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Accounting Multicolumn Journal 10th Edition Claudia Gilbertson - Solutions
Presented below are selected transactions at Ingles Company for 2008.Jan. 1 Retired a piece of machinery that was purchased on January 1, 1998. The machine cost \($62,000\) on that date. It had a useful life of 10 years with no salvage value.June 30 Sold a computer that was purchased on January 1,
Beka Company owns equipment that cost \($50,000\) when purchased on January 1, 2005. It has been depreciated using the straight-line method based on estimated salvage value of \($5,000\) and an estimated useful life of 5 years.Instructions Prepare Beka Company’s journal entries to record the
On July 1, 2008, Hurtig Inc. invested $720,000 in a mine estimated to have 800,000 tons of ore of uniform grade. During the last 6 months of 2008, 100,000 tons of ore were mined and sold.Instructions(a) Prepare the journal entry to record depletion expense.(b) Assume that the 100,000 tons of ore
The following are selected 2008 transactions of Franco Corporation.Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.Instructions Prepare
Herzogg Company, organized in 2008, has the following transactions related to intangible assets.Instructions Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2008, recording any necessary amortization and
During 2008 Nasra Corporation reported net sales of \($4,900,000\) and net income of \($1,500,000.\) Its balance sheet reported average total assets of \($1,400,000.\)Instructions Calculate the asset turnover ratio.
Coran's Delivery Company and Enright's Express Delivery exchanged delivery trucks on January 1, 2008. Coran's truck cost \($22,000.\) It has accumulated depreciation of \($15,000\) and a fair market value of \($4,000.\) Enright's truck cost \($10,000.\) It has accumulated depreciation of \($8,000\)
Ecklund Company purchased land and a building on January 1, 2008. Management’s best estimate of the value of the land was \($100,000\) and of the building \($200,000.\) But management told the accounting department to record the land at \($220,000\) and the building at \($80,000.\) The building
On January 1, 2008, the Ramirez Company ledger shows Equipment \($29,000\) and Accumulated Depreciation \($9,000.\) The depreciation resulted from using the straight-line method with a useful life of 10 years and salvage value of \($2,000.\) On this date, the company concludes that the equipment
Chan Company sells office equipment on September 30, 2008, for \($20,000\) cash. The office equipment originally cost \($72,000\) and as of January 1, 2008, had accumulated depreciation of \($42,000.\) Depreciation for the first 9 months of 2008 is \($5,250.\) Prepare the journal entries to(a)
Galena Company purchases a patent for \($120,000\) on January 2, 2008. Its estimated useful life is 10 years.(a) Prepare the journal entry to record patent expense for the first year.(b) Show how this patent is reported on the balance sheet at the end of the first year.
Information related to plant assets, natural resources, and intangibles at the end of 2008 for Spain Company is as follows: buildings \($1,100,000;\) accumulated depreciation—buildings \($650,000;\) goodwill \($410,000;\) coal mine \($500,000;\) accumulated depletion—coal mine \($108,000.\)
In its 2005 annual report Target reported beginning total assets of \($32.2\) billion; ending total assets of \($35.0\) billion; property and equipment (net) of \($19.4\) billion; and net sales of \($51.2\) billion. Compute Target’s asset turnover ratio.
What is a payroll?
How many hours were worked by a Hobby Shack employee who arrived at 8:29 and departed at 12:27?
How does Hobby Shack calculate overtime earnings?
What are the total earnings of a Hobby Shack employee who worked 44 hours in a week and earns $11.00 per hour?
Where does an employer get the information used to determine the amount of federal income tax to withhold from employees’ earnings?
Employee federal income tax withholdings are based on what two factors?
Does the employer or employee pay social security tax and Medicare tax?
What does the payroll register summarize?
Why do companies complete employee earnings records?
How do payroll procedures differ for employees who request that their pay be deposited through electronic funds transfer?
At December 31, 2007, Pickeril Imports reported the following information on its balance sheet.Instructions(a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.(b) Enter the January 1, 2008,
Information related to Hively Company for 2008 is summarized below.Instructions(a) What amount of bad debts expense will Hively Company report if it uses the direct write-off method of accounting for bad debts?(b) Assume that Hively Company decides to estimate its bad debts expense to be 2% of
Presented below is an aging schedule for Lawrenz Company.At December 31, 2008, the unadjusted balance in Allowance for Doubtful Accounts is a credit of \($10,000.\)Instructions(a) Journalize and post the adjusting entry for bad debts at December 31, 2008.(b) Journalize and post to the allowance
At December 31, 2008, the trial balance of Schnakenberg Company contained the following amounts before adjustment.Instructions(a) Prepare the adjusting entry at December 31, 2008, to record bad debts expense under each of the following independent assumptions.(1) An aging schedule indicates that
Schottenheimer Co. closes its books monthly. On June 30, selected ledger account balances are:During July, the following transactions were completed.Instructions(a) Journalize the July transactions and the July 31 adjusting entry for accrued interest receivable. (Interest is computed using 360
On January 1, 2008, Frybendall Company had Accounts Receivable \($56,900\) and Allowance for Doubtful Accounts \($4,700.\) Frybendall Company prepares financial statements annually. During the year the following selected transactions occurred.InstructionsJournalize the transactions. Jan. 5 Feb. 2
SEK Company sells office equipment and supplies to many organizations in the city and surrounding area on contract terms of 2/10, n/30. In the past, over 75% of the credit customers have taken advantage of the discount by paying within 10 days of the invoice date.The number of customers taking the
Micah Bartlett Company purchased equipment on January 1, 2007, at a total invoice cost of \($400,000.\) The equipment has an estimated salvage value of \($10,000\) and an estimated useful life of 5 years. The amount of accumulated depreciation at December 31, 2008, if the straight-line method of
Ann Torbert purchased a truck for \($11,000\) on January 1, 2007. The truck will have an estimated salvage value of \($1,000\) at the end of 5 years. Using the units-of-activity method, the balance in accumulated depreciation at December 31, 2008, can be computed by the following formula:a.
Martha Beyerlein Company incurred \($150,000\) of research and development costs in its laboratory to develop a patent granted on January 2, 2008. On July 31, 2008, Beyerlein paid \($35,000\) for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31,
Trent Mercer owns and operates a music store in a mature shopping mall. When the largest store in the mall (often referred to as the anchor) moved two years ago, the traffic in the shopping center dramatically decreased. Mr. Mercer has an opportunity to move the business to a popular new shopping
Sophia Perez is a high school student who works part time in a local sports equipment store. As part of her duties, she records daily transactions in a journal. One day she asks the owner, “You use the purchase invoice as your source document for recording purchases of merchandise on account. You
How does a merchandising business differ from a service business?
How are sales tax rates usually stated?
Why is sales tax collected considered a liability?
What is the title of the general ledger account used to summarize the total amount due from all charge customers?
What is the difference in the receipt received by a customer from a cash register versus a point-of-sale terminal?
What are the two types of batch reports?
Who transfers funds between banks involved in the credit card sales?
To which accounts are the separate amounts in the sales journal posted individually?
List the five steps for posting to a general ledger account.
At December 31, 2007, Braddock Company had a balance of \($15,000\) in the Allowance for Doubtful Accounts. During 2008, Braddock wrote off accounts totaling \($13,000.\) One of those accounts (\($1,800)\) was later collected. At December 31, 2008, an aging schedule indicated that the balance in
On December 31, 2008, Jarnigan Co. estimated that 2% of its net sales of \($400,000\) will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. On May 11, 2009, Jarnigan Co. determined that Terry Frye’s account was uncollectible and wrote off
Orosco Supply Co. has the following transactions related to notes receivable during the last 2 months of 2008.Instructions(a) Journalize the transactions for Orosco Supply Co.(b) Record the collection of the Givens note at its maturity in 2009. Nov. 1 Loaned $15,000 cash to Sally Givens on a
Record the following transactions for Sandwich Co. in the general journal.2008 May 1 Received a $7,500, 1-year, 10% note in exchange for Julia Gonzalez’s outstanding accounts receivable.Dec. 31 Accrued interest on the Gonzalez note.Dec. 31 Closed the interest revenue account.2009 May 1 Received
Singletary Company had the following select transactions.Apr. 1, 2008 Accepted Wilson Company’s 1-year, 12% note in settlement of a $20,000account receivable.July 1, 2008 Loaned $25,000 cash to Richard Dent on a 9-month, 10% note.Dec. 31, 2008 Accrued interest on all notes receivable.Apr.
The following information pertains to Napa Merchandising Company.Instructions(a) Calculate the amount of credit sales made during the year. (b) Calculate the balance of accounts receivable at the end of the year. Merchandise inventory at end of year $33,000 Accounts receivable at beginning of year
Bledel Company had accounts receivable of \($100,000\) on January 1, 2008. The only transactions that affected accounts receivable during 2008 were net credit sales of \($1,000,000,\) cash collections of \($900,000,\) and accounts written off of \($30,000.\)Instructions(a) Compute the ending
At December 31,2007, Leis Co. reported the following information on its balance sheet.During 2008, the company had the following transactions related to receivables.Instructions(a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the
Information related to Hermesch Company for 2008 is summarized below.Instructions(a) What amount of bad debts expense will Hermesch Company report if it uses the direct writeoff method of accounting for bad debts?(b) Assume that Hermesch Company estimates its bad debts expense to be 2% of credit
Presented below is an aging schedule for Zillmann Company.At December 31, 2008, the unadjusted balance in Allowance for Doubtful Accounts is a credit of \($12,000.\)Instructions (a) Journalize and post the adjusting entry for bad debts at December 31, 2008.(b) Journalize and post to the allowance
At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment.Instructions(a) Based on the information given, which method of accounting for bad debts is Worcester Company using—the direct write-off method or the allowance method? How can you
On January 1, 2008, Kloppenberg Company had Accounts Receivable \($139,000,\) Notes Receivable \($25,000,\) and Allowance for Doubtful Accounts \($13,200.\) The note receivable is from Sara Rogers Company. It is a 4-month, 12% note dated December 31, 2007. Kloppenberg Company prepares financial
Gretel Bakken forgot to journalize and post the adjusting entry for prepaid insurance at the end of the June fiscal period. What effect will this omission have on the records of Ms. Bakken’s business as of June 30? Explain your answer.
Vincente Burgos states that his business is so small that he just records supplies and insurance as expenses when he pays for them. Thus, at the end of a fiscal period, Mr. Burgos does not record adjusting and closing entries for his business. Do you agree with his accounting procedures? Explain
For what are special amount columns in a journal used?
What is the advantage of having special amount columns in a journal?
Cain Company dishonors a note at maturity. What actions by Cain may occur with the dishonoring of the note?
At the end of 2008, Delong Co. has accounts receivable of \($700,000\) and an allowance for doubtful accounts of \($54,000.\) On January 24, 2009, the company learns that its receivable from Ristau Inc. is not collectible, and management authorizes a write-off of \($5,400.\)(a) Prepare the journal
Assume the same information as BE9-4. On March 4, 2009, Delong Co. receives payment of \($5,400\) in full from Ristau Inc. Prepare the journal entries to record this transaction.Data from BE9-4.At the end of 2008, Delong Co. has accounts receivable of \($700,000\) and an allowance for doubtful
Nieto Co. elects to use the percentage-of-sales basis in 2008 to record bad debts expense. It estimates that 2% of net credit sales will become uncollectible. Sales are \($800,000\) for 2008, sales returns and allowances are \($45,000,\) and the allowance for doubtful accounts has a credit balance
On January 10, 2008, Edmunds Co. sold merchandise on account to Jeff Gallup for \($13,600,\) n/30. On February 9, Jeff Gallup gave Edmunds Co. a 10% promissory note in settlement of this account. Prepare the journal entry to record the sale and the settlement of the account receivable.
Peter Dowther owns a small business. At the end ofa fiscal period, he does not make an adjustment for supplies. Are Mr. Dowther’s accounting procedures correct? What effect will Mr. Dowther's procedures have on the business's financial reporting? Explain your answer.
When posting amounts from a journal to general ledger accounts, a $10.00 debit to Supplies is mistakenly posted as a credit to Utilities Expense. Will this error be discovered when the work sheet is prepared? Explain.
What do the ending balances of permanent accounts for one fiscal period represent at the beginning of the next fiscal period?
What do the balances of temporary accounts show?
Why are lines drawn in both the Balance Debit and Balance Credit columns when an account has a zero balance?
Which accounts go on the post-closing trial balance?
Why are temporary accounts omitted from a post-closing trial balance?
PepsiCo’s financial statements are presented in Appendix A. Coca-Cola’s financial statements are presented in Appendix B.Instructions(a) Based on the information contained in these financial statements, determine each of the following for each company:(1) Cash and cash equivalents balance at
In 2008, Roso Carlson Company had net credit sales of \($750,000.\) On January 1, 2008, Allowance for Doubtful Accounts had a credit balance of \($18,000.\) During 2008, \($30,000\) of uncollectible accounts receivable were written off. Past experience indicates that 3% of net credit sales become
Foti Co. accepts a $1,000, 3-month, 12% promissory note in settlement of an account with Bartelt Co. The entry to record this transaction is as follows. a. Notes Receivable 1,030 Accounts Receivable 1,030 b. Notes Receivable 1,000 Accounts Receivable 1,000 c. Notes Receivable 1,000 Sales 1,000 d.
Janna Sturm does not use a journal in her business records. She records the debits and credits for each transaction directly in the general ledger accounts. Is Ms. Sturm using the correct procedure? Explain your answer.
Trent Marvets does the accounting work for his business. When posting, he first transfers all of the information to the general ledger accounts. Then he returns to the journal and, all at one time, writes the account numbers in the Post. Ref. column of the journal. Eiko Harada also does the
List four reasons why a depositor’s records and a bank's records may differ.
If a check mark is placed on the check stub of each canceled check, what does a check stub with no check mark indicate?
Why do businesses use petty cash funds?
Why is Cash and not Petty Cash credited when a petty cash fund is replenished?
Iris Velez and Suanne Merker have personal checking accounts for which they receive a bank statement every month. Ms. Merker does not prepare a reconciliation; instead she records the balance on the bank statement as her new checkbook balance. Ms. Velez. prepares a bank statement reconciliation for
Dorset Company decides to establish a petty cash fund. The owner, Edna Dorset, wants to establish a \($100.00\) petty cash fund and limit payments to \($20.00\) or less. The manager, Roy Evans, suggests a petty cash fund of \($3,000.00\) limited to payments of \($50.00\) or less. Mr. Evans claims
What is the first step in checking for arithmetic errors when two column totals are not in balance?
What is one way to check for an error caused by transposed numbers?
What term is used to describe an error that occurs when numbers are moved to the right or left in an amount column?
On May 31, 2008, James Logan Company had a cash balance per books of \($6,781.50.\)The bank statement from Farmers State Bank on that date showed a balance of \($6,404.60.\) A comparison of the statement with the cash account revealed the following facts.1. The statement included a debit memo of
The bank portion of the bank reconciliation for Backhaus Company at November 30, 2008, was as follows.The adjusted cash balance per bank agreed with the cash balance per books at November 30.The December bank statement showed the following checks and deposits.The cash records per books for December
Starr Theater is located in the Zurbrugg Mall. A cashier’s booth is located near the entrance to the theater. Two cashiers are employed. One works from 1-5 pM., the other from 5-9 pM.Each cashier is bonded. The cashiers receive cash from customers and operate a machine that ejects serially
Cushenberry Company maintains a petty cash fund for small expenditures. The following transactions occurred over a 2-month period.Instructions(a) Journalize the petty cash transactions.(b) Post to the Petty Cash account.(c) What internal control features exist in a petty cash fund? July 1
Flint Hills Genetics Company of Lawrence, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2008, the company’s cash account per its general ledger showed the following balance.A comparison of the details on the bank statement with the details in the cash
The bank portion of the bank reconciliation for Conlin Company at October 31, 2008 was as follows.The adjusted cash balance per bank agreed with the cash balance per books at October 31.The November bank statement showed the following checks and deposits:The cash records per books for November
Baumgardner Company’s bank statement from Last National Bank at August 31, 2008, shows the following information.A summary of the Cash account in the ledger for August shows: Balance, August 1, \($16,900;\) receipts \($77,000;\) disbursements \($73,570;\) and balance, August 31, \($20,330.\)
Richardson Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Jake Stickyfingers
When is a correcting entry necessary?
When an amount is journalized and posted as a debit to an incorrect expense account, why is the amount of the correcting entry debited to the correct expense account?
When an amount is journalized and posted as a debit to an incorrect expense account, why is the amount of the correcting entry credited to the incorrect expense account?
What internal control objectives are met by physical, mechanical, and electronic controls?
A company writes a check to replenish a \($100\) petty cash fund when the fund contains receipts of \($94\) and \($3\) in cash. In recording the check, the company should:a. debit Cash Over and Short for \($3.\)b. debit Petty Cash for \($94.\)c. credit Cash for \($94.\)d. credit Petty Cash for
State the four questions used to analyze a transaction.
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