Arena Company provides health insurance to its employees that costs $14,400 per month. In addition, the company contributes 4% of the employees’ $144,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:
Debit to Employee Retirement Program Payable $5,760.
Credit to Employee Benefits Expense $20,160.
Credit to Employee Benefits Expense $14,400.
Debit to Medical Insurance Payable $14,400.
Debit to Employee Benefits Expense $20,160.
When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $25,560 and its estimated salvage value is $3,000. After 4 years of straight-line depreciation, the asset’s total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals:
Cambria owns equipment that cost $95,300 with accumulated depreciation of $65,200. Cambria asks $35,450 for the equipment but sells the equipment for $33,300. Compute the amount of gain or loss on the sale.
Harvel Company is required by law to collect and remit sales taxes to the state. If Havel has $8,500 of cash sales that are subject to an 7% sales tax, what is the journal entry to record the cash sales?
Debit Cash $9,095; credit Sales $8,500; credit Sales Taxes Payable $595.
Debit Accounts Receivable $9,095; credit Sales $8,500; credit Sales Taxes Payable $595.
Debit Cash $8,500; credit Sales $8,500; and record the sales tax when paid.
Debit Cash $8,500; credit Sales $7,905; credit Sales Taxes Payable $595.
Debit Sales Taxes Payable $595; debit Cash $7,905; credit Sales $8,500.
On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $18,000. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)
No journal entry required.
Debit interest expense, $200; credit interest payable, $200.
Debit interest expense, $300; credit interest payable, $300.
Debit interest expense, $400; credit interest payable, $400.
Debit interest expense, $600; credit interest payable, $600.
The following information is available on a depreciable asset owned by First Bank & Trust:
Purchase date October 1, Year 1
Purchase price $122,100
Salvage value $11,700
Useful life 12 years
Depreciation method straight-line
The asset’s book value is $103,700 on October 1, Year 3. On that date, management determines that the asset’s salvage value should be $6,700 rather than the original estimate of $11,700. Based on this information, the amount of depreciation expense the company should recognize during the last three months of Year 3 would be (Do not round intermediate calculations. Round your final answer to two decimal places):
A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $56,000; the land at $49,800, and the parking lot at $19,200. Land should be recorded in the accounting records with an allocated cost of (Do not round intermediate calculations):
A corporation had 13,500 shares of $5 par value common stock outstanding when the board of directors declared a stock dividend of 4,995 shares. At the time of the stock dividend, the market value per share was $19. The entry to record this dividend is:
Debit Common Stock Dividend Distributable $94,905; credit Retained Earnings $94,905.
Debit Retained Earnings $94,905; credit Common Stock Dividend Distributable $24,975; credit Paid-In Capital in Excess of Par Value, Common Stock $69,930.
Debit Retained Earnings $94,905; credit Common Stock Dividend Distributable $94,905.
Debit Retained Earnings $24,975; credit Common Stock Dividend Distributable $24,975.
No entry is needed.
A company has 2,500 shares of $100 par preferred stock. It also has 20,000 shares of common stock outstanding, and its total stockholders’ equity equals $600,000. The book value per common share is:
Shamrock Company had net income of $33,580. The weighted-average common shares outstanding were 9,200. The company sold 4,200 shares before the end of the year. There were no other stock transactions. The company’s earnings per share is:
The partnership agreement for Smith Wesson & Davis, a general partnership, provided that profits be shared between the partners in the ratio of their financial contributions to the partnership. Smith contributed $140,000, Wesson contributed $84,000 and Davis contributed $28,000. In the partnership’s first year of operation, it incurred a loss of $247,500. What amount of the partnership’s loss, should be absorbed by Smith? (Do not round your intermediate calculations and round your final answer to the nearest whole dollar amount.)
Badger and Fox are forming a partnership. Badger contributes a building that has a market value of $332,000; the partnership assumes responsibility for a $116,000 note secured by a mortgage on the property. Fox invests $91,000 in cash and equipment that has a market value of $66,000. For the partnership, the amounts recorded for total assets and for total capital account are:
Total assets $373,000; total capital $373,000.
Total assets $489,000; total capital $373,000.
Total assets $605,000; total capital $605,000.
Total assets $489,000; total capital $489,000.
Total assets $373,000; total capital $489,000.
Smith, West, and Krug form a partnership. Smith contributes $204,000, West contributes $170,000, and Krug contributes $306,000. Their partnership agreement calls for a 6% interest allowance on the partner’s capital balances with the remaining income or loss to be allocated equally. If the partnership reports income of $208,800 for its first year, what amount of income is credited to Krug’s capital account?
A corporation declared and issued a 5% stock dividend on November 1. The following information was available immediately prior to the dividend:
Retained earnings $710,000
Shares issued and outstanding 56,000
Market value per share $19
Par value per share $5
The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:
Smith, West, and Krug form a partnership. Smith contributes $198,000, West contributes $165,000, and Krug contributes $297,000. Their partnership agreement calls for the income or loss division to be based on the ratio of capital invested. If the partnership reports income of $167,000 for its first year, what amount of income is credited to Smith’s capital account? (Do not round your intermediate calculations.)
The following data were reported by a corporation:
The number of outstanding shares is:
Mack, Harris, and Huss are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period’s ending capital account balances are Mack, $15,400, Harris, $15,400, Huss, $(2,400). After all the assets are sold and liabilities are paid, but before any contributions to cover any deficiencies, there is $28,400 in cash to be distributed. Huss pays $2,400 to cover the deficiency in his account. The general journal entry to record the final distribution would be:
Debit Cash $28,400; debit Huss, Capital $2,400; credit Mack, Capital $15,400; credit Harris, Capital $15,400.
Debit Mack, Capital $15,400; debit Harris, Capital $15,400; credit Cash $30,800.
Debit Mack, Capital $15,400; debit Harris, Capital $15,400; credit Huss, Capital $2,400; credit Cash $28,400.
Debit Mack, Capital $9,466; debit Harris, Capital $9,467; debit Huss, Capital $9,467; credit Cash $28,400.
Debit Mack, Capital $14,200; debit Harris, Capital $14,200; credit Cash $28,400.