2023 Survey of Accounting Receivables and Inventories Complete the following exercise on excel template Exercise 7 E6 2 | Assignments Online

 

Survey of Accounting

 

 

 

Receivables and Inventories

 

 

 

Complete the following exercise on excel template.

 

 

 

 

 

Exercise 7

 

E6-2

 

Determine due date and interest on notes

 

Obj|1

 

 

 

✓ Feb. 20, $450

 

Determine the due date and the amount of interest due at maturity on the following notes:

 

	Date of Note	Face Amount	Interest Rate	Term of Note
a.	January 6	$40,000	9%	45 days
b.	March 23	9,000	10	60 days
c.	May 30	12,000	12	90 days
d.	August 30	18,000	10	120 days
e.	October 1	10,500	8	60 days

 

 

 

 

 

 

 

 

 

 

 

E6-7

 

Estimating doubtful accounts

 

Obj|4

 

Newbury Bikes Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 2012, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

 

Age Interval                           Balance                                   Percent Uncollectible

 

Not Past Due                          $667,000                                             ½%

 

1 – 30 Days past due                158,000                                            2

 

31 -60 Days past due                   54,000                                           5

 

61 -90 Days past due                         20,000                                     15

 

91 -180 Days past due                       15,000                                     40

 

Over 180 Days past due                    10,500                                    75

 

                                                         $925,000

 

 Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 2012.

 

 

 

E6-8

 

Entry for uncollectible accounts

 

Obj|4

 

Using the data in Exercise 6-7, assume that the allowance for doubtful accounts for Newbury Bikes Co. had a negative balance of 2$3,800 as of December 31, 2012.

 

   Illustrate the effects of the adjustment for uncollectible accounts as of December 31, 2012, on the accounts and financial statements

 

 

 

 

 

 

 

Exercise 8 Fixed Assets and Intangible Assets

 

 

 

 

 

 

 

Exercise 8

 

 

 

E7-3

 

Determine cost of land

 

Obj|1

 

✓ $715,725

 

Express Delivery Company acquired an adjacent lot to construct a new warehouse, paying $80,000 and giving a short-term note for $620,000. Legal fees paid were $1,900, delinquent taxes assumed were $9,000, and fees paid to remove an old building from the land were $6,000. Materials salvaged from the demolition of the building were sold for $1,175. A contractor was paid $800,000 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

 

E7-4

 

Capital and revenue expenditures

 

Obj|1

 

Hometown Delivery Co. incurred the following costs related to trucks and vans used in operating its delivery service:

 

• 1.Changed the oil and greased the joints of all the trucks and vans.

• 2.Changed the radiator fluid on a truck that had been in service for the past four years.

• 3.Installed a hydraulic lift to a van.

• 4.Installed security systems on four of the newer trucks.

• 5.Overhauled the engine on one of the trucks purchased three years ago.

• 6.Rebuilt the transmission on one of the vans that had been driven 40,000 miles. The van was no longer under warranty.

• 7.Removed a two-way radio from one of the trucks and installed a new radio with a greater range of communication.

• 8.Repaired a flat tire on one of the vans.

• 9.Replaced a truck’s suspension system with a new suspension system that allows for the delivery of heavier loads.

• 10.Tinted the back and side windows of one of the vans to discourage theft of contents.

    

   

  E7-8

  Straight-line depreciation

  Obj|2

  ✓ $3,170

  A refrigerator used by a meat processor has a cost of $86,750, an estimated residual value of $7,500, and an estimated useful life of 25 years. What is the amount of the annual depreciation computed by the straight-line method?

   

   

   

  Liabilities and Stockholders’ Equity

   

   

   

  Complete the following exercise on excel template.

   

  Exercise 9

   

  E8-2

   

  Notes payable

   

  A business issued a 30-day, 7% note for $36,000 to a creditor on account. Illustrate the effects on the accounts and financial statements of recording (a) the issuance of the note and (b) the payment of the note at maturity, including interest.

   

  E8-5

   

  Accrued product warranty

   

  Fungus Audio Works Inc. warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $680,000 for January. In February, a customer received warranty repairs requiring $4,200 of parts.

   

  • a. Determine the warranty liability at January 31, the end of the first month of the current year.

  • b. What accounts are decreased for the warranty work provided in February?

     

    E8-11

    Recording payroll taxes

    According to a summary of the payroll of Apline Publishing Co., $460,000 was subject to the 7.5% FICA tax. Also, $39,000 was subject to state and federal unemployment taxes.

   

  • a. Calculate the employer’s payroll taxes, using the following rates: state unemployment, 4.3%; federal unemployment, 0.8%.

  • b. Illustrate the effects on the accounts and financial statements of recording the accrual of payroll taxes.