Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / 1
1. Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transaction for March Units Sold at Retail Date Activities Mar. 1 Beginning inventory Mar 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales Totals Units Acquired at Cost 210 units @ $53.20 per unit 280 units @ $58.20 per unit 140 units @ $63.20 per unit 260 units @ $65.20 per unit 370 units @ $88.20 per unit 890 units 240 units @ $98.20 per unit 610 units Compute the number of units in ending inventory. Ending inventory units
2.
|
A company purchased a machine on November 1, 2020. The machine cost $18,000, has an estimated salvage value of $1,200 and an estimated life of 4 years. How much depreciation will be recorded at December 31, 2020? Use the straight-line depreciation method. |
Multiple Choice
$700
$1,200
$350
$4,200
|
A company paid $27,000 rent in advance for the six-month period of December 2020 to May 2021. The payment was made on November 22, 2020. The December 31, 2020 adjustment for expired rent would include: |
Multiple Choice
a $4,500 debit to Prepaid Rent.
a $4,500 credit to Rent Expense.
a $4,500 credit to Prepaid Rent.
a $27,000 debit to Rent Expense.
Adjusting Entries:
Multiple Choice
are made to correct errors.
are optional.
are needed for expenses that were paid for before or after they were used.
will always affect cash.
If adjusting entries are not made for prepaid expenses, assets on the balance sheet:
Multiple Choice
may be either overstated or understated.
will not be affected.
will be understated.
will be overstated.
When preparing a worksheet, the adjusted balance of the Accumulated Depreciation account is extended to the:
Multiple Choice
Income Statement Debit column.
Income Statement Credit column.
Balance Sheet Credit column.
Balance Sheet Debit column.
The Supplies Expense account is reported on the:
Multiple Choice
Balance Sheet and has a normal credit balance.
Income Statement and has a normal credit balance.
Balance Sheet and has a normal debit balance.
Income Statement and has a normal debit balance.
Which of the following statements is correct if a company prepares a worksheet at the end of the accounting year?
Multiple Choice
Preparation of the financial statements is not required.
The financial statements are prepared using the worksheet data.
Only an income statement is required.
the adjusting entries do not need to be journalized.
A consecutive, twelve-month accounting period is called a(n)
Multiple Choice
fiscal year
accounting year
accrual year
adjusted year
When a trial balance is in balance,
Multiple Choice
the company has earned a net income.
the general ledger is free of errors.
the debit account balances equal the credit account balances.
adjusting entries are not required.
After the closing entries are posted to the ledger, each expense account will have
Multiple Choice
a zero balance.
a debit balance.
either a debit or a credit balance.
a credit balance.
Which of the following accounts is not closed?
Multiple Choice
Wages Expense
Fees Income
John Garcia, Drawing
Prepaid Rent
Which of the following statements is not correct?
Multiple Choice
Before the Income Summary account is closed, its balance represents the net income or net loss for the accounting period.
The owner's drawing account is closed to the Income Summary Statement.
The Income Summary account is a temporary owner's equity account.
The Income Summary account is used only at the end of an accounting period to help with the closing procedure.
Which of the following is the only account that would be included in a closing entry?
Multiple Choice
Accounts Payable
Supplies Expense
Accumulated Depreciation
Cash
A postclosing trial balance could include all of the following except the ______ account.
Multiple Choice
Owner's Drawing
Cash
Accounts Receivable
Supplies
Which of the following accounts is a permanent account?
Multiple Choice
Supplies Expense
Supplies
Owner's drawing
Fees Income
During the closing process, Accumulated Depreciation--Equipment will
Multiple Choice
be closed to the capital account
be closed to the income summary account
not be used
be closed to the drawing account
Which of the following accounts has a normal credit balance?
Multiple Choice
Accounts Receivable
Accounts Payable
T. Stark, Drawing
Cash
Which of the following statements is correct?
Multiple Choice
The balance of the owner's drawing account will appear on the postclosing trial balance.
Closing entries are entered directly on the worksheet.
The Balance Sheet section of the worksheet contains the data that is used to make closing entries.
Preparation of the postclosing trial balance is the last step in the end-of-period routine.
1. please see the attached file for complet solution.
2. As per Straight Line Method,
Depreciation = (Cost - Salvage Value) / Estimated Life
Depreciation = ($ 18,000 - $ 1,200) / 4 years
Depreciation = $ 16,800 / 4 = $ 4,200 per year
But, machine was purchased on 1st Nov 20 and Year ended on 31st Dec 20, so used for 2 months
Depreciation for 2 months = $ 4,200 x 2 / 12
Therefore, Depreciation for 2 months = $ 700
Ans - 2 $ 4,500 credit to Prepaid Rent
On Nov 22 entry passed would have been :
Prepaid Rent $27,000
Cash $27,000
(To record prepaid rent for 6 months)
Now at the end of every month, entry to be passed :
Rent Expense $ 4,500
Prepaid Rent $ 4,500
Ans : 3 are needed for expenses that were paid for before or after they were used.
Adjusting entries are passed to get exact profit or loss for the accounting period.
Ans : 4 will be overstated
Entry for Prepaid Expense is -
Expense
Prepaid Expense
When prepaid expenses becomes actual expense, the above entry is passed if this entry is not passed balance in prepaid expense would be more and hence, balance sheet would be overstated.
*** As per Chegg guidelines when there are many subquestions, we have to answer only first four and hence I answered accordingly
