Question: Given the following scenario, choose the best

> On August 1, 20X1, Martinez Company purchased a truck (delivery equipment) for $55,600, signing a 90-day, 8 percent note for the entire purchase price. Give the entry in general journal form to record the purchase of the equipment with the note and the p

> During 20X1, Tolliver Company borrowed money at Natchez State Bank and Trust on two occasions. On June 8, the company borrowed $60,000, giving a 120-day, 5 percent note, and on September 8, the company discounted at 7 percent an $80,000, 90-day note paya

> Find the maturity value of each of the following notes payable: 1. A 60-day note, dated February 15, 20X1, with a face value of $52,000, bearing interest at 8 percent. 2. A six-month note, dated March 10, 20X1, with a face value of $21,600, bearing inter

> Compute the maturity value for each of the following notes: 1. A note payable with a face amount of $50,000, dated June 15, 20X1, due in three months, bearing interest at 7 percent. 2. A note payable with a face amount of $44,000, dated May 5, 20X1, due

> Find the due date of each of the following notes: 1. A note dated May 19, 20X1, due in 120 days. 2. A note dated November 1, 20X1, due two years from that date. 3. A note dated April 10, 20X1, due six months from that date.

> Use the information given in Exercise 15.8, except assume that Conrod Utilities received the check for $1,680 on January 28, 20X2 (instead of on December 8, 20X1). Give the general journal entry necessary. The cash receipt has already been entered in the

> On December 8, 20X1, Conrod Utilities Services Company received a check for $1,680 from Shirley Cosby, whose $3,360 account was written off on September 10 (Exercise 15.7). In the accompanying letter, Cosby apologized and said she probably would be unabl

> Conrod Utilities Services Company uses the direct charge-off method to record uncollectible accounts. On September 10, 20X1, the company learned that Shirley Cosby, a customer who owed $3,360, had moved and left no forwarding address. Conrod Utilities co

> Delta Company pays salaries and wages on the last day of each month. Payments made on December 31, 20X1, for amounts incurred during December are shown below. Cumulative amounts paid prior to the December 31 payroll for the persons named are also shown.

> Assume the same facts as in Exercise 15.5, except that the recovery of the $14,800 from Alexis Watson was received on February 28, 20X2. Give the entry in general journal form to record the reinstatement of Watson’s account and to record the receipt of h

> On December 8, 20X1, after a threatened lawsuit by Richey Plumbing, Alexis Watson paid the $14,800 account charged off on April 30, 20X1 (Exercise 15.4). Give the entries in general journal form to reinstate Watson’s account and to record the receipt of

> On April 30, 20X1, Richey Plumbing, which uses the allowance method, decided that the $14,800 account of Alexis Watson was worthless and should be written off. Give the general journal entry to record the write-off.

> On December 31, 20X1, before adjusting entries, the balances of selected accounts of the Xavier Equipment Company were as follows: Accounts Receivable $930,000 Allowance for Uncollectible Accounts (debit balance) 3,000 dr. The company has determined th

> Assume that Galaxy Company makes its estimate of uncollectible accounts on December 31 as 3.2 percent of total accounts receivable. Compute the estimated amount of uncollectible accounts and give the general journal entry to record the provision for unco

> On December 31, 20X1, certain account balances at Galaxy Company were as follows before year-end adjustments: Accounts Receivable $ 941,500 Allowance for Uncollectible Accounts (credit) 1,860 Sales 9,205,500 Sales Returns and Allowances 38,650 A further

> Diamond Jewelers has never borrowed money. Because of rapid growth, on June 25, 20X1, John Peoples, the owner, applied for a loan of $300,000 from his bank. The banker asked Peoples for copies of financial reports of Diamond Jewelers for 20X0 and quarter

> Ryan & Sabo sells copy equipment. It grants all customers a 12-month warranty, agreeing to make necessary repairs within the following 12-month after-sale period free of charge. At the end of each year, the company estimates the total cost to be incurred

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Lane Company charges off the cost of all magazine advertising in the year it is incurred even though the advertising probably

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Sanchez Company has decided to charge off as a loss the portion of its accounts receivable that it estimates will be uncollec

> Mike Ryan is the owner of Ryan Contractors, a successful small construction company. He spends most of his time out of the office supervising work at various construction sites, leaving the operation of the office to the company’s cashi

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Patterson Company purchased many small tools during 20X1 at a total cost of $3,000. Some tools were expected to last for a fe

> For each of the following cases, respond to the question and indicate the accounting principle or concept that applies. 1. Princeton, LLC, paid insurance premiums of $9,600 on December 1, 20X1. These premiums covered a two-year period beginning on that d

> The following selected accounts were taken from the financial records of Sonoma Valley Distributors at December 31, 20X1. All accounts have normal balances. Cash $31,340 Accounts Receivable 67,900 Note Receivable, due 20X2 10,250 Merchandise Inventory 36

> The Adjusted Trial Balance section of the worksheet for Hendricks Janitorial Supplies follows. The owner made no additional investments during the year. Prepare a postclosing trial balance for the firm on December 31, 20X1.

> Examine the following adjusting entries and determine which ones should be reversed. Show the reversing entries that should be recorded in the general journal as of January 1, 20X2. Include appropriate descriptions. 20X1 (Adjustment a) Dec. 31 Uncollecti

> On December 31, 20X1, the Income Statement columns of the worksheet for The Sax Shop contained the following information. Give the entries that should be made in the general journal to close the revenue, cost of goods sold, expense, and other temporary a

> The worksheet of Lantz’s Office Supplies contains the following asset and liability accounts. The balance of the Notes Payable account consists of notes that are due within a year. Prepare a balance sheet dated December 31, 20X1. Obtain

> The worksheet of Lantz’s Office Supplies contains the following owner’s equity accounts. Use this data and the net income determined in Exercise 13.3 to prepare a statement of owner’s equity for the year ended December 31, 20X1. No additional investments

> The worksheet of Lantz’s Office Supplies contains the following revenue, cost, and expense accounts. Prepare a classified income statement for this firm for the year ended December 31, 20X1. The merchandise inventory amounted to $59,775

> The following accounts appear on the worksheet of Commonwealth Crafts at December 31, 20X1. Indicate the section of the classified balance sheet in which each account will be reported. SECTIONS OF CLASSIFIED BALANCE SHEET a. Current Assets b. Plant and E

> During September 20X1, Interior Designs Specialty Shop, a retail store, had the transactions listed below. The general ledger accounts used to record these transactions are also provided below. INSTRUCTIONS 1. Open the general ledger accounts and enter t

> Selected accounts and other information from the records of Calderone Company for the year ended December 31 follow: Merchandise Inventory, January 1 $ 20,000 Merchandise Inventory, December 31 22,000 Sales Returns and Allowances 1,000 Store Supplies Exp

> Tsang Company reports the following in its most recent year of operations: - Net sales, $2,000,000 (all on account) - Cost of goods sold, $977,500 - Gross profit, $1,022,500 - Accounts receivable, beginning of year, $220,000 - Accounts receivable, end of

> The accounts listed below appear on the worksheet of Commonwealth Crafts. Indicate the section of the classified income statement in which each account will be reported. SECTIONS OF CLASSIFIED INCOME STATEMENT a. Operating Revenue b. Cost of Goods Sold c

> For each of the following independent situations, prepare the adjusting entry that must be made at December 31, 20X1. Omit descriptions. a. On December 31, 20X1, the Notes Receivable account at Sufen Materials Corporation had a balance of $25,000, which

> On December 31, 20X1, the Notes Payable account at Cherie’s Boutique Shop had a balance of $72,000. This amount represented funds borrowed on a six-month, 6 percent note from the firm’s bank on December 1. Prepare the adjusting journal entry for interest

> On December 1, 20X1, Jenny’s Java Joint borrowed $50,000 from its bank in order to expand its operations. The firm issued a four-month, 9 percent note for $50,000 to the bank and received $48,500 in cash because the bank deducted the interest for the ent

> For each of the following independent situations, prepare the adjusting entry that must be made on December 31, 20X1. Omit descriptions. a. On December 31, 20X1, the Notes Payable account at Tsang Manufacturing Company had a balance of $18,000. This bala

> For each of the following independent situations, prepare the adjusting entry that must be made at December 31, 20X1. Omit descriptions. a. During the year 20X1, Alenikov Company had net credit sales of $2,020,000. Past experience shows that 1.5 percent

> The Income Statement section of the Johnson Company worksheet for the year ended December 31, 20X1, has $201,000 recorded in the Debit column and $216,250 in the Credit column on the line for the Income Summary account. What were the beginning and ending

> The beginning inventory of SoCal Wholesalers was $121,000, and the ending inventory is $116,500. What entries are needed at the end of the fiscal period to adjust Merchandise Inventory?

> Celeste Renard, owner of Sensual Linens Shop, was preparing checks for payment of the current month’s purchase invoices when she realized that there were two invoices from Passionate Linens Company, each for the purchase of 100 red, heart-imprinted king-

> Meri Medical Supplies estimates that its office employees will earn $175,000 next year and its factory employees will earn $600,000. The firm pays the following rates for workers’ compensation insurance: $0.60 per $100 of wages for the office employees a

> On January 31, AC Gourmet Shop prepared its Employer’s Annual Federal Unemployment Tax Return, Form 940. During the previous year, the business paid total wages of $462,150 to its 14 employees. Of this amount, $98,000 was subject to FUTA tax. Using a rat

> On June 30, the State Unemployment Tax Payable account in the general ledger of Your Office Supplies showed a balance of $2,148. This represents the SUTA tax owed for the second quarter of the year. On July 31, the business issued a check to the state un

> On April 30, Quality Furniture Company prepared its state unemployment tax return for the first quarter of the year. The firm had taxable wages of $85,000. Because of a favorable experience rating, Quality pays SUTA tax at a rate of 1.4 percent. How much

> On March 31, the Federal Unemployment Tax Payable account in the general ledger of The Argosy Company showed a balance of $1,507. This represents the FUTA tax owed for the first quarter of the year. On April 30, the firm deposited the amount owed in the

> At the end of the weekly payroll period on June 30, the payroll register of Known Consultants showed employee earnings of $50,000. Determine the firm’s payroll taxes for the period. Use a social security rate of 6.2 percent, Medicare rate of 1.45 percent

> After Copper Corporation paid its employees on July 15 and recorded the corporation’s share of payroll taxes for the payroll paid that date, the firm’s general ledger showed a balance of $20,584 in the Social Security Tax Payable account, a balance of $4

> On July 31, the payroll register for Red Company showed the following totals for the month: gross earnings, $38,950; social security tax, $2,414.90; Medicare tax, $564.78; income tax, $5,842.00; and net amount due, $30,128.32. Of the total earnings, $30,

> Private Investigations has two office employees. A summary of their earnings and the related taxes withheld from their pay for the week ending June 7, 20X1, follows. 1. Prepare the general journal entry to record the company’s payroll f

> Fashion Standards is a retail clothing store. Sales of merchandise and purchases of goods on account for January 20X1, the first month of operations, appear below. INSTRUCTIONS 1. Record the purchases of goods on account on page 1 of a three-column purch

> Data about the marital status, withholding allowances, and weekly salaries of the four office workers at Ollie’s Office Supply Company follow. Use the tax tables in Figure 10.2 to find the amount of federal income tax to be deducted fro

> Using the earnings data given in Exercise 10.3, determine the amount of Medicare tax to be withheld from each employee’s gross pay for December. Assume a 1.45 percent Medicare tax rate and that all salaries and wages are subject to the

> The monthly salaries for December and the year-to-date earnings of the employees of Cross Consulting Company as of November 30 follow. Determine the amount of social security tax to be withheld from each employee’s gross pay for Decembe

> During one week, four production employees of Morgan Manufacturing Company worked the hours shown below. All these employees receive overtime pay at one and one-half times their regular hourly rate for any hours worked beyond 40 in a week. Determine the

> The hourly rates of four employees of European Enterprises follow, along with the hours that these employees worked during one week. Determine the gross earnings of each employee.

> After returning from a three-day business trip, the accountant for Southeast Sales, Johanna Estrada, checked bank activity in the company’s checking account online. The activity for the last three days follows. After matching these tran

> Flores Company received a bank statement showing a balance of $13,000 on November 30, 20X1. During the bank reconciliation process, Flores Company’s accountant noted the following bank errors: 1. A check for $153 issued by Flora, Inc., was mistakenly cha

> Venturi Office Supplies received a bank statement showing a balance of $73,027 as of March 31, 20X1. The firm’s records showed a book balance of $72,987 on March 31. The difference between the two balances was caused by the following items. Prepare a ban

> At Livermore Delivery and Courier Service, the following items were found to cause a difference between the bank statement and the firm’s records. Indicate whether each item will affect the bank balance or the book balance when the bank reconciliation st

> Johnson Corporation received a bank statement showing a balance of $15,900 as of October 31, 20X1. The firm’s records showed a book balance of $15,572 on October 31. The difference between the two balances was caused by the following items. Prepare a ban

> Tony Zendejas is the owner of Housewares Galore, a housewares store that sells a wide variety of items for the kitchen, bathroom, and home. Housewares Galore offers a company credit card to customers. The company has experienced an increase in sales sinc

> On January 2, Vanessa’s Floral Supplies Inc. issued Check 3100 for $400 to establish a petty cash fund. On January 31, Check 3159 was issued to replenish the petty cash fund. An analysis of payments from the fund showed these totals: Supplies, $78; Deliv

> On January 2, The Orange Legal Clinic issued Check 2108 for $400 to establish a petty cash fund. Indicate how this transaction would be recorded in a cash payments journal. Use 1 as the page number for the cash payments journal.

> The following transactions took place at Nickie’s Sports Gear during the first week of October 20X1. Record these transactions in a cash payments journal. Use 15 as the page number of the cash payments journal.

> Bushell Company (buyer) and Schiff, Inc. (seller), engaged in the following transactions during February 20X1. Schiff, Inc. operates in a state with no sales tax. BUSHELL COMPANY SCHIFF, INC. Both companies use the perpetual inventory system. Journalize

> On April 1, Manning Meat Distributors sold merchandise on account to Fichman’s Franks for $3,700 on Invoice 1001, terms 2/10, n/30. The cost of merchandise sold was $2,200. Payment was received in full from Fichman’s Franks, less discount, on April 10. R

> Record the following transactions of Fashion Park in a general journal. Use 1 as the page number for the general journal. Fashion Park must charge 8 percent sales tax on all sales. The company uses the perpetual inventory system.

> Wang Corporation operates in a state with no sales tax. The company uses the perpetual inventory system. Record the following transactions in a general journal. Use 1 as the page number for the general journal.

> Record the following transactions of Evelyn’s Designs in a general journal. The company uses the perpetual inventory system.

> Rubino Corporation engaged in the following transactions during June. The company uses the perpetual inventory system. Record these transactions in a general journal.

> Identify the normal balance of the following accounts. Use “Dr.” for debit or “Cr.” for credit. 1. _____ Merchandise Inventory 2. _____ Sales Tax Payable 3. _____ Sales 4. _____ Sales Discounts 5. _____ Sales Returns and Allowances 6. _____ Cost of Goods

> Matrix Toy Company sells toys and games to retail stores. The firm offers a trade discount of 40 percent on toys and 30 percent on games. Its credit sales and sales returns and allowances transactions for August are shown below. The general ledger accoun

> The following transactions took place at Nickie’s Sports Gear during the first week of October 20X1. Record these transactions in a cash receipts journal. Use 12 as the page number for the cash receipts journal.

> Complete the following schedule by supplying the missing information.

> The following errors were made in recording transactions in posting from the purchases journal. How will these errors be detected? a. A credit of $2,000 to the Thomastown Furniture Company account in the accounts payable ledger was posted as $200. b. The

> On June 30 the general ledger of Newport Clothiers, a clothing store, showed a balance of $65,895 in the Purchases account, a balance of $2,125 in the Freight In account, and a balance of $1,280 in the Purchases Returns and Allowances account. What was t

> On April 7, Fisher & Sons Appliances was given an allowance of $1,210 by Modern Kitchens, which issued Credit Memorandum 112. The allowance was for scratches on stoves that were originally purchased on Invoice 911 dated March 20. Prepare the general jour

> On March 19, Beautiful Kitchens, a retail store, received Credit Memorandum 244 for $4,125 from M & J Appliance Corporation. The credit memorandum covered a return of damaged trash compactors originally purchased on Invoice 4101 dated February 3. Prepare

> The following transactions took place at AutoQuest Car Parts during the first week of July. Indicate how these transactions would be entered in a purchases journal like the one shown in this chapter.

> The following transactions took place at Extreme Bikers. Indicate the general ledger account numbers that would be debited and credited to record each transaction. GENERAL LEDGER ACCOUNTS 101 Cash 205 Accounts Payable 501 Purchases 502 Freight In 503 Pur

> The accounting system of Rose and Tea Fine Kitchenware includes the following journals. Indicate which journal is used to record each transaction. JOURNALS Cash receipts journal Cash payments journal Purchases journal Sales journal General journal TRANSA

> The accounts receivable ledger for Modern Vintage Antiques follows below. 1. Prepare a schedule of accounts receivable as of January 31, 20X1. 2. What should be the balance in the Accounts Receivable (control) account?

> Kimberly Ashley, the bookkeeper for Interiors Designs, has just finished posting the closing entries for the year to the ledger. She is concerned about the following balances: Capital account balance in the general ledger: $194,200 Ending capital balance

> The balances of certain accounts of Camille Corporation on April 30, 20X1, were as follows: Sales $330,000 Sales Returns and Allowances 4,500 The firm’s net sales are subject to an 8 percent sales tax. Prepare the general journal entry to record payment

> Oliver’s English Gardens, a wholesale firm, made sales using the following list prices and trade discounts. What amount will be recorded for each sale in the sales journal? 1. List price of $7,000 and trade discounts of 30 and 10 percent 2. List price of

> Rossi Wholesalers made sales using the following list prices and trade discounts. What amount will be recorded for each sale in the sales journal? 1. List price of $950 and trade discount of 10 percent 2. List price of $3,080 and trade discount of 20 per

> The sales journal for Carolina Company is shown below. Describe how the amounts would be posted to the general ledger accounts.

> Record the general journal entries for the following transactions of The Linen Barn that occurred in July. Use 15 as the page number for the general journal.

> The following transactions took place at Washington Outdoor Adventures during June. Enter these transactions in a sales journal like the one shown in Figure 7.2. Use 18 as the page number for the sales journal.

> The transactions below took place at Washington Outdoor Adventures, a retail business that sells outdoor clothing and camping equipment. Indicate the numbers of the general ledger accounts that would be debited and credited to record each transaction. GE

> Post the following journal entries to the appropriate ledger accounts. Assume the following account balances as of March 1, 20X1: Accounts Receivable (control account) $1,788 Accounts Receivable—Carol Fountain 940 Accounts Receivable&ac

> The accounting system of Great Harvest Healthy Foods includes the journals listed below. Indicate the specific journal in which each of the transactions listed below would be recorded. JOURNALS Cash receipts journal Sales journal Purchases journal Cash p

> Complete a chart of the accounting cycle by writing the steps of the cycle in their proper sequence.

> The Trial Balance section of the worksheet for Fashion World for the period ended December 31, 20X1, appears below. Adjustments data are also given. ADJUSTMENTS a. Supplies used, $7,200 b. Expired insurance, $4,800 c. Depreciation expense for machinery,

> 1. An officer of Westway Corporation recently commented that when he receives the firm’s financial statements, he looks at just the bottom line of the income statement—the line that shows the net income or net loss for the period. He said that he does no

> On December 31, the Income Summary account of Ballon Company has a debit balance of $222,000 after revenue of $234,000 and expenses of $456,000 were closed to the account. Kenneth Ballon, Drawing has a debit balance of $24,000 and Kenneth Ballon, Capital

> The ledger accounts of Aveeno Company appear as follows on March 31, 20X1: All accounts have normal balances. Journalize and post the closing entries. Use 4 as the page number for the general journal in journalizing the closing entries. Use account numbe

> The Income Summary and Violante Autro, Capital accounts for Autro Production Company at the end of its accounting period follow. Complete the following statements: 1. Total revenue for the period is __________. 2. Total expenses for the period are ______