1. Mary Parker Co. invested $15,000 in ABC Corporation and received stock in exchange. Mary Parker Co.'s journal entry to record this transaction would include a:
Debit to investments.
Credit to retained earnings.
Credit to capital stock
Debit to expense.
2. In its first year of operations Acme Corp. had income before tax of $400,000. Acme made income tax payments totaling $150,000 during the year and has an income tax rate of 40%. What would be the balance in income tax payable at the end of the year?
$ 10,000 credit.
$ 10,000 debit.
3. On November 1, 20X8, Tim's Toys borrows $30,000,000 at 9% to finance the holiday sales season. The note is for a six-month term and both principal and interest are payable at maturity. What should be the balance of interest payable for the loan as of December 31, 20X8?
4. Eve's Apples opened business on January 1, 20X8, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's prepaid insurance as of December 31, 20X8?
5. Which of the following adjusting entries creates an increase in liabilities (Points: 1)
Accruing unrecorded interest expense.
Recording the amount of expired prepaid insurance.
Accruing unrecorded interest revenue.
Recording depreciation expense.
6. The Esquire Clothing Company borrowed a sum of cash on October 1, 2007, and signed a note payable. The annual interest rate was 12% and the company's year 2007 income statement reported interest expense of $1,260 related to this note. What was the amount borrowed?
7. When an employer makes an end-of-period adjusting entry with a debit to supplies expense, the usual credit entry is made to:
8. The Jansen Company showed a $19,500 liability on its 2008 balance sheet for unearned subscription revenue. During 2009, $54,400 was received from customers for subscriptions and the 2009 income statement reported subscription revenue of $71,100. What is the liability amount for unearned subscription revenue that will appear in the 2009 balance sheet?
9. Carolina Mills purchased $270,000 in supplies this year. The supplies account increased by $10,000 during the year to an ending balance of $66,000. What was supplies expense for Carolina Mills during the year?
10. Herrera Company received $3,600 on October 1, 2008 for one year's rent in advance and recorded the transaction with a credit to the rent revenue account. The December 31, 2008 adjusting entry is:
(Be sure and mention account(s) debited and credited.)
1. Debit to investments, Credit to cash.
2. $10,000 credit. Total liability would be $160,000 of which $150,000 has been paid.
3. $30,000,000 x 9% x 2 /12 months = $450,000
4. $36,000 x 12 / 18 months = $24,000 PLUS $12,000 x 12 / 24 months = $6,000. Total for both = $30,000
5. Recording the amount of expired prepaid insurance and ...
For each of the 10 questions, the solution gives a sentence or two of explanation which includes the calculation details that were used to arrive at the solution.