Accounting Sample Finals

Accounting Sample Finals - Spring 2006 Writing space...

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Spring 2006 Writing space condensed for more efficient copying. Scratch pages deleted also. Merle Accounting Potpourri: [061Fa] Accounting for Trading Securities: Jackson Company was formed at the start of Year 1. At the end of Year 1, Jackson Company had Trading Securities with a fair market value of $2,800 and a valuation allowance of $400 credit balance. No Trading Securities were sold in Year 1. In Year 2, Jackson bought more Trading Securities at a cost of $4,300 and sold some Trading Securities that had originally cost $2,100. The firm received $2,500 cash for Trading Securities sold in Year 2. The fair market value of the Trading Securities on hand at the end of Year 2 was $4,900. Unrealized Gain (Loss) in the income statement for Year 1: $__________ [7 points] UNRL $400.00 Realized Gain (Loss) in Year 2: $__________ [7 points] RG $400.00 Unrealized Gain (Loss) in the income statement for Year 2: $__________ [7 points] UNRL $100 Valuation Allowance at the end of Year 2 [be sure to indicate debit or (credit)]: $________ [7 points] credit $500 Exam continued on the next page. Page 2 of 16 Accounting Potpourri (continued): [061Fa] Accounting for Available for Sale Securities: Jack Russell Company was formed at the start of Year 1. At the end of Year 1, Jack Russell Company had an Available for Sale Securities portfolio with a fair market value of $4,400 and a valuation allowance of $500 debit balance. No Available for Sale Securities were sold in Year 1. In Year 2, Jack Russell bought Available for Sale Securities at a cost of $6,200 and sold some Available for Sale Securities that had originally cost $1,800. The firm received $1,600 cash for Available for Sale Securities sold in Year 2. The fair market value of the Available for Sale Securities on hand at the end of Year 2 was $7,900. Unrealized Gain (Loss) in the owners’ equity section for Year 1: $__________ [8 points] UNRG $500 Valuation Allowance at the end of Year 2 [be sure to indicate debit or (credit)]: $________ [8 points] credit $400 Exam continued on next page. Page 3 of 16 Accounting Potpourri (continued): [061Fa] Accounting for Investments Using the Equity Method:
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The Rachel Company purchased 36% (47,000 shares) of the David Company for $900,000 paying cash at the start of Year 1. Immediately after the purchase of these shares by the Rachel Company, the companies have these owners’ equity account balances: Rachel David Company Company Contributed Capital $1,600,000 $810,000 Retained Earnings $1,460,000 $420,000 David Company owns two assets for which the fair market values exceed the net book values: Buildings and Copyrights. The excess of fair market values over net book values is $320,000 for the Buildings and $740,000 for the Copyrights. Buildings have a remaining useful life of twelve years and Copyrights have a remaining useful life of six years. During Year 1, Rachel and David had separate net incomes of $840,000 and $510,000,
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This note was uploaded on 03/25/2008 for the course ACCT 250A taught by Professor Hopkins during the Fall '07 term at USC.

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Accounting Sample Finals - Spring 2006 Writing space...

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