f03mid1 - @ NAME TA ECON 10A EXAM 1 FALL ’03 I. [ill—...

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Unformatted text preview: @ NAME TA ECON 10A EXAM 1 FALL ’03 I. [ill— "; in. i, r tti “newswwr a... “t. eczererrs c once we Matching Match each numbered rem with its icirereddetirritlott contra account 0 9'. deferrals matching principle 33' 10. accruals prepaid expenses .-.=--F 1 l. accumulated depreciation unearned revenue J!" 12. time-period concept depreciation .1 13. accrued expenses plant asset {i 14. adjusting entries revenue principle t 15. seemed revenues book value F 16. cash-basis accounting a category of miscellaneous assets that typically expire in the near future a_ liability created when a business collects cash fi'om customers in advance of doing work for the customr ' an account with a balance opposite a companion account expense associated with spreading (allocating) the cost ofa plant asset over its useful life long-lived assets, such as land, buildings, and equipment, thatare used in the operations of the business the basis for recording revenues diattells accountants when to record-revenues and the amount of revenue to record ~ ' - the basis for recording expenses that directs accountants to identify all expensas incurred during the period, to measure the expenses, and to match them against the revenues earned during that same period assign revenues to the period they were can-red and expenses to the period in which they were incurred revenues that have been earned but not recorded ' ensures that accounting information is reported at regular intervals a collective-tom] for accrued expenses and accrued revenues expenses that have been incurred but not yet recorded . a balance sheet account credited when adjusting for depreciation the difference between a plant asset account balance and its accumulated depreciation e. collectivetern-r for prepaid expenses and unearned revenues accounting that records hatteections only when cash is received orpaid The adjusted trial balance fact Chai Tea Company at December 31, 2003 is presented below: M £20301; Cash 10,5 00 Acummts mneivable 150,000 Aflnwsnee for nncufleetibie 3100011013 10,000 Prepaid. rent 5,000 Invenme _ 25,000 Equipment - I300,000 Ammulated depreciafi-un - equipment 125,000 Amuuts payable 20,000 Notes payable - due in fine: months 30,000l Salaries payable - 4,000 Incl-es! payable 1,000 Capital shack 200,000 Retahwd earnings . 3 7;. r»; 50,000 Sales revenue r I! ’ ' ~—' 400,000 C0615 afgands soId 180,000 *- Saleries expense —-' 120.000 — Rautexpnnsn .4519 15,000 -r- Depreciation enema - .SmWJJUO 5w : - '9 Interest expense -~—- 2.000 ~""_, __ Bad. debt expense (425“ 30.903 "" totals _ 001.000 550.000 129. Prepare the closing entries far Chni Tea Company for the yearns-dad Decmnhiar 31I 1003. \— 5-” ® 130‘ Prepare an income statement for Chai Tea Company for the year endedDecember 31. 2003. 0 (,0 {a} (3.) Sales revenue 400,000 _ Income sltmmazy _ 400.000 [11.) Income emery - 349,500 (-37 ' Castofgnnds sold "— 130 000 r" Salaries expense ' - "‘ 120,000 """ Rem expense 2.90.". 15,000 V“ Depreciationexpensp ~30‘000 '-= ‘- - Interestexpense 21000 ' ' 1 Bad debt expense - Lax-fl 1:500 v 3 Ce.) Income smmry _ 50,500 ‘ - _ Retaineg‘. earnings 50 300 .1 (2001' Tea Company Income Statement For the Year Ended December 3-1I 2003 Seies revenue 5400' 000 Cost of goods sold ."7' ,2 *‘1 ’ Gross profit I i" %‘%33 Other expenses: '5" ‘ _ ' Salaries expense 3120 mm " " Rm]! 6301360158 Rig—nu “5:000 Depreclntmn expense . 30 900 g 54.1.) Interest expense 2 boo Bad debt expense .- ._ 2,500 ‘ .m- Tolal other menses " "‘3: _ J 5’ 5"!“ 590 Net income fail-5.0.0 ‘31}, 13!. Prepare a classified balance sheet for Chai Tea Company as of December 11. 2003. f. Chsi Tea Company Balance Sheet As of December 3 l, 2003 Assets Current assets: Cash 3 10,500 Accounts receivable $150,000 Less: allowance for uncollectible accounts |0,000 l40.000 Inventory 25,000 Prepaid rent 5,000 Total current assets 180,500 Property and equipment: Equipment 3 00,000 Less: Accumulated depreciation 15,000 115 ,000 Total assets m Liabilities and Shareholders' Equity '- Qurrem liabilities: Accounts payable S 20,000 Notes payable 30,000 . Salaries payable 4,000 interest payable ' Jim Total current liabilities 55,000 Shareholders' equity: - Capital stock $200,000 Retained earnings 100 00 Total shareholders' equity 300,500 .Total liabilities and shareholders' equity m 1 10. The Detember 31, 19x5, trial balance of Central Delivery Service included the following: - Debit Credit Accounts receivable $175,000 Unearned delivery service revenue 5 24,000 Prepaid rent . 64,0 00 Prepaid insurance 3 3,600 Equipment 240,000 Accum. depn.~equipment 30,000 Salary expense1 20,0 00 Additional data: (7,“ :1, 5- i f; .3. a 37;? a} Depreciation on equipment for ‘lQXfi is $15,000. .341- “ I b] Delivery services performed but unbilled and uncollectecl at year end amourit to $6,400. fins _-.~ FIT-17’ c]: Twe-thirds of the revenue received in advance has been earned by December 31. d] The prepaid rent relates to one-half of a year beginning on October 1, IQXE. --e) The prepaid insurance represents the annual premium on a policy providing coverage starting September 1, 19X6. _. 1‘] Since the last payday, emplovees have earned an additional $2,400 which has not yet been paid or recorded. - Prepare the necessary year-end adjusting eneies as of December 31, 19X6. (Note: All revenues eamed relate to delivery services.) - Credit 12,000 Delivery Service Revenue — Uneamed Delivery Service Revenue 16,000 6.40:] — — moc- — — 2,400 15,000 11,200 ' 105 Bright jewelers had the following transactions in April. Prepare journal entries for these transactions assuming Bright Jewelers uses a perpetual inventory system. @ Apr.2 Bright received an $i8,000 invoice from one of its suppliers. Terms were 2/10 n 30, FOB shi ' point. Bright pald fire freight bill amounting to $2,000. {I ppm 4 Bright returned $2,500 of the merchandise billed on April 2 because it was defective. 5 Bright sold $3,000 of merchandise on account, terms 3/15 nl30. The cost of the merchandise sold was 55.500- 19 Bright-paid the invoice dated April 2, less the return and the discount 15 A customer returned $2,500- of merchandise sold on April 5. The cast ofthe rammed merchandise was $1,450. ' 19 Bright received payment on the remaining amount due From the sale of April 5, less the return and the discount. -.. name = Apr. 2 — m— _ 4 _ — s — m— w— w _ —-m- w— w — — — _ — _ — 18,000 3,000 ...
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f03mid1 - @ NAME TA ECON 10A EXAM 1 FALL ’03 I. [ill—...

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