Prelim_One_draft_summer_2008_altered

Prelim_One_draft_summer_2008_altered - ORIE 350 Name(please...

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ORIE 350 Name (please print) ___________________________________ Prelim, Summer 2008 Accounting Equation A = L + SE Earnings Per Share EPS = Net Income Average Number of Shares Outstanding Inventory Impairment Net realizable value (NRV) – equals the estimated selling price in the ordinary course of business less costs of repair, preparation and disposal Net adjusted cost (NAC) – equals the NRV less a normal profit margin (NPM). NAC = NRV – NPM Replacement cost (RC) – replacement of inventory by purchase or reproduction. _______________________________________________________________________ Depreciation (straight line) Historical Cost - Salvage Value Annual Depreciation = Useful Life
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1. The following are selected data taken from the financial statements of the Remington Golf Club in Glen Ridge, New Jersey. The club uses the accrual method of accounting. Dues are billed to the members on an annual basis. The club also sells gift certificates, which are recorded as revenue when they are redeemed, not when they are sold. Gift certificates are sold for cash. The club uses a single revenue account to record all revenues. Dec. 31, 2007 Dec. 31, 2006 Accounts Receivable $85,750 $90,200 Unearned Revenue $45,800 $50,300 Revenue $2,465,000 $2,228,450 Show journal entries for the net effect of the following events that took place during fiscal year 2007. a. All outstanding dues at the end of 2006 were collected from members. b. Unearned revenue at the end of 2006 was all earned in 2007. c. $255,400 in gift certificates were sold in 2007. Some, but not all of them were redeemed. d. Dues for fiscal 2007 were all billed to members. Some, but not all of the members paid their dues in 2007.
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2. RMC Industries had a beginning stockholder’s equity credit balance of $645,000.
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