# Expert Answers

1. Woody's Cafe's real estate tax of $1,110.85 was due on November 1, 2013. Due to financial problems, Woody was unable to pay his cafe's real estate tax bill until January 15, 2014. The penalty for late payment is 81/ 4% ordinary interest. Answer the following questions:

(a) How much is the penalty Woody must pay

(b) What did Woody pay on January 15? Round all answers to the nearest cent.

2. Jane's April 1 inventory had a cost of $48,000 and a retail value of $70,000. During April, net purchases cost $210,000 with a retail value of $390,000. Net sales at retail for Jane for April were $280,000. Calculate the cost of ending inventory using the retail inventory method. (Round to the nearest hundredth percent.)

3. Use the below information to calculate the (a) net sales, (b) gross profit, (c) total operating expenses, and (d) net income.

Sales returns $700 Rent expense $1,288 Sales discounts $950 Depreciation expense $600 Cost of merchandise sold $7,600 Gross sales $20,900 Advertising expense $1,650 Salary expense $2,900 Heat expense $900

Part B: Answer each of the following questions. Be sure to show all work and calculation

1. Acme Track Incorporated received 360 pairs of Nike running shoes. Each pair sells for $58. Acme found 1/ 9 of the pairs to be defective and returned them. Assuming each pair cost Acme $26, what profit did Acme make assuming all non-defective sneakers were sold?

2. The checkbook of Vance Company had a balance of $2,210.55. The bank statement showed a balance of $4,918.18. The bank collected a $2,000 note minus a $5 service charge. There was a deposit in transit of $610.88. Several checks outstanding totaled $1,196.17. Vance collected $42.33 in interest on the checking account. Vance recorded a $300 check for $400. The bank service charge is $14.99. What is the adjusted reconciled balance?

3. Over the past month, 900 trucks were sold. Abe sold 4 times as many as Joe. How many trucks did Abe sell, and how many trucks did Joe sell?

4. Juan Sevez buys a new computer priced at $650. He makes a down payment of 15%. How much of the purchase is not paid for? (Round to nearest hundredth or hundredth as needed.)

5. Find the amount of (a) net price and (b) trade discount using the following information:

Stove List $1,400 Chain discount 13/10/46. Assume markup is based on cost.

Solve for the actual cost using the information below. Round your answer to the nearest cent.

7. Mobilee Oil Company accepted a $10,000, 120-day note dated March 3 at 8112% to settle a past-due account receivable. Mobilee Oil discounted the note to raise cash on May 10 at a discounted rate of 9%. What proceeds did Mobilee Oil receive? Use ordinary interest.

8. Adjax bought a machine for $86,000. Its estimated life is 10 years with a residual value of $6,000. Using the straight-line method, what is the book value of the machine at the end of year 2?

9. A business's total sales, including a 5% tax, were $23,152.81. Calculate the (a) actual sales and (b) sales tax liability.

10. Jim Leary insured his bookstore with a fire insurance policy of $90,000 at a cost of $0.58 per $100. Eight months later, his insurance company canceled the policy because of failure to correct a fire hazard. What did Jim have to pay for the eight months of coverage?

(a) How much is the penalty Woody must pay

(b) What did Woody pay on January 15? Round all answers to the nearest cent.

2. Jane's April 1 inventory had a cost of $48,000 and a retail value of $70,000. During April, net purchases cost $210,000 with a retail value of $390,000. Net sales at retail for Jane for April were $280,000. Calculate the cost of ending inventory using the retail inventory method. (Round to the nearest hundredth percent.)

3. Use the below information to calculate the (a) net sales, (b) gross profit, (c) total operating expenses, and (d) net income.

Sales returns $700 Rent expense $1,288 Sales discounts $950 Depreciation expense $600 Cost of merchandise sold $7,600 Gross sales $20,900 Advertising expense $1,650 Salary expense $2,900 Heat expense $900

Part B: Answer each of the following questions. Be sure to show all work and calculation

1. Acme Track Incorporated received 360 pairs of Nike running shoes. Each pair sells for $58. Acme found 1/ 9 of the pairs to be defective and returned them. Assuming each pair cost Acme $26, what profit did Acme make assuming all non-defective sneakers were sold?

2. The checkbook of Vance Company had a balance of $2,210.55. The bank statement showed a balance of $4,918.18. The bank collected a $2,000 note minus a $5 service charge. There was a deposit in transit of $610.88. Several checks outstanding totaled $1,196.17. Vance collected $42.33 in interest on the checking account. Vance recorded a $300 check for $400. The bank service charge is $14.99. What is the adjusted reconciled balance?

3. Over the past month, 900 trucks were sold. Abe sold 4 times as many as Joe. How many trucks did Abe sell, and how many trucks did Joe sell?

4. Juan Sevez buys a new computer priced at $650. He makes a down payment of 15%. How much of the purchase is not paid for? (Round to nearest hundredth or hundredth as needed.)

5. Find the amount of (a) net price and (b) trade discount using the following information:

Stove List $1,400 Chain discount 13/10/46. Assume markup is based on cost.

Solve for the actual cost using the information below. Round your answer to the nearest cent.

7. Mobilee Oil Company accepted a $10,000, 120-day note dated March 3 at 8112% to settle a past-due account receivable. Mobilee Oil discounted the note to raise cash on May 10 at a discounted rate of 9%. What proceeds did Mobilee Oil receive? Use ordinary interest.

8. Adjax bought a machine for $86,000. Its estimated life is 10 years with a residual value of $6,000. Using the straight-line method, what is the book value of the machine at the end of year 2?

9. A business's total sales, including a 5% tax, were $23,152.81. Calculate the (a) actual sales and (b) sales tax liability.

10. Jim Leary insured his bookstore with a fire insurance policy of $90,000 at a cost of $0.58 per $100. Eight months later, his insurance company canceled the policy because of failure to correct a fire hazard. What did Jim have to pay for the eight months of coverage?

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