I have 7 accounting problems I need answer to please

Problem1

E8-4

At the end of 2011, Delong Co. has accounts receivable of $700,000 and an allowance

for doubtful accounts of $54,000. On January 24, 2012, the company learns that its receivable

from Ristau Inc. is not collectible, and management authorizes a write-off of $5,400.

(a) Prepare the journal entry to record the write-off.

(b) What is the cash realizable value of the accounts receivable (1) before the write-off and

(2) after the write-off?

 

Problem2

E9-4

Chris Rock has prepared the following list of statements about depreciation.

1. Depreciation is a process of asset valuation, not cost allocation.

2. Depreciation provides for the proper matching of expenses with revenues.

3. The book value of a plant asset should approximate its market value.

4. Depreciation applies to three classes of plant assets: land, buildings, and equipment.

5. Depreciation does not apply to a building because its usefulness and revenue-producing

ability generally remain intact over time.

6. The revenue-producing ability of a depreciable asset will decline due to wear and tear and to

obsolescence.

7. Recognizing depreciation on an asset results in an accumulation of cash for replacement of

the asset.

8. The balance in accumulated depreciation represents the total cost that has been charged to

expense.

9. Depreciation expense and accumulated depreciation are reported on the income statement.

10. Four factors affect the computation of depreciation: cost, useful life, salvage value, and residual

value.

Instructions

Identify each statement on page 430 as true or false. If false, indicate how to correct the statement.

 

Problem3

E10-4

Guyer Company publishes a monthly sports magazine, Fishing Preview. Subscriptions

to the magazine cost $20 per year. During November 2011, Guyer sells 12,000 subscriptions

beginning with the December issue. Guyer prepares financial statements quarterly and recognizes

subscription revenue earned at the end of the quarter. The company uses the accounts

Unearned Subscriptions and Subscription Revenue.

Instructions

(a) Prepare the entry in November for the receipt of the subscriptions.

(b) Prepare the adjusting entry at December 31, 2011, to record subscription revenue earned in

December 2011.

(c) Prepare the adjusting entry at March 31, 2012, to record subscription revenue earned in the

first quarter of 2012.

 

Problem4

E11-4

Grossman Corporation issued 1,000 shares of stock.

Instructions

Prepare the entry for the issuance under the following assumptions.

(a) The stock had a par value of $5 per share and was issued for a total of $52,000.

(b) The stock had a stated value of $5 per share and was issued for a total of $52,000.

(c) The stock had no par or stated value and was issued for a total of $52,000.

(d) The stock had a par value of $5 per share and was issued to attorneys for services during

incorporation valued at $52,000.

(e) The stock had a par value of $5 per share and was issued for land worth $52,000.

 

Problem5

E12-4

Dossett Company had the following transactions pertaining to stock investments.

Feb. 1 Purchased 600 shares of Goetz common stock (2%) for $6,000 cash, plus brokerage

fees of $200.

July 1 Received cash dividends of $1 per share on Goetz common stock.

Sept. 1 Sold 300 shares of Goetz common stock for $4,400, less brokerage fees of $100.

Dec. 1 Received cash dividends of $1 per share on Goetz common stock.

Instructions

(a) Journalize the transactions.

(b) Explain how dividend revenue and the gain (loss) on sale should be reported in the income

statement.

 

Problem6

E13-4

Villa Company reported net income of $195,000 for 2011.Villa also reported depreciation

expense of $45,000 and a loss of $5,000 on the sale of equipment.The comparative balance

sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in

accounts payable, and a $4,000 decrease in prepaid expenses.

Instructions

Prepare the operating activities section of the statement of cash flows for 2011. Use the indirect

method.

 

Problem 7

E14-4

The comparative condensed income statements of Hendi Corporation are shown below.

HENDI CORPORATION

Comparative Condensed Income Statements

For the Years Ended December 31

2012 2011

Net sales $600,000 $500,000

Cost of goods sold 483,000 420,000

Gross profit 117,000 80,000

Operating expenses 57,200 44,000

Net income $ 59,800 $ 36,000

Instructions

(a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using

2011 as a base.

(b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar

form for both years.

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