The T-accounts presented below are taken from the general ledger of Health Force
Corporation on March 31, 2013. Determine the balance of each account and present
them in proper trial balance format.
Cash Accounts Payable Common Stock
5,000 12,000 3,200 4,200 30,000
9,000 650 24,000
44,000 15,200
36,000 650
8,000 16,100 Salaries Payable Service Revenue
3,000 650 5,000 21,000
24,000 16,400 9,000
10,000 3,200 22,000
750 36,000
Accounts Receivable Unearned Revenue Advertising Expense
21,000 8,000 22,000 44,000 4,200
3,000
Prepaid Insurance Notes Payable Salaries Expense
1,200 100 16,500 15,200
100 16,100
100 16,400
5,000
Equipment Rent Expense
35,300 650
650
650
Insurance Expense
100
100
100
Dividends
7,750
A flour mill orders grain sacks from a local farmer. When the company places an order
for grain on account, the corresponding journal entry includes a debit to Supplies and a
credit to ____________________.
The cash ratio is calculated by dividing cash flows from operating activities by current
liabilities.
A(n) ____________________ is the buyer of receivables, who acquires the right to
collect the receivables and assumes the risk of uncollectibility.
Trend analysis is another name for ____________________ analysis.
Atlantis Tropicals
The following information was taken from the company’s records at the end of 2013.
Credit Sales $1,000,000
Sales returns and allowances 80,000
Accounts Receivable–December 31, 2013 255,000
Allowance for Doubtful Accounts–December 31, 2013
(Before adjustment for bad debts) 23,000
Estimated uncollected accounts
(per aging schedule at December 31, 2013) 35,000
Refer to Atlantis Tropicals. If bad debts are estimated at 1% of net credit sales, how
much will the company report as bad debts expense for 2013?
When a company estimates the amount of expected warranty expenses to be incurred in
the future pertaining to past product sales, the account to be credited is called the
____________________.
The ability of a company to pay its debt as it comes due relates to
____________________.
When using vertical analysis of the income statement, the base upon which all items are
compared is net income.
An investment in common stock is not considered to be a cash equivalent.
Refer to Korn Business Solutions. What are the two types of leases that a company can
have? Describe each briefly.
The two items that must be estimatedwith respect to a plant asset in order to properly
allocate cost to the affected accounting periods are ____________________ and
____________________.
The amount recognized on the balance sheet as the cost of inventory will ultimately be
recognized as a(n) ____________________.
A company’s records indicate the balance in its checking account at the end of the
month is $5,671. Comparing the company’s records with the monthly bank statement
reveals several additional cash transactions, such as a bank service charge of $75, a
$4,000 note receivable collected by the bank plus interest earned of $100, and an NSF
check for $350. Determine the company’s adjusted cash balance and prepare the journal
entries necessary to adjust the account balance.