1. Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? Answer a. Bad Debt Expense 20,000 […]

1.) The Hamblen Company has budgeted production for the next five quarters as follows: 2004 2004 2004 2004 2005 Quarter …………… First Second Third Fourth First Production in units … 10,000 12,000 16,000 14,000 11,000 Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year totals 4,000 lbs. The raw materials inventory at the […]

1. (TCOs 2 & 3) During the year, Zander is transferred by his employer from Seattle to San Diego. His moving expenses are not reimbursed and are as follows: Cost of moving household furnishings $9,000 Transportation $1,000 Meals $800 Lodging $1,400 His qualified moving expenses are: (Points : 5) $12,200. $11,800. $11,400. $10,000. None of the above

1. The Hilltop Corporation is considering (as of 1/1/08) the replacement of an old machine that is currently being used. The old machine is fully depreciated but can be used by the corporation through 2011. If Hilltop decides to replace the old machine, Baker Company has offered to purchase it for $50,000 on the replacement date. The disposal value of the old machine would be […]

1. Individual proprietors report their business income and deductions on: A. Form 1065 B. Form 1120S C. Schedule C D. Schedule A E. Form 1041 2. According to the Internal Revenue Code A?§162, deductible business expenses must be one of the following? A. incurred for the production of investment income B. ordinary and necessary C. minimized D. appropriate and measurable E. personal and justifiable 3. […]

1. Jasmine Company produces hand tools. A sales budget for the next four months is as follows: March 10,400 units, April 13,700, May 16,400 and June 21,500. Jasmine Company’s ending finished goods inventory policy is 20% of the following month’s sales. What is budgeted finished goods inventory for May? 2. Toimi has forecast sales for the next three months as follows: July 4,800 units, August […]

1. The basic differences between the financial statements of a merchandising business and a service business include reporting cost of merchandise sold on the income statement and the: (Points : 1) inclusion of merchandise inventory on the balance sheet as a current asset. stockholders’ equity section of the balance sheet. other income section of the income statement. inclusion of a stockholders’ equity statement. 2. Which […]

1. Calhoun Inc has forecast purchases on account to be $310,000 in March, $370,000 in April, $421,000 in May, and $499,000 in June. Seventy percent of purchases are paid for in the month of purchase, the remaining 30% are paid in the following month. What are budgeted cash payments for April? 2. Carlton has forecast sales to be $212,000 in February, $276,000 in March, $297,000 […]

1.) Cold Spring produces premium bottle water. Cold Spring purchases artesian water, stores the water in large tanks, and then runs the water through 2 processess; filtration and bottling. During February, the filtration proces incurred the following costs inprocessing 190,000 liters: Wages of workers operating the filtration equipment $21,950 Manufacturing overhead allocated to filtration $25,050 Water $ 150,000 Cold Spring had no beginning inventory in […]

1 ) A company purchased $6,000 worth of supplies in August. On August 31, the balance in the Supplies account was $3,200. The adjusting entry includes a: Debit to Supplies Expense for $3,200. Credit to Supplies for $2,800. Debit to Supplies for $2,800. Credit to Cash for $2,800. Credit to Supplies Expense for $2,800. 2 ) PPW Co. leased a portion of its store to […]