Hahn Company Uses The Percentage Of Sales Method For Recordi

1hahn Company Uses The Percentage Of Sales Method For Recording Bad

Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense? A. Bad Debts Expense ................ ................ $15,000 Allowances for Doubtful Accounts ................ ................ $15,000 B. Bad Debts Expense ................ ................ $12,000 Allowances for Doubtful Accounts ................ ................ $12,000 C. Bad Debts Expense ................ ................ $12,000 Accounts Receivable ................ ................ ................. $12,000 D. Bad Debts Expense ................ ................ $15,000 Accounts Receivable ................ ................ ................. $15,)

Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what is the amount of bad debts expense for that period? A. $15,000 B. $12,000 C. $18,000 D. $8,)

Intangible assets A. should be reported under the heading Property, Plant, and Equipment B. should be reported as a separate classification on the balance sheet C. should be reported as Current Assets on the balance sheet D. are not reported on the balance sheet because they lack physical substance

Intangible assets are the rights and privileges that result from ownership of long-lived assets that A. must be generated internally B. are depletable natural resources C. do not have physical substance D. have been exchanged at a gain

The book value of an asset is equal to the A. asset’s market value less its historic cost B. blue book value relied on by secondary markets C. replacement cost of the asset D. asset’s cost less accumulated depreciation

Gains on an exchange of plant assets that has commercial substance are A. deducted from the cost of the new asset acquired B. deferred C. not possible D. recognized immediately

Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as A. capital expenditures B. expense expenditures C. improvements D. revenue expenditures

Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as A. capital expenditures B. expense expenditures C. ordinary repairs D. revenue expenditures

When an interest-bearing note matures, the balance in the Notes Payable account is A. less than the total amount repaid by the borrower B. the difference between the maturity value of the note and the face value of the note C. equal to the total amount repaid by the owner D. greater than the total amount repaid by the owner

The interest charged on a $200,000 note payable, at a rate of 6%, on a 2-month note would be A. $12,000 B. $6,000 C. $3,000 D. $2,)

If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%? A. $3,000,000 B. $90,000 C. $300,000 D. $210,)

Hilton Company issued a four-year interest-bearing note payable for $300,000 on January 1, 2011. Each January the company is required to pay $75,000 on the note. How will this note be reported on the December 31, 2012 balance sheet? A. Long-term debt, $300,000. B. Long-term debt, $225,000. C. Long-term debt, $150,000; Long-term debt due within one year, $75,000. D. Long-term debt, $225,000; Long-term debt due within one year, $75,000.

A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011 for 648,666, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2011, is A. $30,000 B. $24,000 C. $32,434 D. $25,)

When the effective-interest method of bond discount amortization is used A. the applicable interest rate used to compute interest expense is the prevailing market interest rate on the date of each interest payment date B. the carrying value of the bonds will decrease each period C. interest expense will not be a constant dollar amount over the life of the bond D. interest paid to bondholders will be a function of the effective-interest rate on the date the bonds were issued

If a corporation has only one class of stock, it is referred to as A. classless stock B. preferred stock C. solitary stock D. common stock

Capital stock to which the charter has assigned a value per share is called A. par value stock B. no-par value stock C. stated value stock D. assigned value stock

ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2011. What is the annual dividend on the preferred stock? A. $50 per share B. $5,000 in total C. $500 in total D. $.50 per share

Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2010. The board of directors declares and pays a $45,000 dividend in 2011. What is the amount of dividends received by the common stockholders in 2011? A. $0 B. $25,000 C. $45,000 D. $20,)

When the selling price of treasury stock is greater than its cost, the company credits the difference to A. Gain on Sale of Treasury Stock B. Paid-in Capital from Treasury Stock C. Paid-in Capital in Excess of Par Value D. Treasury Stock

The purchase of treasury stock A. decreases common stock authorized B. decreases common stock issued C. decreases common stock outstanding D. has no effect on common stock outstanding

Marsh Company has other operating expenses of $240,000. There has been an increase in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities, what were Marsh's cash payments for operating expenses? A. $228,000 B. $232,000 C. $200,000 D. $280,)

Where would the event purchased land for cash appear, if at all, on the indirect statement of cash flows? A. Operating activities section B. Investing activities section C. Financing activities section D. Does not represent a cash flow

In performing a vertical analysis, the base for cost of goods sold is A. total selling expenses B. net sales C. total revenues D. total expenses

Blanco, Inc. has the following income statement (in millions): BLANCO, INC. Income Statement For the Year Ended December 31, 2011 Net Sales .............................. $200 Cost of Goods Sold .............................. 120 Gross Profit .............................. 80 Operating Expenses .............................. 44 Net Income .............................. $ 36 Using vertical analysis, what percentage is assigned to Net Income? A. 100% B. 82% C. 18% D. 25%

Dawson Company issued 500 shares of no-par common stock for $4,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share? A. Cash ........................................................... $4,500 Common Stock 4,500 B. Cash .................................... $4,500 Common Stock 1,000 Paid-In Capital in Excess of Par 3,500 C. Cash ...................... $4,500 Common Stock 1,000 Paid-In Capital in Excess of Stated Value 3,500 D. Common Stock ........................................................... $4,500 Cash 4,)

Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a A. credit to Paid-In Capital from Treasury Stock for $9,000 B. credit to Retained Earnings for $9,000 C. debit to Paid-In Capital from Treasury Stock for $45,000 D. debit to Retained Earnings for $45,)

Which of the following is a fundamental factor in having an effective, ethical corporate culture? A. Efficient oversight by the company’s Board of Directors B. Workplace ethics C. Code of conduct D. Ethics management programs

Two individuals at a retail store work the same cash register. You evaluate this situation as A. a violation of establishment of responsibility B. a violation of segregation of duties C. supporting the establishment of responsibility D. supporting internal independent verification

The Sarbanes-Oxley Act imposed which new penalty for executives? A. Fines B. Suspension C. Criminal prosecution for executives D. Return of ill-gotten gains

The Sarbanes-Oxley Act requires that all publicly traded companies maintain a system of internal controls. Internal controls can be defined as a plan to A. safeguard assets B. monitor balance sheets C. control liabilities D. evaluate capital stock

Paper For Above instruction

The use of accounting methods to estimate bad debts expense is crucial in portraying a company's financial health accurately. Hahn Company's utilization of the percentage of sales method exemplifies how management applies historical data and industry standards to estimate uncollectible accounts. By employing a 1% rate on total sales of $1,500,000 (comprising $300,000 cash sales and $1,200,000 credit sales), Hahn records a bad debts expense of $15,000, corresponding to option A. This approach directly links estimated bad debts to sales revenue, emphasizing the impact of sales volume on receivables.

Further, using the percentage of receivables method involves calculating the required adjustment based on existing allowances and estimated uncollectible accounts. Given a $15,000 estimated uncollectible amount and a current $3,000 credit balance in Allowance for Doubtful Accounts, the bad debts expense recognized will be $12,000, as reflected in option B. This method prioritizes the balance sheet's representation of receivables' net realizable value, focusing on the aging of accounts and existing allowances.

Intangible assets represent non-physical resources such as patents, trademarks, and goodwill, which provide long-term value to a company. According to accounting standards, these assets should be reported as a separate classification on the balance sheet, aligning with option B. Proper classification aids stakeholders in assessing a company's long-term assets distinct from tangible property, plant, and equipment.

The fundamental nature of intangible assets is that they do not have physical substance but confer rights and privileges through ownership. As such, they are classified under non-current assets and recognized on the balance sheet, adhering to option C. They include rights like trademarks, copyrights, or patents acquired externally, which do not manifest physically but are crucial for competitive advantage.

The book value of an asset is determined by subtracting accumulated depreciation from its original cost, thus reflecting the asset's net carrying amount. This is consistent with option D. The book value is distinct from market value, which can fluctuate independently of depreciation and original cost.

Gains on exchanges of plant assets with commercial substance are recognized immediately, in accordance with accounting principles, because these transactions affect the company's financial position. Deferred gains are not appropriate as they could distort the financial statements temporarily. The correct treatment is recognizing gains immediately, corresponding to option D.

Operating expenses for a company relate to day-to-day functions necessary to maintain operations. Ordinary repairs, which are costs incurred to keep assets in working condition, are classified as revenue expenditures, meaning they are expensed in the period incurred, as per option D. These are not capitalized because they do not enhance the asset’s future benefits but merely maintain existing utility.

Costs that increase asset efficiency or useful life, such as improvements or major upgrades, are capital expenditures, which are capitalized on the balance sheet beyond current period expenses. Accordingly, these are classified under option A. This ensures the cost is matched with future benefits over the asset's extended life.

When an interest-bearing note matures, the Notes Payable account reflects the total liability owed by the borrower, which is typically equal to the face value plus any accrued interest not yet paid. As a result, the balance corresponds to the total obligation at maturity, aligning with option C.

Calculating interest on a short-term note involves applying the annual interest rate proportionally to the period. For a $200,000 note at 6% over two months, interest is $2,000, subject to precise calculation. However, given the options, the closest and correct response is option D.

The total interest cost of bonds issued at a premium includes the nominal interest expense adjusted for the premium amortization. For a $3,000,000 bond at 10% interest, with a 30% income tax rate, the annual net cash cost accounts for tax savings. This results in an effective cash cost of approximately $210,000, matching option D.

Hilton Company's four-year note payable with annual payments of $75,000 results in a liability reduction each year. By December 31, 2012, after two payments, the remaining long-term debt is $150,000, but since payments scheduled within one year are classified separately, the proper reporting involves both long-term and current portions, as in option C.

The bonds issued by a company with a premium and an effective-interest rate of 8% require amortization of the premium over their life. The interest expense recognized for the first period (July 1, 2011) is calculated based on the bond’s carrying amount and market rate, roughly $32,434, adhering to option C.

When using the effective-interest method, the bond's carrying amount decreases over time as the premium is amortized, and interest expense varies accordingly. This method reflects the bond's amortized cost and the expense's gradual recognition, consistent with option C.

In equity capital, if a company has only one class of stock, it is known as common stock. This term is standardized in corporate finance, aligning with option D. It signifies ownership rights and voting privileges for shareholders.

Stocks assigned a specific value per share in the corporate charter are called par value stocks. This legal nominal value is fixed to regulate the minimum issuance price, matching option A.

The annual dividend on preferred stock with a stated rate of 5% and a $100 par value is calculated as $5 per share. For 1,000 shares, total dividends amount to $5,000, corresponding with option B.

In cases of noncumulative preferred stock, dividends declared and paid are allocated first to preferred shareholders, with any remaining distributed to common shareholders. Since no dividends were paid in 2010, the amount received by common stockholders in 2011 is zero, as indicated in option A.

If the selling price of treasury stock exceeds its purchase cost, the excess is credited to Paid-in Capital from Treasury Stock, reflecting the gain from the transaction, consistent with option B.

The purchase of treasury stock reduces the company's treasury stock account and decreases total stockholders' equity but does not affect the number of issued or outstanding shares directly, although indirectly it impacts outstanding shares. The most accurate is option C, as treasury stock is deducted from outstanding shares.

When preparing cash flow statements using the direct method and considering cash payments for operating expenses, adjustments include changes in prepaids and accrued liabilities. An increase in prepaid expenses and a decrease in accrued liabilities imply adjustments to payments, resulting in an approximate cash payment of $232,000, as in option B.

Events such as land purchase for cash appear on the investing activities section of the cash flow statement, as they relate to long-term asset acquisition, corresponding with option B.

Vertical analysis uses net sales as the base to analyze expense and profit percentages on the income statement. This method standardizes figures for comparative purposes, matching option B.

Vertical analysis of Blanco, Inc.’s income statement assigns 18% to net income, derived by dividing net income of $36 million by net sales of $200 million. This proportion is 18%, aligning with option C.

A corporation issuing no-par common stock for consideration must record the transaction based on the amount received and any stated or assigned value. If the stock has a stated value of $2 per share, and 500 shares are issued for $4,500, the journal entry reflects credit to common stock and paid-in capital, matching option C.

When treasury stock is resold at a price higher than cost, the gain is credited to Paid-in Capital from Treasury Stock, which is reflected in option A. This account captures the excess over the cost of treasury shares.

The purchase of treasury stock decreases the total amount of shares outstanding because these shares are held in the company's treasury, thus decreasing outstanding shares, in line with option C.

Cash payments for operating expenses, calculated under the direct method, are adjusted for changes in prepaid expenses and accrued liabilities. Given the expenses, prepaid increase, and liabilities decrease, the approximate cash paid is $232,000, as in option B.

Land purchased for cash appears in the investing activities section of the cash flow statement because it involves the acquisition of a long-term asset, which is consistent with option B.

In vertical analysis, the basis for analyzing the cost of goods sold is net sales, providing a percentage comparison of cost relative to total sales, matching option B.

Using vertical analysis, Blanco, Inc