Posted: October 20th, 2022

Penn Foster 06161000: Accounting for Assets

Penn Foster 06161000 – Accounting for AssetsSoft-Side beds Co. received a non-interest bearing note from Beds R Us Co. on October 1. The amount of the note that will be due at the maturity date is $6,200. The note was accepted by Soft-Side Beds for merchandise sold to Beds R Us with a selling price of $6,000.The note is due in three months.1. When the note is received on October 1, the entry to record the transaction by Soft-Side Beds Co. will include which of the following?a. A credit to Sales for $6,200b A debit to Notes Receivable for $6,200c A credit to Interest Revenue for $200d A debit to Discount on Notes Receivable for $2002. When the note is collected on the maturity date, the entry to record the transaction by Soft-Side Beds Co. will include which of the following?a. A credit to Cash for $6,000b. A credit to Notes receivable for $6,000c. A debit to Discount on Notes Receivable for $200d. A debit to Interest Revenue for $2003. Piper and Sons. Inc has been in business for 20yrs. During that time, the company has consistently used the LIFO inventory costing method. Prices for merchandise have increased consistently over the 20 years. If the company has maintained or increased the quantity of its inventory level over the 20 years, what conclusion can you reach?a. The ending inventory figure reported on the balance sheet may be significantly lower than its current value.b. Piper and Sons Inc will have paid more income taxes over the past 20 years than it would have if it has used the FIFO method.c. Total net income for the past 20 years is greater than it would been reported using another inventory method.d. The company will have to continue using the LIFO method indefinitely because of generally accepted accounting principles and federal income tax rules.ShirtWaist Co. counted ending inventory as $178,000 at year-end, Jan 31, upon review of the records, it was noted that the following two items were in transit during the count:(a) A supplier shipped goods costing $2,000 to Shirtwaist. The goods were sent FOB destination on Jan 31 and weren’t counted by Shirtwaist.(b) Goods costing $6,000 were shipped by Shirtwaist to a customer. The goods were sent FOB shipping point on Jan 31 and were counted by Shirtwaist.4. What is the amount of the revised ending inventorya. $172,000b. $174,000c. $178,000d. $182,000Credit Sales during the Year $2,400,000Year End Accounts Receivable (12/31) $352,000Year End Allowance for Doubtful Accounts (12/31) $27,000Bad Debt expense for the Year $18,0005. What amount will the year-end balance sheet show as the net realizable value of Accounts Receivable?a. $307,000b. $325,000c. $334,000d. $379,000Prepare a bank reconciliation and answer question 6 based on the following informationThe accountant for Larizza Corp was preparing bank reconciliation as of February 28. The following items were identified:(a) Larizza Book Balance $35,900(b) Error by Lizza in recording a customer’s check: the amount was recorded in cash receipts as $110; the correct amount of $101 was recorded by the bank as a deposit(c) Outstanding Checks $12,050(d) Interest Earned on Checking Account $75(e) Customers NSF Check Returned by the Bank $3256. Larizza’s adjusted Cash Balance at February 28 isa, $23,591b. $35,641c. $35,659d $46,691Use the following information to create journal entries and/or T accounts. The answer question 7 and 8Several purchase activity transactions for Kostko Corp are described below. Kostko records purchases using the gross method and uses a periodic inventory system. All purchases are on credit and are subject to credit terms of 2/10, n/30, FOB shipping point.(a) April 1: Kostko purchases merchandise with an invoice prices of $12,000 from Hubbard Co.(b) April 5: Kostko pays freight costs of $400 on the merchandise that was purchased and delivered on April 1.(c) April 7; Kostko returns merchandise with an invoice price of $1,500 to Hubbard because the merchandise was damaged.(d) April 12: Kostko purchase merchandise with an invoice price of $7,500 from Smith and Jones Co.(e) April 22; Kostko pays the amount due to Smith and Jones for the merchandise purchased on April 12.(f) April 30; Kostko pays the balance due for the merchandise purchased on April 1, note that Kostko returned part of the merchandise on April 7.7. What is the correct Journal entry for the April 22 transaction?a. Debit Accounts Payable, $7,500; credit Cash $7,500b. Credit Accounts Payable, $7,500; debit Cash $7,500c. Credit Accounts Payable, $7,500; debit Purchase Discounts, $150, debit Cash, $7,350d Debit Accounts Payable, $7,500; credit Purchase Discounts, $150, credit Cash, $7,3508. Assuming a beginning balance of $17,500. What is the amount of Net Purchases shown on Kostkos income statement at the end of April?a $35,350b. $35,500c $37,000d $38,6509. Carpet Cleaners purchased a new delivery truck at the beginning of Year One. The truck has a cost of $37,000, an estimated life of five years, and an estimated residual value of $7,000. A full year’s depreciation expense is to be recorded in Year One. The truck was driven 20,000 miles during year One and 24,000 during Year Two. The number of expected miles over five years is 100,000. By what amount will double-declining balance depreciation exceed straight line depreciation over the five year life of the truck?a. The salvage valueb Cost less total accumulated depreciationc Cost plus total accumulated depreciationd. Total depreciation expense under double-declining-balance and straight-line depreciation are equal.10. D Corp reported new sales (all on credit) of $1,600,000 and cost of goods sold of $1,100,000 for the year. The beginning balance in Accounts receivable was $150,000.The Accounts Receivable balance decreased by $10,000 during the year. What is the accounts receivable turnover ratio for the year? (Round your answer to two decimal places).A 7.59B 10.32C 10.67d. 11.03Make journal entries and answer question 11 and 12 based on the following information(a) Sept 3; Purchased merchandise on credit for $7,000(b) Sept 8: Returned merchandise with a cost of $800, the merchandise was purchased on Sept 3(c) Sept 15; Sold merchandise on credit for $4,500, the cost of the merchandise was $3,00011. Under the periodic inventory system, the September 15 entry will include a debit to which of the following?a. Accounts Receivable for $4,500b. Cost of Goods Sold for $3,000c. Inventory for $3,000d. Sales for $4,50012. If the periodic inventory system is used, what are the effects on the accounting equation of the merchandise purchase on Sept 3?a. Assets and liabilities decrease $7,000b. Liabilities increase, and owner’s equity decreases $7,000c. Assets and owner’s equity decrease $7,000d. Liabilities and assets increase $7,00013. H Corp has an inventory turnover rate of 8 times. If H corps cost of goods sold is $150,000 thenA the company will report sales of $1,200,000b. the gross profit will be $1,200,000c. the company’s average inventory is $18,750d. H. Corp sells its inventory 1,200 times per year14. In 2008, Villa Inc. purchased securities for $10,000 classifying them as available for sale. The carrying value was increased to $13,000 at the end of 2008 and the investment was sold in 2009 for $16,000. What journal entry would villa make to record the sales?a. Debit Cash, $16,000, credit investment in stock, $13,000, credit Gain on Sales of Stock $3,000b. Debit Cash, $16,000 debit Unrealized Gain/Loss, $3,000; credit investment in Stock, $13,000; credit Gain on Sale of Stock $6,000c. Debit Loss on Sale of Stock $3,000; debit Investment in Stock, $13,000, credit Cash $16,000d. Debit Cash, $16,000; credit investment in Stock, $10,000; credit Gain on Sale of Stock, $6,00015. Cookville Transportation Company sold an old truck on Dec 31 for $18,400 cash. The acquisition cost was $75,000 and estimated residual value at the time of acquisition was $8,000. Accumulated depreciation on Dec 31 after adjustment was $53,600. When the sale is recorded, it should include which of the following:a. A debit of $3,000 to Loss on Disposalb. A credit of $21,400 to the Truck accountc. A credit of $3,000 to Gain on Disposald. A credit of $5,000 to Gain on Disposal16. A company established a petty cash fund for $300. On Dec 31, the fund was replenished for $125. The amount of cash on hand was $175. All disbursements were for expenses. What are the effects on the accounting equation of the transaction to replenish the petty cash fund on December 31?a. No effect; assets increase and decrease $125b. Assets and owners’ equity decrease $125c. Assets decrease $300, owners’ equity decreases $125, and liabilities increase $175d. Assets and owner’s equity decrease $175Donavon Company purchased a dump truck at the beginning of 2008 at a cost of $56,000.The truck had an estimated life of five years and an estimated residual value of $20,000. On Jan 1, 2011, the company made major repairs of $8,000 to the truck that extended the life three years. Starting with 2011, the truck has a remaining life of five years and zero salvage value. The company uses the straight line depreciation method.17. The truck is reported on the balance sheet at the end of 2010 at what book value?a. $41,600b. $34,400c. $21,600d. $14,40018. What amount should be recorded as depreciation expense each year starting in 2011?a. $6,880b $7,200c $8,480d $8,80019. Susan’s Stores purchased a trademark at the beginning of 2008 for $340,000. Economic benefits were expected for 10 years, and the trademark’s legal life was 20 years. During 2008, Susan’s incurred research and development costs of $200,000. What is the book value of the trademark at Dec 31, 2008?a. $306,000b. $323,000c. $486,000d. $506,000Account Receivable (January 1, 2008) $236,000Credit Sales during 2008 $720,000Collections form Credit Customers during 2008 $590,000Customer Accounts written off as uncollectable during 2008 $8,000Allowance for doubtful Accounts (credit balance,after write-off of uncollectible accounts) $700Estimated uncollectible Accounts based on an aging analysis $9,60020. What is the balance of Accounts receivable at Dec 31, 2008?a. $236,000b. $348,400c $358,000d. $366,00021. Monument Inc purchased 1,000 shares of common stock for $50 per share and classified them as trading securities. At the end of the year, the fair value of the stock was $46 per share. The investment was sold the next year for $53 per share. What is the realized gain or loss?a. Realized loss of $3,000b. realized gain of $3,000c. realized loss of $4,000d. Realized gain of $7,000Use the following information to prepare a partial income statement and answer question 22, 23, and 24Merchansider Corporation uses the periodic inventory system. Selected account balances at year-end July 31, 20x0Sales Revenue $200,000Purchases $110,000Inventory (beginning) $23,000Inventory (ending) $17,000Purchase Returns and Allowances $4,000Purchase Discounts $7,000Transportation-in $3,000Sales Discounts $9,000Sales Returns and Allowances $5,00022. What is the cost of goods purchased?a. $99,000b $102,000c. $103,000d. $113,00023. What is the amount of net sales?a. $186,000b. $191,000c. $195,000d. $200,00024. What is the gross profit?a. $57,000b. $78,000c. $90,000d. $92,00025. Shelton Corp uses a periodic inventory system. At the beginning of 2008, its inventory balance was $125,000. During the first four months of 2008, net purchases amounted to $475,000 and net sales were $500,000. On May 1, 2008, a fire destroyed the company’s warehouse and its entire inventory. The average gross profit ration in recent years had been 40%. What is the estimated amount of Shelton’s inventory loss on May1, 2008?a. $50,000b. $250,000c. $300,000d. $350,000

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