Question 7 (7 points) ArundelCompany uses percentage of sales to estimateuncollectibles.

Question 7 (7 points)

Arundel Company uses percentage of sales to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance of $78,000 and had a total of $730,000 in credit sales. Arundel assumes that 1.0% of sales will eventually be uncollectible. before adjustment, the Allowance for Uncollectible Accounts had a credit balance of 5,000. What dollar amount should be credited to Allowance for Uncollectible Accounts at year end?

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Question 8 (7 points)

Salisbury Company uses the perpetual inventory system and had the following inventory & sales activity for the month of May 2019:

Date

Activity

Quantity

Unit Price

5/1

Beginning Inventory

175

$11.50

5/5

Purchase

200

$10.50

5/10

Sales

300

$25

5/15

Purchase

200

$13.00

5/20

Sales

250

$28

5/25

Purchase

150

$13.50

Using the LIFO method, determine the dollar value for Ending Inventory at the end of month of May. Round to the nearest cent.

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Question 9 (7 points)

Adelphi Company purchased a machine on January 1, 2017, for $50,000.  The machine was estimated to have a service life of ten years with an estimated residual value of $5,000.  Adelphi sold the machine on January 1, 2021 for $21,000. Adelphi uses the double declining method for depreciation. Using this information, how much is the gain or (loss) for the equipment sale entry made on January 1, 2021. Enter a loss as a negative number.

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Question 10 (7 points)

Barbara is an employee of Baltimore Company. Baltimore Company pays employees the Friday after the wages are earned. Overtime in excess of 40 hours must be paid at 150% of the normal hourly rate.  Social Security taxes are 6.2% and Medicare taxes are 1.45%. The federal unemployment tax rate is 1.3% and the state unemployment tax rate is 4.5%. Barbara’s wages, including the current pay period, will not exceed the limits for Social Security, Medicare and unemployment taxes. Barbara earns $18 per hour and worked 49 hours for the week ended January 13 , 2019. Baltimore will withhold $220 federal income taxes. Use this information to determine the total payroll tax expense for Baltimore Company as related to Barbara’s earnings. (Round to the closest cent)

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Question 11 (15 points)

The following is the Easton Company adjusted Trial Balance. 

Easton Company

Adjusted Trial Balance

December 31, 2018

Account Title

Debit

Credit

Cash

$88,665 

Accounts Receivable

232,400 

Supplies

17,000 

Equipment

395,000 

Accumulated Depreciation

$224,260 

Accounts Payable

72,555 

Capital Stock

220,000 

Retained Earnings

127,145 

Service Revenue

881,105 

Interest Income

5,500 

Dividends

9,000 

Rent Expense

59,500 

Wages Expense

529,000 

Supplies Expense

42,000 

Utilities Expense

8,000 

Depreciation Expense

150,000 

________

     Totals

$1,530,565 

$1,530,565 

Use this information to prepare the Single-Step Income Statement for the fiscal year. There are additional lines in the formatted income statement form to allow for authorized alternate presentations. 

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Question 12 (15 points)

The following is the Easton Company’s adjusted Trial Balance. 

Easton Company

Adjusted Trial Balance

December 31, 2018

Account Title

Debit

Credit

Cash

$88,665 

Accounts Receivable

232,000 

Supplies

17,000 

Equipment

395,000 

Accumulated Depreciation

$224,260 

Accounts Payable

72,555 

Capital Stock

220,000 

Retained Earnings

127,145 

Service Revenue

877,105 

Interest Income

5,500 

Dividends

7,000 

Rent Expense

59,900 

Wages Expense

529,000 

Supplies Expense

40,000 

Utilities Expense

8,000 

Depreciation Expense

150,000 

________

     Totals

$1,526,565 

$1,526,565 

How do you Use this information to prepare the Balance Sheet for the fiscal year. There are additional lines in the formatted Balance Sheet form to allow for authorized alternate presentations.