Midterm Exam 2 Review-Solution

Midterm Exam 2 Review-Solution - ACCT 2101 Midterm Exam 2...

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ACCT 2101 Midterm Exam 2 Review 1. Equipment was acquired on January 1, 2005 at a cost of $185,000. It had an estimated useful life of 10 years and an estimated residual value of $15,000. It was depreciated using the straight line method for 3 years. On January 1, 2008, the assets estimated life was changed from the original estimate to 8 years and the salvage value was increased to $20,000. On July 1, 2010, the asset was sold for $ 75,000. What amount was credited/debited to record the gain or loss on disposal? A. $23,375 Loss B. $2,000 Loss C. $8,000 Gain D. $ 23,500 Gain
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2. Shamrock Inc. sells Merchandise to customers on credit and uses the allowance method of accounting for uncollectible accounts. On June 3, 2007 Allowance for Doubtful Accounts had a debit balance of $3,600 and the Accounts Receivable account had a balance of $52,000. In July 2007, a customer whose account was written off in the year 2006 paid Shamrock $ 4,500 in partial payment of the original invoice of $6,600. Credit sales for the year 2007 were $250,000. If
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  • Fall '07
  • Bhan
  • Accounting, Net Income, Current Assets, Shamrock Inc.

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