ACCT 201 Final Exam Practice (TCC 2023) | questions| with complete solutions

A company has sales of $756,200 and cost of goods sold of $303,200. Its gross profit equals: correct answer: Sale - Cost of goods sold = gross profit $756,200 - $303,200. $453,000. Peavey Enterprises purchased a depreciable asset for $31,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $3,800, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of: correct answer: Depreciation Expense = (Cost − Salvage Value)/Estimated Useful Life Depreciation Expense = ($31,000 − $3,800)/4 $6,800.00 Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,900 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is: correct answer: Dr. Allowance for doubtful accounts 2,900 Cr. Accounts Receivable—A. Hopkins 2,900 At the end of the current year, using the aging of receivable method, management estimated that $29,250 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for