $133,000 note secured by a mortgage on the property. Fox invests $108,000 in cash and equipment that has a market value of $83,000. For the partnership, the amounts recorded for total assets and for total capital account are:
Total assets $557,000; total capital $557,000.
Total assets $557,000; total capital $424,000.
Total assets $424,000; total capital $557,000.
Total assets $424,000; total capital $424,000.
Total assets $690,000; total capital $690,000
45.Smith, West, and Krug form a partnership. Smith contributes $201,000, West contributes $167,500, and Krug contributes $301,500. Their partnership agreement calls for a 6% interest allowance on the partner’s capital balances with the remaining income or loss to be allocated equally. If the partnership reports income of $205,200 for its first year, what amount of income is credited to West’s capital account?
$67,060.
$68,400.
$55,000.
$65,050.
$73,090.
46. Rice, Hepburn, and DiMarco formed a partnership with Rice contributing $63,600, Hepburn contributing $53,000 and DiMarco contributing $42,400. Their partnership agreement called for the income (loss) division to be based on the ratio of capital investments. If the partnership had income of $84,000 for its first year of operation, what amount of income would be credited to DiMarco’s capital account? (Do not round your intermediate calculations. Round your final answer to the nearest thousand.)
$84,000.
$33,600.
$22,400.
$28,000.
$42,400.
47. A company had a beginning balance in retained earnings of $43,400. It had net income of $6,400 and paid out cash dividends of $5,725 in the current period. The ending balance in retained earnings equals:
$12,125.
$42,725.
$44,075.
$49,800.
$55,525.
48. Smith, West, and Krug form a partnership. Smith contributes $177,000, West contributes $147,500, and Krug contributes $265,500. Their partnership agreement calls for a 6% interest allowance on the partner’s capital balances with the remaining income or loss to be allocated equally. If the partnership reports income of $176,400 for its first year, what amount of income is credited to Krug’s capital account?
$55,850.
$57,620.
$47,000.
$62,930.
$58,800.
49. A company has earnings per share of $9.20. Its dividend per share is $1.25, its market price per share is $111.32, and its book value per share is $87. Its price-earnings ratio equals:
12.10.
7.36.
8.10.
9.20.
9.46.
50. A corporation had 13,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 4,680 shares. At the time of the stock dividend, the market value per share was $18. The entry to record this dividend is:
No entry is needed.
Debit Common Stock Dividend Distributable $84,240; credit Retained Earnings $84,240.
Debit Retained Earnings $46,800; credit Common Stock Dividend Distributable $46,800.
Debit Retained Earnings $84,240; credit Common Stock Dividend Distributable $84,240.
Debit Retained Earnings $84,240; credit Common Stock Dividend Distributable $46,800; credit Paid-In Capital in Excess of Par Value, Common Stock $37,440.
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When factory payroll costs are assigned to products in a job cost accounting system:
A. Factory Labor is debited and Work in Process is credited.
B. Work in Process Inventory and Factory Overhead are debited and Factory Labor is credited.
C. Cost of Goods Manufactured is debited and Direct Labor is credited.
D. Direct Labor and Indirect Labor are debited and Factory Labor is credited.
E. Work in Process is debited and Factory Labor is credited.
Canoe Company’s manufacturing accounting system uses direct labor costs to apply overhead to work in process and finished goods inventories. Canoe Company’s manufacturing costs for the year were: direct labor, $30,000; direct materials, $50,000; and manufacturing overhead applied, $6,000. The overhead allocation rate was: 5.0%.
A. 12.0%.
B. 20.0%.
C. 500.0%.
D. 16.7%.
The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company’s overhead allocation rate is: 40%.
A. 50%.
B. 80%.
C. 200%.
D. 220%.
O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. expects to incur $800,000 of overhead during the next period, and expects to use 50,000 labor hours at a cost of $10.00 per hour. What is O.K. Company’s overhead allocation rate? 6.25%.
A. 62.5%.
B. 160%.
C. 1600%.
D. 67%.
If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for $8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale? $8.00.
A. $5.50.
B. $2.50.
C. $1.60.
D. $0.90.
The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applicable to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units?
. $3,750.
A. $2,000.
B. $4,000.
C. $6,000.
D. $9,000.
At the current year-end, Hardly Company found that its overhead was underapplied by $2,500, and this amount was not deemed to be a material amount. Based on this information, Hardly should: Close the $2,500 to Cost of Goods Sold.
A. Close the $2,500 to Finished Goods Inventory.
B. Do nothing about the $2,500, since it is not material, and it is likely that overhead will be overapplied by the same amount next year.
C. Carry the $2,500 to the income statement as “Other Expense”.
D. Carry the $2,500 to the next period.
The amount by which the overhead applied to jobs during a period exceeds the overhead incurred during the period is known as:
Adjusted overhead.
A. Estimated overhead.
B. Predetermined overhead.
C. Underapplied overhead.
D. Overapplied overhead.
If a company applies overhead to production with a predetermined rate, a credit balance in the Manufacturing Overhead account at the end of the period means that:
The bookkeeper has made an error because the debits don’t equal the credits.
A. The balance will be carried forward to the next period as an overhead cost.
B. Actual overhead was less than the overhead amount charged to production.
C. The overhead was underapplied for the period.
D. Actual overhead was greater than the overhead amount charged to production.
Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include: A debit to Cost of Goods Sold for $600.
A. A credit to Manufacturing Overhead for $600.
B. A credit to Finished Goods Inventory for $600.
C. A debit to Work in Process Inventory for $600.
D. A credit to Cost of Goods Sold for $600.
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1. Net purchases are:
A) Purchases + Purchases Returns and Allowances.
B) Purchases – Purchases Discount – Purchases Returns and Allowances.
C) Purchases – Freight – Purchases Returns and Allowances.
D) Purchases + Freight-In.
2. Purchases is a(n):
A) cost.
B) asset.
C) liability.
D) revenue.
3. A cost account is treated the same as:
A) a liability.
B) Capital.
C) a revenue.
D) an expense.
4. Jackie’s Online Service on April 30 has the following account balances:
Sales $20,000
Sales returns and allowances 2,000
Purchases 14,000
Freight-In 1,000
Purchases Returns and allow. 2,000
Purchases Discounts 1,400
Net purchases for the period are:
A) $10,600.
B) $9,600.
C) $12,600.
D) $14,000.
5. A characteristic of Purchases Returns and Allowances is:
A) it has a normal credit balance.
B) it increases when merchandise is returned.
C) it decreases cost.
D) All of these are correct.
6. Clothes’ R Us bought some new clothes for its fashion line and is required to pay the freight costs. The freight terms are:
A) F.O.B. destination.
B) F.O.B. shipping point.
C) 2/10, n/30.
D) None of these are correct.
7. When the term F.O.B. shipping point is used, title passes:
A) when goods reach the halfway point.
B) when goods reach the destination.
C) when goods are shipped.
D) when the buyer unpacks the goods.
8. On November 30, Janoch’s Dog Kennel purchased $500 of merchandise on account from the Ganster Company. The goods were shipped F.O.B. shipping point. The freight charge of $40 was paid by Ganster Company and added to the invoice. The amount to record in the Purchases account is:
A) $500.
B) $540.
C) $520.
D) $550.
9. The entry to record a purchase of $2,000 on account, terms of 2/10, n/30, would include a:
A) debit to Purchases Discount for $40.
B) credit to Accounts Payable for $2,000.
C) debit to Accounts Payable for $2,000.
D) credit to Cash for $2,000.
10. Purchased office supplies on account. This will be recorded with:
A) a debit to Accounts Payable and a credit to Supplies.
B) a debit to Supplies and a credit to Supplies Expense.
C) a debit to Supplies and a credit to Accounts Payable.
D) a credit to Supplies and a debit to Purchases.
11. Heidi’s Accessories bought 40 necklaces for $10 each on account. The invoice included a 6% sales tax and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the purchase would include:
A) a debit to Accounts Payable for $424.00.
B) a debit to Accounts Payable for $400.00.
C) a debit to Purchases for $424.00.
D) a debit to Purchases for $400.00.
12. On February 12, Clare purchased $350 of merchandise on account from Larsen’s Accessories, terms 2/10, n/30. The goods were shipped F.O.B. destination. The freight charge was $40. The amount to be recorded in the Accounts Payable Subsidiary ledger is:
A) $343.
B) $383.
C) $350.
D) $390.
13. A debit memorandum decreases which account on the buyer’s books?
A) Accounts Payable
B) Purchases Returns and Allowances
C) Sales Returns and Allowances
D) Accounts Receivable
14. The entry to record returned merchandise to Vans Company is:
A) debit Purchases Returns and Allowances; credit Accounts Payable in the general ledger.
B) debit Accounts Payable; credit Purchases.
C) debit Accounts Payable/Vans Company in the accounts payable subsidiary ledger and debit Accounts Payable in the general ledger; credit Purchases Returns and Allowances.
D) debit Purchases; credit Accounts Payable.
15. Heidi’s Accessories bought 40 necklaces for $10 each on account. The invoice included a 6% sales tax and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the return would include:
A) a debit to Accounts Payable for $50.00.
B) a debit to Accounts Payable for $53.00.
C) a debit to Purchases Returns and Allowances for $50.00.
D) a debit to Purchases Returns and Allowances for $53.00.
16. Jackson purchased $400 of goods and received credit terms of 2/10, n/30. How much did he pay if payment was made during the discount period?
A) $360
B) $408
C) $400
D) $392
17. Medeco bought goods for $150 on credit. Medeco returned $50 worth of goods. Terms of the sale were 2/10, n/30. If Medeco pays the amount owed within the discount period, what is the amount they should pay?
A) $97
B) $147
C) $98
D) $148
18. Using the perpetual inventory system, the purchase of merchandise on account would include a:
A) debit to Merchandise Inventory and a credit to Accounts Payable.
B) debit to Accounts Payable and a credit to Merchandise Inventory.
C) debit to Accounts Receivable and a credit to Sales.
D) debit to Sales and a credit to Accounts Receivable.
19. The return of merchandise to the supplier for credit using the perpetual inventory system would include a:
A) debit to Accounts Receivable and a credit to Accounts Payable.
B) debit to Accounts Payable and a credit to Merchandise Inventory.
C) debit to Merchandise Inventory and a credit to Accounts Payable.
D) debit to Accounts Payable and a credit to Purchases Returns and Allowances.
20. The account used in perpetual inventory to record the cost of inventory used to make the sale is:
A) Purchases.
B) Purchases Returns and Allowances.
C) Purchases Discounts.
D) Cost of Goods Sold.
Accounting
ORDER A PLAGIARISM FREE PAPER NOW
For the ease of making this assignment a bit easier on your – I created a new Google spreadsheet for you to use! It also has the changes on it that were discovered today.
If this is your FIRST time on the assignment – use this one, ignore the rest of the post!
If you used the old excel document from the first assignment (this morning) on you need to make the changes below –
14.2 WORK TOGETHER ALERT – MUST MAKE CHANGES!
New Balance for:
Purch. Return & Allowances – $9497.00 (credit)
Salary Expense – $204,180.85 (debit)
Change both of these totals in your Trial Balance and your columns should equal!
**Debits and Credits still for each column MUST match. Follow along – do NOT go ahead. This part of the worksheet gets complicated and easy to mess up.
***The file will easily open in Google Sheets. No need to use it in Excel – please use Google Sheets. There are directions on the first tab for you to read. The problem (worksheet) is on the Work Together tab. Change tabs easily at the bottom.
