ACC111 Financial Accounting I Test #3 Spring 2014,,,,,,,,,,

Journalize the following transactions usingA. the direct write-off method of accounting for uncollectible receivablesB. the allowance method of accounting for uncollectible receivablesJune 10 Received $1,100 from Jim Dobbs and wrote off $4,000, the remainder owed.Oct. 11 Reinstated the account of Jim Dobbs and received $4,000 cash in full payment.A.DEBITCREDITDEBITCREDITB:2. Determine the amount of interest due at maturity and the maturity value on the following notesassuming the year to have 360 days:(a)(b)FaceAmount$6,000$9,000Termof Note60 days90 daysInterestRate9%8%InterestAmountMaturityValue3. Journalize the following transactions for Solley Company.a. Received a $4,800.00, 90-day, 9% note from Alan Hibbetts in payment of his account.b. Received the amount due from Hibbetts on his note.DEBITCREDIT24.A.B.C.D.Classify each of the following costs associated with long-lived assets as one of the following:BuildingsMachinery and EquipmentLandLand Improvements______19.Fees paid to architect to design new office building_____ 20.Cost of insurance during the construction of new office building_____ 21.Interest on money borrowed to finance construction of new office building_____ 22.Sales Taxes paid on new factory equipment_____ 23.Freight costs paid on purchase of new equipment_____ 24.Repairs made to used office equipment at acquisition_____ 25.Costs to survey a new piece of land for a new business location_____ 26.Costs of government permits required to develop land for a new business location_____ 27.Purchase price of land purchased for new business site_____ 28.Landscaping at new business location5. Determine the depreciation expense for the first year two years for equipment costing $500,000, witha life of 5 years, and residual value of $50,000, using (a) the double declining-balance method and (b) thestraight-line method.(a) Year 1Year 2(b)Year 1Year 26. A company had stock outstanding as follows during each of its first three years of operations: 2,500shares of 10% cumulative preferred stock, $100 par, and 50,000 shares of $10 par common stock. Theamounts distributed as dividends are as follows:Year 1 $12,000Year 2 $28,000Year 3 $60,0003Determine the total dividends and per share dividends for each class of stock for each year by completingthe schedule.PreferredTotalPer ShareCommonTotalPer Share7. On April 1, 10,000 shares of $5 par common stock were issued at $22, and on April 7, 5,000 shares of$50 par preferred stock were issued at $104. Journalize the entries for April 1 and 7.DEBITCREDIT8. On February 1 of the current year, Motor, Inc. issued 500 shares of $2 par common stock to an attorneyin return for preparing and filing the Articles of Incorporation. The value of the services is $8,500.Journalize this transaction.DEBITCREDIT9. On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with acurrent market price of $73. Journalize this transaction.4DEBITCREDIT10. A corporation, which had 18,000 shares of common stock outstanding, declared a 3-for-1 stock split.Answer the following:(a) What will be the number of shares outstanding after the split?___________________________(b) If the common stock had a market price of $240 per share before the stock split, whatwould be an approximate market price per share after the split?_________________________________11. The dates of importance in connection with a cash dividend of $65,000 on a corporations commonstock are January 15, February 15, and March 15. Journalize the entries required on each date.DEBITCREDITMULTIPLE CHOICE Circle the letter of the best answer.1. Under the corporate form of business organizationa. ownership rights are easily transferred.b. a stockholder is personally liable for the debts of the corporation.c. stockholders acts can bind the corporation even though the stockholders havenot been appointed as agents of the corporation.d. stockholders wishing to sell their corporation shares must get the approval ofother stockholders.2. The state charter allows a corporation to issue only a certain number of shares of each class of stock.This amount of stock is calleda. treasury stockb. issued stockc. outstanding stockd. authorized stock3. Par valuea. is the monetary value assigned per share in the corporate charter.b. represents what a share of stock is worth.c. represents the original selling price for a share of stock.d. is established for a share of stock after it is issued.4. The date on which a cash dividend becomes a binding legal obligation is on the5a.b.c.d.declaration date.date of record.payment date.last day of the fiscal year end.5. The primary purpose of a stock split is toa. increase paid-in capitalb. reduce the market price of the stock per sharec. increase the market price of the stock per shared. increase retained earnings6. Which of the following statements is not true about a 2-for-1 split?a. Par value per share is reduced to half of what it was before the split.b. Total contributed capital increases.c. The market price will probably decrease.d. A stockholder with ten shares before the split owns twenty shares after the split.7. Which of the following below is an example of a capital expenditure?a. cleaning the carpet in the front roomb. tune-up for a company truckc. replacing an engine in a company card. replacing all burned-out light bulbs in the factory 08. When a company throws away machinery that is fully depreciated with no residual value, this transactionwould be recorded with the following entrya. debit Accumulated Depreciation; credit Machineryb. debit Machinery; credit Accumulated Depreciationc. debit Cash; credit Accumulated Depreciationd. debit Depreciation Expense; credit Accumulated Depreciation9. Which of the following below is an example of a capital expenditure?a. cleaning the carpet in the front roomb. tune-up for a company truckc. replacing an engine in a company card. replacing all burned-out light bulbs in the factory10. Allowance for Doubtful Accounts is classified as a(n) ______ and has a normal ______ balance.a. equity, creditb. contra-asset, debitc. equity, debitd. contra-asset, credit11. The amount of the promissory note plus the interest earned on the due date is called thea. realizable valueb. maturity valuec. face valued. net realizable value612. All of the following below are needed for the calculation of straight-line depreciation excepta. costb. residual valuec. estimated lifed. units produced