Question: Jung Company accepted credit cards in payment

> Sandy’s Accounting Service began operation on January 1, Year 1. The company experienced the following events for its first year of operations: Events Affecting Year 1: 1. Provided $96,000 of accounting services on account. 2. Collected $80,000 cash fro

> Hardin Services Co. experienced the following events in Year 1: 1. Provided services on account. 2. Collected cash for accounts receivable. 3. Attempted to collect an account and, when unsuccessful, wrote off the amount to uncollectible accounts expense.

> Wilkins Enterprises has two hourly employees: Marcia and Clark. Both employees earn overtime at the rate of 1½ times the hourly rate for hours worked in excess of 40 per week. Assume the Social Security tax rate is 6 percent on the first $1

> The following transactions apply to Farmer’s Equipment Sales Corp. for Year 1: 1. The business was started when Farmer’s received $60,000 from the issue of common stock. 2. Purchased $160,000 of merchandise on account.

> The Malon Appliance Co. provides a 120-day parts-and labor warranty on all merchandise it sells. Malon estimates the warranty expense for the current period to be $2,450. During this period, a customer returned a product that cost $1,950 to repair. Requ

> To support himself while attending school, Steve Owens sold computers to other students. During the year, Steve purchased computers for $150,000 and sold them for $280,000 cash. He provided his customers with a one-year warranty against defects in parts

> Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $30,000 cash from the issue of common stock. 2. Purchased inventory for $15,000 cash. 3. Sold inventory costing $9,000 for $20,000 cash. 4. Paid $1,500

> The following legal situations apply to Zier Corp. for Year 1: 1. A customer slipped and fell on a slick floor while shopping in the retail store. The customer has filed a $5 million lawsuit against the company. Zier’s attorney knows that the company wil

> The following selected transactions apply to Fast Stop for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month. 1. Ca

> The Tiger Book Store sells books and other supplies to students in a state where the sales tax rate is 7 percent. The Tiger Book Store engaged in the following transactions for Year 1. Sales tax of 7 percent is collected on all sales. 1. Book sales, not

> Danny Bell started Bell Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $3,000 of cash revenue for performing services. 2. Borrowed $4,800 cash from the bank. 3. Adjusted the accoun

> Bricca Co. issued a $60,000 face value discount note to First Bank on June 1, Year 1. The note had a 6 percent discount rate and a one year term to maturity. Required: Prepare general journal entries for the following transactions: a. The issuance of th

> Jim Hanks borrowed money by issuing two notes on January 1, Year 1. The financing transactions are described next. 1. Borrowed funds by issuing a $60,000 face value discount note to State Bank. The note had an 8 percent discount rate, a one-year term to

> Mark Miller started a moving company on January 1, Year 1. On March 1, Year 1, Miller borrowed cash from a local bank by issuing a one-year $80,000 face value note with annual interest based on a 12 percent discount. During Year 1, Miller provided servic

> The following information was drawn from the balance sheets of the Augusta and Reno companies: Required: a. Compute the current ratio for each company. b. Which company has the greater likelihood of being able to pay its bills? c. Assume that both comp

> Use the following information to prepare a classified balance sheet for Latimer Co. at the end of Year 1: $36,200 12,400 29,650 50,000 45,500 38,300 36,400 36,250 3,600 Accounts receivable Accounts payable Cash Common stock Long-term notes payable M

> The following transactions apply to Ritter Co. for Year 1: 1. Received $40,000 cash from the issue of common stock. 2. Purchased inventory on account for $128,000. 3. Sold inventory for $200,000 cash that had cost $110,000. Sales tax was collected at the

> During Year 1, Hardy Merchandising Company purchased $40,000 of inventory on account. Hardy sold inventory on account that cost $24,500 for $38,000. Cash payments on accounts payable were $22,000. There was $26,000 cash collected from accounts receivable

> The two employees at Oswald Co. receive various fringe benefits. Oswald Co. provides vacation at the rate of $500 per day, and each employee earns one day of vacation per month worked. In addition, Oswald Co. pays a total amount of $780 per month in medi

> Culver Co. employed Jen Sing in Year 1. Jen earned $5,200 per month and worked the entire year. Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings, and the Medicare tax rate is 1.5 percent. Jen’s federal income tax withhol

> Easy Stop has two employees in Year 1. Catherine earns $4,500 per month and Jordan, the manager, earns $11,000 per month. Neither is paid extra if they work overtime. Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings, and

> Union Corporation borrowed $60,000 from the bank on November 1, Year 1. The note had a 6 percent annual rate of interest and matured on April 30, Year 2. Interest and principal were paid in cash on the maturity date. Required: a. What amount of cash did

> At the beginning of Year 1, Hill Manufacturing purchased a new computerized drill press for $75,000. It is expected to have a five-year life and a $15,000 salvage value. Required: a. Compute the depreciation for each of the five years, assuming that the

> Hinds Company started operations by acquiring $120,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $110,000 cash. The equipment had an expected useful life of five years and an estimated salvage va

> The following events apply to The Soda Shop for the Year 1 fiscal year: 1. The company started when it acquired $20,000 cash from the issue of common stock. 2. Purchased a new ice cream machine that cost $20,000 cash. 3. Earned $36,000 in cash revenue. 4

> Usrey Company purchased a restaurant building, land, and equipment for $600,000 cash. The appraised value of the assets was as follows: Required: a. Compute the amount to be recorded on the books for each of the assets. b. Show the purchase in a horizo

> Florida Company purchased a building and the land on which the building is situated for a total cost of $800,000 cash. The land was appraised at $300,000 and the building at $700,000. Required: a. What is the accounting term for this type of acquisition

> Oregon Logging Co. purchased an electronic saw to cut various types and sizes of logs. The saw had a list price of $160,000. The seller agreed to allow a 5 percent discount because Oregon paid cash. Delivery terms were FOB shipping point. Freight cost am

> Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. 1. Acquired $30,000 cash from the issue of common stock

> Identify each of the following long-term operational assets as either tangible (T) or intangible (I). a. Retail store building b. Shelving for inventory c. Trademark d. Gas well e. Drilling rig f. FCC license for TV station g. 18-wheel truck h. Timber i.

> Which of the following items should be classified as long-term operational assets? a. Cash b. Buildings c. Production machinery d. Accounts receivable e. Prepaid rent f. Franchise g. Inventory h. Patent i. Tract of timber j. Land k. Computer l. Goodwill

> Efficient Shredding Service has just completed a minor repair on a shredding machine. The repair cost was $1,900, and the book value prior to the repair was $6,000. In addition, the company spent $12,000 to replace the roof on a building. The new roof ex

> On January 1, Year 1, Mead Machining Co. purchased a compressor and related installation equipment for $72,500. The equipment had a three-year estimated life with a $12,500 salvage value. Straightline depreciation was used. At the beginning of Year 3, Me

> On January 1, Year 1, Heflin Enterprises purchased a parcel of land for $20,000 cash. At the time of purchase, the company planned to use the land for future expansion. In Year 2, Heflin Enterprises changed its plans and sold the land. Required: a. Assu

> A plant asset with a cost of $50,000 and accumulated depreciation of $41,000 is sold for $10,000. Required: a. What is the book value of the asset at the time of sale? b. What is the amount of gain or loss on the disposal? c. How would the sale affect n

> Pete’s Pizza purchased a delivery van on January 1, Year 1, for $35,000. In addition, Pete’s paid sales tax and title fees of $1,500 for the van. The van is expected to have a four-year life and a salvage value of $6,500. Required: a. Using the straight

> Design Service Co. purchased a new color copier at the beginning of Year 1 for $47,000. The copier is expected to have a five-year useful life and a $7,000 salvage value. The expected copy production was estimated at 2,000,000 copies. Actual copy product

> Required: Give some examples of long term operational assets that each of the following companies is likely to own: (a) Sears, (b) Princess Cruise Lines, (c) Southwest Airlines, and (d) Harley-Davidson Co.

> Assume the following. Madrid Company purchased a parcel of land on January 1, Year 1, for $600,000. It constructed a building on the land at a cost of $3,000,000. The building was occupied on January 1, Year 4, and is expected to have a useful life of 40

> The following information is available for two different types of businesses for the Year 1 accounting year. Hopkins CPAs is a service business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells

> The Transnational Business Inc. (TBI) purchased an asset that cost $60,000 on January 1, Year 1. The asset had a four-year useful life and a $10,000 salvage value. Required: a. Determine the amount of expense recognized on the Year 1 income statement, a

> Tri-Cities Equipment Rentals, LLC rents equipment such as cranes and bulldozers to construction companies, while Sam’s Tax Services, LLC provides income tax and accounting services to individuals and small businesses. Samâ€&#

> Garth Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Garth’s financial condition just prior to the purchase of these assets is shown in the following statement

> Horn Co. acquired the business Medical Supply Co. for $275,000 cash and assumed all liabilities at the date of acquisition. Medical’s books showed tangible assets of $250,000, liabilities of $10,000, and equity of $240,000. An appraiser

> Fulton Sand and Gravel paid $800,000 to acquire 1,200,000 cubic yards of sand reserves. The following statements model reflects Fulton’s financial condition just prior to purchasing the sand reserves. The company extracted 650,000 cubic

> On January 1, Year 1, Mid state Power Company overhauled four turbine engines that generate power for customers. The overhaul resulted in a slight increase in the capacity of the engines to produce power. Such overhauls occur regularly at two year interv

> Ford Construction Company purchased a forklift for $150,000 cash. It had an estimated useful life of four years and a $10,000 salvage value. At the beginning of the third year of use, the company spent an additional $9,000 that was related to the forklif

> The following information is available for Bradford Inc. and Windsor Inc. at December 31: Required: a. What is the accounts receivable turnover for each of the companies? b. What is the average days to collect the receivables? c. Assuming both companie

> The following post-closing trial balance was drawn from the accounts of Southern Timber Co. as of December 31, Year 1: Transactions for Year 2: 1. Acquired an additional $20,000 cash from the issue of common stock. 2. Purchased $80,000 of inventory on

> Bali Sales Company experienced the following events: 1. Purchased merchandise inventory for cash. 2. Purchased merchandise inventory on account. 3. Returned merchandise purchased on account. 4. Sold merchandise inventory for cash. Label the revenue recog

> Advanced Carpet Cleaning provided $76,000 of services during Year 1, its first year of operations. All customers paid for the services with major credit cards. Advanced Carpet submitted the credit card receipts to the credit card company immediately. The

> On March 1, Year 1, Taylor’s Deli loaned $18,000 to Style Studio for one year at 5 percent interest. Required: Answer the following questions: a. What is Taylor’s interest income for Year 1? b. What is Taylor’s total amount of receivables at December 31

> Cachet Enterprises loaned $30,000 to Craft Co. on September 1, Year 1, for one year at 6 percent interest. Required: a. Record these general journal entries for Cachet Enterprises: (1) The loan to Craft Co. (2) The adjusting entry at December 31, Year 1

> Classic Auto Parts sells new and used auto parts. Although a majority of its sales are cash sales, it makes a significant amount of credit sales. During Year 1, its first year of operations, Classic Auto Parts experienced the following: Required: a. As

> Applied Business Systems has a small number of sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Applied Business Systems earned $46,000 of cash revenue

> Pollard Service Co. experienced the following transactions for Year 1, its first year of operations: 1. Provided $86,000 of services on account. 2. Collected $72,000 cash from accounts receivable. 3. Paid $39,000 of salaries expense for the year. 4. Poll

> Juno Inc. experienced the following events for the first two years of its operations: Year 1: 1. Issued $5,000 of common stock for cash. 2. Provided $80,000 of services on account. 3. Provided $22,000 of services and received cash 4. Collected $65,000 c

> The accounts receivable balance for Edd’s Shoe Repair at December 31, Year 1, was $76,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $3,200. During Year 2, $2,900 of accounts receivable were written off as uncollectible. I

> To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Daun purchased the stereo systems for $140,000 and sold them for $250,000 cash. She provided her customers with a one-year

> The following three independent sets of facts relate to contingent liabilities: 1. In November of the current year, an automobile manufacturing company recalled all pickup trucks manufactured during the past two years. A flaw in the battery cable was dis

> Which of the following would be debited to the Inventory account for a merchandising business using the perpetual inventory system? Required: a. Transportation-out. b. Purchase discount. c. Transportation-in. d. Purchase of a new computer to be used by

> The following selected transactions apply to Topeca Supply for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month. 1

> Required Identify each of the following long-term operational assets as either tangible (T) or intangible (I): a. Pizza oven b. Land c. Franchise d. Filing cabinet e. Copyright f. Silver mine g. Office building h. Drill press i. Patent j. Oil well k. De

> Which of the following items should be classified as long-term operational assets? a. Prepaid insurance b. Coal mine c. Office equipment d. Accounts receivable e. Supplies f. Copyright g. Delivery van h. Land used in the business i. Goodwill j. Cash k. F

> Give some examples of long term operational assets that each of the following companies is likely to own: (a) Caterpillar, (b) Amtrak, (c) Facebook, and (d) Bank of America Corp.

> Zolnick Enterprises has two hourly employees: Kelly and Jon. Both employees earn overtime at the rate of 1½ times the hourly rate for hours worked in excess of 40 per week. Assume the Social Security tax rate is 6 percent on the first $110,

> The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $50,000 from the issue of common stock. 2. Purchased equipment inventory of $380,000 on account. 3. Sold equipment for $510,000 cash (not in

> Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $16,200 of cash revenue. 2. Borrowed $12,000 cash from the bank. 3. Adjusted the accounting records to recog

> Harden Co. issued a $60,000 face value discount note to National Bank on July 1, Year 1. The note had a 6 percent discount rate and a one-year term to maturity. Required: Prepare general journal entries for the following: a. The issuance of the note on

> The following information was drawn from the balance sheets of the Kansas and Montana companies: Required: a. Compute the current ratio for each company. b. Which company has the greater likelihood of being able to pay its bills? c. Assume that both co

> The following transactions apply to Park Co. for Year 1: 1. Received $50,000 cash from the issue of common stock. 2. Purchased inventory on account for $180,000. 3. Sold inventory for $250,000 cash that had cost $140,000. Sales tax was collected at the r

> The following transactions apply to Bob’s Bike Shop for Year 1, its first year of operations: 1. Acquired $35,000 cash from the issue of common stock. 2. Acquired $9,600 of merchandise from Bob Hall, the owner, who had acquired the merchandise prior to o

> Sky Co. employed Tom Mills in Year 1. Tom earned $5,100 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $110,000 of earnings, and the Medicare tax rate is 1.5 percent. Tom’s federal income tax withhold

> Assume the following. Queensland Company purchased a parcel of land on January 1, Year 1, for $400,000. It constructed a building on the land at a cost of $2,000,000. The building was occupied on January 1, Year 4, and is expected to have a useful life o

> The Paris Corp. incurred $3,600,000 of research cost and $800,000 of development cost during the current year. Required: a. Determine the amount of expense recognized on its income statement assuming Paris uses U.S. GAAP. b. Determine the amount of expe

> Executive Jets, LLC operates a charter flight-service company in the northwestern United States. Classic Steps, LLC is a company that provides dance lessons to students of all ages. Classic Steps has dance studios in several cities throughout the western

> Old Town Entertainment has two employees in Year 1. Clay earns $3,600 per month, and Philip, the manager, earns $10,800 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $110,000 of earni

> Abardeen Corporation borrowed $90,000 from the bank on October 1, Year 1. The note had an 8 percent annual rate of interest and matured on March 31, Year 2. Interest and principal were paid in cash on the maturity date. Required: a. What amount of cash

> Colorado Mining paid $600,000 to acquire a mine with 40,000 tons of coal reserves. The following statements model reflects Colorado Mining’s financial condition just prior to purchasing the coal reserves. The company extracted 15,000 to

> On January 1, Year 1, Webb Construction Company overhauled four cranes, resulting in a slight increase in the life of the cranes. Such overhauls occur regularly at two-year intervals and have been treated as a maintenance expense in the past. Management

> Sheldon Jones borrowed money by issuing two notes on March 1, Year 1. The financing transactions are described next. 1. Borrowed funds by issuing a $52,000 face value discount note to Farmers Bank. The note had an 8 percent discount rate, a one-year term

> Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish borrowed cash from a local bank by issuing a one-year $120,000 face value note with annual interest based on an 8 percent discount. During Year 1, Parish provided serv

> Tippah Antiques uses the periodic inventory system to account for its inventory transactions. The following account titles and balances were drawn from Tippah’s records for Year 2: beginning balance in inventory, $42,000; purchases, $128,000; purchase re

> On January 1, Year 1, Poultry Processing Company purchased a freezer and related installation equipment for $42,000. The equipment had a three-year estimated life with a $3,000 salvage value. Straight-line depreciation was used. At the beginning of Year

> Use the following information to prepare a classified balance sheet for Alpha Co. at the end of Year 1: $26,500 12,200 20,500 30,000 10,000 17,500 26,300 23,600 Accounts receivable Accounts payable Cash Common stock Land Long-term notes payable Merc

> On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $28,000 cash. At the time of purchase, the company planned to use the land for a warehouse site. In Year 3, Prairie Enterprises changed its plans and sold the land. Required: a. As

> The two employees of Silver Co. receive various fringe benefits. Silver Co. provides vacation at the rate of $315 per day. Each employee earns one day of vacation per month worked. In addition, Silver Co. pays a total amount of $650 per month in medical

> City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $36,000. In addition, City paid sales tax and title fees of $1,200 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $4,000. Required:

> Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to have a fouryear useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print produ

> At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $52,000. It is expected to have a five-year life and a $7,000 salvage value. Required: a. Compute the depreciation for each of the five years, assuming that the company u

> Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $120,000 cash, had an expected useful life of six years, and had an estimated salva

> The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $60,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $40,000 cash. 3. Earned $72,000 in cash revenue. 4. Paid $25,000 cas

> The trial balance of Pacilio Security Services, Inc. as of January 1, Year 9, had the following normal balances: During Year 9, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 8. 2. Paid $9,000 o

> For each of the following cases determine the ending balance in the inventory account. a. Jill’s Dress Shop had a beginning balance in its inventory account of $40,000. During the accounting period, Jill’s purchased $75,000 of inventory, returned $5,000

> The following quarterly information is given for Rossie for Year 1 (amounts shown are in millions): Required: a. Divide the class into groups and organize the groups into four sections. Assign each section financial information for one of the quarters.

> The trial balance of Pacilio Security Services, Inc. as of January 1, Year 8, had the following normal balances: During Year 8, Pacillo Security Services experienced the following transactions: 1. Paid the salaries payable from Year 7. 2. Purchased equ

> Scott Putman owns and operates a lawn care company. Like most companies in the lawn care business, his company experiences a high level of employee turnover. However, he finds it relatively easy to replace employees because he pays above-market wages. He

> Assume you are examining the balance sheets of two companies and note the following information: Maxie Smith, a student who has had no accounting courses, remarks that Company A and Company B have the same amount of equipment. Required: In a short par

> Companies in the gas and oil business use a lot of property, plant, and equipment. Not only is there the significant investment they must make in equipment used to find, extract, and process the oil and natural gas, but they must also purchase the rights

> American Greetings Corporation manufactures and sells greeting cards and related items such as gift wrapping paper. CSX Corporation is one of the largest railway networks in the nation. The following data were taken from one of the companiesâ€