chapter 12 practice activity Key
1.Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. The beginning inventory for a merchandising business was $73,000, and the ending inventory is $66,000.
First entry: Debit Income Summary, $73,000; credit Merchandise Inventory, $73,000
Second entry: Debit Merchandise Inventory, $66,000; credit Income Summary, $66,000
Learning Objective: 1
Level: Medium
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Section: 1
2.Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. During the year, the firm had net credit sales of $490,000. Past experience shows that 1.2 percent of the firm's net credit sales result in uncollectible accounts.
Debit Uncollectible Accounts Expense, $5,880; credit Allowance for Doubtful Accounts, $5,880
Learning Objective: 2
Level: Easy
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Section: 1
3.Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. Equipment purchased for $104,000 on January 3, 20--, has an estimated life of 5 years and an estimated salvage value of $9,000. The firm uses the straight-line method of depreciation. Determine the adjustment for the month ended January 31, 20--.
Debit Depreciation Expense--Equipment, $1,583.33; credit Accumulated Depreciation--Equipment, $1,583.33
Learning Objective: 2
Level: Medium
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Section: 1
4.Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. The Supplies account has a balance of $1,300. On December 31, 20--, an inventory of supplies showed that items costing $550 were on hand.
Debit Supplies Expense, $750; credit Supplies, $750
Learning Objective: 2
Level: Medium
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Section: 1
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LearningObjective:2 / 3
Level:Easy / 1
Level:Medium / 3
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