Question 1 of 50 case 10.7 the bi-weekly payroll for gilkey
Question 1 of 50
Case 10.7
The bi-weekly payroll for Gilkey contruction was as follows:
Gross pay for Wages $15,000
Employee payroll deductions:
Employee income tax $3,400
FICA(8%) $1,200
401 K Retirement plan contributions $1,500
Refer to Case 10.7. The journal entry to record the payroll for Gilkey would include:
a debit to Wage expense for $8,900.
a credit to FICA payable for $1,200.
a debit to Cash for $15,000.
a credit to Employee income taxes payable for $1,500.
Question 2 of 50
Case 9.2
Axel Logistics purchased the following long term assets with market values:
Asset Market Value
Equipment $200,000
Land $250,000
Furniture $150,000
Building $400,000
Refer to Case 9.2. If Axel pays $800,000 for all of the long term assets in a basket purchase, what amount would be the recorded as the cost of the furniture?
$60,000
$100,000
$48,000
$120,000
Question 3 of 50
Case 10.4
Lisa Lay manages the women’s clothing department of Fashion Department Store. She earns a base monthly salary of $1,000 plus a 6% commission on her personal sales. Through payroll deductions, Lay donates $35 per month to a charitable organization, and she authorizes Fashion to deduct $40 monthly for her health insurance. Tax rates on Lay’s earnings are 10% for income tax and 8% of the first $90,000 for FICA. During the first 11 months of the year, she earned $81,000.
Refer to Case 10.4. Compute Lay’s net pay for December assuming $80,000 in sales for December.
$4,681
$1,000
$4,500
$3,615
Question 4 of 50
Case 9.2
Axel Logistics purchased the following long term assets with market values:
Asset Market Value
Equipment $200,000
Land $250,000
Furniture $150,000
Building $400,000
Refer to Case 9.2. If Axel pays $800,000 for all of the long term assets in a basket purchase, what amount would be the recorded as the cost of the equipment?
$100,000
$200,000
$150,000
$160,000
Question 5 of 50
The journal entry to increase an imprest petty cash fund from $300 to $400 would be:
A) Miscellaneous Expense 100
Cash in bank 100
B) Petty Cash 100
Cash in bank 100
C) Accounts Receivable 100
Cash in bank 100
D) Cash in bank 100
Petty Cash 100
A)
B)
C)
D)
Question 6 of 50
Case 9.7
Suppose General Electric Company (GE) pays $400,000 to acquire a patent on January 1, 2008. GE believes this patent’s useful life is five years.
Refer to Case 9.7. What is the journal on January 1 to acquire the patent?
A) Amortization Expense 400,000
Patent 400,000
B) Amortization Expense 80,000
Accumulated Amortization 80,000
C) Patent 80,000
Cash 80,000
D) Patent 400,000
Cash 400,000
A)
B)
C)
D)
Question 7 of 50
In accounting, how is goodwill defined?
The excess of the cost to purchase another company over the market value of its net liabilities
The excess of the cost to purchase another company over the book value of its net assets
The excess of the cost to purchase another company over the market value of its net assets
The excess of the cost to purchase another company over the market value of its cash accounts
Question 8 of 50
Letting no single employee be responsible for authorizing transactions, handling assets, and keeping accounting records are called:
control environment.
segregation of duties
risk assessment.
control activities.
Question 9 of 50
Separation of duties is important for internal control of:
cash receipts.
cash payments.
neither of the above.
both of the above.
Question 10 of 50
An example of an optional deduction from pay for an employee would be:
FICA.
state income taxes.
charitable contributions.
federal income taxes.
Question 11 of 50
The allocation of the cost of a natural resource to expense over its useful life is called:
amortization.
depletion.
depreciation.
production.
Question 12 of 50
The amount that should be recorded as the cost of a long term asset is:
A) the cost to get the asset ready for its intended use.
B) the cost to purchase the asset.
C) both A and B.
D) none of the above.
Question 13 of 50
Gilkey Enterprises wrote a check for $540 to a supplier. The check was incorrectly recorded for $450 by the bank. The adjustment on the bank reconciliation should be:
$90 added to the bank balance of a bank reconciliation.
$90 subtracted from the book balance of a bank reconciliation.
$90 subtracted from the bank balance of a bank reconciliation.
$90 added to the book balance of a bank reconciliation.
Question 14 of 50
Case 10.8
The bi-weekly payroll for Oddessy Consulting was:
Gross pay for Wages $25,000
Employee payroll deductions:
Employee income tax $7,400
FICA(8%) $2,000
401 K Retirement plan contributions $2,500
Refer to Case 10.8. The journal entry to record the payroll for Oddessy would include a:
debit to Cash for $25,000.
credit to Employee income taxes payable for $7,400.
debit to Wage expense for $13,100.
credit to Wages payable for $13,100.
Question 15 of 50
The source document behind a notes receivable is called a(n):
account.
promissory note.
journal entry.
subsidiary ledger.
Question 16 of 50
Natural resources are reported on the balance sheet as which of the following?
Cost minus book value
Cost minus liabilities
Cost minus accumulated deprecation
Cost minus accumulated depletion
Question 17 of 50
Case 8.2
Emerson Electronics had the following information related to its September inventory.
Number of Units Cost
Sept. 1 Beginning Inventory 200 Units $10
6 Purchase 200 Units $12
16 Sold 250 Units
27 Purchase 200 Units $14
30 Sold 300 Units
Sales were made at $15 per unit and Emerson uses the perpetual inventory system.
Refer to Case 8.2. The average cost per unit after the September 27 purchase would be:
$11.
$12.50.
$13.31.
$12.71.
Question 18 of 50
When a maker of a note does not pay at maturity it is called:
A) defaulting on a note.
B) dishonoring a note.
C) both A and B.
D) neither A or B.
Question 19 of 50
Which of the following would be considered a capital expenditure?
Putting a new heating a cooling system on a building
Cleaning the carpet on a weekly basis
Regular maintenance of a building
Painting the restrooms of a building
Question 20 of 50
Ordinary repairs are recorded by:
debiting an expense account.
crediting an asset account.
crediting an expense account.
debiting an asset account.
Question 21 of 50
Under the allowance method of accounting for bad debts, the journal entry for writing off a customers accounts is:
A) Allowance for doubtful accounts XXXX
Bad Debts Expense XXXX
B) Bad Debts Expense XXXX
Allowance for doubtful accounts XXXX
C) Allowance for doubtful accounts XXXX
Cash XXXX
D) Accounts Receivable XXXX
Allowance for doubtful accounts XXXX
A)
B)
C)
D)
Question 22 of 50
A sprinkler system would be recorded in which account?
Land
Machinery
Equipment
Land improvements
Question 23 of 50
For good internal controls over payroll, which functions should be separated?
Passing out paychecks or pay stubs
Hiring and firing of employees
Payroll accounting
All of the functions above should be separated
Question 24 of 50
Case 9.6
TD Industries has a piece of equipment that has a cost of $400,000. The equipment has accumulated depreciation of $305,000.
Refer to Case 9.6. If the equipment is sold for $120,000, TD will:
credit a gain for $25,000.
credit cash for $120,000.
debit a loss for $25,000.
debit equipment for $200,000.
Question 25 of 50
Of the following assets which one would be listed first on the balance sheet?
Prepaid Expenses
Land
Cash
Accounts Receivable
Question 26 of 50
Case 10.2
Whirlpool sells $2,120,000 of products in January 2009 on credit. It is estimated that 3% of the products will be returned for warranty work. At the end of January, $30,300 of warranty work has been done.
A) Warranty Expense 30,300
Estimated Warranty Payable 30,300
B) Estimated Warranty Payable 63,600
Cash 63,600
C) Warranty Expense 63,600
Estimated Warranty Payable 63,600
D) Estimated Warranty Payable 30,300
Cash 30,300
Refer to Case 10.2. The journal entry for the warranty work would be:
A)
B)
C)
D)
Question 27 of 50
A signature card is used by banks to help protect against:
inappropriate deposits.
check forgery.
petty cash being stolen.
errors in a bank reconciliation.
Question 28 of 50
Notes receivable that are for longer than one year are considered:
revenues.
current assets.
long term assets.
expenses.
Question 29 of 50
Which inventory costing method would use the actual cost of each individual unit or product?
FIFO
LIFO
Weighted average
Specific Identification
Question 30 of 50
In a company with good internal controls, which department should be responsible for preparing employee earnings records?
Payroll
Accounting
Human resources
Finance
Question 31 of 50
Case 9.4
J + J construction has trucks with a cost of $300,000. The trucks have an estimated useful life of 5 years, and an estimated salvage value of $20,000. The trucks are estimated to run 200,000 miles during their estimated life.
Refer to Case 9.4. The amount of depreciation expense in the first year under double declining balance depreciation would be:
$112,000.
$200,000.
$190,000.
$120,000.
Question 32 of 50
Case 9.4
J + J construction has trucks with a cost of $300,000. The trucks have an estimated useful life of 5 years, and an estimated salvage value of $20,000. The trucks are estimated to run 200,000 miles during their estimated life.
Refer to Case 9.4. If 50,000 miles are driven in year 1, the amount of deprecation expense in the first year under unit of production depreciation would be:
$65,000.
$75,000.
$70,000.
$80,000.
Question 33 of 50
Case 9.2
Axel Logistics purchased the following long term assets with market values:
Asset Market Value
Equipment $200,000
Land $250,000
Furniture $150,000
Building $400,000
Refer to Case 9.2. If Axel pays $800,000 for all of the long term assets in a basket purchase, what amount would be the recorded as the cost of the land?
$180,000
$200,000
$250,000
$100,000
Question 34 of 50
Case 10.5
Chip King works as a cook for Damon’s Grill. His straight-time pay is $10 per hour, with time and a half for hours in excess of 40 per week. King’s payroll deductions include withheld income tax of 7% of total earnings, FICA tax of 8% of total earnings, and a weekly deduction of $10 for a charitable contribution to United Fund.
Refer Case 10.5. Assuming King worked 50 hours during the week, compute his gross pay for the week.
$600
$550
$400
$500
Question 35 of 50
Patriot Bank loans P+P Company $200,000 on a 1 year promissory note on December 1, 2009. The interest rate of this loan is 8.5%. The principle and interest are due in one year. The journal entry to accrue one months worth of interest earned on 12-31-09 is:
A) Interest Receivable 1,417
Interest Revenue 1,417
B) Cash 17,000
Interest revenue 17,000
C) Cash 1,417
Interest revenue 1,417
D) Interest Receivable 17,000
Interest Revenue 17,000
A)
B)
C)
D)
Question 36 of 50
Case 7.10
Jade Co Killian Co
Cash $10,000 $25,000
Short-term investments 5,000 15,000
Net Receivables 45,000 55,000
Current liabilities $45,000 $100,000
Refer to Case 7.10. Calculate the Quick ratio for Jade Company.
1.5
1.25
1.0
1.33
Question 37 of 50
Case 8.2
Emerson Electronics had the following information related to its September inventory.
Number of Units Cost
Sept. 1 Beginning Inventory 200 Units $10
6 Purchase 200 Units $12
16 Sold 250 Units
27 Purchase 200 Units $14
30 Sold 300 Units
Sales were made at $15 per unit and Emerson uses the perpetual inventory system.
Refer to Case 8.2. The value of cost of goods sold under FIFO would be:
$6,500.
$7,000.
$6,300.
$6,700.
Question 38 of 50
Suppose King Manufacturing signs a $600,000 note payable to purchase land. King also pays $40,000 in back property taxes, $10,000 in transfer taxes, $25,000 to remove an old building, and a $3,000 survey fee. In addition, King had a ground breaking ceremony to start construction of a new building that costs $1,200. What is the cost of the land?
$678,000
$679,200
$650,000
$600,000
Question 39 of 50
Lanny Company’s cash account shows an ending balance of $770. The bank statement shows a $20 service charge and an NSF check for $100. A $250 deposit is in transit, and outstanding checks total $400. What is Navarro’s adjusted cash balance?
$1,050
$650
$680
$530
Question 40 of 50
The allocation of the cost of a plant asset to expense over its useful life is called:
production.
depreciation.
amortization.
depletion.
Question 41 of 50
Case 6.1
Horner Consulting has the following related to its cash account:
Cash account balance $3,100
Bank statement balance $3,200
Deposits in transit $250
Outstanding Checks:
#1001 $50
#1003 $340
#1006 $225
Bank Service charge $25
NSF check – Customer Gilkey $240
Refer to Case 6.1. What is the journal entry for the NSF check?
A) Miscellaneous Expense 240
Cash 240
B) Cash 240
Accounts Receivable – Gilkey 240
C) Accounts Receivable – Gilkey 240
Cash 240
D) Cash 240
Miscellaneous Expense 240
A)
B)
C)
D)
Question 42 of 50
Case 9.4
J + J construction has trucks with a cost of $300,000. The trucks have an estimated useful life of 5 years, and an estimated salvage value of $20,000. The trucks are estimated to run 200,000 miles during their estimated life.
Refer to Case 9.4. The amount of depreciation expense in the second year under double declining balance depreciation would be:
$75,200.
$66,000.
$65,000.
$72,000.
Question 43 of 50
Case 9.3
Leah, Inc. has machinery with a cost of $100,000. The machinery has an estimated useful life of 10 years, and an estimated salvage value of $10,000. The machinery is expected to be able to produce a total of 1,000,000 units during its estimated life.
Refer to Case 9.3. The amount of depreciation expense in the third year under double declining balance depreciation would be:
$15,000.
$12,400.
$20,000.
$18,000.
Question 44 of 50
Case 10.1
Maytag sells $1,120,000 of products in January 2009 on credit. It is estimated that 2% of the products will be returned for warranty work. At the end of January, $10,500 of warranty work has been done.
A) Warranty Expense 10,500
Estimated Warranty Payable 10,500
B) Estimated Warranty Payable 10,500
Cash 10,500
C) Estimated Warranty Payable 22.400
Cash 22.400
D) Warranty Expense 22,400
Estimated Warranty Payable 22,400
Refer to Case 10.1. The journal entry for the warranty work would be:
A)
B)
C)
D)
Question 45 of 50
An oil well that cost $10,000,000 has an estimated 50,000,000 barrels of oil. If in 2008, 200,000 barrels of oil were extracted, then what is depletion expense for the year?
$40,000
$30,000
$20,000
$80,000
Question 46 of 50
Maggie Moo’s Ice Cream Shop had a gross pay of $19,000 and a net pay of $13,200 for the latest payroll. The journal entry to pay the payroll would be:
A) Salaries Expense 13,200
Cash 13,200
B) Salaries Payable 19,000
Cash 19,000
C) Salaries Expense 13,200
Salaries Payable 13,200
D) Salaries Payable 13,200
Cash 13,200
A)
B)
C)
D)
Question 47 of 50
Desks and chairs are recorded in which account?
Furniture and fixtures
Machinery
Land
Land improvements
Question 48 of 50
The percentage of sales method of estimating bad debts is considered to be a(n):
retained earnings statement approach.
balance sheet approach.
cash flows statement approach.
income statement approach.
Question 49 of 50
Reducing expense to increase operating profit is representative of:
safeguarding assets
following company policies
promoting operational efficiency
ensuring accurate, reliable accounting records
Question 50 of 50
Case 9.3
Leah, Inc. has machinery with a cost of $100,000. The machinery has an estimated useful life of 10 years, and an estimated salvage value of $10,000. The machinery is expected to be able to produce a total of 1,000,000 units during its estimated life.
Refer to Case 9.3. The book value of the machinery at the end of the second year under straight line depreciation would be:
$82,000.
$100,000.
$18,000.
$91,000.
