ACCT 2301 Exam 5

Description

QUESTION 1

1. On November 1, 2018, Bregman Service borrowed $100,000 cash on a 12-month 10%  note.  The principal and the interest are due on October 31, 2019.   Record Bregman’s journal entry for the issuance of the note on November 1, 2018 and also journalize the adjusting journal entry to accrue 2 month’s interest at December 31, 2018. (6 points)

 

QUESTION 2

1. On June 10, 2019 Chirinos Catering Company accepted $4,000 in cash from a customer who wanted a wedding dinner catered.  On August 5, 2019, Chirinos catered the wedding dinner for the customer.  Journalize the June 10 and the August 5 transactions for Chirinos. (6 points)

 

QUESTION 3

1. On January 1, 2019, Altuve Tours purchased a bus for $550,000.  Altuve expects the bus to remain useful for 5 years and have a residual value of $50,000.  Using the Straight Line method, calculate the depreciation expensefor the year 2019 and the book value of the trailer at the end of 2019. (6 points)

 

QUESTION 4

1. On January 1, 2019, the Astros purchased a Batting Cage for $850,000. The Astros expect to use the machine over the next 5 years. The estimated residual value of the machine is $50,000. Create a depreciation schedule using the double-declining-balancemethod of depreciation. (12 points)

 

QUESTION 5

1. On January 1, 2019, Springer Spring Manufacturing Corporation purchased a machine for $2,500,000. The Corporation expects to use the machine to make 750,000 springs over the next five years. The estimated residual value of the machine at the end of the third year is $150,000. The Corporation used the machine to make 175,000 springs in 2019, 160,000 springs in 2020 and 145,000 springs in 2021, 135,000 in 2022, and 135,000 in 2023. Calculate depreciation expensefor 2019 if the Corporation uses the units-of-production method of depreciation. (4 points)

 

QUESTION 6

1. Correa Company buys, ten-year bonds at face value in the amount of $1,000,000 on January 1, 2019. The bonds pay 12% interest on June 30 and December 31. Correa intends to hold the bonds to maturity.  Record Correa Company’s journal entry for the purchase of the bonds on January 1, 2019 and the receipt of the first 6 months of interest on June 30. (8 points)

 

QUESTION 7

1. On Jan. 1, 2019 Alvarez buys 12,000 shares of stock for the market price of $25 per share.  These shares are an Equity Investment.  On April 1, 2019, the shares paid $0.75 dividend per share. Journalize Alvarez’s purchase of the shares and the receipt of the dividend. (4 points)

 

QUESTION 8

1. On January 1, 2019, Cole Corp. sold accounting services with a selling price of $15,000 on account. Sales tax applies to the services sold and the state sales tax rate is 8%. Prepare Cole’s  journal entry for the sale. (4 points)