Q&A Hero

Q: a company has the following assets:the total amount reported under property, plant, and equipment would bea.$54,400,000b.$42,000,000c.$52,000,000d.$44,400,000

Q: a company purchased factory equipment for $250,000. it is estimated that the equipment will have a $25,000 salvage value at the end of its estimated 5-year useful life. if the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be a.$100,000 b.$60,000 c.$90,000 d.$54,000

Q: a company purchased office equipment for $20,000 and estimated a salvage value of $4,000 at the end of its 10-year useful life. the constant percentage to be applied against book value each year if the double-declining-balance method is used is a.10% b.15% c.20% d.2%

Q: a factory machine was purchased for $60,000 on january 1, 2012. it was estimated that it would have a $12,000 salvage value at the end of its 5-year useful life. it was also estimated that the machine would be run 40,000 hours in the 5 years. if the actual number of machine hours ran in 2012 was 4,000 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2012 would be a.$6,000 b.$9,600 c.$12,000 d.$4,800

Q: Match each of the following accounts with its normal balance (a or b).a. Debitb. CreditSales

Q: on january 1, a machine with a useful life of five years and a residual value of $30,000 was purchased for $90,000. what is the depreciation expense for year 2 under the double-declining-balance method of depreciation? a.$21,600 b.$36,000 c.$28,800 d.$17,280

Q: a plant asset cost $96,000 and is estimated to have a $12,000 salvage value at the end of its 8-year useful life. the annual depreciation expense recorded for the third year using the double-declining-balance method would be a.$8,040 b.$13,500 c.$11,812 d.$9,190

Q: equipment with a cost of $150,000 has an estimated salvage value of $10,000 and an estimated life of 4 years or 10,000 hours. it is to be depreciated by the units-of-activity method. what is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours? a.$37,500 b.$35,000 c.$37,800 d.$36,250

Q: equipment with a cost of $320,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 15,000 hours. it is to be depreciated using the units-of-activity method. what is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours? a.$80,000 b.$90,400 c.$66,000 d.$75,000

Q: a machine with a cost of $240,000 has an estimated salvage value of $15,000 and an estimated useful life of 5 years or 15,000 hours. it is to be depreciated using the units-of-activity method of depreciation. what is the amount of depreciation for the second full year, during which the machine was used 5,000 hours? a.$75,000 b.$45,000 c.$65,000 d.$80,000

Q: the calculation of depreciation using the declining-balance method a.ignores salvage value in determining the amount to which a constant rate is applied b.multiplies a constant percentage times the previous year's depreciation expense c.yields an increasing depreciation expense each period d.multiplies a declining percentage times a constant book value

Q: units-of-activity is an appropriate depreciation method to use when a.it is impossible to determine the productivity of the asset b.the asset's use will be constant over its useful life c.the productivity of the asset varies significantly from one period to another d.the company is a manufacturing company

Q: Match each of the following definitions with the term (a–h) it defines.a. Credit termsb. FOB destinationc. FOB shipping pointd. Periodic inventory systeme. Perpetual inventory systemf. Inventory shrinkageg. Single-step income statementh. Multiple-step income statementShipping terms where the ownership of merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier

Q: vickers company uses the units-of-activity method in computing depreciation. a new plant asset is purchased for $48,000 that will produce an estimated 100,000 units over its useful life. estimated salvage value at the end of its useful life is $4,000. what is the depreciation cost per unit? a.$4.40 b.$4.80 c.$0.44 d.$0.48

Q: on october 1, 2012, hess company places a new asset into service. the cost of the asset is $60,000 with an estimated 5-year life and $15,000 salvage value at the end of its useful life. what is the book value of the plant asset on the december 31, 2012, balance sheet assuming that hess company uses the double-declining-balance method of depreciation? a.$39,000 b.$45,000 c.$54,000 d.$57,000

Q: interline trucking purchased a tractor trailer for $98,000. interline uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1,000,000 miles over its 12-year useful life. salvage value is estimated to be $14,000. if the truck is driven 80,000 miles in its first year, how much depreciation expense should interline record? a.$6,222 b.$7,840 c.$6,720 d.$7,259

Q: conley company purchased equipment for $40,000 on january 1, 2010, and will use the double-declining-balance method of depreciation. it is estimated that the equipment will have a 5-year life and a $2,000 salvage value at the end of its useful life. the amount of depreciation expense recognized in the year 2012 will be a.$5,760 b.$9,120 c.$9,600 d.$5,472

Q: foyle company purchased a new van for floral deliveries on january 1, 2011. the van cost $40,000 with an estimated life of 5 years and $10,000 salvage value at the end of its useful life. the double-declining-balance method of depreciation will be used. what is the balance of the accumulated depreciation account at the end of 2012? a.$6,400 b.$19,200 c.$25,600 d.$9,600

Q: foyle company purchased a new van for floral deliveries on january 1, 2012. the van cost $40,000 with an estimated life of 5 years and $10,000 salvage value at the end of its useful life. the double-declining-balance method of depreciation will be used. what is the depreciation expense for 2012? a.$8,000 b.$6,000 c.$12,000 d.$16,000

Q: dobler company purchased factory equipment with an invoice price of $75,000. other costs incurred were freight costs, $1,300; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500; fire insurance policy covering equipment, $1,500. the equipment is estimated to have a $5,000 salvage value at the end of its 8-year useful service life. instructions (a)compute the acquisition cost of the equipment. clearly identify each element of cost. (b)if the straight-line method of depreciation was used, the annual rate applied to the depreciable cost would be __________.

Q: Indicate whether each of the following expenditures should be classified as land (L), land improvements (LI), buildings (B), equipment (E), or none of these (X)._____ 1. Computer installation cost_____ 2. Driveway cost_____ 3. Architect’s fee_____ 4. Surveying costs_____ 5. Grading costs_____ 6. Cost of lighting for parking lot_____ 7. Insurance while in transit and freight on computer purchased_____ 8. Material and labor costs incurred to construct factory_____ 9. Cost of tearing down a warehouse on land just purchased_____10. Utility cost during first year

Q: Indicate whether each of the following expenditures should be classified as land (L), land improvements (LI), buildings (B), equipment (E), or none of these (X)._____ 1. Parking lots_____ 2. Electricity used by a machine_____ 3. Excavation costs_____ 4. Interest on building construction loan_____ 5. Cost of trial runs for machinery_____ 6. Drainage costs_____ 7. Cost to install a machine_____ 8. Fences_____ 9. Unpaid (past) property taxes assumed_____10. Cost of tearing down a building when land and a building on it are purchased

Q: all of the following statements are true regarding the declining-balance method of depreciation except a.the declining-balance method ignores salvage value when calculating depreciation b.the declining-balance method produces lower depreciation expense in the early years as opposed to the later years c.the declining-balance method is compatible with the matching principle d.the declining-balance method is appropriate when assets lose their usefulness rapidly

Q: danford trucking purchased a tractor trailer for $147,000. danford uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1,000,000 miles over its 12-year useful life. salvage value is estimated to be $21,000. if the truck is driven 80,000 miles in its first year, how much depreciation expense should danford record? a.$9,333 b.$11,760 c.$10,080 d.$10,889

Q: Gunselman Company purchased a machine on January 1, 2012. In addition to the purchase price paid, the following additional costs were incurred:(a) sales tax paid on the purchase price,(b) transportation and insurance costs while the machinery was in transit from the seller,(c) personnel training costs for initial operation of the machinery,(d) installation costs necessary to secure the machinery to the building flooring,(e) major overhaul to extend the life of the machinery,(f) lubrication of the machinery gearing before the machinery was placed into service,(g) lubrication of the machinery gearing after the machinery was placed into service, and(h) annual city operating license. InstructionsIndicate whether the items (a) through (h) are capital or revenue expenditures in the spaces provided: C = Capital, R = Revenue. (a)_____________ (b)______________ (c)______________ (d)______________ (e)_____________ (f)______________ (g)______________ (h)______________

Q: revson corporation purchased land adjacent to its plant to improve access for trucks making deliveries. expenditures incurred in purchasing the land were as follows: purchase price, $50,000; brokers fees, $6,000; title search and other fees, $5,000; demolition of an old building on the property, $5,700; grading, $1,200; digging foundation for the road, $3,000; laying and paving driveway, $25,000; lighting $7,500; signs, $1,500. list the items and amounts that should be included in the land account.

Q: Identify the following expenditures as capital expenditures or revenue expenditures.(a) Replacement of worn out gears on factory machinery.(b) Construction of a new wing on an office building.(c) Painting the exterior of a building.(d) Oil change on a company truck.(e) Replacing a 486 computer chip with a Pentium chip, which increases productive capacity. No extension of useful life expected.(f) Overhaul of a truck motor. One year extension in useful life is expected.(g) Purchased a wastebasket at a cost of $10.(h) Painting and lettering of a used truck upon acquisition of the truck.

Q: Using the following data for Hayes, Inc., compute its asset turnover ratio and the return on assets ratio.

Q: For each item listed below, enter a code letter in the blank space to indicate the allocation terminology for the item. Use the following codes for your answer: A—Amortization D—Depreciation N—None of these

Q: Using the following information, what is the amount of net income?Purchases $32,000 Selling expenses $ 960Merchandise inventory, September 1 5,700 Merchandise inventory,September 30 6,370Administrative expenses 910 Sales 63,000Rent revenue 1,200 Interest expense 1,040 a. $29,800 b. $29,960 c. $28,760 d. $31,670

Q: When comparing a merchandising business to a service business, the financial statement that changes the most is the a. balance sheet b. income statement c. statement of owner's equity d. statement of cash flows

Q: Kinney Company purchased a truck for $76,000. The company expected the truck to last four years or 100,000 miles, with an estimated residual value of $8,000 at the end of that time. During the second year the truck was driven 27,000 miles. Compute the depreciation for the second year under each of the methods below and place your answers in the blanks provided.

Q: On January 1, 2010, Keller Company purchased and installed a telephone system at a cost of $20,000. The equipment was expected to last five years with a salvage value of $3,000. On January 1, 2011, more telephone equipment was purchased to tie-in with the current system for $8,000. The new equipment is expected to have a useful life of four years. Through an error, the new equipment was debited to Telephone Expense. Keller Company uses the straight-line method of depreciation.InstructionsPrepare a schedule showing the effects of the error on Telephone Expense, Depreciation Expense, and Net Income for each year and in total beginning in 2009 through the useful life of the new equipment.

Q: Merchandise is sold for cash. The selling price of the merchandise is $6,000, and the sale is subject to a 7% state sales tax. The journal entry for the sale would include a credit to a. Cash for $6,000 b. Sales for $6,240 c. Sales Tax Payable for $420 d. Sales for $5,580

Q: indicate in the blank spaces below, the section of the balance sheet where the following items are reported. use the following code to identify your answer:PPE Property, Plant, and EquipmentI IntangiblesO OtherN/A Not on the balance sheet

Q: If the seller is to pay the freight costs of delivering merchandise, the delivery terms are stated as a. FOB shipping point b. FOB destination c. FOB n/30 d. FOB seller

Q: On March 1, 2012, Geoffrey Company acquired real estate, on which it planned to construct a small office building, by paying $90,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $2,200. Additional expenditures before construction began included $1,500 attorney's fee for work concerning the land purchase, $5,500 real estate broker's fee, $9,100 architect's fee, and $16,000 to put in driveways and a parking lot.Instructions(a) Determine the amount to be reported as the cost of the land.(b) For each cost not used in part (a), indicate the account to be debited.

Q: When the perpetual inventory system is used, the inventory sold is shown on the income statement as a. cost of merchandise sold b. purchases c. purchases returns and allowances d. net purchases

Q: Kendrick Company was organized on January 1. During the first year of operations, the following expenditures and receipts were recorded in random order.InstructionsAnalyze the foregoing transactions using the following tabular arrangement. Insert the number of each transaction in the Item space and insert the amounts in the appropriate columns.

Q: Which of the following is not a difference between a retail business and a service business? a. what is sold by the business b. the inclusion of gross profit on the income statement c. elements of the accounting equation d. the inclusion of merchandise inventory on the balance sheet

Q: The arrangements between buyer and seller as to when payments for merchandise are to be made are called a. credit terms b. net cash c. cash on demand d. gross cash

Q: For each entry below make a correcting entry if necessary. If the entry given is correct, then state "No entry required."(a) The $50 cost of repairing a printer was charged to Computer Equipment.(b) The $5,500 cost of a major engine overhaul was debited to Repair Expense. The overhaul is expected to increase the operating efficiency of the truck.(c) The $6,000 closing costs associated with the acquisition of land were debited to Operating Expenses.(d) A $400 charge for transportation expenses on new equipment purchased was debited to Freight-In.

Q: To encourage a buyer to pay before the end of the credit period, the seller may offer a (answer from perspective of seller) a. purchases discount b. sales discount c. trade discount d. volume discount

Q: Mark’s Repair Service uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions and events occurred during the first three years.instructionsprepare the necessary entries. (show computations.)

Q: Corbit Corp. sold merchandise for $10,000 cash. The cost of merchandise sold was $7,590. The journal entries for this transaction under the perpetual inventory system would be a. Cash 10,000 Merchandise Inventory 10,000Cost of Merchandise Sold 7,590 Sales 7,590 b. Cash 10,000 Sales 10,000Cost of Merchandise Sold 7,590 Merchandise Inventory 7,590 c. Cash 10,000 Sales 10,000Cost of Merchandise Sold 10,000 Merchandise Inventory 10,000 d. Cash 7,590 Sales 7,590Cost of Merchandise Sold 7,590 Merchandise Inventory 7,590

Q: (a) Faster Company purchased equipment in 2005 for $92,000 and estimated an $8,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2011, there was $58,800 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2012, the equipment was sold for $21,000.Prepare the appropriate journal entries to remove the equipment from the books of Faster Company on March 31, 2012.(b) Lewis Company sold equipment for $11,000. The equipment originally cost $25,000 in 2009 and $6,000 was spent on a major overhaul in 2012 (charged to the Equipment account). Accumulated Depreciation on the equipment to the date of disposal was $20,000.Prepare the appropriate journal entry to record the disposition of the equipment.(c) Selby Company sold equipment that had a book value of $4,500 for $5,000. The equipment originally cost $15,000 and it is estimated that it would cost $19,000 to replace the equipment.Prepare the appropriate journal entry to record the disposition of the equipment.

Q: A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of a period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is a. $795 b. $685 c. $265 d. $635

Q: Prepare the journal entries to record the following transactions for Reese Company, which has a calendar year end and uses the straight-line method of depreciation.(a) On September 30, 2012, the company sold old equipment for $36,000. The equipment was purchased on January 1, 2010, for $76,000 and was estimated to have a $16,000 salvage value at the end of its 5-year life. Depreciation on the equipment has been recorded through December 31, 2011.(b) On June 30, 2012, the company sold old equipment for $24,000. The equipment originally cost $36,000 and had accumulated depreciation to the date of disposal of $15,000.

Q: Which account will be included in the closing entries of both service and merchandising businesses? a. Advertising Expense b. Cost of Merchandise Sold c. Customer Refunds Payable d. Merchandise Inventory

Q: Vineyard Company sold the following two pieces of equipment in 2012:instructionsjournalize all entries required to update depreciation and record the sales of the two assets in 2012. the company has recorded depreciation on the equipment through december 31, 2011.

Q: Presented below are selected transactions for the Tinker Company for 2013.Jan. 1 Retired a piece of equipment that was purchased on January 1, 2003. The equipment cost $75,000 on that date, and had a useful life of 10 years with no salvage value.April 30 Sold equipment for $35,000 that was purchased on January 1, 2010. The equipment cost $90,000, and had a useful life of 5 years with no salvage value.Dec. 31 Discarded equipment that was purchased on June 30, 2009. The equipment cost $37,000 and was depreciated on a 5-year useful life with a salvage value of $2,000.InstructionsJournalize all entries required as a result of the above transactions. Tinker Company uses the straight-line method of depreciation and has recorded depreciation through December 31, 2012.

Q: Under the periodic inventory system, the journal entry for the cost of merchandise sold at the point of sale will include which of the following? a. None of these choices b. Cost of Merchandise Sold c. Inventory d. Purchases

Q: the following information is available from the annual reports of reser company and trent companyInstructions(a) Based on the preceding information, compute the following values for each company:1. Asset turnover ratio2. Return on assets(b) What conclusion concerning the management of plant assets can be drawn from these data?

Q: What is the major difference between a periodic and a perpetual inventory system? a. Under the periodic inventory system, the purchase of inventory will be debited to the purchases account. b. Under the periodic inventory system, no journal entry is made at the time of the sale of inventory for the cost of the inventory. c. Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the month. d. All of these choices are correct.

Q: Forcum Company reports the following information (in millions) during a recent year: net sales, $12,408.5; net earnings, $304.9; total assets, ending, $4,312.6; and total assets, beginning, $4,254.3.Instructions(a) Calculate the (1) return on assets, (2) asset turnover, and (3) profit margin ratios.(b) Prove mathematically how the profit margin and asset turnover ratios work together to explain return on assets, by showing the appropriate calculations.

Q: Who is responsible for the freight costs when the terms are FOB shipping point? a. the ultimate customer b. the buyer c. the seller d. either the seller or the buyer

Q: here are selected 2012 transactions of howe corporation.instructionsjournalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. howe corporation uses straight-line depreciation.

Q: Generally, the revenue account for a merchandising business is entitled a. Sales b. Fees Earned c. Gross Sales d. Gross Profit

Q: Phill Co. has equipment that cost $54,000 and has been depreciated $30,000.InstructionsRecord entries for the disposal under the following assumptions.(a) It was scrapped as having no value.(b) It was sold for $29,000.(c) It was sold for $18,000.

Q: Multiple-step income statements show a. gross profit but not income from operations b. neither gross profit nor income from operations c. both gross profit and income from operations d. income from operations but not gross profit

Q: (a) A company purchased a patent on January 1, 2012, for $2,000,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. On June 30, 2012, the company paid legal costs of $162,000 in successfully defending the patent in an infringement suit. Prepare the journal entry to amortize the patent at year end on December 31, 2012.(b) Milner Company purchased a franchise from the Tasty Food Company for $450,000 on January 1, 2012. The franchise is for an indefinite time period and gives Milner Company the exclusive rights to sell Tasty Wings in a particular territory. Prepare the journal entry to record the acquisition of the franchise and any necessary adjusting entry at year end on December 31, 2012.(c) Huerter Company incurred research and development costs of $500,000 in 2012 in developing a new product. Prepare the necessary journal entries during 2012 to record these events and any adjustments at year end on December 31, 2012.

Q: Where are selling and administrative expenses found on the multiple-step income statement? a. before gross profit b. after sales and before gross profit c. after net income and before expenses d. after gross profit

Q: a.a patent that was acquired for $600,000 at the beginning of the current year expires in 20 years and is expected to have value for 5 years. present the adjusting entry to amortize the patent for the current year. b.research and development costs of $300,000 were incurred during the current fiscal year. determine the minimum amount to be expensed for the current fiscal year.

Q: Nelson Company, organized in 2012, has these transactions related to intangible assets in that year:Instructions(a) Prepare the necessary entries to record these intangibles. All costs incurred were for cash.(b) Make the entries as of December 31, 2012, recording any necessary amortization.(c) Indicate what the balance should be on December 31, 2012.

Q: If merchandise sells for $3,500, with terms of 3/15, n/45, and the cost of the inventory sold is $2,100, the amount charged to sales is a. $3,395 b. $3,500 c. $2,037 d. $2,100

Q: Which of the following accounts has a normal debit balance? a. Accounts Payable b. Merchandise Inventory c. Sales d. Interest Revenue

Q: During the current year Knight Company incurred several expenditures. Briefly explain whether the expenditures listed below should be recorded as an operating expense or as an intangible asset. If you view the expenditure as an intangible asset, indicate the number of years over which the asset should be amortized. Explain your answer.(a) Spent $30,000 in legal costs in a patent defense suit. The patent was unsuccessfully defended.(b) Purchased a trademark from another company. The trademark can be renewed indefinitely. Knight Company expected the trademark to contribute to revenue indefinitely.(c) Knight Company acquires a patent for $2,000,000. The company selling the patent has spent $1,000,000 on the research and development of it. The patent has a remaining life of 15 years.(d) Knight Company is spending considerable time and money in developing a different patent for another product. So far $3,000,000 has been spent this year on research and development. Knight Company is very confident they will obtain this patent in the next few years.

Q: The proper journal entry for the receipt of inventory purchased on account in a periodic inventory system would be a. Jan. 1 Merchandise Inventory 1,600 Accounts Payable 1,600 b. Jan. 1 Office Supplies 1,600 Accounts Payable 1,600 c. Jan. 1 Purchases 1,600 Accounts Payable 1,600 d. Jan. 1 Purchases 1,600 Accounts Receivable 1,600

Q: Presented below is information related to plant assets and intangible assets at year end on December 31, 2012, for Looper Company:Buildings $1,080,000Goodwill 320,000Patents 480,000Land 390,000Accumulated Depreciation 650,000instructionsprepare a partial balance sheet for looper company that shows how the above listed items would be presented.

Q: When merchandise purchased on account is returned under the perpetual inventory system, the buyer would debit a. Merchandise Inventory b. Purchases Returns and Allowances c. Accounts Payable d. Accounts Receivable

Q: Jensen Company purchased a new machine on September 1, 2012, at a cost of $128,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 80,000 working hours during its 8-year life.InstructionsCompute depreciation using the following methods in the year indicated.(a) Straight-line for 2012 and 2013, assuming a December 31 year-end.(b) Declining-balance using double the straight-line rate for 2012 and 2013.(c) Units-of-activity for 2012, assuming machine usage was 2,900 hours. (Round depreciation per unit to the nearest cent.)

Q: Inventory shrinkage is journalized when a. merchandise is returned by a buyer b. merchandise purchased from a seller is incomplete or short c. merchandise is returned to a seller d. there is a difference between the physical count of inventory and the perpetual inventory records

Q: Redeker Company purchased equipment on January 1, 2011, for $80,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life.InstructionsAnswer the following independent questions.1. Compute the amount of depreciation expense for the year ended December 31, 2011, using the straight-line method of depreciation.2. If 16,000 units of product are produced in 2011 and 24,000 units are produced in 2012, what is the book value of the equipment at December 31, 2012? The company uses the units-of-activity depreciation method.3. If the company uses the double-declining-balance method of depreciation, what is the balance of the Accumulated Depreciation—Equipment account at December 31, 2013?

Q: In credit terms of 3/15, n/45, the "3" represents the a. number of days in the discount period b. full amount of the invoice c. number of days when the entire amount is due d. percent of the available discount for early payment

Q:

Q: A chart of accounts for a merchandising business a. usually is the same as the chart of accounts for a service business b. usually requires more accounts than does the chart of accounts for a service business c. usually is standardized by the FASB for all merchandising businesses d. always uses a three-digit numbering system

Q: Prepare journal entries to record the following transactions entered into by the Castagno Company:

Q: If merchandise sells for $3,500 on account, with terms of 3/15, n/45, and the cost of the inventory sold is $2,100, the journal entry for the receipt of the customer’s payment on account within the discount period under the gross method would include a. a credit to Cash for $3,395 b. a credit to Accounts Receivable for $3,395 c. a debit to Sales of $105 d. a credit to Sales Discounts for $105

Q: Prepare journal entries to record the following transactions entered into by the Castagno Company:

Q: The December 31, 2011, balance sheet of the Kramer Company had Accounts Receivable of $650,000 and a credit balance in Allowance for Doubtful Accounts of $33,000. During 2012, the following transactions occurred: sales on account $1,450,000; sales returns and allowances, $100,000; collections from customers, $1,250,000; accounts written off, $35,000; previously written off accounts of $8,000 were collected.Instructions(a) Journalize the 2012 transactions.(b) If the company uses the percentage of receivables basis to estimate bad debt expense and determines that uncollectible accounts are expected to be 6% of accounts receivable, what is the adjusting entry at December 31, 2012?