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Brandon Rick 5 Questions Part 2

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Question 6. Given the following information, prepare a balance sheet for Brandon’s
Campstore for the year ending December 31, 2012:


Cash  38,745  Retained earnings   171,309
Common stock  43,500  Equipment   37,200
Accounts receivable  14,109  Accounts payable   26,351
Land  35,000  Inventory   81,311
Prepaid supplies  9,003  Income taxes payable   5,284
Office computer  16,399  Other PPE   26,550
Accumulated depreciation  21,013  Prepaid insurance   9,140

Question 7. Rick Company’s beginning inventory and purchases during the fiscal
year ended December 31, 2012, were as follows: (Note: The company uses a
perpetual system of inventory.)

Units Unit Price Total cost
January 1- Beginning inventory  18  24  432
March 12- Sold  13
April 11- purchased  45  29  1,305
June 20 - Sold  33
Aug 16 - Purchase  35  27  945
Sept 11 - Sod  29
Total cost of inventory
Ending inventory is 23 units  80  2,682

What is the ending inventory of Rick Company for 2012 using FIFO?

Question 8. Assume that in Year 1, the ending merchandise inventory is overstated
by $30,000. If this is the only error in Years 1 and 2, fill in the items below,
indicating which items will be understated, overstated, or correctly stated for
Years 1 and 2.

Item Year 1 Year 2
Gross Profit _____________ ______________
Net Income _____________ ______________
Ending Retained Earnings _____________ ______________

Question 9. Below is a list of treatments of accounting topics. Place GAAP on the line
if the treatment is GAAP-based and place IFRS on the line if the treatment is
IFRS-based.

A. The use of LIFO is allowed. ___________________
B. Both research and development costs are expensed as incurred.
___________________
C. Market is defined as current replacement cost. ___________________

Question 10.  Record the necessary journal entries from the following bank
reconciliation information for July 31, 2011:

Bank Balance, July 31, 2011 $ 28,542
Checkbook Balance, July 31, 2011 29,344
Bank collection of note receivable 1,545 + 210 interest
Bank service charge 75
Deposits in transit 3,145
Outstanding checks 2,685
NSF check from customer 770
Correction of book error (check #456 written for $280, recorded at $28)—maintenance expense

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