Midterm Study CH2

Question 1

supplies of $28,800 were purchased. actual year-end supplies totaled $6,600. the adjusting entry for supplies will

Answer 1

increase expenses $22,200

Question 2

adjusting entry of how much was used at year end when prior receiving unearned rent revenue

Answer 2

debit unearned rent revenue and credit rent revenue

Question 3

adjusting entry of accrued interest on a loan

Answer 3

debit interest expense and credit interest payable

Question 4

which type of account is always debited during the closing process

Answer 4

revenue

Question 5

accounts receivable: $725,000 debit
allowance for doubtful accounts: $1,500 credit
it is estimated that 4% of accounts receivable will be uncollectible. the adjusting amount would be

Answer 5

27,500

Question 6

accrued interest adjusting entry (earning interest)

Answer 6

debit interest receivable credit interest revenue

Question 7

loaned $600,000 to another company on December 1, 2025 and received a 3-month 8% interest bearing note with a face value of $600,000. How much interest is accrued on December 31, 2025?

Answer 7

$4,000

Question 8

Dana Inc. has 10 employees who work M-F and are paid every other Friday. each is paid 800 for a 40 hour work week. all 10 employers worked 3 days not yet paid. what is the adjusting entry?

Answer 8

debit salaries and wages expense and credit salaries and wages payable $4,800

Question 9

panda corp paid cash $120,000 on june 1, 2025 for a years rent in advance and recorded a debit to prepaid rent. the december 31, adjusting entry is

Answer 9

debit rent expense and credit prepaid rent $70,000

Question 10

what must be considered in estimating the depreciation on an asset for an accounting period

Answer 10

the original cost and the useful life

Question 11

additional assets acquired: $250,000
revenues: $860,000
expenses: $620,000
dividends declared: $23,000
change in stockholders equity?

Answer 11

increase $217,000

Question 12

which account is a nominal (temporary) account? retained earnings, inventory, salaries and wages expense, unearned service revenue

Answer 12

salaries and wages expense

Question 13

Mason Company recorded journal entries for the issuance of common stock for $200,000, the payment of $65,000 accounts payable, and the payment of salaries expense of $105,000. what is the net effect of these entries on stockholders equity?

Answer 13

increase $95,000

Question 14

how is the allowance for doubtful accounts reported in the financial statements?

Answer 14

as a deduction from accounts receivable in current assets on the balance sheet

Question 15

revenues of $225,000, expenses $232,000, and dividends of $4,000. the new balance of retained earnings will

Answer 15

decrease by $11,000

Question 16

revenues of $330,000, incurred expenses of $200,000, paid dividends of $45,000. when income summary is closed to retained earning the amount of debit or credit to retained earnings is a

Answer 16

credit of $130,000

Question 17

Sherlock inc begs in operations on October 1, 2025. the company acquired a building known as that date for $560,000. the useful life is 25 years and the salvage value is $60,000. if the company uses straight lie what is the accumulated depreciation balance on December 31, 2026 (this is the only building)?

Answer 17

$25,000