Regina harrison is a partner in pressed for time

1. On April 1, a company paid the $1,998 premium on a three-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the year ended December 31? (Round your answer to 1 decimal places.)

$1,998.00.

$666.00.

$1,498.50.

$499.50.

$55.50.

2. On September 30, the Cash account of Value Company had a normal balance of $6,700. During September, the account was debited for a total of $13,900 and credited for a total of $13,200. What was the balance in the Cash account at the beginning of September?

A $6,000 credit balance.

A $7,400 credit balance.

A $6,000 debit balance.

A $0 balance.

A $7,400 debit balance.

3. At the beginning of January of the current year, Thomas Law Center's ledger reflected a normal balance of $53,400 for accounts receivable. During January, the company collected $16,200 from customers on account and provided additional services to customers on account totaling $13,200. Additionally, during January one customer paid Thomas $5,700 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

$50,400.

$3,000.

$56,100.

$50,700.

$56,400.

4. A $55 credit to Sales was posted as a $160 credit. By what amount is Sales in error?

$55 understated.

$160 overstated.

$105 overstated.

$105 understated.

$160 understated.

5. A company purchased a new truck at a cost of $38,500 on July 1. The truck is estimated to have a useful life of 5 years

and a salvage value of $4,000. The company uses the straight-line method of depreciation. How much depreciation

expense will be recorded for the truck during the first year ended December 31?

$3,450.

$3,850.

$4,200.

$6,900.

$7,700.

6. A company had no office supplies available at the beginning of the year. During the year, the company purchased $430 worth of office supplies. On December 31, $165 worth of office supplies remained. How much should the company report as office supplies expense for the year?

$165.

$215.

$265.

$430.

$595.

7. Andrea Conaway opened Wonderland Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:

1. Conaway invested $22,000 cash in the business.

2. Conaway contributed $28,500 of photography equipment to the business.

3. The company paid $3,800 cash for an insurance policy covering the next 24 months.

4. The company received $9,100 cash for services provided during January.

5. The company purchased $7,900 of office equipment on credit.

6. The company provided $3,600 of services to customers on account.

7. The company paid cash of $2,350 for monthly rent.

8. The company paid $3,950 on the office equipment purchased in transaction #5 above.

9. Paid $360 cash for January utilities.

Based on this information, the balance in the cash account at the end of January would be:

$61,000.

$20,640.

$28,900.

$24,600.

$22,000.

8. Hal Smith opened Smith's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books:

1. Smith invested $32,000 cash in the business.

2. Smith contributed $114,000 of equipment to the business.

3. The company paid $3,400 cash to rent office space for the month.

4. The company received $23,000 cash for repair services provided during March.

5. The company paid $7,600 for salaries for the month.

6. The company provided $4,400 of services to customers on account.

7. The company paid cash of $640 for monthly utilities.

8. The company received $4,500 cash in advance of providing repair services to a customer.

9. Smith withdrew $6,400 for his personal use from the company.

Based on this information, net income for March would be:

$15,760.

$20,260.

$9,360.

$13,860.

$20,360.

9. Hal Smith opened Smith's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books:

1. Smith invested $32,500 cash in the business.

2. Smith contributed $115,000 of equipment to the business.

3. The company paid $3,500 cash to rent office space for the month.

4. The company received $23,500 cash for repair services provided during March.

5. The company paid $7,700 for salaries for the month.

6. The company provided $4,500 of services to customers on account.

7. The company paid cash of $650 for monthly utilities.

8. The company received $4,600 cash in advance of providing repair services to a customer.

9. Smith withdrew $6,500 for his personal use from the company.

Based on this information, the balance in Hal Smith, Capital reported on the Statement of Owner's Equity at the end of March would be:

$161,750.

$157,150.

$150,650.

$14,250.

$20,850.

10. On January 1 a company purchased a five-year insurance policy for $2,200 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:

Debit Prepaid Insurance, $2,200; credit Cash, $2,200.

Debit Prepaid Insurance, $1,760; credit Insurance Expense, $1,760.

Debit Prepaid Insurance, $440; credit Insurance Expense, $440.

Debit Insurance Expense, $440; credit Prepaid Insurance, $440.

Debit Insurance Expense, $1,760; credit Prepaid Insurance, $1,760.

• The ending inventory balance of $416,000 included $72,800 of consigned inventory for which Gotham was the consignor.

• The ending inventory balance of $416,000 included $23,600 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.

• The ending inventory balance of $416,000 did not include goods costing $48,800 that were purchased by Gotham on December 28 and shipped FOB destination on that date. Gotham did not receive the goods until January 2 of the following year.

• The ending inventory balance of $416,000 included damaged goods at their original cost of $39,600. The net realizable value of the damaged goods was $10,800.

• The ending inventory balance of $416,000 included $43,800 of consigned inventory for which Gotham was the consignee.

Based on this information, the correct balance for ending inventory on December 31 is:

$319,800

$247,000

$363,600

$343,400

$309,000

11. Gotham Company reported a December 31 ending inventory balance of $416,000. The following additional information is also available:

12. On December 31 of the current year, Hewett Company reported an ending inventory balance of $216,500. The following additional information is also available:

Based on the above information, the correct balance for ending inventory on December 31 is:

$195,200

$156,900

$172,200

$201,200

$210,500

13. A company had sales of $699,500 and cost of goods sold of $270,800. Its gross margin equals:

$(428,700).

$699,500.

$970,300.

$270,800.

$428,700.

14. A company had sales of $380,000 and its gross profit was $149,500. Its cost of goods sold equals:

$(230,500).

$529,500.

$149,500.

• Hewett sold goods costing $38,300 to Trump Enterprises on December 28 and shipped the goods on that date with shipping terms of FOB shipping point. The goods were not included in the ending inventory amount of $216,500 because they were not in Hewett's warehouse.

• Hewett purchased goods costing $44,300 on December 29. The goods were shipped FOB destination and were received by Hewett on January 2 of the following year. The shipment was a rush order that was supposed to arrive by December 31. These goods were included in the ending inventory balance of $216,500.

• Hewett's ending inventory balance of $216,500 included $15,300 of goods being held on consignment from Rumsfeld Company. (Hewett Company is the consignee.)

• Hewett's ending inventory balance of $216,500 did not include goods costing $95,300 that were shipped to Hewett on December 27 with shipping terms of FOB destination and were still in transit at year-end.

$230,500.

$380,000.

15. A company's gross profit was $81,950 and its net sales were $356,800. Its gross margin ratio equals (Round your answer to 2 decimal places):

77.03%.

54.06%.

6.85%.

22.97%.

4.35%.

16. Use the following information for Razor Company to compute inventory turnover for 2011.

2011 2010

Net sales $655,500 $584,500

Cost of goods sold 390,100 361,000

Ending inventory 79,300 80,980

(Round your final answer to two decimal places.)

8.27

4.92

7.22

4.46

4.87

17. On October 1, Robinson Company sold merchandise in the amount of $6,400 to Rosser, with credit terms of 2/10, n/30. The cost of the items sold is $4,600. Robinson uses the perpetual inventory system. The journal entry or entries that Robinson will make on October 1 is:

A Accounts receivable 4,600

Sales 4,600

B

Accounts receivable 6,400

Sales 6,400

Cost of goods sold 4,600

Merchandise inventory 4,600

C

Sales 6,400

Accounts receivable 6,400

D

Sales 6,400

Accounts receivable 6,400

Cost of goods sold 4,600

Merchandise inventory 4,600

18. Based on the following information from Raptor Company's balance sheet, calculate the current ratio.

Current assets $ 77,000

Long-term investments 60,000

Plant assets 260,000

Current liabilities 49,000

Long-term liabilities 100,000

Raptor, Capital 248,000

.64.

2.80.

2.62.

.92.

1.57.

19. On October 1, Whaley Company sold merchandise in the amount of $6,600 to Lee Company, with credit terms of 1/10, n/30. The cost of the items sold is $4,800. Whaley uses the perpetual inventory system. Lee pays the invoice on October 8, and takes the appropriate discount. The journal entry that Whaley makes on October 8 is:

A

Cash 6,534

Sales discounts 66

Accounts receivable 6,600

B

Cash 6,600

Accounts receivable 6,600

C

Cash 6,534

Accounts receivable 6,534

D

Cash 4,752

Sales discounts 48

Accounts receivable 4,800

E

Cash 4,800

Accounts receivable 4,800

20. A company that has operated with a 30% average gross profit ratio for a number of years had $105,000 in sales during the first quarter of this year. If it began the quarter with $18,500 of inventory at cost and purchased $72,500 of inventory during the quarter, its estimated ending inventory by the gross profit method is:

$18,500.

$17,500.

$31,500.

$22,050.

$28,500.

21. Hankco accepts all major bank credit cards, including Omni Bank's, which assesses a 3% charge on sales for using its card. On June 28, Hankco had $3,200 in Omni Card credit sales. What entry should Hankco make on June 28 to record the deposit?

Debit Accounts Receivable $3,200; credit Sales $3,200.

Debit Cash $3,200; credit Sales $3,200.

Debit Accounts Receivable $3,104; debit Credit Card Expense $96; credit Sales $3,200.

Debit Cash $3,296; credit Credit Card Expense $96; credit Sales $3,200.

Debit Cash $3,104; debit Credit Card Expense $96; credit Sales $3,200.

22. Teller purchased merchandise from TechCom on October 17 of the current year and TechCom accepted Teller's $12,800, 90-day, 9% note. What entry should TechCom make on January 15 of the next year when the note is paid? (Use 360 days a year. Do not round intermediate calculations.)

Debit Cash $13,088; credit Notes Receivable $13,088.

Debit Cash $13,088; credit Interest Revenue $48; credit Interest Receivable $240; credit Notes Receivable $12,800.

Debit Cash $4,920; credit Interest Revenue $100; credit Interest Receivable $20; credit Notes Receivable $4,800.

Debit Notes Receivable $12,800; debit Interest Receivable $288; credit Sales $13,088.

Debit Cash $13,088; credit Interest Revenue $288; credit Notes Receivable $12,800.

23. The interest accrued on $4,200 at 5% for 60 days is (Use 360 days a year. Do not round intermediate calculations):

$245.

$35.

$25.

$105.

$21.

24. Teller purchased merchandise from TechCom on October 17 of the current year and TechCom accepted Teller's $8,400, 90-day, 8% note. What entry should TechCom make on December 31, to record the accrued interest on the note? (Use 360 days a year. Do not round intermediate calculations.)

Debit Interest Receivable $28; credit Interest Revenue $28.

Debit Cash $28; credit Notes Receivable $28.

Debit Cash $140; credit Notes Receivable $140.

Debit Cash $168; credit Interest Revenue $140; credit Interest Receivable $28.

Debit Interest Receivable $140; credit Interest Revenue $140.

25. The following information is available for Johnson Manufacturing Company at June 30:

Cash in bank account $ 6,755

Inventory of postage stamps 77

Money market fund balance 12,700

Petty cash balance 380

NSF checks from customers returned by bank 897

Postdated checks received from customers 466

Money orders 557

A nine-month certificate of deposit maturing on December 31 of current year 8,300

Based on this information, Johnson Manufacturing Company should report Cash and Cash Equivalents on June 30 of:

$20,392

$20,809

$20,732

$19,835

$15,992

26. A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable $ 443,000 Debit

Allowance for Doubtful Accounts 1,330 Debit

Net Sales 2,180,000 Credit

All sales are made on credit. Based on past experience, the company estimates 3.0% its outstanding receivables are uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Debit Bad Debts Expense $66,730; credit Allowance for Doubtful Accounts $66,730.

Debit Bad Debts Expense $64,070; credit Allowance for Doubtful Accounts $64,070.

Debit Bad Debts Expense $13,290; credit Allowance for Doubtful Accounts $13,290.

Debit Bad Debts Expense $65,400; credit Allowance for Doubtful Accounts $65,400.

Debit Bad Debts Expense $14,620; credit Allowance for Doubtful Accounts $14,620.

27. A company factored $48,000 of its accounts receivable and was charged a 3% factoring fee. The journal entry to

record this transaction would include a:

Debit to Cash of $48,000 and a credit to Accounts Receivable of $48,000.

Debit to Cash of $48,000 and a credit to Notes Payable of $48,000.

Debit to Cash of $46,560, a debit to Factoring Fee Expense of $1,440, and a credit to Accounts Receivable of $48,000.

Debit to Cash of $49,440 and a credit to Accounts Receivable of $49,440.

Debit to Cash of $48,000, a credit to Factoring Fee Expense of $1,440, and credit to Accounts Receivable of $46,560.

28. A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the

company's unadjusted trial balance reported the following selected amounts:

Accounts receivable $ 360,000 debit

Allowance for uncollectible accounts 550 credit

Net sales 805,000 credit

All sales are made on credit. Based on past experience, the company estimates 0.5% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Debit Bad Debts Expense $3,475; credit Allowance for Doubtful Accounts $3,475.

Debit Bad Debts Expense $2,350; credit Allowance for Doubtful Accounts $2,350.

Debit Bad Debts Expense $4,575; credit Allowance for Doubtful Accounts $4,575.

Debit Bad Debts Expense $4,025; credit Allowance for Doubtful Accounts $4,025.

Debit Bad Debts Expense $1,800; credit Allowance for Doubtful Accounts $1,800.

29. Martha Company has an established petty cash fund in the amount of $500. The fund was last reimbursed on November 30. At the end of December, the fund contained the following petty cash receipts:

December 4 Freight charge for merchandise purchased $ 50

December 7 Freight charge for delivery to customer $ 74

December 12 Purchase of office supplies $ 39

December 18 Donation to charitable organization $ 58

If, in addition to these receipts, the petty cash fund contains $267.00 of cash, the journal entry to reimburse the fund on

December 31 will include:

A debit to Cash Over and Short of $12.00.

A credit to Office Supplies of $74.

A debit to Transportation-Out of $89.

A debit to Transportation-In of $89.

A credit to Cash Over and Short of $12.00.

30. A company uses the percent of receivables method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:

Accounts receivable $ 432,000 Debit

Allowance for Doubtful Accounts 1,380 Debit

Net Sales 2,230,000 Credit

All sales are made on credit. Based on past experience, the company estimates 3.0% of its outstanding receivables are uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Debit Bad Debts Expense $1,6690; credit Allowance for Doubtful Accounts $1,6690.

Debit Bad Debts Expense $12,960; credit Allowance for Doubtful Accounts $12,960.

Debit Bad Debts Expense $14,340; credit Allowance for Doubtful Accounts $14,340.

Debit Bad Debts Expense $11,580; credit Allowance for Doubtful Accounts $11,580.

Debit Bad Debts Expense $6,690; credit Allowance for Doubtful Accounts $6,690.

31. Arena Company provides health insurance to its employees that costs $16,000 per month. In addition, the company contributes 4% of the employees' $160,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:

Credit to Employee Benefits Expense $22,400.

Debit to Medical Insurance Payable $16,000.

Credit to Employee Benefits Expense $16,000.

Debit to Employee Retirement Program Payable $6,400.

Debit to Employee Benefits Expense $22,400.

32. A company had fixed interest expense of $4,200, its income before interest expense and any income taxes is $16,800, and its net income is $7,200. The company's times interest earned ratio equals:

0.25.

1.71.

2.33.

0.58.

4.00.

33. During August, Arena Company sells $361,000 in product that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a balance of $12,300 before adjustment. Customers returned product for warranty repairs during the month that used $8,900 in parts for repairs. The entry to record the estimated warranty expense for the month is:

Debit Estimated Warranty Liability $18,050; credit Warranty Expense $18,050.

Debit Warranty Expense $14,650; credit Estimated Warranty Liability $14,650.

Debit Warranty Expense $5,750; credit Estimated Warranty Liability $5,750.

Debit Warranty Expense $18,050; credit Estimated Warranty Liability $18,050.

Debit Estimated Warranty Liability $8,900; credit Warranty Expense $8,900.

34. An employee earned $3,600 working for an employer. The current rate for FICA Social Security is 6.2% and the rate for FICA Medicare 1.45%. The employer's total FICA payroll tax for this employee is (Do not round your intermediate calculations. Round you final answers to two decimal places):

$52.20.

$223.20.

$275.40.

$550.80.

Zero, since the FICA tax is a deduction from an employee's pay, and not an employer tax.

35. An asset's book value is $18,800 on June 30, Year 6. The asset is being depreciated at an annual rate of $3,800 on the straight-line method. Assuming the asset is sold on December 31, Year 7 for $15,800, the company should record:

A loss on sale of $4,600.

Neither a gain nor a loss is recognized on this type of transaction.

A gain on sale of $4,600.

A loss on sale of $2,700.

A gain on sale of $2,700.

36. A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $59,500; the land at $47,000, and the parking lot at $18,500. Land should be recorded in the accounting records with an allocated cost of (Do not round intermediate calculations):

$100,000.

$43,600.

$5.

$47,000.

$37,600.

37. An employee earned $45,400 during the year working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee's annual FICA taxes amount is:

$658.30.

$3,473.10.

$2,814.80.

Zero, since the employee's pay exceeds the FICA limit.

$6,946.20.

38. Monte Ray leases office space for $6,300 per month. On January 3, Monte Ray incurs $94,400 to improve his leased office space. These improvements are expected to yield benefits for 10 years. Ray has 8 years remaining on his lease. Compute the amount of expense that should be recorded the first year related to the improvements.

$6,300.

$15,740.

$18,100.

$11,800.

$9,440.

39. A company had average total assets of $922,000. Its gross sales were $1,093,000 and its net sales were $975,000. The company's total asset turnover equals (Round your final answer to two decimal places):

0.84.

0.95.

1.12.

1.21.

1.06.

40. On November 1, Carter Company signed a 120-day, 12% note payable, with a face value of $18,900. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

No journal entry required.

Debit interest expense, $252; credit interest payable, $252.

Debit interest expense, $378; credit interest payable, $378.

Debit interest expense, $504; credit interest payable, $504.

Debit interest expense, $756; credit interest payable, $756.

41. Regina Harrison is a partner in Pressed for Time. An analysis of Regina Harrison's capital account indicates that during the most recent year, she withdrew $31,000 from the partnership.

Her share of the partnership's net loss was $21,500 and she made an additional equity contribution of $21,000. Her capital account ended the year at $161,000. What was her capital balance at the beginning of the year?

$160,500

$139,500

$192,500

$214,000

$129,500

42. Badger and Fox are forming a partnership. Badger contributes a building that has a market value of $340,000; the

partnership assumes responsibility for a $120,000 note secured by a mortgage on the property. Fox invests $95,000 in

cash and equipment that has a market value of $70,000. For the partnership, the amounts recorded for Badger's Capital

account and for Fox's Capital account are:

Badger, Capital $340,000; Fox, Capital $165,000.

Badger, Capital $220,000; Fox, Capital $165,000.

Badger, Capital $220,000; Fox, Capital $95,000.

Badger, Capital $220,000; Fox, Capital $70,000.

Badger, Capital $340,000; Fox, Capital $95,000.

43. A company has 31,000 shares of common stock outstanding. The stockholders' equity applicable to common shares is $393,700, and the par value per common share is $10. The book value per share is:

$2.70.

$12.70.

$39.37.

$10.00.

$0.08.

44. A company has earnings per share of $9.90. Its dividend per share is $.65, its market price per share is $126.72, and its book value per share is $103. Its price-earnings ratio equals:

10.40.

8.80.

9.90.

12.80.

15.23.

45. A corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares. At the time of the stock dividend, the market value per share was $12. The entry to record

this dividend is: Debit Retained Earnings $30,000; credit Common Stock Dividend Distributable $30,000.

Debit Common Stock Dividend Distributable $36,000; credit Retained Earnings $36,000.

Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000.

Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $36,000.

No entry is needed.

46. Web Services is organized as a limited partnership, with David White as one of its partners. David's capital account began the year with a balance of $46,600. During the year, David's share of the partnership income was $9,100, and David received $5,600 in distributions from the partnership. What is David's partner return on equity?

12.0%

19.5%

18.8%

11.6%

18.2%

47. Shamrock Company had net income of $33,120. The weighted-average common shares outstanding were 9,600. The company declared a $4,300 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company's earnings per share is:

$3.00.

$2.75.

$3.65.

$3.45.

$3.90.

48. A company has net income of $920,000; its weighted-average common shares outstanding are 184,000. Its dividend per share is $.65, its market price per share is $92, and its book value per share is $82.0. Its price-earnings ratio equals (Do not round your intermediate calculations):

18.40.

10.65.

16.40.

10.00.

9.35.

49. Trump and Hawthorne have decided to form a partnership. Trump is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership. The following information regarding the asset to be contributed by Trump is available:

Historical cost of the asset $78,000

Accumulated depreciation on the asset $41,000

Note payable secured by the asset* $20,000

Agreed-upon market value of the asset $46,000

*will be assumed by the partnership

Based on this information, Trump's beginning equity balance in the partnership will be:

$46,000

$20,000

$26,000

$37,000

$78,000

50. A company has 1,500 shares of $100 par preferred stock. It also has 30,000 shares of common stock outstanding, and its total stockholders' equity equals $645,000. The book value per common share is:

$15.71.

$100.00.

$20.48.

$16.50.

$21.50.