Answer the following questions:
1. One example of a contra-asset is:
A. Sales Discount
B. Sales Returns and Allowances
C. Uncollectible Accounts Expense
D. None of the above are contra assets
2. The journal entry to record a sales return made by a customer would include:
A. A debit to Accounts Receivable and a credit to Sales Returns
B. A debit to Cash and Sales Returns
C. A debit to Sales Returns and a credit to Accounts Receivable
D. A debit to Accounts Receivable and a credit to Cash
3. Accounts receivable written off during the year totaled $61,500 while the beginning and ending balance of Allowance for Doubtful Accounts were $51,300 and $55,700, respectively. The amount of uncollectible accounts expense for the period was:
D. Cannot be determined from the information given
4. Cady, Inc., had beginning and ending accounts receivable balances of $35,000 and 32,000, respectively. During the period, $100,000 was collected from credit customers. What was the amount of credit sales during the period?
5. In times of rising prices, ______ generally result(s) in the ______ ending inventory.
A. LIFO and FIFO, same
B. LIFO, higher
C. FIFO, lower
D. LIFO, lower
6. Affiliated Industries purchased a piece of equipment for $5,500, FOB shipping point. The company paid freight of $225 and installation costs of $485. During installation, the equipment was damaged requiring $195 in repair costs. The total cost assigned to the equipment should be:
7. Ivanhoe Enterprises acquired a piece of equipment on January 3, 2007. The total cost of the equipment was $35,000. Ivanhoe estimated that the equipment would be used for 8 years before being sold for an estimated $7,000. Assuming the use of straight-line depreciation, the total depreciation expense for the year ended December 31, 2007 was:
8. Brook side Enterprises acquired a piece of machinery on January 3, 2006. The total cost of the machinery was $138,600. Brook side estimated that the machinery would be used for 77,000 hours before being sold for an estimated $3,850. Brook side uses the units-of-production method of depreciation. Assuming the machine was used for 15,800 hours during 2006, 18,300 hours during 2007 and 17,400 hours during 2008, the balance in the accumulated depreciation account on January 2, 2009 would be:
9. Irmelas Enterprises owns some equipment with an original cost of $84,700 and accumulated depreciation of $41,650. If the equipment is sold for $9,500 in cash plus a 9-month $30,000 note receivable with a stated 12% interest rate, the gain or loss recognized on the sale would be:
A. $3,550 loss
B. $3,550 gain
C. $2,150 loss
D. $2,150 gain
10. B&V Enterprises exchanged a used crane with an original cost of $200,000 and accumulated depreciation of $140,000 for a truck with a fair market value of $100,000. B&V also paid cash of $25,000. What amount of gain should B&V report on this transaction?
11 – 15 Record the following journal entries.
10/1 Sold $5,000 of tables on account the terms of payment are 1/15n30
10/5 Customer returned $1,000 of tables
10/14 Customer paid $3,000 of the balance due on the account
10/30 Customer paid the remaining balance due on the account
16 – 20 Lorena Company purchased a van at a total cost of $55,000. At the end of its useful life of 5 years, the van should have a salvage value of $5,000. The van is expected to be driven 100,000 miles over this time period as follows: year 1 25,000 miles, year 2 30,000 miles, year 3 20,000 miles, year 4 15,000 miles, and year 5 10,000 miles. Prepare a schedule showing the depreciation expense and year-end carrying value of the van for each of the next two years under each of the following methods of depreciation:
• Straight Line
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1. The answer is option C
2. The answer is option C
3. The answer is option B
4. The answer is option D...
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