"Homework Quiz—1

"Homework Quiz—1 - Homework Quiz1...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Homework Quiz—1 1. Described below are three transactions of Larson Company for 2010: On May 10, the company purchased goods from Fry Company for $50,000, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. On June 1, the company purchased equipment for $60,000 from Raney Company, paying $20,000 in cash and giving a one-year, 9% note for the balance. On September 30, the company discounted at 10% its $120,000, one-year zero-interest-bearing note at First State Bank. (c) Indicate the manner in which the above transactions should be reflected in the Current Liabilities section of Larson Company's December 31, 2010 balance sheet. 1a. In the table below write the journal entries for the three transactions; write date for each. 1b. In the table below write the 12/31 adjusting journal entries needed to properly report interest. Assume straight-line amortization of discount. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
1c. In the table below write the 12/31 Current Liability accounts and amounts for the above transactions. 2. Miley Equipment Company sells computers for $1,500 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2010, the company sold 700 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $30 for parts and $60 for labor. (Assume sales all occur at December 31, 2010.) In 2011, Miley incurred actual warranty costs relative to 2010 computer sales of $10,000 for parts
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 6

"Homework Quiz—1 - Homework Quiz1...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online