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Question
Highlight Hotel deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on December 31, its Cash account shows a $18,393, debit balance. Highlight Hotel's June 30 bank statement shows $15,921 on deposit in the bank. Prepare the necessary adjusting journal entries using the following information:
- Outstanding checks as of December 31 total $2,261.
- The December 31 bank statement included a $35 debit memorandum for bank services.
- Check No. 2519, listed with the canceled checks, was correctly drawn for $850 in payment of a utility bill on December 16. Highlight Hotel mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $805.
- The December 31 cash receipts of $3,425 were placed in the banku2019s night depository after banking hours and were not recorded on the December 31 bank statement.
- The bank statement included a check from a customeru2019s payment of an account receivable that had been returned NSF in the amount of $1,228.
Prepare the necessary adjusting journal entries.
Answer
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Related questions
Q:
Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
3.0373 Assuming all revenue is to be received at the end of each year, what are the net cash flows for this investment if net present value equals ($11,790)?
A. $78,210
B. $10,920
C. $25,750
D. $237,547
E. $33,513
Q:
Scott Corporation is considering the purchase of new equipment costing $30,000. The projected annual after-tax net income from the equipment is $1,200, after deducting $10,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of three years and a $4,000 salvage value. Scott requires a 12% return on its investments. The factors for the present value of $1 for different periods follow: Periods 12 Percent 1 8929 2 0.7972 3 0.7118 4 0.6355 What is the net present value of the machine and what is the maximum Scott would have been willing to pay for it?
A. $(251.52) but Scott would not pay any amount to acquire the machine because the NPV is negative.
B. $(251.52) and Scott would be willing to pay $29,748.48 for the machine.
C. $(251.52) but the price Scott would pay cannot be determined. D. $900 and Scott would be willing to pay $30,900 to acquire the machine
E. $900 but Scott would not be willing to acquire the machine.
Q:
A disadvantage of using the payback period to compare investment alternatives is that:
A. It ignores cash flows beyond the payback period.
B. It includes the time value of money.
C. It cannot be used when cash flows are not uniform.
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E. It cannot be used to compare investments with different initial investments.
Q:
A given project requires a $25,000 investment and is expected to generate end-of-period annual cash inflows as follows: Year 1
Year 2
Year 3
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$15,000
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i = 10% n = 2
i = 10% n = 3 .9091
.8264
.7513 A. $6,217.50
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C. ($6,217.50)
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E. $0.00
Q:
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B. Internal rate of return, payback period, and accounting rate of return.
C. Accounting rate of return, net present value, and payback period.
D. Payback period, internal rate of return, and net present value.
E. Net present value, payback period, accounting rate of return, and internal rate of return.
Q:
Which of the following is an objective of capital budgeting?
A. To eliminate all risk.
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E. To reduce the number of investment activities.
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A company is evaluating the purchase of a machine for $750,000 with a nine-year useful life and no salvage value. The company uses straight-line depreciation and it assumes that the annual net cash flow from using the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is the company's average investment?
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A company is evaluating the purchase of a machine for $900,000 with a six-year useful life and no salvage value. The company uses straight-line depreciation and it assumes that the annual net cash flow from using the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is the company's average investment?
Q:
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A company is considering purchasing a machine for $123,000. The machine is expected to generate a net after-tax income of $8,200 per year. Depreciation expense would be $12,300. What is the payback period for this machine?
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A company is considering purchasing a machine for $75,000. The machine is expected to generate a net after-tax income of $11,250 per year. Depreciation expense would be $7,500. What is the payback period for this machine?
Q:
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Time Value of Money Cash Flows
Accrual Income
Allows Comparison
Difficult to Compare
Reflects Time Value of Money
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Q:
The _______________________________ is computed by discounting the future net cash flows from the investment at the project's required rate of return and then subtracting the initial amount invested.
Q:
The _______________________________ is computed by dividing a project's after-tax net income by the average amount invested in it.
Q:
In evaluating capital budgeting alternatives, there are two primary methods that do not consider the time value of money. These methods are _______________ and __________________. There are also two primary methods that consider the time value of money; these are ___________________ and _______________________.
Q:
The process of restating future cash flows in terms of their present value is called _____________________.
Q:
The usual budget period is:
A. An annual period of 250 working days.
B. A monthly period separated into daily budgets.
C. A quarterly period separated into weekly budgets.
D. An annual period separated into weekly budgets.
E. An annual period separated into quarterly and monthly budgets.
Q:
The most useful budget figures are developed:
A. From the top down.
B. From the bottom up following a participatory process.
C. Solely by the budget committee.
D. By the CEO.
E. After the accounting period has begun.
Q:
Preparing a master budget is usually the responsibility of:
A. The company CEO.
B. The marketing department.
C. A budget committee.
D. The chief financial officer.
E. Lower level management.
Q:
Part of the cash budget is based on information drawn from the capital expenditures budget.
Q:
Activity-based budgeting is a budget system based on expected activities and their activity levels, which helps management plan for the resources required.
Q:
The budgets within the master budget must be prepared in a definite sequence as dictated by GAAP.
Q:
The ______________________________ shows the budgeted costs for direct materials, direct labor, and overhead based on the budgeted production volume from the production budget.
Q:
Clic, Inc. provides the following data for the next four months: March
April
May
June
July Unit Sales 500
580
530
600 Ending Raw Materials Inventory
663 lbs. Ending Finished Goods Inventory
174 units Desired ending inventory:
Raw materials = 30% of next month's production needs
Finished goods = 20% of next month's sales
Pounds of raw material required for each finished Unit = 5 lbs.
Direct labor hours per unit = 0.5 hrs
Direct labor rate = $12/hour
Required:
a. Calculate the budgeted production for April and May.
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c. Calculate the cost of direct labor for May.
Q:
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107,000 112,400 Operating expenses: Payroll
13,600 14,280 Advertising
5,400 5,700 Rent
1,500 1,500 Depreciation
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40,000 Bank loan payable
16,000 Additional data:
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(3) Operating expenses are paid in the month they are incurred.
(4) A minimum cash balance of $40,000 is required at the end of each month.
(5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made whenever excess cash is available. Prepare the company's cash budget for May. Show the ending loan balance at May 31.
Q:
Which of the following statements is true regarding absorption costing?
A. It is a not the traditional costing approach.
B. It is not permitted to be used for financial reporting.
C. It is not permitted to be used for tax reporting.
D. It assigns all manufacturing costs to products.
E. It requires only variable costs to be treated as product costs.
Q:
Which of the following is not a product cost?
A. Direct labor.
B. Indirect manufacturing costs.
C. Direct materials.
D. Manufacturing overhead.
E. Advertising costs.
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Contribution margin divided by sales equals contribution margin ratio.
Q:
When units produced exceed the units sold, income under absorption costing is higher than income under variable costing.