Can you help me with the accounting problems; so far I’ve ...



Can you help me with the accounting problems; so far I’ve done some of the work which is highlighted in Yellow.? The others that are highlighted in red it needs your attention. Also, if you don’t mind, can you check and see if all of my answers are correct?1. On January 1, Altillo borrowed $10,000 at 6% interest for 1 year. Altillo accrues interest on the note monthly. If no adjusting entry is made at the end of January, what will be the impact on the financial statements?a.Revenues will be overstated by $50b.Expenses will be understated by $600 [b]c.Liabilities will be understated by $1, Income will be overstated by $502. On February 2, Reedy’s Printing Service received a payment of $6,000 for contracted printing work that will completed over the next 3 months. As of the end of February, the company had completed 1/3 of the work. The adjusting journal entry at the end of February for prepaid revenue will includea.a debit to Unearned Revenue for $6,000b.a credit to Unearned Revenue for $4,000c.a credit to Printing Revenues for $2,000d.a debit to Cash for $2,0003. In accordance with the revenue recognition principle, sales revenues are recorded whena. [my answer)earned, which typically occurs when the goods are transferred from the seller to the buyer.b.cash is received from the customer for items already delivered.c.an order is received from a customer with delivery of the product expected to take place within the next 30 days.d.the accountant determines which period's income statement "needs" more revenue.4. Which of the following accounts is not included in the computation of net sales?a.Sales Discountsb.Salesc.Sales Returns and Allowancesd. Freight Out5. Proponents of LIFO, as opposed to FIFO, point out that LIFO results ina.lower income taxes in a period of deflation.b.a more current cost of goods sold.c.lower net income in a period of deflation.d.higher net income in periods of inflation.6. The ending inventory of Larkin Company, which uses a periodic inventory system, was understated $7,000 on December 31, 2007, and overstated $3,000 on December 31, 2008. Because of these errors, 2008 net income wasa.overstated $3,000.b.overstated $10,000.c.understated $4,000.d.understated $10,000.7. Kotsch Textile purchased machinery for $60,000 eight years ago. It was expected to have a useful life of ten years, no salvage value, and was depreciated using the straight-line method. At the end of its eighth year of use, it was retired from service and given to a junk dealer. The entry to record the retirement includes aa.debit to Loss on Disposal for $12,000.b.credit to Depreciation Expense for $6,000.c.debit to Machinery for $60,000.d.credit to Accumulated Depreciation—Machinery for $48,000.8. Salvage (residual) value is deducted in the computation of depreciation expense in all of the following methods with the exception ofa.straight-line.b.units-of-activity.c.declining-balance. d.All of the above include a deduction of salvage value.9. The three primary accounting problems associated with accounts receivable area.valuation, disposition, and statement presentation.b.recognition, valuation, and statement presentation.c.recognition, valuation, and disposition. d.revenue recognition, matching, and statement presentation.10. Which of the following methods and bases of accounting for uncollectible accounts receivable is inconsistent with the proper application of matching?a.Direct write-off methodb.Aging of receivables allowance methodc.Percentage of receivables basisd.Percentage of sales basis11. Novak Corporation borrowed $80,000 on March 1, 2008, signing a one year, 6% note payable to Lebo State Bank. The adjusting entry required on December 31, 2008, includes aa.debit to interest expense of $4,000.b.debit to cash of $80,000.c.credit to interest revenue of $4,000.d.debit to interest payable of $4,800.12. All of the following would be classified as current liabilities at 12/31/2008 except:a.Accounts Payable.b.Notes Payable, due 5/1/2009.c.Bonds Payable, due 2013.d.Salaries Payable.13. Cash provided by operating activitiesa.may be larger than net income.b.equals the change in cash for the year.c.summarizes cash flows relating to the purchase and sale of long-lived assets.d.decreases when long-term debt is repaid.14. One major purpose of the statement of cash flows is to provide information abouta.the firm's profitability.b.the firm's cash receipts and payments during a period. c.the firm's resources and claims against those resources.d.changes in retained earnings.PART IIMatching – Assets/Depreciation Instructions: Match the cash expenditures given below with the appropriate accounting treatment. An individual classification may be used more than once, or not at all.TreatmentsA.Record the expenditure as an asset and depreciate it.B.Record the expenditure as an asset and amortize it.C.Record the expenditure as an asset and deplete it.D.Record the expenditure as an asset but do not systematically allocate it to expense.E.Record the expenditure as an expense in the current period.F.None of the above is appropriate.Expenditures___A_1.Acquired a truck.A____?2.Purchased a copyright from an author.B___E_3.Paid for minor repairs to a building.E___B_4.Purchased a producing silver mine.C____? 5.Paid attorney's fees in acquiring land.DPART IIIStatement Of Cash Flows Classifications Instructions: Each of the events below may have an effect on the statement of cash flows. Designate how the event should be reported within the statement of cash flows using the codes provided below. Codes may be used more than once, or not at all.CodesA.Investing activity; cash inflowB.Investing activity; cash outflowC.Financing activity; cash inflowD.Financing activity; cash outflowE.Operating activity; cash inflowF.Operating activity; cash outflowG.Noncash investing and financing activityEvents____F_1.Issued checks for the weekly payroll___F__2.Paid an account payable____D_3.Issued bonds payable for cash___D__4.Declared and paid a cash dividend____F_5.Paid cash for a new car for a traveling salesperson___B__6.Purchased treasury stock for cash___F__7.Paid cash for 40% interest in another company___C__8.Received interest on a long-term bond investment___?__9.Converted bonds payable into common stock___?__10.Sold a long-term stock investment for cash at book value1. F 6. D2. F 7. B3. C 8. E4. D 9. G5. B 10. APART IVDepreciation Methods Schilling Corporation purchased a machine on January 1, 2007, at a total cost of $900,000. The machine has an estimated useful life of 10 years or 1,000,000 units of output and a salvage value of $150,000.Instructions: Complete the following table by presenting the annual depreciation expense for the years 2007 and 2008, under the indicated depreciation methods. Assume actual activity in terms of units of output was: 2007—60,000 units and 2008—120,000 units.———————————————————————————————————— Annual Depreciation Expense 2007 2008————————————————————————————————————Straight-Line:$$————————————————————————————————————(Supporting Computations)————————————————————————————————————Double-Declining-Balance:$$————————————————————————————————————(Supporting Computations)————————————————————————————————————Units-of-Activity:$$————————————————————————————————————(Supporting Computations)PART VInstructions: Complete the requirements specified for each of the following independent situations.A.State the missing items identified by “?”. purchases + Freight in ? = Cost of goods purchases + Purchases discounts + Purchases returns and allowances = Purchases3.Beginning inventory + Purchases – Purchases discounts – Purchases returns and allowances + Freight-in = Cost of goods available for saleB.Watts Company uses the lower of cost or market (LCM) basis for its inventory. The following information relates to its December 31, 2008 inventory. Determine the amount of the ending inventory applying LCM to individual items.December 31, 2008ProductUnitsUnit CostMarketA200$1922B2502926C3001618D1503028E1801517PART VI — ACCOUNTS RECEIVABLE A. ACCOUNTS RECEIVABLE—UNCOLLECTIBLE ACCOUNTSInstructions: Present the journal entries specified below; show supporting calculations.The trial balance of Gannon Company at December 31, 2007 includes the following: Debits CreditsAccounts Receivable 100,000Allowance for Doubtful Accounts 500Sales (all on credit) 800,000Sales Returns and Allowances 30,000If Gannon uses the aging method and estimates that $4,000 of receivables will be uncollectible, prepare the adjusting entry.Bad Debts Expense$4,000 Allowance for Doubtful Accounts4,000 (To record estimate of uncollectible accounts)Bad Debts Expense .................................................................. 4,500Allowance for Doubtful Accounts ($500 + $4,000) ......... 4,500(2)If Gannon estimates uncollectibles at 1% of net credit sales, prepare the appropriate adjusting entry.Bad Debts Expense8,000 Allowance for Doubtful Accounts8,000 (To record estimated bad debts for year)Bad Debts Expense (1% × $770,000) ...................................... 7,700Allowance for Doubtful Accounts.................................... 7,700Net Sales = $800,000 - $30,000 = $770,000(3)Assume that on February 10, 2008 the specific account of Mark Tresh with a balance of $600, is deemed uncollectible. Record the write-off.Feb. 10 Allowance for Doubtful Accounts 600Account Receivable-Mark Tresh600(Write off of Mark Tresh account)Allowance for Doubtful Accounts ............................................. 600 Accounts Receivable ..................................................... 600(4)Assume that on May 12, 2008 Tresh pays one-half of the above balance in full and is expected to pay the remainder within 30 days. Record the appropriate entries. May.12Account Receivable-Mark Tresh300 Allowance for Doubtful Accounts300 (To reverse write-off of M. Tresh account) May. 12Cash300 Accounts Receivable-M. Tresh300 (To record collection from M. Tresh)Accounts Receivable ............................................................... 600Allowance for Doubtful Accounts ................................... 600Cash ........................................................................................ 300 Accounts Receivable .................................................................. 300B.SALE OF ACCOUNTS RECEIVABLEInstructions: Present the journal entries specified below.(1)Price Company sells $400,000 of accounts receivable to National Factors, Inc. for cash less a 2.5% service charge. Record the sale.Accounts Receivable –National Factors400,000 Sales400,000 (To record sales on account)Cash300,000Service Charge Expense (2.5% x $400,000)100,000 Account receivable400,000 (To record sale of receivable to National Factors) Cash ......................................................................................... 390,000Service Charge Expense .......................................................... 10,000Accounts Receivable.......................................................................... 400,000(2)Made Visa credit card sales totaling $7,500. A 2% service fee is charged by Visa. Record the sale on the books of Price Company.Cash7,350Service Charge Expense (2% x $7,500) 150Sales7,500 (To record credit card sales)Cash ......................................................................................... 7,350Service Charge Expense .......................................................... 150Sales ...................................................................................... 7,500PART VII—BALANCE SHEET CLASSIFICATIONS Instructions: Match the account titles given below with the appropriate Balance Sheet classifi-cation. An individual classification may be used more than once, or not at all. An account may also not appear in the balance sheet. ClassificationsA.Current AssetsE.Current LiabilitiesB.Long-term InvestmentsF.Long-term LiabilitiesC.Property, Plant, and EquipmentG.Stockholders’ EquityD.Intangible AssetsH.Not separately presented on the Balance Sheet Account Titles?mon StockA9.Prepaid InsuranceE2.Unearned Rent RevenueD10.CopyrightsA3.SuppliesA11.Accounts ReceivableE4.Accounts Payable?12.DividendsD5.TrademarksC13.Accumulated Depreciation E 6.Salaries PayableC7.EquipmentH8. Service RevenueP14-5A Grania Company’s income statement contained the condensed information below.Problems: Set A 683GRANIA COMPANY Income StatementFor the Year Ended December 31, 2008Revenues $970,000Operating expenses, excluding depreciation $624,000Depreciation expense 60,000Loss on sale of equipment 16,000 700,000Income before income taxes 270,000Income tax expense 40,000Net income $230,0002008 2007Accounts receivable $75,000 $60,000Accounts payable 41,000 28,000Income taxes payable 11,000 7,000Accounts payable pertain to operating expenses.GRANIA COMPANYPartial Statement of Cash FlowsFor the Year Ended December 31, 2008Cash flows from operating activitiesNet income$230,000Adjustments to reconcile net income??to net cash provided by operating activitiesDepreciation expense$ 60,000Loss on sale of equipment16,000Increase in accounts receivable(15,000)Increase in accounts payable13,000Increase in income taxes payable?? 4,000 78,000Net cash provided by operating activities$308,000*P14-6A Data for Grania Company are presented in P14-5A.InstructionsPrepare the operating activities section of the statement of cash flows using the direct method.Cash from operations $308,000GRANIA COMPANYPartial Statement of Cash FlowsFor the Year Ended December 31, 2008Cash flows from operating activitiesCash receipts from customers$955,000(1)Less cash payments:For operating expenses$611,000(2)For income taxes??36,000(3) 647,000Net cash provided by operating ??activities$308,000(1)Computation of cash receipts from customersRevenues$970,000Deduct: Increase in accounts receivable? (15,000)($75,000 – $60,000)Cash receipts from customers$955,000(2)Computation of cash payments for operating expensesOperating expenses per income statement$624,000Deduct: Increase in accounts payable (13,000)($41,000 – $28,000)Cash payments for operating expenses$611,000(3)Computation of cash payments for income taxesIncome tax expense per income statement$ 40,000Deduct: Increase in income taxes payable? (4,000)($11,000 – $7,000)Cash payments for income taxes$ 36,000?Thanks, ? ................
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