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Question
Cairo Co. uses the allowance method of accounting for uncollectible accounts. Cairo Co. accepted a $5,000, 12%, 3-month note dated May 16, from Alexandria Co. in exchange for its past-due account receivable.
Required:
Part a. Prepare the journal entry for the receipt of the note on May 16.
Part b. Prepare the journal entries for (1) the receipt of interest and (2) the receipt of the principal balance at maturity on August 14.
Part c. Assume that Alexandria made the interest payment but not the principal payment on August 14. On November 30, Cairo writes off the note when it becomes clear that Alexandria will never pay. Prepare the journal entry to write-off the note receivable.
Answer
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Related questions
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C) $5,000.
D) $6,000.
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$14,500 Net cash provided by investing activities
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D) are always positive unless the company is experiencing serious financial trouble.
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Which of the following represent cash outflows from financing activities?
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Which of the following statements about calculation of cash flows from operating activities under the indirect method is correct?
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D) When a company repays a loan, it reports a cash inflow from financing activities.
Q:
Cash flows from financing activities include all of the following except:
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Q:
Which of the following statements about straight-line depreciation is correct?
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Q:
Which of the following is not an amount that is needed to calculate straight-line depreciation?
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B) An estimate of the assets useful economic life to the company
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D) The cost the company will be required to incur to replace the asset
Q:
Which of the following statements most appropriately describes the purpose of depreciating a long-lived tangible asset?
A) To indicate how the asset has physically deteriorated
B) To show that the asset will eventually and gradually become obsolete
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The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation costs. One-half of the total cost or $250,000 is paid in cash; a note in the amount of $250,000 is signed. How should the company record this transaction?
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B) Debit Equipment for $500,000, credit Cash for $250,000, and credit Notes Payable for $250,000
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Your company buys a computer system for $3 million and pays the vendor $200,000 to install the computer system. Your company should record:
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Q:
Under the cost principle, a company capitalizes:
A) all ordinary repair expenditures incurred in the use of an asset.
B) any interest incurred in borrowing money to help pay for asset acquisitions.
C) all reasonable and necessary costs of acquiring an asset and preparing it for use.
D) the total market value of individual assets acquired in a basket purchase.
Q:
The following information was summarized from the adjusted trial balance of Reliance Yacht Repair, Inc. as of September 30, 2015, the end of the companys fiscal year. Accounts Payable
$1,500 Accounts Receivable
6,000 Accumulated DepreciationEquipment
2,000 Cash
9,420 Common Stock
9,300 Equipment
4,000 Insurance Expense
500 Interest Expense
80 Notes Payable (long-term)
2,500 Notes Receivable (short-term)
5,500 Prepaid Rent
500 Retained Earnings
3,200 Service Revenue
11,000 Supplies
1,500 Supplies Expense
2,500 Unearned Revenue
2,000 Utilities Expense
1,500 Required:
Part a. Prepare the closing entry for the company for the year ended September 30, 2015.
Part b. Draw a T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entry, and then determine the ending balance.
Part c. Prepare a post-closing trial balance at September 30, 2015.
Q:
On December 31, 2016, Ditka Inc. had Retained Earnings of $267,800 before its closing entries were prepared and posted. During 2016, the company had service revenue of $168,100 and interest revenue of $81,300. The company used supplies in the amount of $87,900, advertising expenses were $16,400, salaries and wages totaled $18,300, and income tax expense was calculated as $13,700. During the year, the company declared and paid dividends of $6,000.
Required:
Part a. Prepare the closing entries dated December 31, 2016.
Part b. Draw a T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entries, and then determine the ending balance.