HomeworkLib
Question

5. On January 1, 2013, Franz Company purchased a truck that cost $22,000. The truck had an expected useful life of 5 years and a $4,000 salvage value. The amount of pense recognized in 2007 assuming that Franz uses the double declining balance method is: a. $4,320. b. $5,280. c. $7,200. d. $8,800.
Evergreen Company accepted credit card receivables in exchange for $50,000 of services provided to customers. The credit card company charges a 3% service charge. This transaction would a. decrease expenses by $1,500 b. increase assets by $50,000 c. increase Retained Earnings by $48,500. d. b and c. 4. Baker Co. had sales of $300,000 in 2013. The company expects to incur warranty expenses amounting to 3% of sales. There were $6,000 of warranty obligations paid in cash during 2013. Based on this information: a. Warranty expenses would decrease net earnings by $9,000 in 2013. b. Assets would decrease by $6,000 as a result of the accounting events associated with warranties in 2013. c. Total warranty obligations would increase by $3,000 in 2013. d. All of these. 5.
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

4)Correct option is " C"

Account title Debit credit
cash [Asset ] 48500
credit card expense   [50000*.03] [expense] 1500
Sales revenue   [revenue] 50000

Retained earning will increase by amount of net income 50000 -1500 = 48500

5)COrrect option is "D"

Account title Debit credit
a Warranty expense 9000
Estimated warranty liability[300000*.03] 9000
b Estimated warranty liability 6000
cash 6000
0 0
Add a comment
Know the answer?
Add Answer to:
5. On January 1, 2013, Franz Company purchased a truck that cost $22,000. The truck had...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  •       Pattern Company purchased 100% of Stock Company on January 2, 2013, for $450,000. At the time,...

          Pattern Company purchased 100% of Stock Company on January 2, 2013, for $450,000. At the time, Stock’s capital stock was $300,000, and its retained earnings were $150,000. At the time, Pattern and Stock had no intercompany transactions. Any excess of value implied by the purchase price over book value is attributable to land.       A.  Prepare the journal entry to record Pattern’s investment in Stock.       B.   Prepare the entry to eliminate Pattern’s investment in Stock.       C.   Complete the workpaper. Pattern Company and Stock Company...

  • 2.   On January 1, 2013, Paver Company purchased 100% of Shovel Company for $ 150,000. At the...

    2.   On January 1, 2013, Paver Company purchased 100% of Shovel Company for $ 150,000. At the time, Shovel Company's Common Stock totaled $100,000, and Retained Earnings was $50,000. Paver incurred $5,000 in indirect expenses related to the acquisition. A.  Prepare the journal entries on Paver's books to record the investment in Shovel. B.   Prepare the elimination entry that would be required on the workpaper in order to prepare a consolidated balance sheet. C.   If Shovel’s Common Stock at acquisition was the same, but...

  • On January 1, 2014, Jose Company purchased a building for $280,000 and a delivery truck for...

    On January 1, 2014, Jose Company purchased a building for $280,000 and a delivery truck for $36,000. The following expenditures have been incurred during 2016: • The building was painted at a cost of $7,500. • To prevent leaking, new windows were installed in the building at a cost of $9,700. • To improve production, a new conveyor system was installed in the building at a cost of $57,500. • The delivery truck was repainted with a new company logo...

  • On January 1, Year 1. Friedman Company purchased a truck that cost $29,000. The truck had...

    On January 1, Year 1. Friedman Company purchased a truck that cost $29,000. The truck had an expected useful life of 8 years and an 57000 salvage value. Friedman uses the double declining balance method What is the book value of the truck at the end of Year 1? (Do not round Intermediate calculations.) Multiple Choice Ο Ο S14750 Ο 521750 Ο Ο >2500 Ο Ο 50.500 ΑΝΑΝ

  • On January 2, 2019, Collins Company purchased a delivery truck for $45,000 cash. The truck had...

    On January 2, 2019, Collins Company purchased a delivery truck for $45,000 cash. The truck had an estimated useful life of seven years and an estimated residual value of $3,000. Straight-line depreciation was used. Assuming the transactions have commercial substance, prepare the journal entries to record the disposition of the truck on September 1, 2019, under each of the following assumptions: (20 marks) (a) The truck and $55,000 cash were exchanged for equipment that had a fair value of $70,000....

  • Chip Company owns one delivery truck, which it purchased on October 1, 2015, at a cost...

    Chip Company owns one delivery truck, which it purchased on October 1, 2015, at a cost of $76,800. The estimated life of the truck at that time was four years. On June 30, 2018, the close of the fiscal year, the accumulated depreciation account had a balance of $52,800. On July 1, 2018, the company traded this vehicle for a new one having a cash price of $85,200. Cash of $67,200 was also exchanged for the new truck. The old...

  • Lucky Company purchased a truck at a cost of $12,000 in 2012. As of January 1,...

    Lucky Company purchased a truck at a cost of $12,000 in 2012. As of January 1, 2017, depreciation of $10,000 had been recorded on this asset. Depreciation expense for 2017 is $2,000. After the adjustments are recorded and posted at December 31, 2017, what is the carrying value of the truck? a.$0 b.$5,500 c.$12,000 d.$2,000

  • 7. Betts & Bogart, Inc. sold inventory for $78,000 cash that had cost them $58,000. Assuming...

    7. Betts & Bogart, Inc. sold inventory for $78,000 cash that had cost them $58,000. Assuming the company uses the perpetual inventory method, the net effect of all journal entries required to properly record this sale would: a. decrease assets by $20,000. b. decrease net income by $20,000. c. increase retained earnings by $20,000. d. increase expenses by $20,000. 8. If land is sold for more than the company paid for it, the resulting "gain on sale" would: a. Decrease...

  • Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest In Shaw Company for...

    Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest In Shaw Company for $542,200. On this date, Shaw Company had common stock of $403,400 and retalned earnings of $138,800. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Book Value Falr Value Marketable securities $20,200 $45,100 Equipment (net) 119,900 140,000 v (a) 2 Your answer is partially correct. Try again. Prepare...

  • Perez Company purchased 90% of the common stock of Sanchez, Inc. on January 1, 2018, for...

    Perez Company purchased 90% of the common stock of Sanchez, Inc. on January 1, 2018, for $85,000. Sanchez Inc had capital stock of $70,000 and retained earnings of $12,000 at that time. Trial balances at the end of 2019 for the companies were: Sanchez $14,000 36,000 8,000 Perez $13,000 22,000 14,000 8,000 84,000 10,000 67.800 10,000 85,000 $ 313,800 6,000 37,000 Cash Accounts Receivable Inventory, 1/1 Advance to Sanchez Company Purchases Other Expenses Plant Assets Dividends Declared Investment in Sanchez...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT