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Quiz, Chapters 4, 6
| 44 | NEU – FIN6101 Quiz # 2, Chapters 4 and 6 | ||
| PLEASE PRINT NAME ———-> | Bill Reeve: You may only enter your name, answers, and use the area to the right for your calculations. | This area is available for your calculations. | |
| WARNING – Your exam is incomplete – please check column A for 1s to identify the incomplete question(s) | |||
| Questions 1 – 5 are a total of 40 points. | |||
| The following information pertains to questions 1 – 5. | A | ||
| On June 1, Year 1, ABC firm bought (50% cash, 50% 90-day note for ALL associated costs) and placed into service a machine | B | ||
| costing $62,000. In order to install the machine, the company also had to pay $2,000 in installation fees. It is anticipated that the | C | ||
| machine will produce 48,000 hours of production and will have salvage value of $4,000 at the end of its useful life, which is 5 years. | D | ||
| During Year 1, the machine is used for a total of 6,000 hours and in Year 2, the machine is used for a total of 15,000 hours. | E | ||
| F | |||
| 1) Calculate the depreciation for the first two calander years (June 1 – December 31 and the full second year) | |||
| for all three methods (Staight-line, units of production, and DDB). | |||
| June 1 – Dec.31, Year 1 | January 1 – Dec. 31, Year 2 | ||
| Straight-line Method: | A. | $6,767 | $11,200 |
| B. | $7,000 | $11,600 | |
| C. | $7,233 | $12,000 | |
| D. | $7,467 | $12,400 | |
| E. | $7,700 | $12,800 | |
| 1 | F. | $8,000 | $13,200 |
| 1 | Select your answers here ———–> | ||
| June 1 – Dec.31, Year 1 | January 1 – Dec. 31, Year 2 | ||
| Units of Production: | A. | $7,000 | $18,125 |
| B. | $7,250 | $18,750 | |
| C. | $7,500 | $19,375 | |
| D. | $7,750 | $20,000 | |
| E. | $8,000 | $20,625 | |
| 1 | F. | $8,250 | $21,250 |
| 1 | Select your answers here ———–> | ||
| June 1 – Dec.31, Year 1 | January 1 – Dec. 31, Year 2 | ||
| DDB Method: | A. | $13,067 | $17,173 |
| B. | $13,533 | $17,787 | |
| C. | $14,000 | $18,400 | |
| D. | $14,467 | $19,013 | |
| E. | $14,933 | $19,627 | ` |
| 1 | F. | $15,400 | $20,240 |
| 1 | Select your answers here ———–> | ||
| 2) Show the journal transaction to record the acquisition on June 1. | |||
| Date | Account Description | Debit | Credit |
| 1 | 1-Jun | ||
| 1 | CASH | ||
| 1 | |||
| 3) Record the depreciation expense on December 31, Year 1 using the units of production method. | |||
| Date | Account Description | Debit | Credit |
| 1 | 31-Dec | ||
| 1 | |||
| 4) On March 13th, Year 3, the company sold the machine for $22,000 cash. The total usage inYear 3 was 2,000 hours. | |||
| Record the adjusting depreciation entry in Year 3 based on units of production | |||
| Date | Account Description | Debit | Credit |
| 1 | 13-Mar | ||
| 1 | |||
| 5) Record the dispostion entry based on the assst’s depreciation history using the units of production method. | |||
| Date | Account Description | Debit | Credit |
| 1 | 13-Mar | $22,000 | |
| 1 | |||
| 1 | ACCUMULATED DEPRECIATION | ||
| 1 | |||
| Questions 6 – 10 are a total of 39 points. | |||
| The following information pertains to questions 6 – 10. | |||
| On June 30, Year 1 XYZ firm bought (100% cash) & placed into service a machine costing $40,000. Freight was $300. | |||
| In order to install the machine, the company also had to pay $1,700 in installation fees. It is anticipated that the machine | |||
| will produce 50,000 hours of production and will have salvage value of $2,000 at the end of its useful life, which is 4 years. | |||
| During Year 1, the machine is used for a total of 6,450 hours and in Year 2, the machine is used for a total of 12,140 hours. | |||
| 6) Calculate the depreciation for the first two calander years (June 30 – December 31 and the full second year) | |||
| for all three methods (Staight-line, units of production, and DDB). | |||
| June 30 – Dec.31, Year 1 | January 1 – Dec. 31, Year 2 | ||
| Straight-line Method: | A. | $4,500 | $9,000 |
| B. | $4,750 | $9,500 | |
| C. | $5,000 | $10,000 | |
| D. | $5,038 | $10,075 | |
| E. | $5,213 | $10,425 | |
| 1 | F. | $5,250 | $10,500 |
| 1 | Select your answers here ———–> | ||
| June 30 – Dec.31, Year 1 | January 1 – Dec. 31, Year 2 | ||
| Units of Production: | A. | $5,160 | $5,418 |
| B. | $5,418 | $5,805 | |
| C. | $5,547 | $6,063 | |
| D. | $5,805 | $9,712 | |
| E. | $5,934 | $10,320 | |
| 1 | F. | $6,063 | $10,386 |
| 1 | Select your answers here ———–> | ||
| June 30 – Dec.31, Year 1 | January 1 – Dec. 31, Year 2 | ||
| DDB Method: | A. | $10,500 | $12,600 |
| B. | $10,800 | $14,175 | |
| C. | $11,200 | $15,750 | |
| D. | $21,000 | $25,200 | |
| E. | $21,600 | $28,350 | ` |
| 1 | F. | $22,400 | $31,500 |
| 1 | Select your answers here ———–> | ||
| 7) Show the journal transaction to record the acquisition on June 30. | |||
| Date | Account Description | Debit | Credit |
| 1 | 30-Jun | ||
| 1 | |||
| 8) Record the depreciation expense on December 31, Year 1 using the units of production method. | |||
| Date | Account Description | Debit | Credit |
| 1 | 31-Dec | ||
| 1 | |||
| 9) On September 27th, Year 3, the company sold the machine for $23,000 cash. Total usage inYear 3 was 5,410 hours. | |||
| Record the adjusting depreciation entry in Year 3 based on units of production | |||
| Date | Account Description | Debit | Credit |
| 1 | 27-Sep | ||
| 1 | |||
| 10) Record the dispostion entry based on the assst’s depreciation history using the units of production method. | |||
| Date | Account Description | Debit | Credit |
| 1 | 27-Sep | $23,000 | |
| 1 | $42,000 | ||
| 1 | |||
| 1 | |||
| Questions 11 – 15 are a total of 21 points. | |||
| The following informations pertains to questions 11 – 15. | |||
| On June 27th, Pen Image Inc. sold Marden Company 10 dozen (120) ball point pens with the Marden Company logo | |||
| printed on each pen. The pens cost $27 per dozen for a total of $270. Marden was granted credits terms of 3/15, net 45. | |||
| On June 30th, Marden returns 12 pens that were damaged in transit. On July 2nd, Marden calls Pen Image and requests | |||
| a price reduction of $25 since the logos were not centered. Pen Image agreed to the reduction. On July 12, Marden | |||
| pays half of the amount owed and pays the balance on August 11. | |||
| 11) Record the journal entry for the transaction that took place on June 27. | |||
| Date | Account Description | Debit | Credit |
| 1 | 27-Jun | ||
| 1 | |||
| 12) Record the journal entry for the transaction that took place on June 30. | |||
| Date | Account Description | Debit | Credit |
| 1 | 30-Jun | ||
| 1 | |||
| 13) Record the journal entry for the transaction that took place on July 2. | |||
| Date | Account Description | Debit | Credit |
| 1 | 2-Jul | ||
| 1 | |||
| 14) Record the journal entry for the transaction that took place on July 12. | |||
| Date | Account Description | Debit | Credit |
| 1 | 12-Jul | CASH | |
| 1 | |||
| 1 | |||
| 15) Record the journal entry for the transaction that took place on August 11. | |||
| Date | Account Description | Debit | Credit |
| 1 | 11-Aug | ||
| 1 | |||
| Please make sure your name is entered in cell E2, Thank you. | |||
| Rounded to the Cent | Income Statement Items | ||
| $ 3.20 | REVENUE (SALES) | ||
| $ 3.24 | SALES DISCOUNTS | ||
| $ 3.27 | SALES RETURNS & ALLOWANCES | ||
| $ 3.30 | ADVERTSING EXPENSE | ||
| $ 25.00 | AMORTIZATION EXPENSE | ||
| $ 26.00 | DEPRECIATION EXPENSE | ||
| $ 27.00 | INSURANCE EXPENSE | ||
| $ 28.00 | INTEREST EXPENSE | ||
| $ 29.00 | GAIN ON DISPOSAL | ||
| $ 30.00 | LOSS ON DISPOSAL | ||
| $ 50.00 | RENT EXPENSE | ||
| $ 100.00 | SALARY EXPENSE | ||
| $ 105.80 | STATIONARY EXPENSE | ||
| $ 105.76 | UTILITY EXPENSE | ||
| $ 105.73 | INCOME SUMMARY | ||
| $ 105.70 | Balance Sheet Items- Assets | ||
| $ 106.00 | CASH | ||
| $ 106.50 | ACCOUNTS RECEIVABLE | ||
| $ 107.00 | NOTES RECEIVABLE | ||
| $ 107.50 | INVENTORY | ||
| $ 108.00 | PRE-PAID INSURANCE | ||
| $ 108.50 | PRE-PAID RENT | ||
| $ 109.00 | P,P, & E – MACHINE | ||
| $ 109.50 | ACCUM. AMORTIZATION | ||
| $ 110.00 | ACCUM. DEPRECIATION | ||
| Rounded to the Dollar | Balance Sheet Items – Liabilities | ||
| $ 150 | ACCOUNTS PAYABLE | ||
| $ 200 | NOTES PAYABLE | ||
| $ 250 | INTEREST PAYABLE | ||
| $ 260 | SALARIES PAYABLE | ||
| $ 270 | UTILITIES PAYABLE | ||
| $ 2,200 | DEFERRED REVENUE | ||
| $ 2,300 | BONDS PAYABLE (B/P) | ||
| $ 2,400 | DISCOUNT ON B/P | ||
| $ 2,500 | PREMIUM ON B/P | ||
| $ 2,600 | Balance Sheet Items – Equity | ||
| $ 2,700 | COMMON STOCK | ||
| $ 4,320 | ADD’L PAID-IN-CAPITAL | ||
| $ 4,322 | RETAINED EARNINGS | ||
| $ 4,324 | |||
| $ 4,326 | |||
| $ 4,328 | |||
| $ 4,330 | |||
| $ 4,430 | |||
| $ 4,500 | |||
| $ 4,750 | |||
| $ 5,000 | |||
| $ 5,038 | |||
| $ 5,150 | |||
| $ 5,155 | |||
| $ 5,160 | |||
| $ 5,165 | |||
| $ 5,175 | |||
| $ 5,190 | |||
| $ 5,200 | |||
| $ 5,210 | |||
| $ 5,213 | |||
| $ 5,250 | |||
| $ 5,218 | |||
| $ 5,418 | |||
| $ 5,547 | |||
| $ 5,800 | |||
| $ 5,805 | |||
| $ 5,934 | |||
| $ 6,050 | |||
| $ 6,063 | |||
| $ 6,767 | |||
| $ 6,800 | |||
| $ 7,000 | |||
| $ 7,200 | |||
| $ 7,233 | |||
| $ 7,250 | |||
| $ 7,300 | |||
| $ 7,400 | |||
| $ 7,467 | |||
| $ 7,475 | |||
| $ 7,500 | |||
| $ 7,700 | |||
| $ 7,750 | |||
| $ 7,850 | |||
| $ 8,000 | |||
| $ 8,250 | |||
| $ 9,000 | |||
| $ 9,500 | |||
| $ 9,712 | |||
| $ 10,000 | |||
| $ 10,075 | |||
| $ 10,320 | |||
| $ 10,386 | |||
| $ 10,425 | |||
| $ 10,450 | |||
| $ 10,500 | |||
| $ 10,800 | |||
| $ 11,000 | |||
| $ 11,200 | |||
| $ 11,600 | |||
| $ 12,000 | |||
| $ 12,400 | |||
| $ 12,600 | |||
| $ 12,800 | |||
| $ 13,000 | |||
| $ 13,067 | |||
| $ 13,200 | |||
| $ 13,250 | |||
| $ 13,500 | |||
| $ 13,533 | |||
| $ 13,750 | |||
| $ 13,850 | |||
| $ 14,000 | |||
| $ 14,175 | |||
| $ 14,250 | |||
| $ 14,467 | |||
| $ 14,500 | |||
| $ 14,750 | |||
| $ 14,933 | |||
| $ 15,000 | |||
| $ 15,400 | |||
| $ 15,750 | |||
| $ 17,173 | |||
| $ 17,787 | |||
| $ 18,125 | |||
| $ 18,400 | |||
| $ 18,750 | |||
| $ 19,000 | |||
| $ 19,013 | |||
| $ 19,100 | |||
| $ 19,200 | |||
| $ 19,300 | |||
| $ 19,375 | |||
| $ 19,627 | |||
| $ 19,750 | |||
| $ 20,000 | |||
| $ 20,240 | |||
| $ 20,500 | |||
| $ 20,625 | |||
| $ 30,725 | |||
| $ 21,000 | |||
| $ 21,250 | |||
| $ 21,600 | |||
| $ 22,000 | |||
| $ 22,002 | |||
| $ 22,400 | |||
| $ 22,450 | |||
| $ 22,500 | |||
| $ 22,750 | |||
| $ 23,000 | |||
| $ 23,002 | |||
| $ 25,200 | |||
| $ 25,750 | |||
| $ 26,750 | |||
| $ 27,750 | |||
| $ 28,350 | |||
| $ 28,750 | |||
| $ 30,000 | |||
| $ 31,250 | |||
| $ 31,500 | |||
| $ 32,000 | |||
| $ 32,500 | |||
| $ 41,500 | |||
| $ 41,750 | |||
| $ 42,000 | |||
| $ 60,000 | |||
| $ 62,000 | |||
| $ 64,000 |
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