Accounting Questions 2023 Business Finance
2023 PROBLEMS The Hobbit Company made the following merchandise purchases and sales during the July July 1
PROBLEMS
The Hobbit Company made the following merchandise purchases and sales during the July:
July. 1 purchased 380 units at $15 each
July 5 purchased 270 units at $20 each
July 9 sold 500 units at $55 each
July 14 purchased 300 units at $24 each
July 30 sold 250 units at$55 each
Required: SHOW ALL CALCULATIONS.
There is no beginning inventory. If the company uses the last-in, first-out (LIFO) perpetual inventory system:
1) What is the value of ending inventory at July 30? $__________
2) What is the value of cost of goods sold at July 30? $_________
On September 30, Emerson Co. has $540,250 of accounts receivable. Emerson uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $13,750.
Required: Prepare journal entries to record the following selected October transactions. The company uses the perpetual inventory system.
October 1 – Sold $325,000 of merchandise (that cost $178,500) to customers on credit.
October 10 – Received $425,100 cash in payment of accounts receivable.
October 23 – Wrote off $16,700 of uncollectible accounts receivable.
October 31 – In adjusting the accounts on October 31, its fiscal year-end, the company estimated that 3.0% of accounts receivable will be uncollectible.
Mahoney Company had the following transactions involving plant assets during year. Unless otherwise indicated, all transactions were for cash.
January 2 Purchased a truck for $50,000 plus sales taxes of $3,000. The truck is expected to have a $4,000 salvage value and a 4 year life.
January 3 Paid $1,500 to have the company’s logo painted on the truck. This did not change the truck’s salvage value.
December 31 Recorded straight-line depreciation on the truck.
Required: Prepare the general journal entries to record these transactions.
On April 1, Year 5 a company discarded a machine that had cost $10,000 and had accumulated depreciation of $8,000 as of December 31, Year 4. The asset had a 5-year life and $0 salvage value.
Required: Prepare the journal entries to 1) record the updating of the depreciation expense and2) discarding of this asset in Year 5.
On January 1, a machine costing $260,000 with a 4-year life and an estimated $5,000 salvage value was purchased. It was also estimated that the machine would produce 500,000 units during its life. The actual units produced during its first year of operation were 110,000.
Required: Determine the amount of depreciation expense for the first year under each of the following assumptions:
1. The company uses the units-of-production method of depreciation $__________
2. The company uses the double-declining-balance method of depreciation $_______
On November 1, Bob’s Skateboards signed a $12,000, 90-day, 5% note payable to cover a past due account payable.
Required:
- What amount of interest expense on this note should Bob’s Skateboards report on year-end December 31? _____________
b. Prepare Bob’s journal entry to record the issuance of the note payable.
c. Prepare Bob’s journal entry to record the payment of the note on February 1 of the following year.
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