Fall2007-Exam1 - ACCOUNTANCY 321 Fall, 2007 EXAM I I. The...

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ACCOUNTANCY 321 Fall, 2007 EXAM I I. The Arens Company was involved in several events/transactions during its fiscal year. For each of the following, you are to specify: a. What specific documents need to be filled out by Arens Company b. In which journal, if any, the event/transaction should be recorded c. The journal entry (give details) d. The specific posting of the event/transaction to any subsidiary ledger (give details) If any answer is NONE, you need to state that. 1. Received customer purchase order #472 in the mail from Shah Company, for 300 units of product X47 (price -- $20 each), and 900 units of product Y36 (price -- $45 each). Approved their credit and shipped the goods. All goods were shipped, except only 100 units of product X47 were available for shipment. (6 pts.) Carrier: Elbaskshish Trucking Freight charges: FOB shipping point; billed to the shipper after delivery of goods a. What Documents? _________________________________________________________ b. Which Journal? ____________________________________________________________ c. Journal entry? _____________________________________________________________ d. Subsidiary ledger? _________________________________________________________ 2. Received sales return request #R587 (total $875) in the mail from Lewis Corporation. The request was approved, and the goods arrived at our firm. (6 pts.) a. What Documents? _________________________________________________________ b. Which Journal? ___________________________________________________________ c. Journal entry? _____________________________________________________________ d. Subsidiary ledger? __________________________________________________________ 3. Legal notification from Dewey, Cheatem, and How, attorneys at law, that Hemphill Company had filed bankruptcy and will be unable to pay any of its outstanding debts to suppliers. Hemphill currently owes Arens Company $2,650. (6 pts.) a. What Documents? _________________________________________________________ b. Which Journal? ____________________________________________________________ c. Journal entry? _____________________________________________________________ d. Subsidiary ledger? _________________________________________________________ 1
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II. The Figueroa Company is considering purchasing a machine manufactured by the Nazzal Company to replace their current Montante machine (the Montante machine would be sold for $45,000). The Nazzal not only reduces some costs, but it also produces a higher quality end product which can be sold for more. Both machines have the same remaining life of 7 years and no expected salvage value at the end of 7 years. The company uses the straight line depreciation method. The company's tax rate is 35%. Assume ALL cash
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This note was uploaded on 09/09/2009 for the course ACCTG 321 taught by Professor Will during the Spring '08 term at San Diego State.

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Fall2007-Exam1 - ACCOUNTANCY 321 Fall, 2007 EXAM I I. The...

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