Financial Statements: Tips for Accounting Students_2024
12. Identify which accounts are affected in each transaction...
Journal Entries and Trial Balance On January L, 20t9, Sharon Matthews established Tri-City Realty, which completed the following transactions during the month: a. Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $20,000. b. Paid rent on office and equipment for the month, $3,650. c. Purchased supplies on account, $1,080. d. Paid creditor on account, $400. e. Earned fees, receiving cash, $15,600. f. Paid automobile expenses (including rental charge) for month, $1.010, and miscellaneous expenses, $680. g. Paid office salaries, $2,120. h. Determined that the cost of supplies used was $600. i. Withdrew cash for personal use, $980. Required: 1. .lourrralize entries for transactions (a) through (i) (in chronological order), using the following account titles: Cash; Supplies; Accounts Payable; Sharon Matthews, Capital; Sharon Matthews, ilrarving; Fees Earned; Rent Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. For a compound transaction, if an amount box does not require an entry, leave it blank. a. g?ql--lt 2O,OO0 € Accounts Payable X b. Sharon Matthews, Capital X 2O,OOC 4oo x Rent Expense X 3,650 , { d. g. h. L2) Feedback Check My Work 1. Identify which accounts are affected in each transaction. Keep in mind that every transaction involves at least two accounts. Determine whether the account increases or decreases and record each increase or decrease following the rules of debit and credit. Remember total debits should equal total credits in your entries. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these T accounts, selecting the appropriate letter to the left of each amount to identify the transactions. Determine the account balances (when required), after all posting is complete, for all accounts having two or more debits or credits. Cash Supplies Bal. 3; Sharon Matthews, Capital Accounts Payable t_ Sharon Matthews, Drawing Fees Earned t_ Rent Expense Office Salaries Expense Automobile Expense Supplies Expense ( ql Miscellaneous Expense L_j I Feedback Check My Work 2. Each increase or decrease recorded in the journal entries corresponds to a debit or credit in the T-accounts, following the rules of debit and credit. Net debits against credits to determine the balance in each T-account and double-check to see if it is a normal balance for that account classification. 3, Prepare an unadjusted trial balance as of January 31, 2019. For those boxes in which no entry is required, leave the box blank. Tri-City Realty Una{iusted Trial Balance January 31, 2019 Debit Credit Balane Balans r-"---"1 i--! iil I l---- -r r-- --, J rlll illl -J !------'.J a__l , __-,___l tii t__."J |_J r-atltt L-"----J i,"--" ---! i::: [--: i__i i----t t.-.-." -,--.i i---l t_-_ J r- l ,.._ ,._.,-i l-"-l i-_._,1 r---r it ti [::t r--*l iiilriti Feedback $ Feedback Check My Work Partially conect 1 more Check My Work uses remaining. (51 Check My S/ork 3. Prepare the trial balance using the ending balances of the T-accounts. Again, double-check to see if each account has a normal balance for that account classification placed in the proper Debit or Credit column. The trial balance column totals should be equal. 4. As a result of the January transactions (a-i), determine the following: a. Amount of total revenue recorded in the ledger. $, b. Amount of total expenses recorded in the ledger. $l c. Amount of net income for January. $ 5. Determine the total increase or decrease in owner's eqLlily for January. Feedback Check My Work 4. Look at the ending balance for each revenue and expense account. Add all expense account amounts together to obtain a total used to calculate: Revenue - Expenses = Net Income (Loss). 5. Compare the ending balance of the owner's equity to the beginning balance of owner's equity. Recall that owner's equity increases with revenues and decreases with expenses and withdrawals. Put another way, net income(loss) is the net change in all assets and liabilities from operating (revenue and expense) transactions that increases or decreases owner's equity.
13. 82. Wellington Corp. has outstanding accounts receivable totaling $2.54 million as of December 31...
82. Wellington Corp. has outstanding accounts receivable totaling $2.54 million as of December 31 and sales on credit during the year of $12.8 million. There is also a debit balance of $6,000 in the allowance for doubtful accounts. If the company estimates that 1% of its net credit sales will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense?
a. $ 25,400.
b. $ 31,400.
c. $122,000.
d. $134,000.
83. Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and sales on credit during the year of $24 million. There is also a credit balance of $12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year?
a. $ 532,000.
b. $ 520,000.
c. $1,920,000.
d. $ 508,000.
84. Wellington Corp. has outstanding accounts receivable totaling $3 million as of
December 31 and sales on credit during the year of $15 million. There is also a debit balance of $12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense?
a. $1,200,000.
b. $ 228,000.
c. $ 240,000.
d. $ 252,000.
85. At the close of its first year of operations, December 31, 2010, Ming Company had accounts receivable of $540,000, after deducting the related allowance for doubtful accounts. During 2010, the company had charges to bad debt expense of $90,000 and wrote off, as uncollectible, accounts receivable of $40,000. What should the company report on its balance sheet at December 31, 2010, as accounts receivable before the allowance for doubtful accounts?
a.$670,000
b.$590,000
c.$490,000
d.$440,000
86. Before year-end adjusting entries, Dunn Company's account balances at December 31, 2010, for accounts receivable and the related allowance for uncollectible accounts were $600,000 and $45,000, respectively. An aging of accounts receivable indicated that $62,500 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is
a.$582,500.
b.$537,500.
c.$492,500.
d.$555,000.
87. During the year, Kiner Company made an entry to write off a $4,000 uncollectible account. Before this entry was made, the balance in accounts receivable was $50,000 and the balance in the allowance account was $4,500. The net realizable value of accounts receivable after the write-off entry was
a.$50,000.
b.$49,500.
c.$41,500.
d.$45,500.
88. The following information is available for Murphy Company:
Allowance for doubtful accounts at December 31, 2009$ 8,000
Credit sales during 2010400,000
Accounts receivable deemed worthless and written off during 20109,000
As a result of a review and aging of accounts receivable in early January 2011, however, it has been determined that an allowance for doubtful accounts of $5,500 is needed at December 31, 2010. What amount should Murphy record as "bad debt expense" for the year ended December 31, 2010?
a.$4,500
b.$5,500
c.$6,500
d.$13,500
Use the following information for questions 89 and 90.
A trial balance before adjustments included the following:
Debit Credit
Sales$425,000
Sales returns and allowance$14,000
Accounts receivable43,000
Allowance for doubtful accounts760
89. If the estimate of uncollectibles is made by taking 2% of net sales, the amount of the adjustment is
a.$6,700.
b.$8,220.
c.$8,500.
d.$9,740.
90. If the estimate of uncollectibles is made by taking 10% of gross account receivables, the amount of the adjustment is
a.$3,540.
b.$4,300.
c.$4,224.
d.$5,060.
91. Lankton Company has the following account balances at year-end:
Accounts receivable$60,000
Allowance for doubtful accounts3,600
Sales discounts2,400
Lankton should report accounts receivable at a net amount of
a.$54,000.
b.$56,400.
c.$57,600.
d.$60,000.
14. A. Calculate the value 5 years hence of a deposit of `1,000 made today if the interest rate is (a) 8
A. Calculate the value 5 years hence of a deposit of `1,000 made today if the interest rate is (a) 8 per cent, (b) 10 per cent, (c) 12 per cent, and (d) 15 per cent.
B. If you deposit Rs.5,000 today at 12 per cent rate of interest, in how many years (roughly) will
this amount grow to Rs 160,000? Work this problem using the rule of 72—do not use tables.
C. A finance company offers to give `8,000 after 12 years in return for Rs 1,000 deposited today.
Using the rule of 72, figure out the approximate interest rate offered.
15. Smoky Mountain Corporation makes two types of hiking boots—Xtrem
Smoky Mountain Corporation makes two types of hiking boots—Xtreme and the Pathfinder. Data concerning these two product lines appear below:
The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:
Required:
1. Using Exhibit 8–12 as a guide, compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system.
2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs):
Using Exhibit 8—10 as a guide, compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.
3. Using Exhibit 8—13 as a guide, prepare a quantitative comparison of the traditional and activity-based cost assignments. Explain why the traditional and activity-based cost assignmentsdiffer.
16. 10 fast questions
1. A $600,000 bond was retired at 98 when the carrying value of the bond was $592,000. The entry to record the retirement would include a (Points : 2) gain on bond redemption of $8,000.
loss on bond redemption of $8,000.
loss on bond redemption of $4,000.
gain on bond redemption of $4,000.
higher when bonds sell at a discount. |
$240,450. |
$15,080 |
$200,000 |
gain on bond redemption of $18,000. |
Bonds Payable for $150,000. |
issue the bonds. |
credit of $10,040 to Loss on Bond Redemption. |
debit to Cash of $3,000,000. |
17. Accounting Homework Help: Adjusting Trial Balance
Bella Beauty Salon's unadjusted trial balance for the current year follows:
Bella Beauty Salon
Trial Balance
December 31
Additional information: a. An insurance policy examination showed $1,400 of expired insurance. b. An inventory count showed $280 of unused shop supplies still available. c. Depreciation expense on shop equipment, $350. d. Depreciation expense on the building, $2,220. e. A beautician is behind on space rental payments, and this $200 of accrued revenue was unrecorded at the time the trial balance was prepared. f. $800 of the Unearned Rent account balance was earned by year-end. g. The one employee, a receptionist, works a five-day workweek at $50 per day. The employee was paid last week but has worked four days this week for which she has not been paid. h. Three months' property taxes, totaling $450, have accrued. This additional amount of property taxes expense has not been recorded. i. One month's interest on the note payable, $600, has accrued but is unrecorded.
Based on the above information, prepare the adjusting journal entries for Bella's Beauty Salon. Use the above information to prepare the adjusted trial balance for Bella's Beauty Salon. |
18. Multiple choice
1. Which of the following is usually the most difficult cost to determine
Service cost
Facility cost
Calling cost
Waiting cost
None of the above
2. Given an activity's optimistic, most likely, and pessimistic time estimates of 3, 6, and 9 days respectively, compute the PERT variance for this activity.
3
1
9
6
none of the above
3. For a local hardware store, the total service cost is $10 per hour per employee and the waiting cost is $8 per hour per customer. Customers arrive at a rate
per hour. On average a customer waits a total of 6 minutes. If a single clerk is employed, what is the total cost of the system
$26.00
$106.00
$16.00
$10.6
none of the above
4. In a PERT network, thef earliest (activity) start time is the:
earliest time that an activity can be finished without delaying the entire project.
latest time that an activity can be started without delaying the entire project.
earliest time that an activity can start without violation of precedence requirements.
latest time that an activity can be finished without delaying the entire project.
none of the above.
19. Discuss how an individual"s investment strategy may change as he or she goes through the...
Discuss how an individual"s investment strategy may change as he or she goes through the accumulation, consolidation, spending, and gifting phases of life.
20. 1.The relationship of $225,000 to $125,000, expressed as a ratio, is a.2.0 to 1 b.1.8 to 1 c.1.5 to.
1.The relationship of $225,000 to $125,000, expressed as a ratio, is
a.2.0 to 1
b.1.8 to 1
c.1.5 to 1
d.0.56 to 1
2.If comparative balance sheets indicate no notes receivable on the preceding year and a $40,000 note receivable on the current year, the increase of $40,000
a.can be stated as 0%
b.can be stated as 100% increase
c.cannot be stated as a percentage
d.can be stated as 500% increase
3.Assume that Axle Company reported a net loss of $50,000 in 2006 and net income of $250,000 in 2007. The increase in net income of $300,000
a.can be stated as 0%
b.can be stated as 100% increase
c.cannot be stated as a percentage
d.can be stated as 200% increase
4.The percentage analysis of increases and decreases in individual items in comparative financial statements is called
a.vertical analysis
b.solvency analysis
c.profitability analysis
d.horizontal analysis
5.Which of the following below generally is the most useful in analyzing companies of different sizes
a.comparative statements
b.common-sized financial statements
c.price-level accounting
d.audit report
6.The percent of fixed assets to total assets is an example of
a.vertical analysis
b.solvency analysis
c.profitability analysis
d.horizontal analysis
7.What type of analysis is indicated by the following?
Increase (Decrease*) | ||||
2007 | 2006 | Amount | Percent | |
Current assets | $380,000 | $500,000 | $120,000* | 24%* |
Fixed assets | 1,680,000 | 1,500,000 | 180,000 | 12% |
a.vertical analysis
b.horizontal analysis
c.liquidity analysis
d.common-size analysis
8.An analysis in which all the components of an income statement are expressed as a percentage of net sales is called
a.vertical analysis
b.horizontal analysis
c.liquidity analysis
d.common-size analysis
9.A balance sheet that displays only component percentages is called
a.trend balance sheet
b.comparative balance sheet
c.condensed balance sheet
d.common-sized balance sheet
10.One reason that a common-size statement is a useful tool in financial analysis is that it enables the user to
a.judge the relative potential of two companies of similar size in different industries.
b.determine which companies in a single industry are of the same value.
c.determine which companies in a single industry are of the same size.
d.make a better comparison of two companies of different sizes in the same industry.
21. An analysis of the transactions made by Mark Kotsay &
An analysis of the transactions made by Mark Kotsay & Co., a certified public accounting firm, for the month of August is shown below. The expenses were $650 for rent, $4,800 for salaries and wages, and $500 for utilities
br>Instructions
(a) Describe each transaction that occurred for the month.
(b) Determine how much owner’s equity increased for the month.
(c) Compute the amount of net income for themonth.
22. Problem 6-1A and 6-2A, my ending gross profit for 6-2A did not match the books given answer and I...
Problem 6-1A and 6-2A, my ending gross profit for 6-2A did not match the books given answer and I am not sure where I am going wrong. Problems: Series A Obj. 2, 3 3.58,983,125 The beginning inventory at Midnight Supplies and data on purchases and sales for a three- PR 6-1A FIFO perpetual inventory month period ending March 31 are as follows Per Unit Number of Units 7,500 75.00 562,500 22,500 11,250 3,750 150.00 1,500 54,000 Total SHOW ME HOW DatTrs action EXCEL TEMPLATE 1,912,500 Jait. urchase1125 50.00225,000 ventory 85.00 150.00 28 Sale 30 Sale 1,687500 Feb. 5 Sale 10 Purchase 16 Sale 28 Sale 87.50 27,000 60.00 4027500 25,500 89.50 4.800,000 4,725,000 4,320,000 4,080,000 V 160.00 Mar. 5 Purchase 30,000 160.00 (4800,000 90.00 14 Sale 675,000 v 7,500 26250160.00 4200,000) v 25 Purchase 30 Sale (Continued)