Question 11 pts

  Which of the following are in accordance with generally accepted accounting principles?

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Question 21 pts

The balance in the office supplies account on June 1 was $4,300, supplies purchased during June were $1,500, and the supplies on hand at June 30 were $2,000. The amount to be used for the appropriate adjusting entry is

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Question 31 pts

Melman Company purchased equipment for $5,000 on Novmber 1. It is estimated that annual depreciation on the computer will be $960. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

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Question 41 pts

Adjusting entries do not include what account?

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Question 51 pts

Action Real Estate received a check for $12,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent was credited for the full $12,000. Financial statements will be prepared on July 31. Action Real Estate should make the following adjusting entry on July 31:

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Question 61 pts

The balance in the Prepaid Rent account before adjustment at the end of the year is $8,000, which represents two months’ rent paid on December1. The adjusting entry required on December 31 is to

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Question 71 pts

If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be

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Question 81 pts

Adjusting entries are

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Question 91 pts

Artie's City College sold season tickets for the 2012 football season for $80,000. A total of 8 games will be played during September, October and November. In September, three games were played. The adjusting journal entry at September 30

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Question 101 pts

Cindy’s Chocolates paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29–31). Employees work 5 days a week and the company pays $2500 per week in wages. What will be the adjusting entry to accrue wages expense at the end of January?

1. On November 1, 2018, Taylor signed a one-year contract to provide handyman services on an as-needed basis to King Associates, with the contract to start immediately. King agreed to pay Taylor $5,400 for the one-year period. Taylor is confident that King will pay that amount, but payment is not scheduled to occur until 2019. Taylor should recognize revenue in 2018 in the amount of

Multiple Choice

a. $900

b. $2,700

c. $0

d. $5,400

2.

Mary signed up and paid $1,140 for a 6 month ceramics course on June 1^st with Choplet Ceramics. As of August 1^st, Choplet’s accounting records would indicate:

Multiple Choice

a. $380 of revenue, $760 of accounts receivable

b. $380 of revenue, $760 of deferred revenue

c. $1,140 of revenue, $1,140 of cash

d. $760 of revenue, $380 of accounts receivable

3.

JRE2 Inc. entered into a contract to install a pipeline for a fixed price of $2,395,000. JRE2 recognizes revenue upon contract completion.

In 2018, JRE2 would report gross profit (loss) of:

Multiple Choice

a. $0.

b. $(432,000).

c. $(241,000).

d. $(291,000).

4.

JRE2 Inc. entered into a contract to install a pipeline for a fixed price of $2,305,000. JRE2 recognizes revenue upon contract completion.

In 2019, JRE2 would report gross profit (loss) of:

Multiple Choice

a. $(149,000).

b. $108,000.

c. $19,000.

d. $57,000.

5.

Indiana Co. began a construction project in 2018 with a contract price of $161 million to be received when the project is completed in 2020. During 2018, Indiana incurred $40 million of costs and estimates an additional $89 million of costs to complete the project. Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed.

Indiana:

Multiple Choice

a. Recognized $40.00 million loss on the project in 2018.

b. Recognized no gross profit or loss on the project in 2018.

c. Recognized $72.00 million loss on the project in 2018.

d. Recognized $9.92 million gross profit on the project in 2018.

6.

Indiana Co. began a construction project in 2018 with a contract price of $164 million to be received when the project is completed in 2020. During 2018, Indiana incurred $35 million of costs and estimates an additional $88 million of costs to complete the project. Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed.

In 2019, Indiana incurred additional costs of $52 million and estimated an additional $37 million in costs to complete the project. Indiana (Do not round your percentage calculated):

Multiple Choice

a. Recognized $40.00 million gross profit on the project in 2019.

b. Recognized $4.00 million gross profit on the project in 2019.

c. Recognized $16.40 million gross profit on the project in 2019.

d. Recognized $38.50 million gross profit on the project in 2019.

7.

Indiana Co. began a construction project in 2018 with a contract price of $163 million to be received when the project is completed in 2020. During 2018, Indiana incurred $36 million of costs and estimates an additional $87 million of costs to complete the project. Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed.

Suppose that, in 2019, Indiana incurred additional costs of $66 million and estimated an additional $53 million in costs to complete the project. Indiana (Do not round your percentage calculated):

Multiple Choice

a. Recognized $6.44 million gross profit on the project in 2019.

b. Recognized $6.44 million loss on the project in 2019.

c. Recognized $9.44 million gross profit on the project in 2019.

d. Recognized $3.00 million loss on the project in 2019.

1.)

Prepare adjusting journal entries, as needed, for the following items.

(a) The Supplies account shows a beginning balance of $100. The company purchases an additional $1,300 of office supplies for cash but a count of supplies reveals only $600 on hand at year-end.

Debit                            [ Select ]                       ["Accounts Receivable", "Retained Earnings", "Supplies Revenue", "Inventory", "Supplies", "Accounts Payable", "Cash", "Cost of Goods Sold", "Supplies Expense"]           for                            [ Select ]                       ["$100", "$2,000", "$800", "$700", "$1,400", "$600", "$1,300"]      
           Credit                            [ Select ]                       ["Accounts Receivable", "Inventory", "Cost of Good Sold", "Accounts Payable", "Retained Earnings", "Supplies Revenue", "Supplies Expense", "Supplies", "Cash"]         for                            [ Select ]                       ["$100", "$700", "$1,300", "$600", "$2,000", "$1,400", "$800"]      

(b) The company purchases 12 months of insurance on September 1st for $18,000 by debiting prepaid insurance. It is now December 31st and 4 months of insurance has been used. Record the necessary adjusting entry as of December 31st.

Debit                            [ Select ]                       ["Accounts Receivable", "Deferred Revenue", "Accounts Payable", "Insurance Revenue", "Retained Earnings", "Cash", "Equipment", "Prepaid Insurance", "Insurance Expense"]           for                            [ Select ]                       ["$1,500", "$12,000", "$6,000", "$9,000", "$4,500", "$18,000", "$3,000"]      
           Credit                            [ Select ]                       ["Accounts Payable", "Prepaid Rent", "Insurance Expense", "Prepaid Insurance", "Supplies", "Cash", "Retained Earnings", "Insurance Revenue", "Equipment", "Accounts Receivable"]         for the same amount as above

(c) A company borrows $40,000 with 6% interest on August 1st, 2018. This amount plus interest is due on July 31st, 2019. Record the adjusting entry on December 31, 2018.

Debit                            [ Select ]                       ["Supplies", "Interest payable", "Net Income", "Cash", "Retained Earnings", "Interest expense", "Interest Revenue", "Equipment", "Interest Receivable"]           for                            [ Select ]                       ["$1,000", "$400", "$200", "$1,200", "$40,000", "$42,400", "$800", "$2,400", "$1,400", "$600"]      
           Credit                            [ Select ]                       ["Equipment", "Accounts payable", "Cash", "Retained Earnings", "Interest revenue", "Interest receivable", "Interest expense", "Accounts Receivable", "Interest payable", "Supplies"]         for the same amount as above.

(d) At year-end, the company received a utility bill for December's electricity usage of $200 that will be paid in early January.

Debit                            [ Select ]                       ["Cash", "Accounts Receivable", "Equipment", "Supplies", "Utilities Revenue", "Utilities Payable", "Retained Earnings", "Utilities Expense"]           for $200
           Credit                            [ Select ]                       ["Equipment", "Deferred Revenue", "Rent Expense", "Accounts Receivable", "Supplies", "Utilities Expense", "Utilities Payable", "Cash", "Prepaid Utilities", "Retained Earnings"]         for $200

(e) A company purchases new equipment for $28,000 cash on January 1st, 2010. The equipment is expected to have a $4,000 salvage at the end of it's 4 year useful life. Record the adjusting entry for depreciation using straight-line as of December 31st, 2010

Debit                            [ Select ]                       ["Accounts Receivable", "Cash", "Service Revenue", "Accounts Payable", "Equipment", "Depreciation Expense", "Supplies", "Accumulated Depreciation", "Retained Earnings", "Prepaid Depreciation"]           for                            [ Select ]                       ["$18,000", "7,000", "$24,000", "$4,000", "$28,000", "$6,000"]      
           Credit                            [ Select ]                       ["Accounts Payable", "Equipment", "Supplies", "Depreciation Expense", "Salaries Expense", "Retained Earnings", "Service Revenue", "Accumulated Depreciation", "Cash", "Accounts Receivable"]         for the same amount as above

2.

Roccos Incorporated reports the following amounts at the end of the year.

In addition, the company had common stock of $21,000 at the beginning of the year and issued an additional $2,100 during the year. The company also had retained earnings of $12,600 at the beginning of the year and paid dividends of $3,800 during the year. Prepare the income statement, statement of stockholders' equity, and balance sheet.

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Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $30 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held in Amalgamated’s trading portfolio. The company’s fiscal year ends on December 31. 2018 Oct. 18 Purchased 2 million preferred shares of Millwork Ventures Company for $58 million. 31 Received semiannual interest of $1.5 million from the Kansas Abstractors bonds. Nov. 1 Purchased 10% bonds of Holistic Entertainment Enterprises at their $18 million face value, to be held until they mature in 2025. Semiannual interest is payable April 30 and October 31. 1 Sold the Kansas Abstractors bonds for $28 million because rising interest rates are expected to cause their fair value to continue to fall. No unrealized gains and losses had been recorded on these bonds previously. Dec. 1 Purchased 12% bonds of Household Plastics Corporation at their $60 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30. 20 Purchased U. S. Treasury bonds for $5.6 million as trading securities, hoping to earn profits on short-term differences in prices. 21 Purchased 4 million common shares of NXS Corporation for $44 million, planning to earn profits from dividends or gains if prevailing market conditions encourage sale. 23 Sold the Treasury bonds for $5.7 million. 29 Received cash dividends of $3 million from the Millwork Ventures Company preferred shares. 31 Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Millwork Ventures Company preferred stock was $27.50 per share and $11.50 per share for the NXS Corporation common. The fair values of the bond investments were $58.7 million for Household Plastics Corporation and $16.7 million for Holistic Entertainment Enterprises. 2019 Jan. 7 Sold the NXS Corporation common shares for $43 million. Required: Prepare the appropriate journal entry for each transaction or event. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Record the purchase of 2 million preferred shares of Millwork Ventures Company for $58 million. Record the receipt of semiannual interest of $1.5 million from the Kansas Abstractors bonds. Record the purchase of 10% bonds of Holistic Entertainment Enterprises at their $18 million face value. ..... Record the entry to adjust to fair value on the date of sale of the Kansas Abstractor bonds. ..... Record the sale of the investment in Kansas Abstractors bonds. ..... Record the purchase of 12% bonds of Household Plastics Corporation at their $60 million face value. ..... Record the purchase of U.S. Treasury bonds for $5.6 million. ..... Record the purchase of 4 million common shares of NXS Corporation for $44 million. Record the entry to adjust to fair value on the date of sale of the U.S. Treasury bonds. Record the sale of the Treasury bonds for $5.7 million. Record the receipt of cash dividends of $3 million from the Millwork Ventures Company preferred shares. Record the accrued interest. Record the entry to adjust to fair value for the Millwork Ventures preferred stock. Record the entry to adjust to fair value for the NXS Corporation common shares. Record the entry to adjust to fair value on the date of sale of the NXS Corporation common shares Record the sale of the NXS Corporation common shares for $43 million.

2. Revenue from the sale of ergonomic hand tools was $350,000 in years 1 through 3 and $450,000 in years 4 through 9. Determine the equivalent annual revenue in years 1 through 9 at an interest rate of 12% per year (show the cash flow diagrams for full credit)

What is the net amount of non-operating revenue and expenses?

-81,000

-6,000

-(9,000)

-(3,000)

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue.

Fees received but not yet earned: _______________________________

Fees earned but not yet received: _______________________________

Paid premium on a one-year insurance policy: _____________________

Sales tax owed to be paid beginning of next year: __________________

Many types of activities occur in a business that result in the need for an accounting transaction. Make a list of at least ten activities that would occur in a large retail store that would result in an accounting entry. Classify each as revenue moving in, revenue moving out, or another type of activity that results in a change in an account.

Niwot Co. sells products and service plans both separately and bundled together. Willy Loman, a Niwot Co. salesman, sold a Widgetron in year 5 for $1,000, its normal price, and told the customer he’d "throw in the 3-year service plan for free," which the company normally sells for an additional $150. The product shipped, the customer paid, and $1,000 in revenue was recognized in year 5. Is this correct? Why or why not?

Multiple Choice

• This is correct because the understanding between the seller and customer was that the product price was $1,000 and the service plan was free, which is in accordance with the principle of faithful representation.

• This is incorrect because the service revenue must be treated as a separate performance obligation, allocated a portion of the $1,000 sales price, and have revenue for it recognized over the three years of the service plan.

• This is incorrect because services must be rendered before any revenue can be recognized.

• This is correct because the product shipped and the customer paid.