ACCT 211 Chapter 9: Liabilities Ch 9
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The following are the transactions relating to the formation ofCardinal Mowing Services, Inc., and its first month ofoperations. |
a. | The firm was organized and the initial stockholders investedcash of $780. |
b. | The company borrowed $1,170 from a relative of one of theinitial stockholders; a short-term note was signed. |
c. | Two zero-turn lawn mowers costing $624 each and a professionaltrimmer costing $169 were purchased for cash. The original listprice of each mower was $793, but a discount was received becausethe seller was having a sale. |
d. | Gasoline, oil, and severalpackages of trash bags were purchased for cash of $117. |
e. | Advertising flyers announcing the formation of the business anda newspaper ad were purchased. The cost of these items, $221, willbe paid in 30 days. |
f. | During the first two weeks of operations, 47 lawns were mowed.The total revenue for this work was $917; $605 was collected incash, and the balance will be received within 30 days. |
g. | Employees were paid $546 fortheir work during the first two weeks. |
h. | Additional gasoline, oil, andtrash bags costing $143 were purchased for cash. |
i. | In the last two weeks of thefirst month, revenues totaled $1,196, of which $488 wascollected. |
j. | Employee wages for the last twoweeks totaled $663; these will be paid during the first week of thenext month. |
k. | It was determined that at theend of the month the cost of the gasoline, oil, and trash bagsstill on hand was $39. |
l. | Customers paid a total of $195 due from mowing services providedduring the first two weeks. The revenue for these services wasrecognized in transaction f. |
Required: |
Prepare the journal entries for above of the transactions. Journal entry options include: Accounts payable Accounts receivable Accumulated depreciation Additional paid-in capital Advertising expense Allowance for bad debts Apicâpreferred Bad debts expense Bonds payable Buildings Capital lease liability Cash Commissions expense Commissions payable Cost of goods sold Current maturities of long-term debt Deferred income taxes Deferred tax liabilities Depreciation expense Discount on bonds payable Discount on notes payable Dividends payable Employee contributions to pension plan Equipment Estimated health care expense Estimated liability for retiree health care--current Estimated warranty liability Federal unemployment taxes withheld Fica taxes withheld Gain on sale of equipment Goodwill Group hospitalization insurance Income tax expense Income taxes payable Income taxes withheld Insurance expense Interest expense Interest income Interest payable Interest receivable Interest revenue Inventory Keg deposits Keg deposits revenue Keg expense Land Loss of sale of equipment Loss on early retirement of bonds Loss on sale of machine Machine Medical insurance contributions Merchandise inventory Miscellaneous expense Note payable Note receivable Paid-in capital Parts inventory Payroll tax expense Payroll taxes payable Preferred stock Premium on bonds payable Prepaid insurance Prepaid rent Real estate tax expense Real estate taxes payable Rent expense Rent payable Rent revenue Retained earnings Serial bonds payable Service revenue Subscription revenue Supplies Supplies expense Supplies on hand Ticket revenue Treasury stock Trucks Unearned rent revenue Unearned revenues Unearned subscription revenue Unearned ticket revenue Utilities expense Wages expense Wages payable Warranty expense Withholding liabilities and each journal entry is either credit ordebit.!!!! |
Barnes Realtors, Inc. prepared the following random list ofassets, liabilities, revenues, and expenses from its December 31,2014 year end accounting records. Prepare the Income statement,Statement of retained earnings and the CLASSIFIED balance sheet forBarnes Realtors, Inc., as of December 31, 2014. Each of yourstatements should have the 3-line heading, and your balance sheetshould be a CLASSIFIED Balance Sheet.
Account | Debit | Credit |
Cash | 800 | |
Common Stock | 11,640 | |
Unearned Revenue | 4,100 | |
Inventory | 2,000 | |
Supplies Expense | 1,200 | |
Supplies | 1,900 | |
Prepaid Rent | 500 | |
Goodwill | 6,000 | |
Building | 40,000 | |
Depreciation Expense | 1,400 | |
Notes Payable, due 2020 | 2,300 | |
Accounts Receiveable | 1,000 | |
Paid in Excess of Par | 3,000 | |
Retained Earnings | 5,100 | |
Income Tax Expense | 8,040 | |
Service Revenue | 33,000 | |
Rent Expense | 2,300 | |
Accounts Payable | 7,500 | |
Salaries Expense | 6,400 | |
Accumulated Depreciation | 8,500 | |
Dividends | 2,000 | |
Cost of Goods Sold | 1,600 | |
Totals | 75,140 | 75,140 |
Question 16
Corresponds to CLO 3(d) Hemmingway Corporation paid salaries of$5,000 and advertising expense of $2,000. Which of the followingjournal entries correctly records these expenses?
Debit: Cash $7,000 | ||
Debit: Salaries/Wages Expense$5,000 | ||
Debit: Salaries/Wages Expense$5,000 | ||
Debit: Salaries/Wages Expense$5,000 |
3 points
Question 17
Corresponds to CLO 4(a) Which of the following statements iscorrect regarding accrued revenues and unearned revenues, beforeadjusting entries have been made?
Accrued revenues have not been earned and unearned revenues havebeen earned. | ||
Accrued revenues have been paid and unearned revenues havenot. | ||
Accrued revenues have not been recorded and unearned revenueshave been recorded. | ||
Accrued revenues have been recorded and unearned revenues havebeen recorded. |
3 points
Question 18
Corresponds to CLO 4(b) Hudson Law Corporation received $5,500cash for legal services to be rendered in the future. The fullamount was credited to the liability account Unearned ServiceRevenue. At the end of the period, Hudson determines that $3,000 ofthe legal services have been rendered. The appropriate adjustingjournal entry to be made at the end of the period is:
debit Unearned Service Revenue, $3,000; credit Cash, $3,000. | ||
debit Unearned Service Revenue, $3,000; credit Service Revenue,$3,000. | ||
debit Unearned Service Revenue, $2,500; credit Service Revenue,$2,500. | ||
debit Service Revenue, $2,500; credit Unearned Service Revenue,$2,500. |
3 points
Question 19
Corresponds to CLO 4(c) Ace Corporation purchased officesupplies costing $13,000 and debited Office Supplies for the fullamount. At the end of the accounting period, a physical count ofoffice supplies revealed $2,700 still on hand. The appropriateadjusting journal entry to be made at the end of the period is:
debit Office Supplies Expense, $10,300; credit Office Supplies,$10,300. | ||
debit Office Supplies, $10,300; credit Office Supplies Expense,$10,300. | ||
debit Office Supplies Expense, $2,700; credit Office Supplies,$2,700. | ||
debit Office Supplies, $2,700; credit Office Supplies Expense,$2,700. |
3 points
Question 20
Corresponds to CLO 4(d) On September 1, Northgate paid $18,000to Evans Management Company for 12 months of rent beginning onSeptember 1. The appropriate journal entry was made to record thistransaction. If financial statements are prepared for the 9 monthsended September 30, the adjusting entry to be made by Northgateis:
debit Rent Expense, $13,500; credit Prepaid Rent, $13,500. | ||
debit Prepaid Rent, $1,500; credit Rent Revenue, $1,500. | ||
debit Prepaid Rent, $1,500; credit Rent Expense, $1,500. | ||
debit Rent Expense, $1,500; credit Prepaid Rent, $1,500. |
3 points
Question 21
Corresponds to CLO 5(a) Lennox Corporation purchased a newdelivery truck for 35,000. The sales taxes are $2,700. The logo ispainted on the side of the truck for $800. The truck's annuallicense is $200. Annual insurance on the truck is $1,300. Whatshould Lennox record as the cost of the new truck?
$40,000 | ||
$38,500 | ||
$37,700 | ||
$35,000 |
3 points
Question 22
Corresponds to CLO 5(b) On April 1, 2013, Ballard Corporationpurchased equipment for $65,000. It is estimated that the equipmentwill have a $5,000 salvage value at the end of its 5 year usefullife. If Ballard uses the straight-line method of depreciation,what is the accumulated depreciation at December 31, 2013?
$13,000 | ||
$12,000 | ||
$9,750 | ||
$9,000 |
3 points
Question 23
Corresponds to CLO 5(c) Tyree Company purchased equipment with acost of $90,000 and an estimated salvage value of $18,000. Theequipment is expected to produce 150,000 units over its estimateduseful life of 10 years. If Tyree uses the units-of-activitymethod, what is the depreciation cost per unit to be used incalculating depreciation?
$1.67 | ||
$0.48 | ||
$2.08 | ||
$0.60 |
3 points
Question 24
Corresponds to CLO 5(d) Kerns Company purchased equipment with acost of $200,000 and an estimated salvage value of $10,000. Theequipment has an estimated useful life of 10 years. If Kerns usesthe double-declining balance method, what is the annualdepreciation rate to be used in calculating depreciation?
5% | ||
10% | ||
20% | ||
40% |
3 points
Question 25
Corresponds to CLO 6(a) Marshall Machinery made a sale for$150,000 on March 31. The customer is sent a statement on April 6and payment is received on April 15. Marshall prepares March'smonthly internal financial statements on April 20. Marshall followsGAAP and applies the revenue recognition principle. When is the$150,000 considered to be earned?
March 31 | ||
April 6 | ||
April 15 | ||
April 20 |