2nd Dry Run for Second Examination in Accounting 101 a. Collected 40,000 subscri

Question

2nd Dry Run for Second Examination in Accounting 101 a. Collected 40,000 subscriptions for ad in the magazine at $100 a subscriptions; at December 31, 15,000 subscriptions remain to be earned. I. debit Subscriptions Income-$1,500,000; credit Unearned Subscriptions-$1,500,000 2. debit 3. debit unearned subscriptions-$2,500,000; credit subscriptions income-$2,500,000 4. debit subscriptioes income-$2,500,000; credit unearned subscriptions-$2,500,000 5, neither is correct, the correct answer is unearned subscriptions-$1.500,000, credit subscriptions income-$1,500,000 If petty cash is at a balance of $400; then expenses of $375 plus cash of $28 will result in a 1. credit to cash short and over $3 b. 2. 3. 4. 5. debit to cash short and over $3 debit to miscellaneous administrative expenses $375 debit to cash in bank $28 neither is correct If employees earn $500,000 per a 5-day work week and salaries must be accrued for 3 days at December 31, then I. Wages Expense is debited and Wages Payable is credited for $500,000 2. Wages Payable is credited for $200,000 3. Wages Expense is debited and Wages Payable is credited for $300,000 4. In the reversing entry, Wages Payable is debited and Wages Expense is Credited for c. $300,000 5. Only Items 1 and 3 are correct 6. Only items 3 and 4 are correct

Explanation / Answer

a. Answer is 3. Debit Unearned subscription $ 2500,000 and Credit Subscription $ 2500,000 Explanation: As the ad for 15000 subscription is pending at year end. therefore,25000 subscription income shall be recognized. Hence, journal entry is: Unearned Revnue Dr, 2,500,000       Subscription revenue 2,500,000 b. Answer is 1.Credit to cash short and over $ 3. Explanation: Journal entry is as follows: Expense Dr. 375      Cash Aaccount 372       Cash Short/Over 3 c. Answer is 3. Wages expense debit and wages payable is credited by $300,000 Explanation: Wages due for three days: 500,000 /5 *3 = $ 300,000

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