The following information regarding cash for Alpha Company is

Subject: Business    / Accounting
Question

Quiz 3

Question 1 The following information regarding cash for Alpha Company is provided for the month ending March 31, 2016:

Item

Amount

Ending Cash per Bank Statement

$25,000

Note collected by bank included interest of $115

$5,615

Bank Service Charges

$55

Deposits in Transit

$2,775

Outstanding Cheques

$4,500

Customer Cheque returned NSF

$350

A review of the bank statement reflected that cheque #224 recorded in the company cheque register as $1,735 to settle an accounts payable, was paid by the bank for the amount of $1,375. Use this information to prepare the compound General Journal entry (without explanation) for March 31, 2016, to cause the company books to match the adjusted cash balance based on the completed bank reconciliation. If no entry is required then write “No Entry Required.”

Question 2 Alpha Company sells goods to customers who use Worldwide Express nonbank credit cards. Credit card sales on July 15, 2016 amounted to $20,000 and were subject to a 4.5% credit card company collection fee. Alpha Company collected payment from Worldwide Express on July 21. Use this information to prepare the General Journal entries (without explanation) for the July 15 sales & the July 21 collections. If no entry is required then write “No Entry Required.”

Question 3 On July 1, 2016, Alpha Company purchased for $78,000, equipment having a service life of eight years and an estimated residual value of $6,000. Alpha has recorded depreciation of the equipment using the double-declining balance method. On December 31, 2019, before making any annual adjusting entries, the equipment was sold for $20,000. Use this information to prepare all General Journal entries (without explanation) required to record the sale event for December 31, 2019

Question 4 On July 1, 2016, Alpha Company purchased for $76,000, equipment having a service life of eight years and an estimated residual value of $4,000. Alpha has recorded depreciation of the equipment using the double-declining balance method. On December 31, 2018, before making any annual adjusting entries, the equipment was exchanged for new machinery having a fair value of $35,000. The transaction has commercial substance. Use this information to prepare all General Journal entries (without explanation) required to record the events for December 31, 2018.

Question 5 Alpha Company uses aging to estimate uncollectibles. At the end of the fiscal year, December 31, 2016, Accounts Receivable has a balance that consists of:

Dollar Value

Age of Account

Estimated Collectible

$100,000

< 30 days old

98%

50,000

30 to 60 days old

90%

25,000

61 to 120 days old

50%

10,000

> 120 days old

10%

The current unadjusted Allowance for Uncollectable Accounts balance is a debit balance of $1,500 and the Bad Debt Expense accounts has an unadjusted balance of zero. After the adjusting entry is made, what will be the dollar balances in the:

1. Accounts Receivable

2. Allowance for Doubtful Accounts

3. Bad Debt Expense

Question 6 Alpha Company has the following account balances information for fiscal year 2015 & 2016 (all balances are normal):

Alpha Company

December 31

Accounts

2016

2015

Accounts Receivable

$50,500

$40,500

Allowance for Doubtful Accounts

2,500

1,500

Merchandise Inventory

57,000

50,000

Office Supplies

25,000

20,000

Credit Sales

985,000

740,000

Sales Discounts

10,000

9,000

Interest Income

25,000

20,000

Cost of Goods Sold

460,000

385,000

1. What is the FY 2016 accounts receivable turnover ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word times. (Example 1.123 would be entered 1.1 times)

2. What is the FY 2016 days outstanding for accounts receivable ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word days. (Example 1.123 would be entered 1.1 days)

Question 7 February 1, 2016, Alpha Company purchased land for the future factory location at a cost of $50,000. The dilapidated building that was on the property was demolished so that construction could begin on the new factory building. The new factory was completed on November 1, 2016. Costs incurred during this period were:

Item

Amount

Demolition dilapidated building

$4,000

Architect Fees

$10,000

Legal Fees – for title search

$2,000

Interest During Active Construction Period

$18,750

Construction Costs

$500,000

Using this information, how much should be recorded as the cost of: (Enter only whole dollar values.)

1. Land

2. New Building