SOL. TO PRELIM EXAM IN AP 1617

SOL. TO PRELIM EXAM IN AP 1617 - SOLUTION TO PRELIM EXAM 2...

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SOLUTION TO PRELIM EXAM 2 NO INVENTORY WAS RECOGNIZED NO PURCHASE WAS RECORDED SO NO EFFECT IN INCOME AND EQUITY BECAUSE GOODS AVAILABLE FOR SALE WERE NOT AFFE SINCE NO INVENTORY AND PURCHASE WERE RECORDED, ASSETS AND LIABILITIES WERE UNDE 3 BALANCE PER BOOK AS OF MAR. 31 34,900 ADD-DEPOSITS DEPOSIT PER BANK 46,700 L-DEPOSIT IN TRANSIT 10,300 TOTAL DEPOSITS FOR APRIL 36,400 TOTAL CASH AVAILABLE 71,300 LESS-WITHDRAWAL DISBURSEMENTS PER BANK 49,700 LESS-OUTSTANDING CHK.-MAR. 12,600 TOTAL CHKS. PAID FOR APRIL 37,100 ADD-OUTSANDING CHK-APR. 6,000 TOTAL DISBURSEMENTS FOR APR. 43,100 BALANCE PER BOOK AS OF APR. 30 28,200 4 CORRECT INTEREST FOR 2016 (400,000 X .75 X 1.1 X .1) 33,000.00 LESS-INTEREST PER CLIENT 30,000 INTEREST TO BE ADDED PER AUDIT 3,000 `5-10 5 D Sales 1,615,040 Less: Accounts receivable, 11/16 426,900 Collections from sales 1,188,140 6 D Cost of sales (P1,615,040/1.4) 1,153,600 Add: Merchandise inventory, 11/16 469,600 Purchases 1,623,200 Less: Accounts payable, 11/16 231,420 Payments for purchases 1,391,780 7 C 8 B Cash receipts: Issuance of common stock for cash 1,600,000 Mortgage note payable 400,000 Notes payable - bank 160,000 Collections from sales (see no. 5) 1,188,140
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Total 3,348,140
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