1) The Orange Company provided $60,000 of services on account during 2015, its f
ID: 2461622 • Letter: 1
Question
1) The Orange Company provided $60,000 of services on account during 2015, its first year in operation. During 2015 Morgan collected $40,000 of cash from its accounts receivable accounts. The company estimates that it will be unable to collect 2% of its revenues on account. The amount of net realizable accounts receivable on the company's 2015 balance sheet was:
A) $20,000
B) $18,800
C) $19,600
D) $58,800
2) On September 1, John's Laundry Service borrows $300,000 from First National Bank on a 5-month, $300,000, 6% note. What entry must Jogns Laundry Service make on December 31 before financial statements are prepared?
A) Debit Interest Payable for $6,000; Credit Interest Expense for $6,000
B) Debit Interest Expense for $6,000; Credit Interest Payable for $6,000
C) Debit Interest Expense for $6,000; Credit Notes Payable for $6,000
D) Debit Interest Expense for $18,000; Credit Interest Payable for $18,000
E) Debit Interest Expense for $18,000; Credit Notes Payable for $18,000
7) At the end of the accounting period, Srawberry Company had a balanace of $20,000 in its common stock account, additional paid in capital of $40,000, retained earnings of $50,000, and $10,000 of treasury stock. The total amount of stockholders' equity is:
A) $100,000
B) $110,000
C) $120,000
D) $60,000
Explanation / Answer
1) Reveneu=$60,000
Acc rec=$20,000
net realizable account= (1-2%)*20,000=$19,600
3)
Stock holder equity= 20000+40000+50000-10000=$100,000
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