The DR & CR
Janet's Juice paid $550 to purchase supplies. The journal entry is this.
What is...
Dr. Supplies 550
Cr. Cash 550
An example of this type (Par, Premium, Discount) of bond issue:
Market rate = $10
Stated rate = $11
Issue price = 102.5%
What is a premium bond.
This method will result in the more depreciation expense early in the life of the asset, as compared with the expense in later periods.
What is declining balance method or double declining balance.
A company had the following purchases during its first quarter of operations:
January: 14 units @ $124
February: 24 units @ $134
March 19: units @ 144
On March 31, there were 26 units remaining: 9 from January, 10 from February, the remaining from March. Using the Specific identification method, This is the cost of the ending inventory.
What is $3,464?
January: 9 X $124 = $1,116
February: 10 X $134 = $1,340
March: 7 X $144 = $1,008
This is the journal entry National Geographic makes after collecting $5,000 for future magazine subscriptions.
What is
Dr. Cash 5000
Cr. Unearned Subscription Revenues 5000
On a discount bond, the unamortized discount and the carrying value of the bond will always add up to this.
What is the par value of the discount bond.
A publisher purchased a printing press for $50,000. It estimates the press will produce 2,000,000 books over its 5 year life, and have a $5,000 salvage value. What would the annual depreciation expense be on the straight-line basis?
What is $9,000?
(50,000 - 5000) / 5
A company had the following purchases during its first quarter of operations:
January: 14 units @ $124
February: 24 units @ $134
March 19: units @ 144
On March 31, there were 26 units remaining. Using the periodic LIFO inventory costing method, this is the cost of the ending inventory.
What is $3,344?
**Last in first out, first in still here.
14@124 = 1,736
12@134 = 1,608
This is the adjusting entry needed for the following situation on December 31, 2021:
On July 1, 2021 Twin Co. paid $12,000 cash for legal services to be performed over a 2-year period from July 1, 2021 to June 30, 2023.
What is
Dr. Legal Service Expense 3,000
Cr. Prepaid Legal Expense 3,000
($12,000/24 months X 6 Months)
On January 1, a company issued and sold a $398,000, 6%, 10-year bond payable, and received proceeds of $393,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. This is the journal entry to record the first interest payment.
What is
Dr. Bond interest expense $12,190
Cr. Cash $11,940
Cr. Discount on Bond Payable $250
** Cash = 398,000 X .06 X 1/2
Discount Amortized = (398,000 - 393,000)/20 pmts = $250/pmt
Interest Expense = 11940 - 250
A publisher purchased a printing press for $50,000. It estimates the press will produce 2,000,000 books over its 5 year life, and have a $5,000 salvage value. What would the annual depreciation expense be on the units-of-production basis if the press produced 250,000 books in year 1?
What is $5,625?
(50,000 - 5,000) / 2,000,000 X 250,000
A company had the following purchases during its first quarter of operations:
January: 14 units @ $124
February: 24 units @ $134
March 19: units @ 144
On March 31, there were 26 units remaining. Using the periodic FIFO inventory costing method, this is the cost of the ending inventory.
What is $3,674?
**Last in first out, first in still here.
19@144 = 2,736
7@134 = 938
The retained earnings account has a credit balance of $47,000 before closing entries are made. Total Revenues for the period are $65,200, total expenses are $44,800, and dividends are $13,000. This is the balance of retained earnings after all closing entries are made.
What is $54,400?
BOY Retained Earnings + Revenues (Closed to Income Summary) - Expenses (Closed to Income Summary) - Dividends
47,000 + 65,200 - 44,800 -13,000
Percy Corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 400 shares to its attorneys in payment of a $6,000 charge for drawing up the articles of incorporation. This is the entry to record this transaction.
What is:
Dr. Organization Expenses 6,000
Cr. Common Stock, $10 Par 4,000
Cr. Paid In Capital In excess 2,000
of Par, Common Stock
A publisher purchased a printing press for $50,000. It estimates the press will produce 2,000,000 books over its 5 year life, and have a $5,000 salvage value. What would the first year's depreciation expense be on the double-declining-balance basis?
What is $20,000?
(1 / 5years) X 2 = 40%
40% X Book Value (50,000)
Jammer Company uses a weighted average perpetual inventory system and reports the following:
August 2 Purchase: 21 units @ $17.00/unit.
August 18 Purchase: 23 units @ $17.00/unit.
August 29 Sale: 42 units.
August 31 Purchase: 26 units @ $20.00/unit.
This is the per-unit value of ending inventory on August 31.
What is $19.79?
**Before 8/31 purchase had 2 units @ $17/unit. After purchase have additional 26 units @ $20/unit.
((2units X $17)+(26 units X $20))/28units
The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debt expense shows Accounts Receivable of Dr. $443,000, Dr. Allowance for Doubtful Accounts $1,330, and Dr. Net Sales of $2,180,000.
Assume all sales are on credit and the company estimates 3.5% of ending accounts receivable to be uncollectible. This is the adjusting entry.
What is:
Dr. Bad Debt Expense 16,835
Cr. Allowance for Doubtful Accounts 16,835
*Total Estimated Uncollectible = $443,000 X 3.5% = $15,505
Adjustment = 15,505 + 1,330 (This is added because Allowance account had a beginning Dr. balance)
The Jones company declared a 25% stock dividend. The company has 140,000 shares of $1 par value stock authorized, and 100,000 issued and outstanding. The stock is selling for $15/share. This is the journal entry to record the dividend declaration.
What is
Dr. Retained Earnings 25,000
Cr. Common Stock Dividend Distributable 25,000
** Large Stock Dividend (25% of outstanding shares) are recorded at par value ($1 * 25,000 shares) = 25,000
On February 1, a publisher purchased a printing press for $50,000. It estimates the press will produce 2,000,000 books over its 5 year life, and have a $5,000 salvage value. What would be the depreciation expense be on the straight-line basis at December 31, of the year purchased?
What is $8250
(50,000 - 5000) / 5 X 11/12
When prices are rising, this inventory method will result in the greatest profits.
What is FIFO.
*In the FIFO method, ending inventory will approximate current costs (higher asset value). In LIFO, Cost of Goods Sold approximates its current costs (higher expense/lower profits).