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A company earned $1,500 in net income for October. Its net sales for October were $10,000. Its profit margin is: (Round your answers to the nearest percentage.)
8,500
15%
667%
150%
2%
2. A company earned $2,500 in net income for October. Its net sales for October were $10,000. Its profit margin is: (Round your answers to the nearest percentage.)
25%
3%
400%
250%
7,500
3. A company purchased a new truck at a cost of $35,000 on July 1, 2009. The truck is estimated to have a useful life of 6 years and a salvage value of $4,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the truck for the year ended December 31, 2009?
$5,166
$5,833
$17,833
$2,917
$2,583
4. A company purchased a new truck at a cost of $48,000 on July 1, 2009. The truck is estimated to have a useful life of 6 years and a salvage value of $5,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the truck for the year ended December 31, 2009?
$7,166
$4,000
$8,000
$3,583
$24,417
5. The balance in Tee Tax Services’ office supplies account on February 1 and February 28 was $1,400 and $410, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February?
$1,335
$910
$1,490
$3,300
$2,160
6. On May 1, 2009 Continental Advertising Company received $4,800 from Julie Bee for advertising services to be completed April 30, 2010. The Cash receipt was recorded as unearned fees and at December 31, 2009, $3,200 of the fees had been earned. The adjusting entry on December 31 Year 1 should include:
A credit to Unearned Fees for $1,600.
A debit to Earned Fees for $1,600.
A debit to Unearned Fees for $1,600.
A debit to Earned Fees for $3,200.
A credit to Earned Fees for $3,200.
7. A company purchased new computers at a cost of $14,800 on September 30, 2010. The computers are estimated to have a useful life of 4 years and a salvage value of $2,500. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the year ended December 31, 2010? (Round your answer to the nearest dollar amount.)
$1,025
$256
$894
$3,075
$769
8. Prior to recording adjusting entries, the Office Supplies account had a $300 debit balance. A physical count of the supplies showed $134 of unused supplies available. The required adjusting entry is:
Debit Office Supplies $300 and credit Office Supplies Expense $300.
Debit Office Supplies Expense $166 and credit Office Supplies $166.
Debit Office Supplies $134 and credit Office Supplies Expense $134.
Debit Office Supplies $166 and credit Office Supplies Expense $166.
Debit Office Supplies $134 and credit Supplies Expense $166.
9. On April 1, 2009, a company paid the $1,750 premium on a three-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the year ended December 31, 2009? (Round your answers to the nearest percentage.)
$656
$438
$583
$1,750
$1,313
10. On June 30, 2009, Apricot Co. paid $7,000 cash for management services to be performed over a two-year period. Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On June 30, 2009 Apricot should record:
A credit to an expense for $7,000.
A debit to a prepaid expense for $7,000.
A debit to Cash for $7,000.
A credit to a prepaid expense for $7,000.
A debit to an expense for $7,000.
11. On May 1, 2009, Amazon Advertising Company received $3,500 from Jacob Mathews for advertising services to be completed April 30, 2010. The Cash receipt was recorded as unearned fees. The adjusting entry on December 31, 2010 should include:
a debit to Unearned Fees for $1,167.
a debit to Earned Fees for $2,333.
a debit to Earned Fees for $3,500.
a credit Earned Fees for $2,333.
a credit to Unearned Fees for $1,167.
12. A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
Understate assets by $28,000.
Understate net income by $28,000.
Overstate net income by $28,000.
Have no effect on net income.
Overstate assets by $28,000.
13. The balance in Tee Tax Services’ office supplies account on February 1 and February 28 was $2,300 and $385, respectively. If the office supplies expense for the month is $3,000, what amount of office supplies was purchased during February?
$2,335
$5,300
$1,510
$1,085
$2,615
14. On January 1 a company purchased a five-year insurance policy for $1,300 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:
Debit Prepaid Insurance, $542; credit Insurance Expense, $542.
Debit Prepaid Insurance, $1,300; credit Cash, $1,300.
Debit Insurance Expense, $260; credit Prepaid Insurance, $542.
Debit Prepaid Insurance, $260; credit Insurance Expense, $260.
Debit Insurance Expense, $260; credit Prepaid Insurance, $260.
15. On April 30, 2009, a three-year insurance policy was purchased for $13,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company’s income statement for the year ended December 31, 2009?
$361
$13,000
$4,333
$9,000
$2,889
16. On January 1, Southwest College received $1,810,000 in Unearned Tuition Revenue from its students for the spring semester, which spans four months beginning on January 2. What amount of tuition revenue should the college recognize on January 31?
$905,000
$603,333
$452,500
$1,810,000
$1,357,500
17. A company’s Office Supplies account shows a beginning balance of $750 and an ending balance of $250. If office supplies expense for the year is $4,900, what amount of office supplies was purchased during the period?
$5,150
$5,650
$5,400
$4,400
$4,650
18. What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,950 before adjustment, and the unexpired amount per analysis of policies is, $4,450?
Debit Insurance Expense, $7,950; credit Prepaid Insurance, $7,950.
Debit Insurance Expense, $4,450; credit Prepaid Insurance, $4,450.
Debit Insurance Expense, $3,500; credit Prepaid Insurance, $3,500.
Debit Prepaid Insurance, $3,500; credit Insurance Expense, $3,500.
Debit Cash, $7,950; Credit Prepaid Insurance, $7,950.
19. On January 1, Southwest College received $1,770,000 in Unearned Tuition Revenue from its students for the spring semester, which spans four months beginning on January 2. What amount of tuition revenue should the college recognize on January 31?
$885,000
$590,000
$442,500
$1,770,000
$1,327,500
20. A company had $9,630,000 in net income for the year. Its net sales were $17,400,000 for the same period. Calculate its profit margin. (Round your answers to one decimal place.)
17.4%
55.3%
50.3%
65.3%
61.6%
21. On June 30, 2009, Apricot Co. paid $6,200 cash for management services to be performed over a two-year period. Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31, 2009 for Apricot would include:
A credit to a liability for $1,550.
A debit to an expense for $4,650.
A debit to a prepaid expense for $4,650.
A debit to a prepaid expense for $1,550.
A debit to an expense for $1,550.
22. The balance in the prepaid insurance account before adjustment at the end of the year is $5,500, which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is:
Debit Insurance Expense, $1,375; credit Prepaid Insurance, $1,375.
Debit Prepaid Insurance, $1,375; credit Insurance Expense, $1,375
Debit Cash, $5,500; Credit Prepaid Insurance, $5,500.
Debit Insurance Expense, $2,750; credit Prepaid Insurance, $2,750.
Debit Prepaid Insurance, $2,750; credit Insurance Expense, $2,750.
23. A company had no office supplies available at the beginning of the year. During the year, the company purchased $200 worth of office supplies. On December 31, $25 worth of office supplies remained. How much should the company report as office supplies expense for the year?
$225
$250
$175
$25
$200
24. SS Co. leased a portion of its store to another company for eight months beginning on October 1, 2009, at a monthly rate of $700. This other company paid the entire $5,600 cash on October 1, which SS Co. recorded as unearned revenue. The journal entry made by SS Co. at year- end on December 31, 2009 would include:
A debit to Cash for $5,600.
A credit to Unearned Rent for $2,100.
A debit to Rent Earned for $2,100.
A credit to Rent Earned for $2,100.
A debit to Unearned Rent for $4,900.
25. A company purchased new computers at a cost of $14,100 on September 30, 2010. The computers are estimated to have a useful life of 4 years and a salvage value of $1,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the year ended December 31, 2010? (Round your answer to the nearest dollar amount.)
$944
$819
$1,092
$3,275
$273