The following information pertains to the Berry Bear Corporation at December 31, 2014 Balance per bank S20 000 Deposits in transit e 000 Outstanding checks 16.000 Bank service charges for December 400 Bank erroneously charged Berry Bears account for Sonny-Bear”s check written for $1,400. As of December 31, the bank had not corrected this error 1.400 Berry Bear”s cash balance per ledger (books) before adjustment […]

The Jupiter Company purchased a parcel of land to be used as the site of a new office complex. The following data pertain to the purchase of the land and the beginning of construction for the new building: Purchase price of land $200,000 Attorney”s fees for land transaction 1,000 Title insurance cost 2,000 Survey fees to determine the boundaries of the lot 800 Excavation costs […]

The following data relate to the bank account of Springfield Cleaners: Cash balance, September 30 per bank $10,000 Cash balance, October 31 per bank 21,500 Checks paid during October by bank 5,900 Checks written during October per books 6,800 Cash balance, October 31 per books 22,200 Bank service charge for October, not recorded on books 100 Deposits per books for October 19,000 The amount of […]

The Venus Company hired an architect to design plans and a construction firm to build a new office building on a parcel of land it owns. The following data relates to the building: Price paid to the construction firm $320,000 Architect fees 18,000 Permit fees 1,200 Property taxes during the construction period 800 Insurance premium for first year of operations 3.000 Property taxes during the […]

This exercise will review the two bases for determining the dollar amount of the adjusting entry to recognize bad debt expense and to adjust the Allowance for Doubtful Accounts account. The trial balance before adjustment at December 31, 2014 for the Liz Company shows the following balances: Debit Credit Accounts Receivable $82000 Allowance for Doubtful Accounts 2120 Sales (all on credit) $410,000 Sales Returns and […]

The Patty Company purchased a piece of office equipment to be used in operations. The following expenditures and other data relate to the equipment: Invoice price excluding sales tax $12,000 Sales tax 600 Delivery charges 200 Installation costs 300 Cost of a special platform 400 Cost of supplies used in testing 80 Insurance premium for first year of use 60 The total acquisition cost of […]

This exercise reviews the journal entries for various transactions involving notes receivable The following transactions occurred during 2014 and pertain to the Aaron Retail Company. June 1 Accepted a note from R. Greenblatt in settlement of his $2,000 account. The note is due in six months and bears interest at 12%. July 1 Sold merchandise to C. Lynn for $5,000. Accepted a note due in […]

A machine was purchased at the beginning of 2012 for $68,000. At the time of its purchase, the machine was estimated to have a useful life of six years and a salvage value of $8,000. The machine was depreciated using the straight-line method of depreciation through 2014. At the beginning of 2015, the estimate of useful life was revised to a total life of eight […]

This exercise will review the measures used to evaluate the liquidity of accounts receivable. The management of M. F. Specie Company is analyzing the entity”s recent financial statements to determine the efficiency of the company”s credit policies for customers. The following information is extracted from the statements: Sales $930,000 Sales returns 30,000 Accounts receivable, 12/31/14 85,000 Accounts receivable, 12/31/13 60,000 Instructions Assuming all sales are […]

This exercise illustrates the use of the retail inventory method to estimate ending inventory. The records of Petite Clothiers report the following figures for the month of September: Sales $79,000 Sales returns 1,000 Freight on purchases 2,400 Purchases (at cost) 48,000 Purchases (at sales price) 92,000 Purchase returns (at cost) 2,000 Purchase returns (at sales price) 3,000 Beginning inventory (at cost) 30,000 Beginning inventory (at […]