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AccountingPrinciples 101- Test #5
Chapter 8
Businsky – Spring 2013
Name: ______________________________ Date: _______________
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Problem |
Points Possible |
Points Received |
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1 |
8 Points |
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2 |
3 Points |
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3 |
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4 |
2 Points |
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5 |
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6 |
4 Points |
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7 |
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8 |
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9 |
10 Points |
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10 |
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11 |
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12 |
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Total |
50 Points |
Problem #1 (8 points)
JarJar Company had the following series of transactions:
11/01/11
JarJar Company borrowed $18,000 by issuing a 1
2%
, 1 year note.
12/1/11
JarJar Company borrowed $25,000 by issuing a 8%, 6 month note.
5/1/12
JarJar paid the full payment due of Note 2.
11/01/12
JarJar paid the full payment due of Note 1
Directions:
1) Record all necessary journal entries for JarJar Company for 2011
2) Record all necessary journal entries for JarJar Company for 2012
Explanations are not required.
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DATE |
DESCRIPTION |
REF |
DEBIT |
CREDIT |
Problem #2 (3 points)
Tarheel Services is holding a note receivable from one of its customers and wishes to collect the cash earlier than the maturity date of the note. The note is for $
1,000
and carries a rate of 4%. Tarheel sells the note to a bank for $950. Please provide the journal entry which Tarheel makes to record this transaction. (Dates and Explanations are not required.)
Problem #3 (3 points)
Clockwise Services is holding a note receivable from one of its customers and wishes to collect the cash earlier than the maturity date of the note. The note is for $1,000 and carries a rate of 4%. Clockwise sells the note to a bank for $1,080. Please provide the journal entry with Clockwise makes to record this transaction. (Dates and Explanations are not required.)
Problem #4 (2 points)
The following information is from the 2013 records of Armadillo Camera Shop:
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Accounts receivable, December 31, 2013 |
$20,000 (debit) |
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Allowance for uncollectible accounts, December 31, 2013 prior to adjustment |
600 (debit) |
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Net credit sales for 2013 |
95,000 |
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Accounts written off as uncollectible during 2013 |
7,000 |
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Cash sales during 2013 |
27,000 |
Uncollectible accounts expense is estimated by the percent-of-sales method. Management estimates that 3% of net credit sales will be uncollectible. Which of the following will be the amount of Uncollectible accounts expense?
A) $7,000
B) $3,450
C) $2,250
D) $2,850
Problem #5 (2 points)
The following information is from the 2013 records of Armadillo Camera Shop:
Accounts receivable, December 31, 2013
$20,000 (debit)
Allowance for uncollectible accounts, December 31, 2013
prior to adjustment
600 (debit)
Net credit sales for 2013
95,000
Accounts written off as uncollectible during 2013
7,000
Cash sales during 2013
27,000
Uncollectible accounts expense is estimated by the percent-of-sales method. Management estimates that 3% of net credit sales will be uncollectible. Which of the following will be the balance of the Allowance for uncollectible accounts after adjustment?
A) $7,000
B) $3,450
C) $2,850
D) $2,250
Problem #6 (4 points)
The following information is from the 2013 records of Armadillo Camera Shop:
Accounts receivable, December 31, 2013
$20,000 (debit)
Allowance for uncollectible accounts, December 31, 2013
prior to adjustment
600 (debit)
Net credit sales for 2013
95,000
Accounts written off as uncollectible during 2013
7,000
Cash sales during 2013
27,000
Uncollectible accounts expense is estimated by the percent-of-sales method. Management estimates that 3% of net credit sales will be uncollectible. Which of the following will be the amount of net Accounts receivable after adjustment?
A) $16,550
B) $17,750
C) $17,150
D) $13,000
Problem #7 (4 points)
A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $
40,000
and collections of $36,000. One account for $650 was written off. Smart Art uses the percent-of-sales method to account for uncollectible account expense, and has decided to use a factor of 2% for their year-end adjustment of uncollectible account expense. At the end of the year, what is the balance in Uncollectible account expense?
A) $150
B) $800
C) $250
D) $1,450
Problem #8 (4 points)
A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40,000 and collections of $36,000. One account for $650 was written off. Smart Art uses the percent-of-sales method to account for uncollectible account expense, and has decided to use a factor of 2% for their year-end adjustment of uncollectible account expense. At the end of the year, what is the balance in Uncollectible account expense?
A) $150
B) $800
C) $250
D) $1,450
Problem #9 (10 points)
At the beginning of 2014, Mark’s sales had the following ledger balances:
During the year there were $450,000 of credit sales, $460,000 of collections, and
$3,700
of write-offs. At the end of the year, Mark’s adjusted for uncollectible account expense using the percent-of-sales method, and applied a rate, based on past history, of 1.2%. At the end of the year, what was the balance in the Accounts receivable?
A) $10,300
B) $3,700
C) $14,000
D) $21,300
Problem #10 (4 points)
As Perry Materials Supply was preparing for the year-end close, their balances were as follows:
Perry Materials uses the aging method and has completed the following analysis of the accounts receivable:
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Customer |
1-30 Days |
31-60 Days |
61-90 Days |
Over 90 Days |
Total Balance |
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Johnson |
$4,600 |
$3,200 |
$7, 800 |
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Hot Pots, Inc. |
800 | 1,000 |
1,800 |
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Potter |
40,000 |
550 |
40,550 |
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Harrison |
3,600 |
900 |
4,500 |
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Marx |
2,000 |
50 |
2,050 |
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Younger |
65,000 |
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Merry Maids |
5,900 |
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Acher |
12,000 |
6,400 |
18,400 |
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Totals |
$127,500 |
$13,750 |
$3,700 |
$1,050 |
$146,000 |
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Uncollectible percentage |
2% |
10% |
20% |
40% |
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Estimated uncollectible amount |
$2,550 |
$1,375 |
$740 |
$420 |
$5,085 |
How much will the Uncollectible account expense for the year be?
A) $2,550
B) $1,115
C) $5,085
D) $11,285
Problem #11 (3 points)
On October 1, 2014, Allen Jewelry Company accepted a 4-month, 10% note for $2,400 in settlement of an overdue account receivable. If the company accrues interest at year-end only, how much interest revenue should be accrued on December 31, 2014?
A) $80
B) $60
C) $240
D) $40
Problem #12 (3 points)
On March 1, 2014, Bayonne Services made a loan to one of its officers. The officer signed a 6-month note for $4,000 at 8%. Bayonne generally accrues interest at year-end only, so at the time the note matured, Bayonne had not accrued any interest revenue. On August 1 when the note matured, the officer settled in full with the company. How much interest revenue did Bayonne record?
A) $320
B) $4,160
C) $160
D) $4,000
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