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1) A company reported the following year-end information:
2) Explain the purpose of reversing entries.
3) ZMart had income before interest expense and income taxes of $12,581 million and
interest expense of $1,063 million. XMart had income before interest expense and
income taxes of $3,596 million and interest expense of $1,143 million. Calculate the
times interest earned for each company and comment on the results.
4) On August 1, a company issues bonds with a par value of $600,000. The bonds
mature in 10 years, and pay 6% annual interest, payable each February 1 and August 1.
The bonds sold at $592,000. The company uses the straight-line method of amortizing
bond discounts. The company's year-end is December 31. Prepare the general journal
entry to record the interest accrued at December 31
5) Match the following definitions with the terms 1 through 9. Place the letter that
identifies the best definition in the blank space next to the term.
6) ____________________________ are amounts owed by customers from credit sales
where payment is required in periodic amounts over an extended time period.
7) A _____________________________ fund is used for the control of small amounts
of cash disbursements.
8) On a process cost summary, the total costs to account for (the processing costs for the
period plus the goods in process at the end of the period) should equal
___________________ (______________________ plus ___________________).
9) Crystal Products allows customers to use bank credit cards to charge purchases. The
bank used by Crystal Products processes all bank credit cards in exchange for a 3%
processing fee. All credit card receipts deposited are credited to the company account
on the day of deposit. Assume that on January 18, Crystal Products sold and deposited
$19,000 worth of bank credit card receipts. Prepare the general journal entry to record
this transaction.
10) What is an adjusted trial balance? Why is it prepared?
