one of the staff work on weekends. This year, the last day of the company\'s fis
ID: 2615446 • Letter: O
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one of the staff work on weekends. This year, the last day of the company's fiscal ye (a) Salaries Expense (b) Salaries Expense (c) Salaries Expense (d) Salaries Expense 15. Sally's Skateboard Shop has a weekly payroll of $9,000 and pays its employees everyE year-end is a 1,800 5,400 5,400 9,000 alalay. What? the correct adjusting entry to accrue salaries expense? 1,800 Salaries Payable Salaries Payable Cash.... Salaries Payable. 9,000 16. David Debi client at the end of the t has performed $700 of accounting services for a client but has not yet billed the (a) Debit Cahiccounting period. What adjusting entry must David prepare? (b) Debit Accounts Receivable and credit Unearned Revenue (c) Debit Accounts Receivable and credit Service R (d) Debit Unearned Revenue and credit Service Revenue Debit Cash and credit Unearned 17. On September I, Starr Guitar Co month bank loan. Principal and interest are due on December 1. If Starr prepares inancial statements, the adjusting entry that they should prepare for Guitar Corp. borrowed $24,000 from their bank, and signed a g%,3. monthly interest on September 30 would be (a) debit Interest Expense, S160; credit Interest Payable, $160. (b) debit Interest Expense, $1920, credit Interest Payable, $1,920. (c) debit Bank Loan Payable, $480; credit Cash, $480. (d) debit Cash, $24,000; credit Bank Loan Payable, $24,000 18. If equipment with a 5-year life was purchased on July 1, 2015 for $60,000, by December 31,. 2016, (a) the accumulated depreciation would be $12,000 and the carrying amount would be S48,000 (b) the accumulated depreciation would be $40,000 and the carrying amount would be $20,000. (c) the accumulated depreciation would be $30,000 and the carrying amount would be $30,000 (d) the accumulated depreciation would be S18,000 and the carrying amount would be $42.000 Use the following information to answer questions 19-21. For last month, the following data were taken from the ledger of Drillbit Inc.: Beginning Inventory Ending Inventory Freight In Purchases Purchase Discounts Purchase Returns and Allowances.. s 21,500 16,200 1.150 112,000 750 1.900 19. What was the cost of goods purchased? (a) $110,100 (b) $109,350 (c) $110.300 (d) $108,200 20. What was the cost of goods sold? (a) $117,300 (b) $115,800 (c) $118,800 (d) $106.700 21. What was the cost of goods available for sale? (a) $132,000 (b) $133,500 (c) $134,650 (d) $117,300Explanation / Answer
15. b) Since year ending is a Wednesday, we will accrue 3 days salary that is 9,000*3/5=$5,400. Since the amount is payable, we will debit expense and credit expense payable.
16. c) An unbilled revenue would be treated as a receivable.
17. a) Amount of loan=$24,000 for 3 months and interest rate=8%,So interest expense for 1 month=24,000*8%*1/12=$160
18. d) Depreciation per year=60,000/5=$12,000.
In 1st year, machine was only used for six months since purchased in July, so 1st year depreciation=12,000/2=$6,000
Depreciation for 2nd year=$12,000
Total depreciation from July 1,2015 to Dec 31,2016=6,000+12,000=$18,000
Carrying amount as on 31st Dec 2016=60,000-18,000=$42,000
19. c) Cost of goods purchased=purchases-purchase returns-purchase discounts+freight in
=1,12,000-1,900-750+1,150
=$1,10,500
20. a) Cost of goods sold=beginning inventory+purchases-Ending inventory
=21,500+1,12,000-16,200
=$1,17,300
21. b) Cost of goods available for sale=beginning inventory+purchases
=21,500+1,12,000
=$1,33,500
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