Intermediate Accounting Test 2

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Intermediate Accounting Test 2
The accountant of Weatherspoon Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2012. | Rental revenue | $29,000 | | Interest expense | 18,000 | | Market appreciation on land above cost | 31,000 | | Wages and salaries-sales | 114,800 | | Materials and supplies-sales | 17,600 | | Income tax | 30,600 | | Wages and salaries-administrative | 135,900 | | Other administrative expenses | 51,700 | | Cost of goods sold | 516,000 | | Net sales | 980,000 | | Depreciation on plant assets (70% selling, 30% administrative) | 65,000 | | Dividends declared | 16,000 |
There were 20,000
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Prepare a statement of cash flows for the year 2012.

he trial balance before adjustment for Sinatra Company shows the following balances. | | Dr. | Cr. | | Accounts Receivable | $82,000 | | | | | Allowance for Doubtful Accounts | 1,750 | | | | | Sales | | | $430,000 | |
Using the data above, give the journal entries required to record each of the following cases. 1. | To obtain additional cash, Sinatra factors without recourse $20,000 of accounts receivable with Stills Finance. The finance charge is 10% of the amount factored. |

2. | To obtain a one-year loan of $55,000, Sinatra assigns $65,000 of specific receivable accounts to Ruddin Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Ruddin Financial. |

3.The company wants to maintain the Allowance for Doubtful Accounts at 5% of gross accounts receivable.

4.The company wishes to increase the allowance by 1½% of net sales.

On December 31, 2011, Hurly Co. performed environmental consulting services for Cascade Co. Cascade was short of cash, and Hurly Co. agreed to accept a $300,000 non-interest-bearing note due December 31, 2013, as payment in full. Cascade is somewhat of a credit risk and typically borrows funds at a rate of 10%. Hurly is much more creditworthy and has various lines of credit at 6%. (a) | Prepare the journal entry to record the transaction of December 31,

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