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ACCTG 471 FINAL EXAM JOURNAL_ENTRIES

ACCTG 471 FINAL EXAM JOURNAL_ENTRIES - F I NAL EXAM JOUR...

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FINAL EXAM JOURNAL ENTRIES CH 8: Valuation of Inventories: A Cost Basis Approach INVENTORY CLASSIFICATIONS AND SYSTEMS PERPETUAL SYSTEM PERIODIC SYSTEM Purchase 900 units @ $7 Purchase 900 units @ $7 Inventory 6300 Purchases 6300 Accounts Payable 6300 Accounts Payable 6300 Sale of 600 units @ $14 Sale of 600 units @ $14 Accounts Receivable 8400 Accounts Receivable 8400 Sales 8400 Sales 8400 Cost of Goods Sold 4200 Inventory 4200 Adjusting Entries (Ending Inventory = 400 units @ $7) Ending Inventory 2800 Cost of Goods Sold 4200 Purchases 6300 *If BI was present then it would be included here as well JE to Reduce Inventory to LIFO Cost of Goods Sold XXX
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LIFO Reserve XXX Treatment of Purchase Accounts CH 9: Inventories: Additional Valuation Issues Recording LCM Direct Method: Loss on Inventory XXX Allowance on Inventory XXX Indirect Method: Cost of Goods Sold XXX Inventory XXX Recording Basket Purchase (Lump-sum) Asset 1 XXX Asset 2 XXX Cash XXX CH 10: Acquisition and Disposition of PPE JE to Capitalize Interest Equipment XXX Interest Expense XXX JE to Update Depreciation Depreciation Expense Accumulated Depreciation XXX
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To Record Sale Cash XXX Acc. Depr. XXX Machine XXX Gain/Loss XXX JE to recognize Contributions (non-reciprocal transfers) (Receiving End) Land XXX Contribution Revenue XXX (Charitable End) Contribution Expense (FV) XXX Land (BV) XXX Gain/Loss (Diff of FV and BV) XXX CH 11: Depreciation, Impairments and Depletion JE to Correct the Prior Year’s Depreciation None JE to Record Loss on Impairment (Tangibles) Loss on Impairment XXX Accumulated Depreciation XXX *When calculating Depr. Exp. After impairment use the FV and divide it by remaining useful life
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JE to record Depletion (e.g. extract 25,000 ounces in the first year) Inventory XXX Acc. Depr. XXX CH 12: Intangible Assets JE to Record Impairment on Goodwill Loss on Impairment XXX Goodwill XXX To Record Impairment on Patent (any intangible is the same) Loss on Impairment XXX Patents XXX Chapter 13: Current Liabilities & Contingencies Interest-Bearing Note Issued Assume that Castle National Bank agrees to lend $100,000 on March 1, 2007, to Landscape Co. if Landscape signs a $100,000, 6%, 4-month note. Landscape records the cash received on March 1 as follows: March 1 Cash 100,000 Notes Payable 100,000 (To record issuance of 6%, 4-month note to Castle Nat’l Bank) If Landscape prepares financial statements semiannually, it makes the following adjusting entry to recognize interest expense and interest payable of $2,000 ($100,000 x 6% x 4/12) at June 30:
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June 30 Interest Expense 2,000 Interest Payable 2,000 (To accrue interest for 4 months on Castle Nat’l Bank note) If Landscape prepares financial statements monthly, its adjusting entry at the end of each month is $500 ($100,000 x 6% x 1/12). At maturity (July 1), Landscape must pay the face value of the note ($100,000) plus $2,000 interest ($100,000 x 6% x 4/12). Landscape records payment of the note and accrued interest as follows: July 1 Notes Payable 100,000 Interest Payable 2,000 Cash 102,000 (To record payment of Castle Nat’l Bank interest bearing note and accrued interest at maturity) Zero-Interest Bearing Note Issued Interest is still charged.
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