Prepare the journal


Question #1  FlipCorp.hasthefollowinginformationregardingitsallowanceforuncollectibleaccounts.

 

 BalanceDecember31, 2014 $28,000

 

Write-offsduring2015 (27,000)

 

Recoveriesduring2015 7,000

 

RequiredallowanceatDecember31, 2015 31,000

 

 Prepare t he journal entries for the write-offs and recoveries for 2015, and for the provision for

 

Uncollectible accounts expense at December 31,2015. Do not provide any journal explanations. If no entry is necessary, write "no

 

entry." (please be sure to fill the date, account name and debit/credit)

 

 

 

General Journal:

 

 Write-offs:

 

Date              Account                Debit                   Credit

 

 

 

 Question#2  On January 1, 2014, Floppy enters into an agreement with State Finance Corporation to sell a group of receivables without

 

recourse. The total face value of the receivables is $150,000. State Finance Corp. will charge 15%interest on the weighted-average

 

time to maturity of the receivables of 95 days plus a 2%fee. Do

 

not provide any journal explanations. If no entry is necessary, write "no entry."

 

 

 

Date       Account             Debit                   Credit

 

 

 

 

Question #3  Floopy uses the periodic inventory method for inventories. Prepare the journal entries for each of the following transactions. Do not

 

provide any journal explanations. If no entry is necessary, write "no entry." Floopy uses the net method for recording inventory

 

transactions.

 

>> On January 5, year 2, purchased $17,000 of garden tillers on account fromFlip, terms 2/10, n/30, FOB destination.

 

Freight charges were $200.

 

>> On January 10, year 2, returned garden tillers worth $2,000 to Flip due to defects.

 

>> On January 24, year 2, paid for tillers purchased fromFlip.

 

>> On January 28, year 2, purchased $30,000 of lawn mowers fromFlam, terms 3/10, n/30, FOB shipping point. The

 

freight charges were $820.

 

>> On February 6, year 2, paid for the lawn mowers purchased on January 28, year 2, fromFlam.

 

AllowanceforUncollectibleAccountsandProvisionforUncollectibleAccounts

 

Date             Account          Debit           Credit

 

Question#4  On January 2, 2014, Floppy Co. issued 6% bonds with a face value of $440,000 when the market interest rate was 8% for $380,208.

 

The bonds are due in ten years, and interest is payable every June 30 and December 31. Floppy does not elect the fair value option

 

for reporting its financial liabilities. Do not provide any journal explanations. If no entry is necessary, write "no entry." Round all

 

numbers to the nearest dollar.

 

Required:

 

a. Prepare the journal entries for the bond issue on January 2, 2014.

 

b. Prepare the journal entry for the interest payment on June 30, 2014.

 

c. Prepare any required end of 2014 adjusting entry.

 

General Journal:

 

Date         Account         Debit                     Credit

 

Question#5 January 1, 2014, Frick Co. issued 3,000 of its 9%, $1,000 face value bonds at 101 1/2. In connection with the sale of these bonds,

 

Frick paid the following expenses:

 

Promotion costs $ 20,000

 

Engraving and printing 35,000

 

Legal fees & commissions 200,000

 

What amount should Frick record as:

 

a. bond issue costs to be amortized over the termof the bonds?

 

b. bond premium or discount?

 

Question#6 On July 1, 2014, Day Co. received $103,288 for $100,000 face amount, 12%bonds, a price that yields 10%. Assuming management

does not elect the fair value option, interest expense & carrying value of the bond at December 31, 2014, should be? Round answers

to the nearest dollar.

Interest expense?

Carrying value of the bond at Dec 31,2014?

 

 

Question#7 For the issuer of a ten-year termbond, the amount of amortization using the interest method would increase each year if the bond was sold at a

a.      Discount            Premium

No                      Yes

b.      Discount           Premium

No                         No

c.      Discount              Premium

d.      Yes                        No

Discount              Premium

Yes                       Yes

 

Question#8 On July 1, 2014, Frick Co. purchased as a held-to-maturity investment $1,000,000 of Frack Inc.'s 8%bonds for $946,000, including accrued interest of $40,000. The bonds were purchased to yield 10%interest. The bonds mature on January 1, 2022, and pay

 

interest annually on January 1. Frick uses the effective interest method of amortization. In its December 31, 2015 balance sheet,

 

what amount should Frick report as investment in bonds? Round all numbers to nearest dollar.

 Question #9 On March 31, year 1, Frick, Inc.'s bondholders exchanged their convertible bonds for common stock. The carrying amount of these bonds on Frick's books was less than the market

value but greater than the par value of the common stock issued. If Frick used the book value method of accounting for the conversion, which of the following statements correctly states an effect of this conversion?

a.     Additional paid-in capital is decreased.

b.    Retained earnings is increased.

c.     An extraordinary loss is recognized.

d.    Stockholders' equity is increased.

 

Question #10 Flip Co. had the following balances at December 31, 2015:

Cash in checking account $35,000

Cash in money market account 75,000

US Treasury bill, purchased 12/1/2015, maturing 3/31/2016 350,000

US Treasury bill, purchased 11/1/2015, maturing 1/31/2016 400,000

 

Flip's policy is to treat as cash equivalents all highly liquid investments with a maturity of three months or less when purchased.

What amount should Flip report as cash and cash equivalents in its December 31, 2015 balance sheet?

 

Question#11  In preparing its August 31, 2015 bank reconciliation, Floppy Corp. has available the following information:

Balance per bank statement, 8/31/15 $18,050

Outstanding checks, 8/31/15 3,250

Return of customer's check for insufficient funds,

8/31/15

600

Deposit in transit, 8/31/15 2,750

Bank service charges for August 100

At August 31, 2015, Floppy's correct cash balance is?

 Question # 12 On the December 31, 2015 balance sheet of Flip Co., the current receivables consisted of the following:

Trade accounts receivable $ 93,000

Allowance for uncollectible accounts (3,000)

Claim against shipper for goods lost in transit (November 2015) 2,000

Selling price of unsold goods sent by Flap on consignment at 130%of cost

(not included in Flip's ending inventory) 26,000

Security deposit on lease of warehouse used for storing some inventories 30,000

Total $150,000

 At December 31, 2015, the correct total of Filp's current net receivables was?

 Question#13  Flip Co. has an 8% note receivable dated June 30, 2014, in the original amount of $150,000. Payments of $50,000 in principal plus

accrued interest are due annually on July 1, 2015, 2016, and 2017. In its June 30, 2017 balance sheet what amount should Flip report as a current asset for interest on the note receivable?

 Question # 14  At December 31, 2014, Filp Co. had a balance sheet credit balance of $260,000 in its allowance for uncollectible accounts. Based on

past experience, 2%of Filp's credit sales have been uncollectible. During 2015 Filp wrote off $325,000 of uncollectible accounts.

Credit sales for 2015 were $9,500,000. In its December 31, 2015 balance sheet, what amount should Filp report as allowance for uncollectible accounts?

 Question # 15  Floppy Corp. factored $600,000 of accounts receivable to Floozy Corp. on October 1, 2015. Control was surrendered by Floppy.

Floozy accepted the receivables subject to recourse for nonpayment. Floozy assessed a fee of 3%and retains a holdback equal to

5%of the accounts receivable. In addition, Floozy charged 15%interest computed on a weighted-average time to maturity of the

receivables of fifty-four days. The fair value of the recourse obligation is $9,000. Floppy will record:

a. cash of ?

b. a loss of ?

 Question # 16  In its 2015 financial statements, FlamCo. reported interest expense of $85,000 in its income statement and cash paid for interest of

$68,000 in its cash flow statement. There was no prepaid interest or interest capitalization either at the beginning or end of 2015.

Accrued interest at December 31, 2014, was $5,000.What amount should Flamreport as accrued interest payable in its December 31, 2015 balance sheet?

 

Question #17 FlamCo. salaried employees are paid biweekly. Advances made to employees are paid back by payroll deductions. Information

 

relating to salaries follows:

 

                                                  12/31/14           12/31/15

 

Employee advances               $24,000            $36,000

 

Accrued salaries payable        40,000                  ?

 

Salaries paid during 2015 (gross) 420,000

 

Salaries expense during 2015 390,000

In Flam's December 31, 2015 balance sheet, accrued salaries payable was?

 

 Question #18  FlamCo.'s payroll for the month ended January 31, 2015, is summarized as follows:

 

Total wages              $10,000

 

Federal income tax withheld             1,200

 

 All wages paid were subject to FICA. FICAtax rates were 8% each for employee and employer. Flamremits payroll taxes on the 15th

 

of the following month. In its financial statements for the month ended January 31, 2015, what amounts should Flam report as

 

 a. total payroll tax liability?

 

b. payroll tax expense?

 

 Question #19  Floozy Co. sells its products in reusable containers. The customer is charged a deposit for each container delivered and receives a

 

refund for each container returned within two years after the year of delivery. Floozy accounts for the containers not returned

 

within the time limit as being retired by sale at the deposit amount. Information for 2016 is as follows:

 

 Container deposits at December 31, 2015 from deliveries in

 

 

 

                                                                2014                                           $150,000

 

                                                                2015                                           430,000                   $580,000

 

Deposits for containers delivered in 2016                                                                             870,000

 

 

 

Deposits for containers returned in 2016 from deliveries in

 

2014                                     $ 90,000

 

2015                                       250,000

 

2016                                      286,000                              626,000

 

 

 

In Floozy's December 31, 2016 balance sheet, the liability for deposits on returnable containers should be?

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