Question

Answer these following multiple choice questions

show working where applicable

1) Dayton Company had the following transactions in 2015, it first year of operation.

• Issue 30,000 shares of common stock. Stock has par value of $5 per share and was issued at $15 per share.
• The company charter authorizes 200,000 shares of common stock.

Which of the following is the correct value of the paid in capital in excess of par?

Select one:

a. $150,000

b. $3,000,000

c. $1,000,000

d. $300,000

2) On January 1, Mario Distributors sold $15,000 worth of goods to customer D&D Sales on account. For several months Mario Distributors tried unsuccessfully to collect from the customer, and finally decided to write off the account. Which of the following is the correct journal entry for the write-off of this transaction?

Select one:

a. Debit Accounts Receivable –D&D Sales $15,000 and Credit Allowance for Uncollectible Accounts $15,000

b. Debit Uncollectible Expense $15,000 and Credit Allowance for Uncollectible Account $15,000

c. Credit Accounts Receivable –D&D Sales $15,000 and Debit Allowance for Uncollectible Accounts $15,000

d. Debit Accounts Receivable –D&D Sales $15,000 and Credit Allowance for Uncollectible Expense $15,000

3) Referring to the following table, what is Operating income?

Sales revenue	$460,000
Cost of goods sold	300,000
Operating expenses	85,000
Sales discounts	20,000
Sales returns and allowances	15,000
Interest revenue	5,000

Select one:

a. $40,000

b. $190,000

c. $160,000

d. $55,000

4) Additional information presented by Mario Distributors shows that the company records uncollectible expense based on 2% of credit sales. If credit sales for January amounts to $200,000, which of the following is the correct journal entry to record this transaction?

Select one:

a. Debit Uncollectible Expense $4,000 and Credit Allowance for Uncollectible Account $4,000

b. Debit Uncollectible Expense $200,000 and Credit Accounts Receivable $200,000

c. Debit Uncollectible Expense $4,000 and Credit Accounts Receivable $4,000

d. Debit Uncollectible Expense $200,000 and Credit Allowance for Uncollectible Account $200,000

5) The following information is from the balance sheet of Mega Corporation as of December 31, 2015. What was the total paid-in capital as of December 31, 2015?

Preferred stock, $100 par		$1,000,000
Paid-in capital in excess of par-preferred		150,000
Common stock, $1 par		350,000
Paid-in capital in excess of par- common		600,000
Retained earnings		255,000
Total stockholders’ equity		2,355,000

Select one:

a. $2,100,000

b. $1,350,000

c. $2,355,000

d. $750,000

6) The following information was extracted from the books of ASB Company Limited for the period ending December 31^st, 2015.

Net Income	1,500,000
Sales revenue	500,000
Loss on sale of land	120,000
Acquisition of land	1,050,000
Depreciation	215,000
Decrease in current liabilities	455,000
Increase in current assets and other than cash	316,000

Which of the following is the correct cash flow from operating activities using the indirect method based on the info presented?

Select one:

a. $1,026,000

b. $1,000,000

c. $1,936,000

d. $1,064,000

8) the following information is needed to reconcile the cash balance for mike right ltd.

a deposit of $5,794.62 is in transit

oustanding cheques total $1,533.25

the book balance is $5,695.62

the bookkeeper recorded a $1,524 cheque as $15,240 in payment of the current month's rent

the bank balance at february 28, 2008 was $16,500.25

a deposit of $300 was credited by the bank for $3000

a customer cheque for $1,280 was returned for nonsufficient funds

the bank service charge is $70

based on the above information, which of the following is the correct adjusted cash book balance?

a) $6,670.38

b) $20,761.62

c) 18,061.62

d) 10,140.24

Answer 1

as per HomeworkLib policy, I'm obliged to answer first 4 parts. Kindly ask remaining parts in a seperate question. the following entry shall be passed for the issue of common stock - account titles and explanation debit credit calculation $ 450,000 cash common stock paid in capital in excess of par-common stock (to record issue of common stock) $ 150,000 $ 300,000 30000*$15 30000*$5 30000*$10 hence, the correct answer is d. $300,000

2 the following entry shall be passed for the writing off of accounts receivable - account titles and explanation debit credit $ 15,000 allowance for uncollectible accounts accounts receivable - D&D Sales (to write off accounts receivable) $ 15,000 hence, the correct answer is C. Credit Accounts Receivable-D&D Sales $15,000 and Debit Allowance for Uncollectible Accounts $15,000

Sales Revenue Sales discounts Sales returns and allowances Net Sales Cost of goods sold Gross Profit Operating expenses Operating Income $ 460,000 $ 20,000 $ 15,000 $425,000 $ 300,000 $ 125,000 $ 85,000 $ 40,000 hence, the correct answer is a. $40,000

4 l the following entry shall be passed for recording uncollectible expense - account titles and explanation debit credit calculation $ 4,000 $200000*2% uncollectible expense allowance for uncollectible accounts (to record uncollectible expense) $ 4,000 hence, the correct answer is a. Debit Uncollectible Expense $4,000 and Credit Allowance for Uncollectible Account $4,000

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