Blog

Marine, Ltd. purchased property for a building site. The costs associated with the property were:          Purchase price $ 185,000   Real estate commissions   15,000   Legal fees   700   Expenses of clearing the land   2,000   Expenses to remove old building   4,000   What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

On January 1, Rolling Rock Magazine received $15,000 from subscribers for the annual subscriptions that it recorded in Unearned Subscription Revenue. The issues of the magazine are mailed to subscribers quarterly. What amount of subscription revenue should the magazine recognize on March 31 when the first issue is sent in March?

Stable Designs received a $400 utility bill for the current month’s electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Stable Designs make to record this transaction?

Costs incurred during an accounting period but unpaid and unrecorded are accrued expenses.

On April 12, Targareyan Enterprises agrees to accept a 60-day, 10%, $4,500 note from Lannister, Ltd. to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Lannister, Inc.?

The following transactions occurred during July:   Received $900 cash for services provided to a customer during July. Received $2,200 cash investment from Bob Johnson, the owner of the business. Received $750 from a customer in partial payment of his account receivable which arose from sales in June. Provided services to a customer on credit, $375. Borrowed $6,000 from the bank by signing a promissory note. Received $1,250 cash from a customer for services to be rendered next year. What was the amount of revenue for July?

On March 12, Korn Company sold merchandise in the amount of $7,800 to Babcock Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Korn uses the perpetual inventory system and the gross method of accounting for sales. Babcock pays the invoice on March 17, and takes the appropriate discount. The journal entry that Korn makes on March 17 is:

Which of the following accounts is not included in the liability section of the balance sheet?

On April 12, Targareyan Enterprises agrees to accept a 60-day, 10%, $4,500 note from Lannister, Ltd. to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Lannister, Inc.?

On March 12, Korn Company sold merchandise in the amount of $7,800 to Babcock Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Korn uses the perpetual inventory system and the gross method of accounting for sales. On March 15, Babcock returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $350. Babcock pays the invoice on March 20, and takes the appropriate discount. The amount that Korn receives from Babcock on March 20 is: