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The accounts receivable turnover is calculated by dividing _________________ by
average ___________________.
Answer:
The gross profit method is based on the assumption that the rate of gross profit remains
constant from one year to the next.
Answer:
Transactions for Tom Petty Company for the month of October are presented below.
Journalize each transaction and identify each transaction by number. You may omit
journal explanations.
1> Invested $40,000 cash in the business in exchange for stock.
2> Purchased land costing $28,000 for cash.
3> Purchased equipment costing $15,000 for $3,000 cash and the remainder on credit.
4> Purchased supplies on account for $800.
5> Paid $1,000 for a one-year insurance policy.
6> Received $3,000 cash for services performed.
7> Received $4,000 for services previously performed on account.
8> Paid wages to employees for $2,500.
9> Paid dividends of $2,000.
Answer:
Teenage Fanclub Printings sold annual subscriptions to their magazine for $30,000 in
December, 2014. The magazine is published monthly. The new subscribers received
their first magazine in January, 2015.
1> What adjusting entry should be made in January if the subscriptions were originally
recorded as a liability?
2> What amount will be reported on the January 2015 balance sheet for Unearned
Subscription Revenue?
Answer:
Current assets are customarily the first items listed on a classified balance sheet.
Answer:
Martin Company issued $900,000, 10-year bonds and agreed to make annual sinking
fund deposits of $72,000. The deposits are made at the end of each year to a fund
paying 5% interest compounded annually. What amount will be in the sinking fund at
the end of the 10 years?
Answer:
Dolan Company uses the allowance method to account for uncollectible accounts.
Prepare the appropriate journal entries to record the following transactions during 2015.
You may omit journal entry explanations.
June 20 The account of Sam Nolan for $1,000 was deemed to be uncollectible and is
written off as a bad debt.
Oct. 14 Received a check for $1,000 from Sam Nolan, whose account had previously
been written off as uncollectible.
Dec. 31 Use the following information for year-end adjusting entries:
The balance of Accounts Receivable and Allowance for Doubtful Accounts at year-end
are a debit balance of $126,000 and a credit balance $2,900, respectively. It is estimated
that bad debts will be 5% of accounts receivable.
Answer:
Fine Boat Company often requires customers to sign promissory notes for major credit
purchases. Journalize the following transactions for Fine Boat Company.
Answer:
The freight cost incurred by a seller to deliver goods sold to a customer is called
________________.
Answer:
