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Tammy invested $40,000 into

Price: $15.99


Q1. Given the following information, show the increase or decrease in the
accounting equation:
A. Deanne invests $45,000 and $10,000 of office equipment into the
business.
B. Furniture is purchased for $8,000 cash.
C. Supplies are purchased on credit for $2,300.
D. The month’s electric bill of $775 was paid.
E. The month’s cash sales were $5,000.

Q2. Journalize the following transactions and include the explanations.
A. Tammy invested $40,000 into her corporation on June 11.
B. Tammy purchased inventory for $95,000, of which $70,000 was on
account on June 14.
C. Tammy paid one month’s rent of $2,400 on June 16.
D. Tammy had sales of $15,000 on account on June 19.
E. Tammy had paid $2,500 on her payables account on June 21.

Q3. Prepare a trial balance from the following information for Computer
Systems, Inc. for December 31, 2012:
Accounts payable $4,298
Common stock $4,073
Sales $8,302
Cash $1,902
Notes payable $888
Wages expense $777
Supplies expense $1,028
Equipment $5,183
Accounts receivable $1,733
Inventory $6,938

Q4. Compute the missing information from this post-closing trial balance:
Cash $38,502
Accounts Receivable 14,372
Prepaid Rent 18,229
Prepaid Insurance 4,583
Supplies (A)
Accounts Payable (B)
Wages Payable 29,428
Common Stock 30,049
Retained Earnings 18,423
_______ _______
Total $80,436 $80,436

Q5. Journalize the following transactions using the perpetual inventory
method:
Nov. 1 Purchased $3,600 of merchandise from Hilltop, terms 2/10, n/30.
Nov. 5 Purchased $1,750 of merchandise for cash from Owen’s Supply.
Nov. 7 Purchased $3,400 of merchandise from Seaside, terms 1/15, n/30.
Nov. 10 Returned $500 of merchandise to Seaside. Credit Memo #131.
Nov. 11 Paid the invoice from Hilltop.

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.)

UnitsUnit PriceTotal 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

Question 11. Journalize the following transactions for Ryan Company:

July 1 Sold $5,300 of merchandise to Rick on account.
Nov. 1 Exchanged Rick’s account receivable for an eight-month, 6% note for
$5,300.
Dec. 31 Recorded accrued interest on Jim’s note (round to nearest dollar).
July 1 Rick paid off his note with interest (round to nearest dollar).

Question 12. A computer system was purchased on July 1 at a cost of $125,000. It’s
expected to be used for four years and to have a residual value of $5,000 after
8,000 hours of service. The system was used for 1,750 hours the first year and
2,100 hours the second year. Calculate the depreciation expense to the nearest
dollar for the first and second years.
Method
Year 1 Year 2
Straight-line ________ ________
Double-declining-balance ________ ________
Units-of-production ________ ________

Question 13. Prepare journal entries for the following transactions for Ryan Company
in the general journal:
Feb. 28 Machinery that cost $57,000 and had accumulated depreciation of
$46,000 was sold for $2,500.
April 10 A van that cost $23,700 and had accumulated depreciation of
$21,000 was sold for $1,250.
July 16 Equipment that cost $120,000 and had accumulated depreciation
of $112,000 was traded in for new equipment with a fair-market value of
$140,000. The old equipment and $135,000 in cash were given for the new
equipment.

Question 14. Journalize the following treasury stock transactions:
May 1 Reacquired 800 shares of $15 par common stock for $13 per share.
May 7 Sold 400 shares at $11 per share.
May 9 Sold 250 shares at $17 per share.

Question 15. The following information was taken from the financial statements of
Brandon Company for 12/31/10 and12/31/09:
Net income for 2010: $313,000
Depreciation expense for 2010: $28,400
Loss on sale of equipment: $7,300

12/31/1012/31/09
Accounts Receivable $46,000$50,000
Merchandise Inventory 35,00028,000
Accounts Payable 27,00024,000
Interest Payable 6,0008,000

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