Accounting Fundamentals For Financial Institutions QUIZ

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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