17) Maxie\'s Game World sold games to a customer on credit for $2.600, terms 1/1
ID: 2587091 • Letter: 1
Question
17) Maxie's Game World sold games to a customer on credit for $2.600, terms 1/10, n/ 30 and the cost of the games was $1,/00 recording the sales transaction in its sales journal, Maxie's would enter: 17) A) S1,700 in the Accounts Receivable Dr/Sales Cr. column and $2,600 in the Cost of Goods Sold Dr/Inventory Cr. column B) $2,600 in the Accounts Receivable Dr/Sales Cr. column and $2,600 in the Cash Cr. column. C) $2,600 in the Accounts Receivable Dr/Sales Cr. column and $1,700 in the Cost of Goods Sold Dr/Inventory Cr. column. ccounts Receivable Dr/Sales Cr. column and $1,700 in the Accounts Payable Dr./Purchases Cr. column the Accounts Receivable Dr/Sales Cr. column and $2.600 in the Other Accounts Dr. column. E) $1,700 in 18) For a retailer required to collect sales taxes from customers, all of the following adaptations would be made to the sales journal except: 18) A) A Sales Taxes Payable credit column would be added. B) Column totals would continue to be posted as usual. C) A Sales Taxes Payable debit column would be added. D) There would be a separate Accounts Receivable debit column. E) There would be a separate Sales credit column 19) A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. 15,000 bolts were It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. In the first year, produced. In the second year, production increased to 19,000 units. Using the units-of-production method, what is the book value of the machine at the end of the second year? 19) A) $190,000. B) $180,000 C) $81,600. D) $144,400. E) S108,400. 20) 20) Land improvements are: A) Expensed in the period incurred. B) Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation C) Also called basket purchases. D) Assets that increase the usefulness of land, and like land, are not depreciated. E) Included in the cost of the land account. 21) Martinez owns machinery that cost $87,000 with accumulated depreciation of $40,000. The company sells the machinery for of $42,000. The journal entry to record the sale would include:21) A) A debit to Cash of $42,000. B) A debit to Accumulated Depreciation of $47,000. C) A credit to Gain on Sale of $2,000. D) A credit to Machinery of $47,000. E) A credit to Accumulated Depreciation of $40,000. 22) A compan y receives a 10%, 120-day note for $1,500. The total interest due on the maturity date is: (Use 360 days a year.) B) $37.50. C)$87.50. D$50.00. E)I50.00 E) July 12 A) $75.00. 23) 23) A 90-day note issued on April 10 matures on: A) July 13. B) July 10.C) July 11. - D) July 9Explanation / Answer
17 B Accounts receivable A/C Dr. 2600 Sales Cr. 2600 Cost of goods sold Dr. 1700 Inventory Cr. 1700 18 C A sales taxes payable debit column would be added * Sales tax payable have credit balance so it will be credited not debited. 19 C. 81600 Depericiation per unit = (cost - residual value) / total production capacity in units (190000-10000)/75000 = 2.4 Depericiation in the first year = 2.4*15000 = 36000 Depericiation in the second year = 2.4*19000 = 45600 Total = 36000 + 45600 = 81600 20 d. Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation 21 a. A debit to cash of $42000 Journal entry : Cash Dr. 42000 Sales Cr. 42000 22 D. $50 Interest = 1500*10/100*120/360 = $50 23 D. July 9 20 days in april 31 days of may 30 days of june 9 days of July (i.e. 9th July ) Total 90 days
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