question archive 1) When a company retires bonds before maturity, the gain or loss on redemption is the difference between the cash paid and the A
1) When a company retires bonds before maturity, the gain or loss on redemption is the difference between the cash paid and the A
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1) When a company retires bonds before maturity, the gain or loss on redemption is the difference between the cash paid and the
A. maturity value of the bonds. B. face value of the bonds. C. carrying value of the bonds. D. original selling price of the bonds.
2.
On May 1, 2013, Pinkley Company sells office furniture for $150,000 cash. The office furniture originally cost $375,000 when purchased on January 1, 2006. Depreciation is recorded by the straight-line method over 10 years with a salvage value of $37,500. What depreciation expense should be recorded on this asset in 2013?
Select one:
A. $16,875.
B. $12,500.
C. $11,250.
D. $33,750.
3.
In 2013, Lang Company had net credit sales of $1,266,000. On January 1, 2013, Allowance for Doubtful Accounts had a credit balance of $25,000. During 2013, $42,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $272,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2013?
Select one:
A. $42,000
B. $27,200
C. $126,600
D. $44,200
4.
Wesley Hospital installs a new parking lot. The paving cost $38,000 and the lights to illuminate the new parking area cost $15,000. Which of the following statements is true with respect to these additions?
Select one:
A. $38,000 should be debited to the Land account.
B. $15,000 should be debited to Land Improvements.
C. $53,000 should be debited to Land Improvements.
D. $53,000 should be debited to the Land account.
5.
Equipment that cost $210,000 and on which $100,000 of accumulated depreciation has been recorded was disposed of for $90,000 cash. The entry to record this event would include a
Select one:
A. credit to the Equipment account for $110,000.
B. credit to Accumulated Depreciation for $100,000.
C. loss of $20,000.
D. gain of $20,000
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Answer:
1.When a company retires bonds before maturity, the gain or loss on redemption is the difference between the cash paid and the
C. carrying value of the bonds.
2.
On May 1, 2013, Pinkley Company sells office furniture for $150,000 cash. The office furniture originally cost $375,000 when purchased on January 1, 2006. Depreciation is recorded by the straight-line method over 10 years with a salvage value of $37,500. What depreciation expense should be recorded on this asset in 2013?
Select one:
B. $12,500.
$37,500 per year x (4 months / 12 months) = $12,500
3.
In 2013, Lang Company had net credit sales of $1,266,000. On January 1, 2013, Allowance for Doubtful Accounts had a credit balance of $25,000. During 2013, $42,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $272,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2013?
Select one:
D. $44,200
$272,000 x .1 + ($42,000 - $25,000) = $44,200
4.
Wesley Hospital installs a new parking lot. The paving cost $38,000 and the lights to illuminate the new parking area cost $15,000. Which of the following statements is true with respect to these additions?
Select one:
C. $53,000 should be debited to Land Improvements.
5.
Equipment that cost $210,000 and on which $100,000 of accumulated depreciation has been recorded was disposed of for $90,000 cash. The entry to record this event would include a
Select one:
C. loss of $20,000.
Value = $210,000 - $100,000 = $110,000.
$90,000 recieved - $110,000 Value = -$20,000 loss
