ACNT-2332 Accounting Information Systems_Winter 2024
33. (Bad-Debt Reporting) From inception of operations to December 31, 2014, Fortner Corporation pro-
(Bad-Debt Reporting) From inception of operations to December 31, 2014, Fortner Corporation pro- videdfor uncollectible accounts receivable under the allowance method. Provisions were made monthly at
2% of credit sales, bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account, and no year-end adjustments to the allow- ance account were made. Fortner ’s usual credit terms are net 30 days.
The balance in Allowance for Doubtful Accounts was $130,000 at January 1, 2014. During 2014, credit sales totaled $9,000,000, interim provisions for doubtful accounts were made at 2% of credit sales, $90,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $15,000. Fort- ner installed a computer system in November 2014, and an aging of accounts receivable was prepared for the first time as of December 31, 2014. A summary of the aging is as follows.
Classification by Month of Sale | Balance in Each Category | Estimated % Uncollectible | ||
November–December 2014 | $1,080,000 | 2% | ||
July–October | 650,000 | 10% | ||
January–June | 420,000 | 25% | ||
Prior to 1/1/14 | 150,000 | 80% | ||
$2,300,000 |
Based on the review of collectibility of the account balances in the “prior to 1/1/14” aging category, addi- tional receivables totaling $60,000 were written off as of December 31, 2014. The 80% uncollectible estimate applies to the remaining $90,000 in the category. Effective with the year ended December 31, 2014, Fortner adopted a different method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable.
Instructions
(a) Prepare a schedule analyzing the changes in Allowance for Doubtful Accounts for the year ended December 31, 2014. Show supporting computations in good form. ( Hint: In computing the 12/31/14 allowance, subtract the $60,000 write-off.)
(b) Prepare the journal entry for the year-end adjustment to Allowance for Doubtful Accounts balance as of December 31, 2014.
34. Spicewood Stables, Inc., was established in Dripping Springs, Texas, on April 1. The company...
Spicewood Stables, Inc., was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April are provided for your review.
- Received contributions from investors and issued $230,000 of common stock on April 1.
- Acquired a barn for $180,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance.
- Provided $18,000 in animal care services for customers on April 3, all on credit.
- Rented stables to customers who cared for their own animals; received cash of $14,000 on April 4 for rent earned this month.
- On April 5, received $3,350 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue).
- Purchased and received hay and feed supplies on account on April 6 for $3,800.
- Paid $2,600 on accounts payable on April 7 for previous purchases.
- Received $2,040 from customers on April 8 on accounts receivable.
- On April 9, prepaid a two-year insurance policy for $4,800 for coverage starting in May.
- On April 28, paid $1,140 in cash for water and utilities used this month.
- Paid $14,800 in wages on April 29 for work done this month.
- Received an electric utility bill on April 30 for $1,560 for usage in April; the bill will be paid next month.
Required:
- 1. Prepare the journal entry for each of the above transactions.
- 2. Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations.
- 3. Prepare an unadjusted trial balance as of April 30.
- 4-a. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income and net profit margin.
- 4-b. Determine whether the net profit margin is better or worse than the 30.0 percent earned by a close competitor.
35. 1) Themes applied to text formatted as paragraphs are located in the ________ tab of the Ribbon. A).
1) Themes applied to text formatted as paragraphs are located in the ________ tab of the Ribbon.
A) Home
B) Design
C) Page Layout
D) View
2) The font often applied to the text in the body of a longer newsletter is ________.
A) Century Gothic-Palatino
B) Times New Roman
C) serif
D) sans serif
3) When text is formatted in columns, and formatting marks are visible, a ________ break appears above the text in Column Layout.
A) paragraph
B) page
C) section
D) column
4) Which option aligns text with both the right margin and the left margin?
A) Left
B) Center
C) Right
D) Justify
5) Margins can be customized in the ________ dialog box.
A) Columns
B) Page Setup
C) Paragraph
D) Styles
6) Unless the user specifies otherwise, options set in the Page Setup dialog box are applied to the current ________.
A) paragraph
B) page
C) section
D) document
7) By default, the gap between columns is ________ inch.
A) 0.25
B) 0.5
C) 0.75
D) 1.0
8) The Break button is in the Setup group of the ________ tab.
A) Home
B) Design
C) Page Layout
D) View
9) Outlines, Shadow, Reflections, and Glow are options in the ________ gallery.
A) Themes
B) Text Effects
C) Column Styles
D) Styles
10) Formatting marks can be hidden from view by ________.
A) clicking the Show/Hide button
B) clicking the Text Effects and Typography button
C) setting the zoom option to One Page
D
36. Cost Calculation
The following cost data for the year ended pertain to a greeting card manufacturer:
Service dept costs $ 50000
Direct labour: wages $242500
Direct labour: fringe benefits $ 47500
Indirect labour fringe benefits $ 15000
Fringe benefits for production supervisor $ 4500
Total overtime premiums paid $ 27500
Cost of idle time:production employees $ 20000
Administrative costs$ 75000
Rental of office space for sales personnel $ 7500
Sales commissions $ 2500
Product promotion costs $ 5000
Direct material $ 1050000
Advertising expense $ 49500
Depreciation on factory building $ 57500
Cost of finished goods inventory $ 57500
Indirect labour:wages $ 70000
Production supervisor`s salary $ 2200
* All services are provided to manufacturing departments.
Cost of idle item is an overhead item, it is not included in direct labour wages given above.
* The rental of sales space was made necessary when the sales offices were converted to storage space for raw material.
Required:
1. Compute each of the following costs for the year just ended:
a. Total prime costs
b. Total manufacturing costs
c. Total overhead costs
d. Total product costs
e. Total period costs
2. One of the costs listed above is an opportunity cost. Identify this cost, and explain why it is an opportunity cost.
37. Given the following tax structure, what minimum tax would need to be assessed on Shameika to make...
Given the following tax structure, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to average tax rates?
Taxpayer | Salary | Muni-Bond Interest | Total Tax |
Mihwah | $19,000 | $7,600 | $1,805 |
Shameika | $77,000 | $33,500 | ??? |
38. 7.45 The fill amount of bottles of a soft drink is normally distributed, with a mean of 2.0 liters..
7.45 The fill amount of bottles of a soft drink is normally distributed, with a mean of 2.0 liters and a standard deviation of 0.05 liter. If you select a random sample of 25 bottles, what is the probability that the sample mean will be a. between 1.99 and 2.0 liters? b. below 1.98 liters? c. greater than 2.01 liters? d. The probability is 99% that the sample mean amount of soft drink will be at least how much? e. The probability is 99% that the sample mean amount of soft drink will be between which two values (symmetrically distributed around the mean)?
39. McGraw Hill Connect, Chapter 8 Accounting
McGraw Hill Connect, Chapter 8 Accounting assignment includes:
CHAPTER 8 HOMEWORK and CHAPTER 8 QUIZ completed online through McGraw Hill Connect site with my credentials DUE NO LATER THAN Sunday, 04-14-2013
AS WELL AS:
Upload DOCUMENTS of Chapter 8 TEST submitted to me through homework market DUE NO LATER THAN Sunday 04-14-2013---- SEE BELOW:
For $40.00 total, due no later than 04-14-2013
Down payment of $15
Chapter 8 TEST document:
PROBLEM #1 22 points
Greenview Food Store developed the following information in recording its bank statement for the month of March 20XX.
Balance per books on March 31 $ 829
Balance per bank on March 31 $ 7,030
1) Checks written in March but still outstanding, $5,200.
2) Checks written in February but still outstanding, $1,200.
3) Deposits of March 30 and 31 not yet recorded by bank, $3,100.
4) NSF check of customer returned by bank, $400.
5) Check #210 for $675 was correctly issued and paid by the bank but incorrectly entered in the cash payments journal as payment on account for $657, for payment to a creditor.
6) Bank service charge for March was $31.
7) A payment on account was incorrectly entered into the cash payments journal and posted to the accounts payable subsidiary ledger for $854 when check #318 was correctly prepared for $584. The check cleared the bank in March.
8) The bank collected a note receivable for the company for $3,000 plus $80 interest.
Instructions:
a) Prepare a bank reconciliation for the Greenview Food Store for the month of March 31, 20XX.
b) Journalize the adjusting entries for Greenview Food Store on March 31, 20XX.
Bank Reconciliation:
Journal Entries:
General Journal | ||||
Date | Description | Debit | Credit | |
PROBLEM #2 18 points
Jenrob Company completed the following selected transactions during January 20XX.
January 1 Established a petty cash fund of $500
15 The cash sales for the day per the register tape were $3,018.
The actual cash received from cash sales were $3,011.
31 Petty cash on hand was $123. Replenished the petty cash fund for the following
disbursements:
Jan 2 Office supplies, $45
10 Postage due on letter, $29 (Miscellaneous Expense)
14 Office supplies, $56.
17 Postage stamps, $42 (Office Supplies).
20 Express charges on merchandise sold, $136 (Delivery Expense).
22 Repair to desk, $63 (Miscellaneous Expense).
30 Office supplies, $12.
31 The cash sales for the day per the register tape were $2,812.
The actual cash received from cash sales were $2,822.
31 Decreased the petty cash fund by $100.
General Journal | ||||
Date | Description | Debit | Credit | |
What is the balance in the cash short/over account (DR or CR & $ amount)? Is it a revenue or an expense?
Balance in Cash Short/Over? ______________________________
Revenue or Expense? ____________________________________
40. Which of the following is not true about rapid application development (RAD)? O Prototyping is an...
Which of the following is not true about rapid application development (RAD)?
O Prototyping is an example of RAD
O Documents are created before the prototype. It is an alternative to the waterfall approach.
O A prototype is developed before system documents
Control commands are keywords in a programming language that allow the programmer to direct the flow of the program based on a decision.
True O False
41. Multiple choice
1. Panjim's prepaid expense account consists only of garage rental prepayments. Its 2005 beginning and ending balance were the same. Which one of the following statements must be true?
Panjim had no garage rental expenses during 2005
Panjim's prepaid expense account balance never varied during 2005
Panjim's prepaid expense account balance varied during 2005
None of the above statements is true
2. Juan Foods purchases a computer system in 2005 for $20,000. Its expected useful life is 5 years. At the end of 2005, it has to record depreciation on the computer system of $2,000.
What is the correct journal entry to record the depreciation?
Debit computer system $2,000; credit depreciation expense $2,000
Debit accumulated depreciation $2,000; credit computer system $2,000
Debit depreciation expense $2,000; credit accumulated depreciation $2,000
Debit computer system $2,000; credit accumulated depreciation $2,000
3. Jackie's Crafts is a successful retailer of fabric by the yard and other sewing supplies. If Jackie were to shut down the store, the bolts of fabrics and the bins of lace and trim, inventory valued at $20,000, on average, at any point in time, would have to be sold for about 10% of that value. But, Jackie's accountant does not feel the need to reduce the value of the inventory on the books.
This is a reflection of the:
Consistency concept
Materiality concept
Historical cost concept
Going-concern concept
4. Weldon Engineering owes one of its creditors $20,000. To settle the debt, Weldon pays $5,000 cash and also issues common stock valued at $15,000 to the creditor.
How would this repayment of the $20,000 debt be recorded in Weldon's books?
Debit debt owed $20,000; credit cash $5,000; credit common stock $15,000
Debit common stock $15,000; debit cash $5,000; credit debt owed $20,000
Debit common stock $15,000; debit debt owed $5,000; credit cash $20,000
Debit debt owed $5,000; credit cash $5,000
42. Multiple-choice questions 1.The entity that is represented by a single set of consolidated financial
Multiple-choice questions
1.The entity that is represented by a single set of consolidated financial statements is:
a.an economic entity.
b.a parent entity.
c.a subsidiary entity.
d.a consolidated entity.
2.AASB 10 Consolidated Financial Statements defines a ‘parent’ and a ‘subsidiary’ as which of the following?
Parent | Subsidiary | |
a. | An entity which is controlled by another entity. | An entity that controls one or more entities. |
b. | An entity which owns more than 20% of the voting shares of another entity. | An entity which is owned partly by another entity. |
c. | An entity that has one or more subsidiaries. | An entity which is controlled by a parent entity. |
*d. | An entity that controls one or more entities. | An entity which is controlled by another entity. |
3.A single set of financial statements that combines the separate sets of financial statements for all entities within an economic entity, is known as:
a.a concise financial report.
b.a condensed financial report.
c.combined financial statements.
d.consolidated financial statements.
4.A group of entities comprised of Kerri Limited (parent entity), Georgia Limited (subsidiary entity) and Emily Limited (subsidiary entity) have the following inventory balances.
- Kerri Limited $41 000
- Georgia Limited $14 000
- Emily Limited $12 000
Which of the following amounts is shown as the consolidated inventory balance in the consolidated financial statements?
a.$12 000
b.$14 000
c.$26 000
d.$67 000
5.The process of preparing consolidated financial statements requires that:
a.no adjustments be made to the individual financial statements or ledger accounts of the entities in the group.
b.adjusting journal entries be recorded in the ledger accounts of the subsidiaries only.
c.accruals of expenses and revenues be recorded directly into the retained earnings account of the parent entity.
d.adjusting journal entries be recorded in the ledger accounts of the parent only.
6. When one entity controls another entity, the business combination results in which of the following types of relationship?
a. Parent–subsidiary
b. Investor–investee
c. Investor–associate
d. Parent–child
7. The process of preparing the combined financial statements of a group of entities is known as:
a. aggregation.
b. combination.
c. accumulation.
d. consolidation.
8. The reasons for the preparation of consolidated financial statements include which of the following?
a. Reporting of risks and benefits
b. Comparable information
c. Supply of relevant information
d. All of the above
9. For the purposes of consolidated financial reporting, a group is:
a. an investor and its investees.
b. a parent entity and all its subsidiaries.
c. an entity that has one or more subsidiaries.
d. an entity that is controlled by a parent.
10. A subsidiary is an entity that:
a. has significant influence over a parent entity.
b. exercises control over a parent entity.
c. has the power to control a parent entity.
d. is controlled by another entity.