On July 1, 2013, a firm purchased a 1-year insurance policy for $6,300 and paid the full premium in advance. The insurance expense associated with this policy for the year ending December 31, 2013, is
$6,300.
$3,150.
$3,675.
$2,100.
On January 2, 2014, a firm purchased equipment for $12,500. Depreciation expense for the year ending December 31, 2014, given the straight-line method, a 4-year useful life, and a salvage value of $2,300, is
$3,125.
$2,550.
$2,300.
$1,725.
On November 1, 2013, a firm accepted a 4-month, 10 percent note for $780 from a customer with an overdue balance. The accrued interest recorded for this note for the year ended December 31, 2013, is
$65.
$78.
$26.
$13.
If an account has a debit balance of $720 in the Trial Balance section of a worksheet and there is a credit entry of $240 in the Adjustments section, the account balance in the Adjusted Trial Balance section of the worksheet is a
$480 debit.
$960 credit.
$960 debit.
$480 credit.
If an account has a debit balance of $720 in the Trial Balance section of a worksheet and there is a debit entry of $240 in the Adjustments section, the account balance in the Adjusted Trial Balance section of the worksheet is a
$960 credit.
$480 debit.
$960 debit.
$480 credit.
Hugh Morris Company pays weekly wages of $17,500 every Friday for a five day week ending on that day. If the last day of the year is on Wednesday, the adjusting entry to record the accrued wages is:
debit Wages Expense $10,500; credit Cash $10,500
debit Wages Expense $10,500; credit Drawing $10,500
debit Wages Expense $7,000; credit Cash $7,000
debit Wages Expense $10,500; credit Wages Payable $10,500
Rose Bush Nursery purchased a delivery truck for $32,300. The truck is expected to have a useful life of 5 years and a residual value of $1,100. If the truck was purchased on June 1, 2013, what is the amount of depreciation expense for the truck for the year ended December 31, 2013? The company uses the straight-line method of depreciation.
$1,100
$3,640
$3,120
$6,240
On October 1, 2013, a firm accepted a 4-month, 9% note for $44,000 from a customer with an overdue account balance. The accrued interest recorded for this note on December 31, 2013, is
$3,960.00
$330.00
$990.00
No accrual is necessary
Prepaid Advertising has a debit balance in the Trial Balance section of the worksheet of $3,500 and a credit entry of $1,500 in the adjustments section of the worksheet, the balance of Prepaid Advertising in the Adjusted Trial Balance section of the worksheet is a
$3,500 debit
$1,500 debit
$2,000 debit
$2,000 credit
Abe & Anna Split Ice Cream Parlour paid $2,150 cash for a 5-month advertising contract on September 30, 2013. The amount of advertising expense reported on the Income Statement for the year ending December 31, 2013, for this advertising contract is
$1,290
$1,720
$430
$2,150
The beginning capital balance shown on a statement of owner's equity is $54,000. Net income for the period is $16,000. The owner withdrew $20,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is
$50,000.
$70,000.
$90,000.
$58,000.
The beginning capital balance shown on a statement of owner's equity is $86,000. Net income for the period is $36,000. The owner withdrew $44,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is
$78,000.
$122,000.
$166,000.
$94,000
The beginning capital balance shown on a statement of owner's equity is $290,000. Net income for the period is $69,000. The owner withdrew $34,500 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is
$290,000.
$359,000.
$393,500.
$324,500
A company reported gross profit of $92,000, total operating expenses of $49,000 and interest income of $3,700. What is the income from operations?
$39,300
$46,700
$43,000
$35,600
At the end of the year Stan Still Stationery Store had the following balances: Sales $590,000; Sales Discounts $2,540; Sales Returns and Allowances $14,600; Sales Salaries Expense $65,000. The Net Sales for the year are:
$575,400
$507,860
$572,860
$587,460
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To answer these questions, we need to understand the concepts and calculations involved in each scenario.
1. For the insurance policy, the insurance expense is usually recognized over the period it covers. Since the policy is for 1 year and was fully paid upfront, the insurance expense for the year ending December 31, 2013, is $6,300.
2. For the equipment depreciation, we need to use the straight-line method, which takes the cost of the equipment, subtracts the salvage value, and divides it by the useful life. In this case, the depreciation expense for the year ending December 31, 2014, would be ($12,500 - $2,300) / 4 = $2,550.
3. For the accrued interest on the note, we need to calculate the interest based on the principal amount and the interest rate. Since the note is for 4 months and the interest rate is 10%, the accrued interest for the year ending December 31, 2013, would be ($780 * 0.10) * (2/12) = $13.
4. For the account balance in the Adjusted Trial Balance section, we need to consider the Trial Balance section's initial balance and the adjustments made. If there is a debit balance of $720 in the Trial Balance section and a credit entry of $240 in the Adjustments section, the account balance in the Adjusted Trial Balance section would be $720 - $240 = $480.
5. For the accrued wages, we need to determine the number of days for which the wages need to be accrued. If the last day of the year is on a Wednesday, the adjusting entry to record the accrued wages would be to debit Wages Expense $2,100 ($17,500 * 3 days/5 days) and credit Wages Payable $2,100.
6. For the depreciation expense of the delivery truck, we need to use the straight-line method by taking the cost of the truck, subtracting the salvage value, and dividing it by the useful life. Since the truck was purchased on June 1, 2013, the depreciation expense for the year ended December 31, 2013, would be ($32,300 - $1,100) * (7/12) / 5 = $3,120.
7. For the accrued interest on the note, we need to calculate the interest based on the principal amount and the interest rate. Since the note is for 4 months and the interest rate is 9%, the accrued interest on December 31, 2013, would be ($44,000 * 0.09) * (2/12) = $660.
8. For the balance of Prepaid Advertising, we need to consider the Trial Balance section's initial balance and the adjustments made. If there is a debit balance of $3,500 in the Trial Balance section and a credit entry of $1,500 in the adjustments section, the balance of Prepaid Advertising in the Adjusted Trial Balance section would be $3,500 - $1,500 = $2,000 debit.
9. For the advertising expense, we need to prorate the cash payment for the advertising contract over the period it covers. If a 5-month advertising contract was paid on September 30, 2013, the amount of advertising expense reported for the year ending December 31, 2013, would be ($2,150 * 3 months) / 5 months = $1,290.
10. For the owner's capital balance, we need to consider the beginning capital balance, the net income, any withdrawals, and additional investments. In this case, the owner withdrew $20,000 cash, so the owner's capital balance at the end of the period would be $54,000 + $16,000 - $20,000 = $50,000.
11. Similar to question 10, the owner's capital balance at the end of the period would be $86,000 + $36,000 - $44,000 = $78,000.
12. Similar to questions 10 and 11, the owner's capital balance at the end of the period would be $290,000 + $69,000 - $34,500 = $324,500.
13. The income from operations is calculated as the gross profit minus the total operating expenses. In this case, the income from operations would be $92,000 - $49,000 = $43,000.
14. The Net Sales are calculated as the Sales minus the Sales Discounts and Sales Returns and Allowances. In this case, the Net Sales for the year would be $590,000 - $2,540 - $14,600 = $572,860.