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Course: ACCT I S 100, Fall 2011
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3 1. a. b. c. d. e. f. g. h. i. j. Received Chapter cash for services rendered. Purchased office equipment on credit. Paid employees' salaries. Received cash from customer in payment on account. Paid telephone bill for the month. Paid for office equipment purchased in transaction 2. Purchased office supplies on credit. Dividends were paid. Obtained a loan from the bank. Billed customers for services rendered....

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3 1. a. b. c. d. e. f. g. h. i. j. Received Chapter cash for services rendered. Purchased office equipment on credit. Paid employees' salaries. Received cash from customer in payment on account. Paid telephone bill for the month. Paid for office equipment purchased in transaction 2. Purchased office supplies on credit. Dividends were paid. Obtained a loan from the bank. Billed customers for services rendered. Assets + + = Liabilities + Stockholders Equity + + + , + + + + + + 2. a. b. c. d. e. f. g. h. i. Supplies ..................................................................................... Accounts Payable ............................................................. 500 Equipment ................................................................................. Cash ................................................................................. Notes Payable .................................................................. 15,000 Rent Expense ............................................................................ Cash ................................................................................. 700 Accounts Payable ...................................................................... Cash ................................................................................. 250 Advertising Expense .................................................................. Accounts Payable ............................................................. 800 Salaries and Wages Expense ................................................... Cash ................................................................................. 2,500 Cash Dividends ......................................................................... Cash ................................................................................. 1,200 Accounts Receivable .................................................................. Service Revenue ............................................................... 12,500 Cash ........................................................................................... Service Revenue ............................................................... 7,000 500 3,500 11,500 700 250 800 2,500 1,200 12,500 7,000 Chapter 4 3. a. Depreciation Expense ..................................................................... Accumulated DepreciationEquipment ................................. 1,340 1,340 b. Supplies Expense ............................................................................ Supplies .................................................................................. ($550 $150) 400 c. Rent Expense .................................................................................. Prepaid Rent ........................................................................... 700 d. Salaries Expense .......................................................................... Salaries Payable ...................................................................... 900 e. Interest Receivable ......................................................................... Interest Revenue ..................................................................... 410 f. Property Taxes Expense ................................................................. Property Taxes Payable ......................................................... 800 g. Unearned (Legal) Service Revenues ............................................... (Legal) Service Revenues ...................................................... ($4,000 $900) 3,100 400 700 900 410 800 3,100 5. March 31 Service Revenue ............................................................... 39,600 Rent Revenue .................................................................... 14,400 Income Summary ....................................................... 54,000 Income Summary............................................................... 36,600 Salaries Expense ........................................................ Rent Expense .............................................................. Office Supplies Expense ............................................. Insurance Expense...................................................... Depreciation Expense ................................................. 20,100 12,000 1,800 1,500 1,200 Income Summary............................................................... Retained Earnings ...................................................... 17,400 17,400 Retained Earnings ...................................................................... Dividends ............................................................ 3,800 31 31 31 3,800 Chapter 5 1. July 1 4 10 11 5,000 Cost of Goods Sold Inventory 2 Accounts Receivable Sales. 2,500 Inventory Accounts Payable.. 6,000 Inventory Accounts Payable.. 1,000 Cash ($5,000 x .98) .. Sales Discounts ($5,000 x .02) .. Accounts Receivable 4,900 100 Accounts Payable Inventory ($6,000 x .01) .. Cash ($6,000 x .99) . 6,000 5,000 2,500 6,000 1,000 5,000 60 5,940 2. (a) (1 ) (2) (3) (4) (5) (b) April April April April 5 6 7 8 April 15 May 4 Purchases ..................................................... Accounts Payable .................................. 30,000 Freight-in ....................................................... Cash ...................................................... 900 Equipment ..................................................... Accounts Payable .................................. 26,000 Accounts Payable ......................................... Purchase Returns and Allowances ........ 3,000 Accounts Payable ......................................... ($30,000 $3,000) Purchase Discounts ............................... [($30,000 $3,000) 2%] Cash ($27,000 $340) ............................ 27,000 Accounts Payable .......................................... ($30,000 $3,000) Cash ....................................................... 27,000 30,000 900 26,000 3,000 540 26,460 27,000 Chapter $751,000 2. a. 6 1. FIFO: Ending inventory $474 45 units @$9.60 = 5 units @$8.40 = 50 units 432 42 $474 b. Average Cost: Ending inventory $444 $1,332 150 = $8.88 per unit 50 units = $444 c. LIFO: Ending Inventory $428 15 units @$8.00 = 35 units @$8.80 = 50 units $ 120 308 $428 d. FIFO: Cost of goods sold $858 15 units @$8.00 = 60 units @$8.80 = 25 units @$8.40 = 100 units $ 120 528 210 $ 858 3. There are 130 units in ending inventory. The beginning inventory layer was reduced by 30 units and the first two purchases were consumed. The last purchase was made after all sales occurred. 3/1 3/30 70 @ $40 40 @ $60 110 units = = $2,800 2,400 $5,200 = Ending inventory 5. Events 1. 2. 3. 4. 5. Items Stockholders Cost of Assets Equity Goods Sold NA O U NA O NA O U U O O U O O U Net Income U O U U O Chapter 7 2. a. Human resource controls. b. Independent internal verification. c. Segregation of duties. d. Establishment of responsibility. e. Documentation procedures. f. Documentation procedures g. Establishment of responsibility h. Human resource controls i. Physical controls j. Segregation of duties 3. 1. 2. 3. 4. 5. B D B A C 6. 7. 8. 9. 10. E A D A B Chapter 8 2. January Sept 1 3. (a) (b) Cash ......................................................................... Accounts ReceivableBaden ............................ 200 300 300 Cash ........................................................................... Accounts ReceivableBaden ............................ (To record collection on account) July 1 500 Accounts ReceivableBaden ..................................... Allowance for Doubtful Accounts ....................... 1 Accounts ReceivableBaden ..................................... Sales ................................................................... Allowance for Doubtful Accounts ................................. Accounts ReceivableBaden ............................ February 1 300 Accounts Receivable Current 130 days past due 3190 days past due Over 90 days past due Mar. 31 Amount $65,000 12,600 10,100 7,400 % 2 7 30 50 Bad Debts Expense ...................................... Allowance for Doubtful Accounts ($8,912 $2,500) ......................... 500 200 300 300 300 Estimated Uncollectible $1,300 882 3,030 3,700 $8,912 6,412 6,412 Chapter 9 1. (a) Accumulated DepreciationEquipment ............................... Loss on Disposal .................................................................. Equipment ................................................................... 30,000 24,000 54,000 (b) Cash ..................................................................................... Accumulated DepreciationEquipment ............................... Gain on Disposal .......................................................... Equipment ................................................................... 29,000 30,000 (c) 18,000 30,000 6,000 Cash ..................................................................................... Accumulated DepreciationEquipment ............................... Loss on Disposal .................................. Equipment ................................................................... 5,000 54,000 54,000 2. 1. Straight-line method: Cost - Salvage Years = $80,000 $5,000 5 = $15,000 per year 2. Units-of-activity method: Cost Salvage Units = $80,000 $5,000 100,000 units = $0.75 per unit 2011 16,000 units $.75 2012 24,000 units $.75 Accumulated Depreciation = $ 12,000 = 18,000 = $30,000 Cost of asset Less: Accumulated Depreciation Book value at December 31, 2012 $80,000 30,000 $50,000 3. Double-declining-balance method: 2011 2012 2013 Book Value Beginning of Year $80,000 48,000 28,800 Declining Balance Rate 40% 40% 40% = Depreciation Expense $32,000 19,200 11,520 Accumulated Depreciation $32,000 51,200 62,720 3. Calculate the book value at the time of the revision: $190,000 - $10,000 10 years = $18,000 annual depreciation expense 3 years have been depreciated: $18,000 3 = $54,000 Book value at the time of the revision: $190,000 $54,000 = $136,000 Calculate the revised annual depreciation: $136,000 - $16,000 5 years remaining = $24,000 revised annual depreciation The depreciation expense for 2012 is $24,000. Chapter 10 1. (a) June 30 Bonds Payable ............................................................. Loss on Bond Redemption ........................................... Discount on Bonds Payable ............................... Cash ................................................................... ($320,000 $287,400 = $32,600) ($320,000 1.02 = $326,400) 320,000 39,000 Bonds Payable ............................................................. Discount on Bonds Payable ............................... Gain on Bond Redemption ................................. Cash ................................................................... ($550,000 $535,000 = $15,000) ($550,000 96% = $528,000) 550,000 Cash ..................................................................................... Bonds Payable ............................................................. Premium on Bonds Payable ........................................ 318,000 Bond Interest Expense ......................................................... Premium on Bonds Payable ................................................. Bond Interest Payable ................................................. ($318,000 8% = $25,440) ($300,000 10% = $30,000) ($30,000 $25,440 = $4,560) 25,440 4,560 (b) June 30 32,600 326,400 15,000 7,000 528,000 2. 2012 Jan. 1 Dec. 31 300,000 18,000 30,000 3. Present value of the interest payments: $600,000 11% x 6/12 = $33,000 $33,000 PV of 1 due periodically for 10 periods at 5% $33,000 7.72173 (Present value of an annuity of 1) = $254,817.09 Present value of the principal: $600,000 PV of 1 due in 10 periods at 5% $600,000 0.61391 (Present value of 1) = $368,346 Proceeds = $254,817.09 + $368,346.00 = $623,163.09
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