Calculation questions

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I need, provide explanations to these questions (Q2, Q8, Q14, Q24, Q26, Q27) ; for calculation questions, please show your work.

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Practice Quiz 2 1. Which T-account is incorrect? a. Depreciation Expense + | - b. Interest Receivable + | - c. Capital Stock______ - | + d. Unearned Rent______ + 2. | - Information related to the Jones Company for the calendar year 2007 follows: Liabilities, December 31, 2007 Assets, December 31, 2007 Dividends Distributed during 2007 $300 700 90 Liabilities, December 31, 2006 250 Assets, December 31, 2006 500 Assuming no capital stock was issued during 2007, the net income earned by the Jones Company during 2007 was a. $ 60 b. $150 c. $240 d. $290 3. Which of the following statements regarding a post-closing trial balance is not true? a. post-closing trial balances only contain permanent accounts b. a post-closing trial balance is prepared as of the end of the company's fiscal year c. post-closing trial balances only contain temporary accounts d. a post-closing trial balance verifies that the total of the debit balances equals the total of the credit balances of all accounts in the general ledger 1 4. Which of the following is an economic resource that should be depreciated over the accounting periods estimated to be benefited? a. salaries incurred but unpaid at year-end b. rent collected in advance for a three-year rental period c. equipment purchased for use in the business operations d. interest revenue accrued on investment in bonds 5. Which of the following errors will be detected by a trial balance? a. posting a credit to Sales instead of to Accounts Payable b. incorrectly computing the balance of the cash account c. not journalizing a complete sales transaction d. forgetting to post a complete purchase transaction 6. What relationship exists between the general journal and the general ledger? a. The general ledger accounts contain the same information as in the general journal, just in a different format. b. The balances in the general ledger will always equal those in the general journal. c. After posting from the general journal the debits in the general ledger must equal the credits. d. the number of accounts in the general journal will always be larger than the number of accounts in the general ledger. 7. Which of the following adjusting entries involves the recognition of an accrued expense? a. recording depreciation on a long-lived asset b. writing off the portion of an insurance policy that has expired c. recognition of salaries owed to employees for work done during the current period that will be paid during the next accounting period d. recognition of bad debt losses that are expected to result from making sales on credit terms 8. The Maddox Company uses the cash basis of accounting. Maddox Company made $500,000 in payments to its suppliers during the year. Maddox's beginning Inventory was $20,000, and its ending Inventory was $35,000. In addition, Maddox had a beginning Accounts Payable of $50,000 and an ending Accounts Payable of $70,000. What is Maddox's Cost of Goods Sold under the accrual basis of accounting? a. $465,000 b. $495,000 c. $505,000 d. $535,000 2 9. On June 1, 2006, Whiting Corporation received $4,104 in advance for a two-year rental of some land, and credited Unearned Rent. In the adjusting entry at December 31, 2006, there would be a a. debit to Unearned Rent for $1,026 b. credit to Unearned Rent for $1,197 c. credit to Rent Revenue for $1,197 d. debit to Unearned Rent for $2,907 10. On May 1, 2007, Zachary Corporation borrowed $2,500 on a two-year, 6% note payable. Interest is due and payable at the end of each six months. Zachary makes all interest payments on schedule. The correct December 31, 2007, adjusting entry would be a. Interest Expense 25 Interest Payable b. Interest Payable 25 100 Cash 100 c. Interest Expense 25 Cash 25 d. Interest Expense 100 Interest Payable 100 11. Posting is the procedure of transferring information from the a. journal to the ledger b. trial balance to the worksheet c. ledger to the journal d. worksheet to the financial statements 12. The balance in deferred (unearned) revenue accounts represents amounts that are Earned Collected a. Yes No b. Yes Yes c. No No d. No Yes 3 13. Rental receipts for the period July 1, 2007 through June 30, 2008, were collected on June 30, 2007. The effect of this transaction on the 2007 financial statements for unearned revenue and rent revenue is Unearned Revenue Rent Revenue a. Increase Increase b. Increase Decrease c. Decrease No effect d. Decrease Increase 14. The Reed Company uses the straight-line method to depreciate its equipment. On May 1, 2007, the company purchased some equipment for $200,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. How much depreciation expense should Reed record for the equipment in the adjusting entry on December 31, 2007? a. $ 6,000 b. $12,000 c. $13,500 d. $18,000 15. Which of the following is not a type of adjusting entry? a. depreciation of long-term physical assets b. allocation of unearned revenue c. correction of an error in the general journal d. recording of accrued revenue 16. The accountant failed to make the adjusting entry to record the amount of interest owed on a note to the bank at the end of the year. This error would cause an overstatement of: a. assets b. expenses c. liabilities d. owners' equity 17. The accountant failed to make the adjusting entry to record the unpaid wages of its employees as of December 31. This error will cause a. an overstatement of assets, liabilities, and owners' equity b. an understatement of expenses, liabilities, and owners' equity c. an understatement of liabilities and an overstatement of owners' equity d. an understatement of assets and liabilities 4 18. The accountant failed to make the adjusting entry to record the depreciation for the year. This error would cause a. an overstatement of assets b. an overstatement of expenses c. an understatement of liabilities d. an understatement of owners' equity 19. Closing entries help to a. update a periodic Inventory account for credit sales b. update the Retained Earnings account on a daily basis c. apportion prepaid expenses and unearned revenues to bring the accounts up to date d. reduce all temporary accounts to zero 20. Which of the following accounts would not be closed to Income Summary during the year-end closing entry process? a. Loss of Sale of Land b. Prepaid Rent c. Freight-in d. Sales Discounts 21. If the credit subtotal is greater than the debit subtotal in the income statement columns of a worksheet, the difference a. indicates that the company incurred an operating loss during the period b. could represent payment of dividends by the entity during the period c. indicates that an error has been made in the accounting process d. indicates that the company earned a net income during the period 22. On a worksheet, which account will not be extended to the balance sheet columns? a. Unearned Rent b. Inventory, January 1 c. Capital Stock d. Accumulated Depreciation 5 23. Marge's Company has all of the special journals that were described in your text (other than the voucher register) as a part of its accounting system. Which of the following journal entries would therefore be recorded in Marge's general journal? a. an entry to record the sale of merchandise on credit b. an entry to record the sale of inventory on credit c. an entry to record the return of defective purchased merchandise for credit d. an entry to record a cash purchase of inventory 24. The Joy Company uses the accrual basis of accounting. Joy Company's Insurance Expense account had a $10,000 balance at the end of the year. The Prepaid Insurance account had a $3,000 balance at the beginning of the year and a $5,000 balance at the end of the year. How much cash was paid for insurance during the year? a. $ 8,000 b. $10,000 c. $12,000 d. $15,000 25. The Peace Company uses the accrual basis of accounting. Peace Company's Wages Expense account had a $510,000 balance at the end of the year. The Wages Payable account had a $23,000 balance at the beginning of the year and a $45,000 balance at the end of the year. How much cash was paid for wages during the year? a. $488,000 b. $510,000 c. $532,000 d. $555,000 26. The Smith Company uses the cash basis of accounting. Smith Company collected $700,000 from its customers during the year. Smith had $50,000 in Accounts Receivable at the beginning of the year, and $90,000 in Accounts Receivable at the end of the year. What is Smith's Sales Revenue under the accrual basis of accounting? a. $660,000 b. $700,000 c. $740,000 d. $790,000 6 27. On March 31, 2004, the Tricot Company purchased a two-year fire insurance policy. Tricot recorded the purchase by debiting Prepaid Insurance and crediting Cash for $12,000. Which of the following adjusting entries should Tricot use at the end of 2004 to match insurance expense against revenues? a. Prepaid Insurance 4,500 Insurance Expense b. Insurance Expense 4,500 4,500 Prepaid Insurance c. Prepaid Insurance 4,500 7,500 Insurance Expense d. Insurance Expense Prepaid Insurance 7,500 7,500 7,500 7
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Explanation & Answer

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2.

Information related to the Jones Company for the calendar year 2007 follows:

Liabilities, December 31, 2007
Assets, December 31, 2007

$300
700
90

Dividends Distributed during 2007
Liabilities, December 31, 2006

250

Assets, December 31, 2006

500

Assuming no capital stock was issued during 2007, the net income earned by the Jones
Company during 2007 was
a. $ 60
b. $150
c. $240
d. $290
Answer
Formulae; Net Income = Total revenues – Total expenses
First we will take the amount that she entered 2017 with from the previous year


500-250 = 250
The we add all the incomes made in 2017 revenues of 2017 subtract the 2017 expenses
250+700+90 = 1040
When we subtract the expense we get
1040-300 = 740
But as we entered 2017, we had an asset amount from 2016, so that acts as an expense
Net income = total revenue – total expenses
740 – 500= 240
So my 2017 ...


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