A/R & Write-offs
What type of account is Allowance for doubtful accounts?
Contra Asset Account
What is the difference between notes receivables and accounts receivables?
Accounts receivables is paid back within a short period of time, while notes receivables is paid back with interest within a longer period of time.
When can goodwill be purchased/recorded?
When entire business is purchased.
The other name for Natural Resources
What is Wasting Assets?
What type of depreciation method(s) DOES NOT use the residual value?
Declining Balance
What is the transaction when a receivable does not pay you on time and is not expected to pay in the future?
DR Allowance for doubtful accounts
CR Accounts Receivable
What is the interest on a 3-month note worth $5000 at a rate of 9%.
$112.50
List 3 intangible assets and their legal life.
Patent - 20 years
Copyright - life of creator + 50 years
Franchises/licenses - Contract term
Trademark - Indefinte
Calculation for Liability for Restoration.
(Restoration Cost/Estimated Units) x units sold
What is the formula for calculating the amortizable cost per unit under the units of activity method?
(Cost - Salvage) / Total Units of Activity = Amortizable Cost per Unit
Which GAAP does the direct write-off method violate?
Matching Principle
What is the journal entry for a bank credit card sale?
Dr. Cash
Dr. Credit Card Expense
Cr. Sales
What is the journal entry to record amortization on a patent (include comment)
Dr. Amortization expense
Cr. Patent
Adjusting entry
Journal Entry for amortizing Natural Resources.
Dr: Amortization Expense
Cr: Liability for Restoration
Cr: Accumulated Amortization
Truck = $40 000
Life expectancy = 16 years
Residual Value = $10 000
Calculate Amortization expense for the year.
$1 875.00
Company A concludes that 3.5% of it's net credit sales will be uncollectible. Credit sales are $395,000 and sales returns are $17,000. What is the adjusting entry for bad debts?
DR Bad debts expense $13230
CR Allowance for doubtful accounts $13230
memo#
Write the journal entry for a $1000 on sale on a non-bank credit card.
Dr. Accounts Receivable
Dr. Credit cad expense
Cr. Sales
At the end of ABC Inc's first fiscal year a successful law suit of $10 000 was used to defend a copyright. The copyright was originally $8000. Record the journal entry for this transaction.
Dr. Copyright
Cr. Cash or A/P or Legal Expense
Coal Mine = $12M ; Restoration cost = $200k ; Residual value = $500K ; Estimated Units = 10M ; Units Cut = 40k ; Units Sold = 20k ; Amortization Expense =?
$23,400
($12M +200k -500k) / 10M = $1.17 x 20,000 = $23,400
Bombom Inc. bought machinery for $50 000. The straight line rate is 6%. Under the double-declining balance method, how much amortization is accumulated over 3 years?
$16 466.40
Calculate the Receivable turnover ratio, if your net credit sales for 2012 are $5,640 and your 2011 net receivables were $700 and your 2012 net receivables are $950?
6.84 times
A 2-year note was issued in January 2016 worth $10,000. At the end of November 2016 you had $1,375 in Interest Revenue.
Calculate the interest rate.
15%
A patent cost $80 000, the useful life is 20 years. The patent already has already been amortized $8 000. Calculate 1 year of amortization.
$4000
Cost = $7M ; Restoration cost = $500k ; Estimated Units = 28M ; Cost per unit = $0.233 ; Residual value = ?
$976,000 ;
($7M - R + 500k) / 28M = $0.233
Bob the Builder sold equipment on June 1, 2004 for $20,000. At the time, the equipment had a cost of $50,000 and accumulated amortization of $35,000. Did they gain or lose on disposal and for how much?
$5,000 gain on disposal