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Fall 2006 exam 1 - MISCH FALL 2006 FINANCIAL ACCOUNTING...

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MISCH NAME_____________________________ FALL 2006 FINANCIAL ACCOUNTING EXAM I PROBLEM POSSIBLE POINTS ACTUAL POINTS 1. Comprehensive Journal Entry Question 38 2. Financial Statements and Closing Entries 32 3. Statement of Cash Flows 08 4. Transaction Analysis 12 5. Multiple Choice 09 6. Quibble Point 01 ---------- Total 100 NOTE: A. If you are asked for an entry or an amount when none is required, write “no entry” or “zero” in the space provided. B. Round all answers to the nearest dollar. C. Partial credit will be given only when supporting computations are shown in good form. D. Calculators with stored-text capabilities are prohibited on this examination. Use of such calculators and/or possession of any unauthorized materials will result in your receiving a zero on the examination. 1
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PART I—COMPREHENSIVE JOURNAL ENTRY QUESTION (38 POINTS) Trek, Inc. had the following accounts, all with normal balances at December 1, 2006. Trek prepares adjusting entries once per year at December 31 (the company’s year end). The balance in Advertising Payable represents an amount due to Sulu Advertising for a bill received in November. The building was bought on July 1, 2004, has a $40,000 residual value, and is expected to last 30 years. The Note Receivable was received from a customer on August 1, 2006, carries a 6% annual interest rate and will be collected on May 1, 2006. ACCOUNT BALANCE Accounts Payable 10,800 Accounts Receivable 38,100 Advertising Expense 13,400 Advertising Payable 5,000 Accumulated Depreciation—Building 6,000 Building 160,000 Cash 42,400 Common Stock 56,200 Insurance Expense 6,900 Land 152,200 Note Receivable 7,000 Rent Expense 9,600 Retained Earnings 101,300 Salary Expense 50,000 Service Revenue 330,600 Supplies Expense 9,700 Utilities Expense 20,600 Trek had the following transactions in December: 1 Issued 2,000 shares of $20 par value common stock in exchange for equipment valued at $40,000. The equipment is expected to have a 5-year life and a $2,000 salvage value at the end of its life.
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