Reference no: EM132647281

Questions -

Q1. Saldana Sales Company has the following selected accounts after posting adjusting entries:

Accounts Payable $ 62,000

Notes Payable, 3-month 50,000

Accumulated Depreciation-Equipment 14,000

Notes Payable, 5-year, 6% 80,000

Payroll Tax Expense 4,000

Interest Payable 3,000

Mortgage Payable 120,000

Sales Tax Payable 38,000

Instructions: Prepare the current liability section of Saldana Sales Company's balance sheet, assuming $20,000 of the mortgage is payable next year.

Q2. On December 1, Destin Corporation borrowed $5,000 on a 90-day, 6% note. Instructions: Prepare the entries to record the issuance of the note, the accrual of interest at year end, and the payment of the note.

Q3. On March 1, Gorman Company borrows $60,000 from Ottawa State Bank by signing a 6-month, 8%, interest-bearing note.

Instructions: Prepare the necessary entries below associated with the note payable on the books of Gorman Company.

(a) Prepare the entry on March 1 when the note was issued.

(b) Prepare adjusting entries necessary on June 30 in order to prepare the semi-annual financial statements. Assume no other interest accrual entries have been made.

(c) Prepare the adjusting entry at August 31 to accrue interest.

(d) Prepare the entry to record payment of the note at maturity.

Q4. During December 2008, Fashion Vixen Publishing sold 2,500 12-month annual magazine subscriptions at a rate of $30 each. The first issues were mailed in February 2009. Prepare the entries on Fashion Vixen's books to record the sale of the subscriptions and the mailing of the first issues.

Q5. Landen Company had cash sales of $54,250 (including taxes) for the month of June. Sales are subject to 8.5% sales tax. Prepare the entry to record the sale.

Q6. Stevens Company does not segregate sales and sales taxes on its cash register. Its register total for the month is $185,500, which includes a 6% sales tax.

Instructions - Compute sales taxes payable, and make the entry to record sales and sales taxes payable.

Q7. On December 1, Wynn Company introduces a new product that includes a one-year warranty on parts. In December, 500 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $60 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost.