Test 3 Part 3

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Temple University *

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5001

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Accounting

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Jan 9, 2024

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11

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On July 9, Miffiin Company receives an $9,400, 150-day, 6% note from customer Payton Summers to replace an account receivable. What entry should be made by Miffin on the maturity date assuming the maker pays in full, and no adjusting entries have been made related to the note? (Use 360 days a year) 44 s Mutuple Choice Scored @ oo casn 59535 cragt Imerest Revenue $235;cradt Notes Recenvable $9.400 Debit Cash $9,400; credit Notes Receivable $9,400. Debit Notes Receivable $9.400; debit Interest Recelvable $235; credit Sales $9.635 Debit Cash $9,404; credit Interest Revenue $94; credit Notes Recelvable $9.400. Debit Cash $9,507; credit Interest Revenue $107; credit Notes Recelvable $9,400. o O O O Explanation $9.400 % 006 » 150/360 = $235 + $0,400 = $9635
7 Giorgio had cost of goods sold of $9,637 million, ending inventory of $2,305 million, and average inventory of $2181 million. Its inventory turnover equals: Multiple Choice 44 points awarded O O o= O wson @ = O e Explanation Invertory Tumover = Costof Goods Sold/Average Invertory Inventory Turmover = $9,637/52181~ 442 times
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Jervis accepts all major bank credit cards, including those issued by Northern Bank (NB), which assesses a 4.0% charge on sales for using its card. On June 28, Jervis had $5,200 in NB Card credit sales. What entry should Jervis make on 1 0 June 28 to record the deposit? 44 points awarded Mutuple Choice () pebrcasn5.200;creciesaies $5.200 Debit Accounts Receivable $5,200; credit Sales $5,200 Explanation Credit card fee expense: $5,200 x 0.040 = $208.00 Cash recelved: $5,200 - $208.00 = $4,992.00 Debit Cash $5,408.00; credit Credt Card Expense $208.00; credit Sales $5,200 Debit Cash $4,092.00; debrt Credit Card Expense $208.00; credrt Sales $5.200 O e O O Debit Accounts Receivable $4,99200; debit Credt Card Expense $208.00; credit Sales $5,200
1 6 On July 9, Miffiin Company receives a $9,200, 90-day, 8% note from customer Payton Summers as payment on account. Compute the amount due st maturity for the note and interest (Use 360 days a year) Multiple Choice 44 points awarded [ scoes ] O sz $9200 58867 59339 Explanation $9,200 x 0.08 x 90/360 = $184 + $9,200 = $9,384 59384 e O O O
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Brinker accepts all msjor bank credit cards, including First Savings Bank's, which assesses a 5% charge on sles for using ts card. On May 26, Brinker had $6,200 in First Savings Bank Card credit sales. What entry should Brinker make on 17 May 26 to record the deposit? 44 points awarded Mutuple Choice (O) Debiicasn $6.510: crect Crect Cara Expense $310;crecit Saies $6,200. Debit Cash $5,890; debit Credit Card Expense $310; credit Sales $6,200. Debit Accounts Receivable $6,200; credit Sales $6,200. Debit Cash $6,200; credt Sales $6,200. O O O |e Debit Accounts Receivable $5,890; debit Credit Card Expense $310; credt Sales $6,200. Explanation Credit card fee expense: $6,200 x 0.050 = $310 Cash recelved: $6,200 - $310 = $5,890
A company used straight-line depreciation for an item of equipment that cost $20,650, had a salvage value of $5,800 and a six-year useful ife. After depreciating the asset for three complete years, the salvage value was reduced to $2,065 1 9 but ts total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful ife: 44 points awarded Mutuple Choice O s @ = ? O s QO sues Explanation O s Accumulated Depreciation through the end of year 3: (Cost of Asset - Salvage Value)/Estimated Useful Life x Years Elapsed (520,650 - $5,800)/6 x 3 = $7.425 Depreciation, years 4 through 6 = (Cost of Asset - Accumulated Depreciation - Salvage Value)/Remalning Estimated Useful Life (520,650 - $7.425 - $2,065)/3 =$3720
The following information is available on a depreciable asset 22 Purchase date January 1, Year 1 Purchase price $106,000 Salvage value 510,000 ga"ma\.lmed Useful life 10 years Depreciation method straight-line The asset's book value is $86,800 on January 1, Year 3. On that date, management determines that the asset's salvage value should be $5,000 rather than the original estimate of $10,000. Based on this information, the amount of depreciation expense the company should recognize during Year 3 would be: Mutuple Choice 1085000 $818000 $1022500 $960000 Explanation $868000 O O (@] O O [(Year 3 book value - revised salvage value)/useful life] = Year 3 depreciation [($86,800 - $5,000)/8)] = $10,225.00.
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