PracticeExam1 - 1. W hen Castle Corporation pays insurance...

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1. When Castle Corporation pays insurance premiums, the transaction is recorded as a debit to prepaid insurance. Additional information for the year ended December 31 is as follows: What was the total amount cash paid by Castle for insurance premiums during the year? A. $218,750 B. $166,250 C. $210,000 D. $227,500 2. Flint Hills, Inc. has prepared a year-end 2009 trial balance. Certain accounts in the trial balance do not reflect all activities that have occurred. Required: Prepare adjusting journal entries, as needed, for the following items. 1. The Supplies account shows a balance of $540, but a count of supplies reveals only $210 on hand. 2. Flint Hills initially records the payments of all insurance premiums as expenses. The trial balance shows a balance of $420 in Insurance expense. A review of insurance policies reveals that $125 of insurance is unexpired. 3. Flint Hills' employees work Monday through Friday, and salaries of $2,400 per week are paid each Friday. Flint Hills' year-end falls on Tuesday. 4. On December 31, 2009, Flint Hills received a utility bill for December electricity usage of $190 that will be paid in early January.
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3. The following is selected financial information for Osmond Dental Laboratories for 2008 and 2009: Osmond issued 2,000 shares of additional capital stock in 2009 for $20,000. There were no other capital transactions. Required: Prepare a statement of shareholders' equity for Osmond Dental Laboratories for the year ended December 31, 2009. *$53,000 + 37,000 15,000 = $75,000 4. Describe what is meant by prepaid expenses and give two examples.
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Prepaid expenses represent assets recorded when a cash disbursement creates benefits beyond the current period . Examples include insurance or rent paid in advance of use.
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5. On September 1, 2009, Jacob Furniture Mart enters into a tentative agreement to sell the assets of its office equipment division. This division comprises operations and cash
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This note was uploaded on 03/28/2010 for the course HAA 123 taught by Professor Wang during the Spring '10 term at Aberystwyth University.

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PracticeExam1 - 1. W hen Castle Corporation pays insurance...

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