ACCT 220 Homework and Quizzes

ACCT 220 Homework and Quizzes Click Link Below To Buy: https://hwaid.com/shop/acct-220-homework-quizzes/ Contact Us: [email protected] ACCT 220 Homework and Quizzes ACCT 220 Principles of Accounting I Quiz 3 Multiple Choice (7 points each) 1. On January 1, 20X1, Blake Company purchased a patent for $68,000. The patent has a remaining legal life of nine years and an expected service life of eight years. The amortization expense (to the nearest dollar) properly recognized for 20X1 is:$0. B. $3,400. C. $7,556. D. $8,500. E. None of these. 2. Which of the following transactions would cause a change in total stockholders’ equity? 1. A stock dividend. 2. Paying a previously declared cash dividend. 3. Reissuing treasury stock at its cost. 4. A stock split. 5. None of these. 3. Normally, the payment of a previously declared dividend will result in: 1. a decrease in liabilities. 2. a decrease in working capital. 3. a decrease in stockholders’ equity. 4. All of the above. 5. None of these. Problem #1 (15 points) Hogan Company sold equipment for $6,000 which cost $8,000 and had accumulated depreciation of $5,500. What is the proper journal entry to record this transaction? Problem #2 (15 points) Hector Company sold equipment, for $1,000 which cost $8,000 and had accumulated depreciation of $5,500. What is the proper journal entry to reflect this transaction? Problem #3 (15 points) Gaines originally issued 15,000 shares of $10 par value common stock at $15 per share. During the current year, 1,000 of these shares were reacquired for $20 each. What is the proper journal entry to record the reacquisition? Problem #4 (34 points) On January 1, 2015 Jett Inc. purchased equipment for $154,000 in cash. The equipment is expected to have an operating life of 4 years. The estimated salvage value is $25,000. Required: 1. Using the straight-line method of depreciation: 2016. Determine the annual depreciation expense for 2015 and 2016. 2017. Determine the accumulated depreciation at the end of each of the following years: 2015 and 2016. 2018. Show how the asset and related accumulated depreciation would appear on the balance sheet at December 31, 2016. 2019. Prepare the journal entries to record the asset’s acquisition and annual depreciation expense for 2015 and 2016. 2. Using the double-declining balance method of depreciation: 2016. Determine the annual depreciation expense for 2015 and 2016. 2017. Determine the accumulated depreciation at the end of each of the following years: 2015 and 2016. 2018. Show how the asset and related accumulated depreciation would appear on the balance sheet at December 31, 2016. ACCT 220 Quiz 2 Latest Question 1 (4 points) Question 1 Unsaved One advantage to using a perpetual inventory system is that the company never has to physically count the inventory. Question 1 options: True False Question 2 (4 points) Question 2 Unsaved The weighted-average inventory method will likely result in neither the highest nor the lowest ending inventory. Question 2 options: True False Question 3 (4 points) Question 3 Unsaved When calculating accounts receivable turnover, a company would prefer a higher number rather than a lower number (within reason) Question 3 options: True False Question 4 (4 points) Question 4 Unsaved When performing a bank reconciliation, checks outstanding are added back to the bank balance. Question 4 options: True False Question 5 (4 points) Question 5 Unsaved Usually the quick ratio will be a lower number than the current ratio. Question 5 options: True False Multiple Choice Select the best answer for each of the following questions. Question 6 (4 points) Question 6 Unsaved The bad-debt method that uses the accounts receivable aging report is _______________. Question 6 options the direct write-off method the percentage-of-sales method the bad-debt expense method the percentage-of-receivables method Question 7 (4 points) Question 7 Unsaved When it is determined that too much money has been set aside for uncollectible accounts, we will _______________. Question 7 options: credit reserve for uncollectible account debit accounts receivable credit cash debit reserve for uncollectible accounts Question 8 (4 points) Question 8 Unsaved A customer whose account was previously written off unexpectedly pays us. If we are using the allowance method we would _______________ Question 8 options: debit cash and credit bad-debt expense debit bad-debt expense and credit cash debit accounts receivable and credit allowance for uncollectible accounts AND debit cash and credit accounts receivable debit reserve for uncollectible accounts and credit cash Question 9 (4 points) Question 9 Unsaved When a retailer accepts a bank card (VISA or MasterCard), they will make what entry for the day’s receipts? Question 9 options: debit accounts receivable; credit sales, and credit “credit card expense” debit cash and credit sales debit cash and debit “credit card expense”; credit sales debit accounts receivable and credit sales Question 10 (4 points) Question 10 Unsaved The company prepares, but does not yet pay, its first payroll of the new year. Salaries total $10,000 and 7.65% is withheld from paychecks for FICA tax. Ignore all other payroll deductions. The journal entries will be _______________. Question 10 options: debit wage expense $10,000 and credit wages payable 10,000; debit payroll tax expense for $1,530 and credit FICA tax payable $1,530 debit wage expense $10,000; credit wages payable $8,470 and FICA tax payable $1,530 debit wage expense $10,000 and debit payroll tax expense $765; credit wages payable $9,235 and credit FICA tax payable $1,530 debit wage expense $10,000 and credit wages payable $10,000; debit payroll tax expense for $765 and credit FICA tax payable $765 Question 11 (4 points) Question 11 Unsaved A company buys a $10,000 bond at 102 as an investment. The correct entry is _______________. Question 11 options: debit investment in bonds and credit cash for $10,200 credit investment in bonds and debit cash for $10,200 debit investment in bonds and credit cash for $9,800 credit investment in bonds and debit cash for $9,800 Question 12 (4 points) Question 12 Unsaved A company issues bonds having a stated value of $100,000 for $102,500. At maturity, the company will _______________. Question 12 options: credit bonds payable for $102,500 credit bonds payable for $100,000 debit bonds payable for $102,500 debit bonds payable for $100,000 Question 13 (4 points) Question 13 Unsaved A company uses the percentage-of-receivables method for establishing the bad-debt reserve. They want the reserve balance to equal 0.5% of debts 30 days old or less, 2% of debts aged 31 to 60 days, and 4% of debts aged over 60 days. An aging report shows $780,000 relating to the past month, $232,600 relating to the prior month, and $89,200 relating to more than two months ago. The balance in the reserve account before adjustment is $10,175. What is the adjusting journal entry? Question 13 options: debit bad-debt expense, credit allowance for bad debts $12,120 debit bad-debt expense, credit allowance for bad debts $1,945 debit bad-debt expense, credit accounts receivable $1,945 debit allowance for bad debts, credit bad-debt expense $1,945 Question 14 (4 points) Question 14 Unsaved A company is closing out the accounting period. The inventory balance at the beginning of the period was $222,750, and at the end of the period it was $215,600. Purchases of goods for resale during the period equaled $682,500. What was the cost of goods sold total? Question 14 options $905,250 $682,500 $689,650 $675,350 Question 15 (4 points) Question 15 Unsaved The following transactions during the month of January: 1/5 bought 10 units at $11.00 each; 1/8 bought 15 units at $11.25 each; 1/15 sold 8 units for $16 each; 1/22 bought 10 units at $11.50 each and sold 12 units for $16.50 each. The ending inventory is $693.75. What inventory costing method is the company using? Question 15 options weighted average FIFO LIFO – perpetual LIFO – periodic SHORT RESPONSE Question 16 What is the difference between the periodic-inventory and perpetual-inventory methods? Question 17 Name two costs, in addition to the purchase price, that are added to merchandise inventory cost. Question 18 What will be the result to inventory values, cost of goods sold, and net income if the LIFO method is used during times of inflation? Question 19 When comparing financial ratios, it is important to make comparisons only within an industry or between like companies. Why might a retail store have a much higher accounts receivable turnover than a manufacturing company? Question 20 How is gross margin or gross profit calculated on a merchandizing company income statement? Question 21 If a retail store has a sale with everything listed at 30% off, and a rack of clothing is also marked as “an additional 20% off,” what is the total discount offered? Question 22 What does 1/10, n/30 mean? Question 23 What cash control is compromised when the purchasing manager is one of the authorized check signers? Question 24 Name at least three out of the four documents that the accounting department should have access to in order to pay an invoice. Question 25 What item from the company’s records must be added to the bank balance when reconciling the bank statement? ACCT 220 Quiz 3 1 . Internal control is defined, in part, as a plan that safeguards a. all balance sheet accounts. b. assets. c. liabilities. d. capital stock. 2. Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them a. increases the potential for errors and fraud. b. decreases the potential for errors and fraud. c. is an example of good internal control. d. is a good example of safeguarding the company’s assets. 3. Control over cash disbursements is generally more effective when a. all bills are paid in cash. b. disbursements are made by the accounts payable subsidiary clerk. c. payments are made by check. d. all purchases are made on credit. 4. An employee authorized to sign checks should not record a. owner cash contributions. b. mail receipts. c. cash disbursement transactions. d. sales transactions. 5.. The relationship between current liabilities and current assets is a. useful in determining income. b. useful in evaluating a company’s liquidity. c. called the matching principle. d. useful in determining the amount of a company’s long-term debt. 6. In preparing its bank reconciliation for the month of April 2014, Delano, Inc. has available the following information. Balance per bank statement, 4/30/14 $78,600 NSF check returned with 4/30/14 bank statement 940 Deposits in transit, 4/30/14 10,000 Outstanding checks, 4/30/14 10,400 Bank service charges for April 60 What should be the adjusted cash balance at April 30, 2014? a. $77,260. b. $77,600. c. $78,020. d. $78,200. 7. Which one of the following items is not considered a part of the cost of a truck purchased for business use? a. Sales tax b. Truck license c. Freight charges d. Cost of lettering on side of truck 8. The four subdivisions for plant assets are a. land, land improvements, buildings, and equipment. b. intangibles, land, buildings, and equipment. c. furnishings and fixtures, land, buildings, and equipment. d. property, plant, equipment, and land. 9. A current liability is a debt that can reasonably be expected to be paid a. within one year or the operating cycle, whichever is longer. b. between 6 months and 18 months. c. out of currently recognized revenues. d. out of cash currently on hand. 10. Depreciation is the process of allocating the cost of a plant asset over its service life in a. an equal and equitable manner. b. an accelerated and accurate manner. c. a systematic and rational manner. d. a conservative market-based manner. 11 . The book value of an asset is equal to the a. asset’s fair value less its historical cost. b. blue book value relied on by secondary markets. c. replacement cost of the asset. d. asset’s cost less accumulated depreciation. 12. A company purchased factory equipment on April 1, 2014 for $160,000. It is estimated that the equipment will have a $20,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2014 is a. $16,000. b. $14,000. c. $10,500. d. $12,000. 13. The units-of-activity method is generally not suitable for a. airplanes. b. buildings. c. delivery equipment. d. factory machinery. 14. A plant asset cost $288,000 and is estimated to have a $36,000 salvage value at the end of its 8-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be a. $24,120. b. $40,500. c. $35,436. d. $27,570. 15. A factory machine was purchased for $375,000 on January 1, 2014. It was estimated that it would have a $75,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2014. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2014 would be a. $37,500. b. $60,000. c. $75,000. d. $30,000. 16. A truck that cost $72,000 and on which $60,000 of accumulated depreciation has been recorded was disposed of for $18,000 cash. The entry to record this event would include a a. gain of $6,000. b. loss of $6,000. c. credit to the Equipment account for $12,000. d. credit to Accumulated Depreciation for $60,000. 17. The following totals for the month of April were taken from the payroll register of Asplend Company. Salaries and wages $72,000 FICA taxes withheld 5,508 Income taxes withheld 15,000 Medical insurance deductions 2,700 Federal unemployment taxes 192 State unemployment taxes 1,296 18. The entry made by Hoffman Granite on January 1 to record the proceeds and issuance of the note is a. Interest Expense 36,000 Cash. 564,000 Notes Payable 600,000 b. Cash 600,000 Notes Payable 600,000 c. Cash 600,000 Interest Expense 36,000 Notes Payable 636,000 d. Cash 600,000 Interest Expense 36,000 Notes Payable 600,000 Interest Payable 36,000 19. What is the adjusting entry required if Hoffman Granite Company prepares financial statements on June 30? a. Interest Expense 24,000 Interest Payable 24,000 b. Interest Expense 24,000 Cash 24,000 c. Interest Payable 24,000 Cash 24,000 d. Interest Payable 24,000 Interest Expense 24,000 20. What entry will Hoffman Granite make to pay off the note and interest at maturity assuming that interest has been accrued to September 30? a. Notes Payable 636,000 Cash 636,000 b. Notes Payable 600,000 Interest Payable 36,000 Cash 636,000 c. Interest Expense 36,000 Notes Payable 600,000 Cash 636,000 d. Interest Payable 24,000 Notes Payable 600,000 Interest Expense 12,000 Cash 636,000 ACCT 220 Week 2 Homework Problems ACCT 220 Week 2 Homework Problem Review the unadjusted trial balance below and prepare adjusting journal entries to record the various described items below. Record in the space provided at the bottom of this spreadsheet. After completing journal entries, complete the adjusted trial balance below. Lastly complete the income statement, balance sheet and statement of retained earnings. The balance sheet must balance. The accounting equation is Assets = Liabilities + Equity. Baltimore Corporation Unadjusted Trial Balance January 31, 2016 Debits Credits Cash $ 37,500 $ – Accounts receivable 12,410 – Prepaid insurance 2,400 – Supplies inventory 7,113 – Equipment 35,000 – Accumulated depreciation – 10,000 Accounts payable – 7,569 Salaries payable – – Interest payable – – Unearned revenue – 8,500 Loan payable – 11,500 Capital stock – 25,000 Retained earnings, Jan. 1 – 15,457 Revenues – 43,995 Depreciation expense – – Interest expense – – Insurance expense – – Office expense 2,500 – Rent expense 13,000 – Salary expense 12,098 – Supplies expense – – Utilities expense – – $ 122,021 $ 122,021 1 Belair Corporation’s equipment had an original life of 140 months, and the straight-line depreciation method is used. As of January 1, the equipment was 40 months old. The equipment will be worthless at the end of its useful life. 2 As of the end of the month, Belair Corporation has provided services to customers for which the earnings process is complete. Formal billings are normally sent out on the first day of each month for the prior month’s work. January’s unbilled work is $25,000. 3 Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $1,500. 4 A review of supplies on hand at the end of the month revealed items costing $3,500. 5 The $2,400 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30. 6 The unearned revenue was collected in December of 2014. 60% of that amount was actually earned in January, with the remainder to be earned in February. 7 The loan accrues interest at 1% per month. No interest was paid in January. 8 At month end, salaries of $2,120 have been earned but not paid. JE # ACCOUNT DEBIT CREDIT 1 2 3 4 5 6 7 8 Baltimore Corporation Adjusted Trial Balance January 31, 2016 Debits Credits Cash Accounts receivable Prepaid insurance Supplies inventory Equipment Accumulated depreciation Accounts payable Salaries payable Interest payable Unearned revenue Loan payable Capital stock Retained earnings, Jan. 1 Revenues Depreciation expense Insurance expense Interest expense Office expense Rent expense Salary expense Supplies expense Utilities expense $ – $ – Baltimore Corporation Income Statement For the month ended January 31, 2016 Baltimore Corporation Balance Sheet January 31, 2016 Baltimore Corporation Statement of Retained Earnings As of January 31, 2015 $35.00 – Add to Cart ACCT 220 WEEK 2 QUIZ – Quiz 2 1. One advantage to using a perpetual inventory system is that the company never has to physically count the inventory. 2. The weighted-average inventory method will likely result in neither the highest nor the lowest ending inventory. 3. When calculating accounts receivable turnover, a company would prefer a higher number rather than a lower number (within reason). 4. When performing a bank reconciliation, checks outstanding are added back to the bank balance. 5. Usually the quick ratio will be a lower number than the current ratio. Multiple Choice 6. The bad-debt method that uses the accounts receivable aging report is _______________. 7. When it is determined that too much money has been set aside for uncollectible accounts, we will _______________. 8. A customer whose account was previously written off unexpectedly pays us. If we are using the allowance method we would _______________. 9. When a retailer accepts a bank card (VISA or MasterCard), they will make what entry for the day’s receipts? 10. The company prepares, but does not yet pay, its first payroll of the new year. Salaries total $10,000 and 7.65% is withheld from paychecks for FICA tax. Ignore all other payroll deductions. The journal entries will be _______________. 11. A company buys a $10,000 bond at 102 as an investment. The correct entry is _______________. 12. A company issues bonds having a stated value of $100,000 for $102,500. At maturity, the company will _______________. 13. A company uses the percentage-of-receivables method for establishing the bad-debt reserve. They want the reserve balance to equal 0.5% of debts 30 days old or less, 2% of debts aged 31 to 60 days, and 4% of debts aged over 60 days. An aging report shows $780,000 relating to the past month, $232,600 relating to the prior month, and $89,200 relating to more than two months ago. The balance in the reserve account before adjustment is $10,175. What is the adjusting journal entry? 14. A company is closing out the accounting period. The inventory balance at the beginning of the period was $222,750, and at the end of the period it was $215,600. Purchases of goods for resale during the period equaled $682,500. What was the cost of goods sold total? 15. The following transactions during the month of January: 1/5 bought 10 units at $11.00 each; 1/8 bought 15 units at $11.25 each; 1/15 sold 8 units for $16 each; 1/22 bought 10 units at $11.50 each and sold 12 units for $16.50 each. The ending inventory is $693.75. What inventory costing method is the company using? Question 15 options: 16. What is the difference between the periodic-inventory and perpetual-inventory methods? 17. Name two costs, in addition to the purchase price, that are added to merchandise inventory cost. 18. What will be the result to inventory values, cost of goods sold, and net income if 19. When comparing financial ratios, it is important to make comparisons only within an industry or between like companies. Why might a retail store have a much higher accounts receivable turnover than a manufacturing company? 20. How is gross margin or gross profit calculated on a merchandizing company income statement? 21. If a retail store has a sale with everything listed at 30% off, and a rack of clothing is also marked as “an additional 20% off,” what is the total discount offered? 22. What does 1/10, n/30 mean? 23. What cash control is compromised when the purchasing manager is one of the authorized check signers? 24. Name at least three out of the four documents that the accounting department should have access to in order to pay an invoice. • 25. What item from the company’s records must be added to the bank balance when reconciling the bank statement? ACCT 220 Week 4 Homework • Compute the interest for the following notes and assume at 360 day year for all quizzes, homework, etc. Date of Note Principle Interest Rate (%) Term Interest July 1 $100,000 10% 90 Days January 1 $70,000 8% 120 Days September 1 $200,000 4% 60 Days • On June 1, 2015, Hardy and Company sold merchandise on account to Laurel Company for $16,000 with terms of 2/10 net 30. On June 30, Laurel Company gave Hardy a 10% Promissory Note to settle the account. Make the journal entries to record the sale and settlement of the account receivable. Date Account Debit Credit • The financial statements of Lawn Mowers Inc. report beginning accounts receivable of $100,000 and ending accounts receivable of $105,000. Net credit sales were $1,200,000 for the year. Calculate the accounts receivable turnover and average collection period in days. Use a 365 day year. 1. Accounts Receivable Turnover (b) Average Days To Collect • Lost in The Woods Trading Company borrows $70,000 at 3% interest from the Bonnie and Clyde Untrustworthy Bank on June 1, 2014. The note is due in one year. • Make the journal entries on the books of the Lost in Woods Trading Company for (1) the acceptance of the note, (2) the adjusting entry on December 31, 2014, and (3) the payoff of the loan on May 31, 2015. Date Account Debit Credit • Make the journal entries on the books of the Bonnie and Clyde Untrustworthy Bank for (1) issuance of the note, (2) the adjusting entry on December 31, 2014, and (3) the payoff of the loan on May 31, 2015. Date Account Debit Credit • ACCT 220 Week 6 Homework • The Steel You Blind Company hires a bookkeeper who says that intangible assets can only be amortized over their legal lives. Is she right or wrong and why? We Move Ya moving company purchased a new cross country moving truck and trailer on July 1, 2015. The cost of the new equipment was $150,000. The truck and trailer is expected to have a 5 year useful life and a salvage value of $12,000. The truck is a diesel and is expected to have a useful life of 10,000 hours. Compute the depreciation expense under the following scenarios: • Straight line for 2015. Units of Activity for 2015 assuming 1,700 hours of on-road use. • Double declining balance using twice the straight line rate for 2015 and 2016. ACCT 220 Week 6 Homework • An accounting intern recently made the following entries. May 2 Cash $140,000 Common Stock $140,000 (Issued 10,000 shares of common stock of $10 stated value at $12 per share.) May 10 Cash $700,000 Preferred Stock $700,000 (Issued 10,000 shares of $50 par value preferred stock for $70 per share.) May 15 Common Stock $20,000 Cash $20,000 (Purchased 1,000 shares of common stock for the treasury for $20 per share.) May 31 Cash $12,500 Common Stock $10.000 Gain on Sale of Stock $2,500 (Sold 500 shares of treasury stock at $25 per share.) Based upon the explanation, make the correct entry for each of the above entries. No further explanation required. Date Account Dr. Cr. • Mary Me Not Corporation has $10 par value common stock is actively traded at a market price of $20 per share. Mary issues 5,000 shares to purchase land advertising for sale at $120,000. Journalize the issuance of the stock in exchange for the land. • On August 15, Joe Rainey Corporation purchases 500 shares of par value common stock for the treasury at a cash price of $10 per share. On November 19, it sells 300 shares of the treasury stock for $15 per share. Journalize the two transactions. • In and Out Retailers sell 2,000 shares of $200 par value preferred stock for $220 each. Journalize the entry. ACCT 220 Week 8 Homework Assignment Instructions For the Week 8 homework assignment, you will create, save, and submit a Microsoft Word document that covers the topics listed below. Always include your name and a descriptive title in the file name. Essay Topics for You to Prepare Fraud Detection and Deterrence (www.acfe.com) Internal Control (COSA: see www.theiia.org) Certification: CFE, CIA, and CISA (return to www.isaca.org) Following your review of course materials this week, using the websites above, create an essay of not more than two pages Relate these topics to our course material for Principles of Accounting I. Your essay should be single-spaced, with double spacing between paragraphs. Use headers within the document. We are writing business reports, not double-spaced academic papers. Tell a story. Explain the concepts. Use APA style for citations and create a works cited list. Your paper should be adequate. Fewer than 1 page is to short more than 2 pages is too long. Consider the question and decide: what would you want to know? Include website references in your essay. This is not a business proposal, but it is not a casual reflective essay. The goal is to research, consider, and report what you know about these topics. The concept of COBIT is related to each topic. ISACA’s “A COBIT 5 Overview” (http://www.isaca.org/COBIT/Documents/A-COBIT-5-Overview.pdf) is a key resource for your overall comments and “framing” of the three topics. Why audit? We will either be the auditor or be audited. We must understand internal control and the management of risk. The management of risk is everyone’s responsibility. We are building your vocabulary. You can use the above concepts—especially the paragraph on “Why audit?”—without reference. A good item for your works cited list: UMUC ACCT 220 Course Materials. Ask questions. Spell check. Write, read, and edit. Take care with word selection and sentence structure, For all submissions in our class, use your own words. Show what you know!