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  21) The proceeds of a discounted note are the face value less the bank discount. 22) On June 1, Mike's Motorcycle Shop accepted a 120-day, 8%, $10,000 note from a customer from the sale of a motorcycle. On July 1, after 30 days, Mike discounted the note at First Bank at 10%. Record the journal entries for Mike's Motorcycles.   23) Chase Hunford negotiated a $40,000 bank loan for 240 days at a bank rate of 10%. The bank deducted the interest in advance. Required (show your calculations): a) Calculate the amount of interest charged by the bank. b) […]

  8) On November 10, Twister Rides issued a 14%, 90-day, $15,000 promissory note. Twister should record the payment of the note on the maturity day as: A) debit Notes Payable $15,525; credit Cash $15,525. B) debit Notes Payable $15,000; debit Interest Payable $525; credit Cash $15,525. C) debit Notes Payable $15,000; debit Interest Expense $525; credit Cash $15,525. D) debit Notes Payable $15,000; credit Cash $15,000.   9) Straight Company sold merchandise to Cross Company and received a promissory note from Cross. Straight should record the transaction as: A) debit Notes Receivable and credit Sales for the principal amount […]

  41) Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system.   April1 Beginning inventory20 units @ $30 11 Purchases70 units @ $32 21 Purchases50 units @ $35   Sales for April: 115 units   a) ________ FIFO b) ________ LIFO c) ________ Weighted-average   42) The ________ holds the merchandise of another business to be sold.   43) If merchandise is purchased ________, the buyer becomes the owner when the merchandise is placed on the carrier.   44) Items that […]

  11) Under the perpetual inventory system, in addition to making the entry to record a return of goods from a customer, a company would: A) debit Merchandise Inventory and credit Cost of Goods Sold. B) debit Cost of Goods Sold and credit Merchandise Inventory. C) debit Sales and credit Cost of Goods Sold. D) debit Purchases and credit Cost of Goods Sold.   12) A credit customer purchased $450 worth of items. Two days later, the customer returned $300 worth of those items. The entry to record this under the perpetual inventory method would include: A) a debit to […]

  61) When the adjustment is made for depreciation, both the Depreciation Expense account and Accumulated Depreciation account are increased.   62) The amount of supplies used causes a decrease in Supplies and an increase in expense.   63) Unearned Revenue is a liability account used to record rent fees received in advance.   64) The amount for beginning inventory is needed when calculating Cost of Goods Sold.   65) Under the periodic inventory system, an adjustment is not made on the worksheet for inventory. 66) The beginning inventory is adjusted by crediting Merchandise Inventory and debiting Income Summary.   […]