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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 |