16. Owen Company's unadjusted book balance at June 30 is$14,440. The company's bank statement reveals bank service chargesof $120. Two credit memos are included in the bank statement: onefor $1,490, which represents a collection that the bank made forOwen, and one for $200, which represents the amount of interestthat Owen had earned on its interest-bearing account in June. Basedon this information, Owen's true cash balance is:
Multiple Choice
$14,440.
$16,010.
$15,730.
$16,250.
17.
At March 31, Cummins Co. had a balance in its cash account of$10,600. At the end of March the company determined that it hadoutstanding checks of $1,145, deposits in transit of $710, a bankservice charge of $40, and an NSF check from a customer for $225.The true cash balance at March 31 is:
Multiple Choice
$10,165
$10,335
$10,600
18. Duke Company's unadjusted bank balance at March 31 is$4,180. The bank reconciliation revealed outstanding checksamounting to $620 and deposits in transit of $460. Based on thisinformation, Duke's true cash balance is:
Multiple Choice
$4,180.
$3,720.
$4,640.
$4,020.
19. On September 30, the bank statement of Fine Company showed abalance of $11,300. The following information was revealed bycomparing the bank statement to the cash balance in Fine'saccounting records:
(1) deposits in transit amounted to $4,650
(2) outstanding checks amounted to $8,500
(3) a $700 check was incorrectly drawn on Fine's account
(4) NSF checks returned by the bank were $1,100
(5) bank service charge was $39
(6) credit memo for $150 for the collection of one of thecompany's account receivable
Based on the above information, the true cash balance was:
Multiple Choice
$8,150.
$8,261.
$7,161.
$8,911.
20. Rainey Company's true cash balance at October 31 is $4,040.The following information is available for the bankreconciliation:
Outstanding checks, $650
Deposits in transit, $490
Bank service charges, $100
The bank had collected an account receivable for Rainey Company,$1,100
The bank statement included an NSF check written by one ofRainey's customers for $660
Based on this information Rainey's unadjusted book balance atOctober 31 is:
Multiple Choice
$4,200.
$4,800.
$3,700.
$3,800.
21. The inventory records for Radford Co. reflected thefollowing
| | | | | | |
| Beginning inventory@ May 1 | 1,900 | units | @ | $ | 5.40 | |
| First purchase @ May 7 | 2,000 | units | @ | $ | 5.60 | |
| second purchase @ May 17 | 2,200 | units | @ | $ | 5.70 | |
| Third purchase @ May 23 | 1,800 | units | @ | $ | 5.80 | |
| Sales @ May 31 | 6,000 | units | @ | $ | 7.30 | |
|
Determine the amount of ending inventory assuming the FIFO costflow method.
Multiple Choice
$11,010
$11,020
$10,260
$6,760
22. Rosewood Company made a loan of $8,400 to one of thecompany's employees on April 1, Year 1. The one-year note carried a6% rate of interest. The amount of interest revenue that Rosewoodwould report during the years ending December 31, Year 1 and Year2, respectively, would be:
Multiple Choice
$504 and $0
$0 and $504
$378 and $126
$126 and $378
23. On January 1, Year 2, Kincaid Company's Accounts Receivableand the Allowance for Doubtful Accounts carried balances of $64,000and $1,400, respectively. During the year Kincaid reported $155,000of credit sales. Kincaid wrote off $1,250 of receivables asuncollectible in Year 2. Cash collections of receivables amountedto $166,700. Kincaid estimates that it will be unable to collectone percent (1%) of credit sales.
The amount of uncollectible accounts expense recognized in theYear 2 income statement will be:
Multiple Choice
$1,550.
$640.
$1,667.
$1,700.
24. Poole Company purchased two identical inventory items. Oneof the items, purchased in January, cost $30. The other, purchasedin February, cost $37. One of the items was sold in March at aselling price of $90. Assuming that Poole uses a LIFO cost flow,which of the following statements is correct?
Multiple Choice
The balance in ending inventory would be $37.
The amount of gross margin would be $53.
The amount of ending inventory would be $33.50.
The amount of cost of goods sold would be $30.
25. Glasgow Enterprises started the period with 75 units inbeginning inventory that cost $2.00 each. During the period, thecompany purchased inventory items as follows. Glasgow sold 395units after purchase 3 for $10.20 each.
| Purchase | No. of Items | Cost |
| 1 | | 370 | | $ | 2.50 | |
| 2 | | 115 | | $ | 2.60 | |
| 3 | | 60 | | $ | 3.00 | |
|
Glasgow's ending inventory under LIFO would be:
Multiple Choice
$675.
$585.
$525.
$450.
