Friday, 8 May 2020

Nichols, Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 75,000 shares of $1 par value common stock outstanding at December 31 of the current year. What is the annual dividend that will be paid to the preferred stockholders?

Nichols, Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 75,000 shares of $1 par value common stock outstanding at December 31 of the current year. What is the annual dividend that will be paid to the preferred stockholders?

A.$6,000

B.$1,000

C.$100,000

D.$0. Preferred stockholders are not guaranteed an annual dividend payment.
Answer
6000

The selling price of a television is $2,000 and the cost to the retailer is $325.
What is the retailer's gross profit from the sale of the television?

A.$2,000

B.$1,675

C.$0
Answer
1675

Kathy's Corner Store has total cash sales for the month of $32,000 excluding sales taxes. If the sales tax rate is 7%, which journal entry is needed? (Ignore Cost of Goods Sold.)

A.debit Cash $34,240, credit Sales Revenue $34,240

B.debit Cash $34,240, credit Sales Revenue $32,000 and credit Sales Tax Payable $2,240

C.debit Cash $32,000 and credit Sales Revenue $32,000

D.debit Cash $29,760, debit Sales Tax Receivable for $2,240 and credit Sales Revenue for $ 32000
Answer
B.debit Cash $34,240, credit Sales Revenue $32,000 and credit Sales Tax Payable $2,240

Marjorie Company's cash balance per the books at the end of the month was $9,000. After comparing the company's records with the monthly bank statement, Marjorie's accountant identified the following reconciling items: outstanding checks, $800; deposits in transit, $700; bank service charge, $20; and NSF check, $400.
The bank collection of a note receivable was $1,500 plus interest of $130. There also was an EFT payment of $150. What is the adjusted book balance at the end of the month?

A.$8,900

B.$10,210

C.$10,080

D.$ 10060
Answer
D.$ 10060


A business purchased office supplies of $22,000 on account. The business would:

A.
debit Supplies for $22,000 and credit Accounts Payable for $22,000.

B.debit Supplies for $22,000 and credit Cash for $22,000.

C.debit Accounts Receivable for $22,000 and credit Supplies for $22,000.

D.debit Accounts Payable for $22,000 and credit Supplies for $22,000.
Answer
A.
debit Supplies for $22,000 and credit Accounts Payable for $22,000.

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