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Insurance Expense 1750 Prepaid Insurance 1750 Prepaid Insurance 1750 Insurance Expense 1750 Insurance Expense 1750 Prepaid Insurance 2.450 Accounts...

1) Kansas Enterprises purchased equipment for $60,000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years.


Using the straight-line method, depreciation expense for 2019 and the book value at December 31, 2019 would be:

A) $12,000 and $36,000.

B) $12,000 and $31,000.

C) $11,000 and $33,000.

D) $11,000 and $38,000.


2) California Adventures issues 5,000 shares of 8%, $100 par value preferred stock at the beginning of 2017. All remaining shares are common stock. The company was not able to pay dividends in 2017, but plans to pay dividends of $100,000 in 2018. Assuming the preferred stock is noncumulative, how much of the $100,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2018?


A) $40,000 to preferred stockholders and $60,000 to common stockholders.

B) $80,000 to preferred stockholders and $20,000 to common stockholders.

C) $20,000 to preferred stockholders and $80,000 to common stockholders.

D) $100,000 to preferred stockholders and $0 to common stockholders.


3) On July 5, Harris Company purchased supplies from the hardware store for $600 on account. On July 10, Harris receives a bill from the hardware store as a reminder about the account balance. On July 17, Harris pays the account in full. How does Harris record the transaction on July 17?

Screen Shot 2018-12-03 at 1.58.59 PM.png

Screen Shot 2018-12-03 at 1.58.59 PM.png

Insurance Expense
1750
Prepaid Insurance
1750
Prepaid Insurance
1750
Insurance Expense
1750
Insurance Expense
1750
Prepaid Insurance
2.450
Accounts Payable
4. 200
I
Insurance Expense
2.450
Prepaid Insurance
2450
A ) Option A
B ) Option B
C ) Option
D ) Option D

Top Answer

1) D) $11,000 and $38,000. 2) A) $40,000 to preferred... View the full answer

2 comments
  • Typed the wrong question for question 3 it should be "The Vine Tavern purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, which of the following adjusting entries would The Vine do to record Insurance Expense from August 1st to December 31st ?"
    • jasseg12
    • Dec 03, 2018 at 10:25pm
  • 5 months expired = insurance expense = 4,200 / 12 x 5 = 1,750. So, debit insurance expense and credit prepaid insurance for 1,750. Option A is correct.
    • dinamarcanete
    • Dec 03, 2018 at 11:08pm

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