1) A company that uses a job order cost accounting system incurred $10,000 of factory
payroll during May. Present the May 31 entry assuming $8,000 is direct labor and
$2,000 is indirect labor.
2) What is purpose of footing and crossfooting the column totals in special journals
3) Savan Co. purchased 14,000 shares of Briton Corporation’s 40,000 shares of
common stock on January 1. This represented 35% of Briton’s outstanding shares and
gave Savan Co. significant influence over Briton’s management and operations. On
October 11, Briton declared and paid cash dividends of $30,000. On December 31,
Briton reported net income of $125,000 for the year. Prepare the journal entries Savan
Co. should record to account for the dividends received and the earnings reported by
Briton Corporation.
4) How are the direct write-off method and the allowance method applied in accounting
for uncollectible accounts receivables?
5) Direct materials variances are called price and quantity variances. However, when
referring to direct labor, these variances are usually called _________________ and
_____________ variances.
6) A company exchanged an old truck for a newer model. The old truck account had a
cost of $76,000 and accumulated depreciation of $65,000 as of the exchange date. The
new truck had a cash price of $84,000, but the company was given a $15,000 trade-in
allowance and the balance of $69,000 was paid in cash. Prepare the journal entry to
record the exchange, if the transaction lacks commercial substance.