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f04mid2 - NAME m.0 7 I l 47 On X3 Vale Co had an unad...

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Unformatted text preview: NAME m .0..- 7 I l 47. On March 31, 20X3, Vale Co. had an unad- justed credit balance of $1,000 in its allowance for uncollectible accounts. An analysis of Vale's trade accounts receivable at that date revealed the lollowing: Estimated _ , f _ f: ___AQL_V ____Amount uncollectible A 1‘90 J/ I} "1 ’ ~_' 0-33 days $60,000 5% #340 a O 31" days 4.000 10% a? 0 CW 60 days 2.000 $1,400 1,100... "I 00 r 700 $4520 0 54,300»: 2.00:9 What amount should Vale report as allowance tor uncollectible accounts in its March 31, 20X3 balance r”: 51'7- ' sheet? 62. San Andreas Mercantile Inc, through earthquake on April 13, 2003. In preparing their insurance c developed the following data: Inventory January 1, 2003, $365, no fault of its own, lost an entire warehouse due to an laim on the inventory loss, they 000-, sales and purchases from January 1, 2003, to April 13. 2003, $1,300,000 and $875,000, respectively. San Andreas consistently reports a 30% gross profit. The estimate 1 d inventory on April 13, 2003, is: Rationale: Beginning inventory $365,000 PluszNet purchases __875,000 Goods available for sale 1,240,000 Less: Cost of goods sold: Net sales ' $1,300,000 Less: Estimated gross profit £390,000) Estimated cost of goods sold (910,000) Estimated ending inventory m _93. On July 1, 2003, Lloyd C0. purchased a $300,000 tract oflan office complex. Lloyd incurred additional costs and realized \. follows: Demolition of existing building on site $60,000 Legal and other fees to close escrow 12,000 10,000 Proceeds from sale of demolition scrap What would be the balance in the land account as of December 3 Purchase price Demolition costs Legal fees A: Sale of scrap Total cost of [and (5) WHAT Is A LOCKED BOX LuPUSIT SYSTEM? f’WW/wzflfofi We d that is intended to be the site of a new salvage proceeds during 2003 as 1. 2003‘? $300,000 60,000 12,000 400100.} £102.01! MW 86. Fellingham Corporation purchased equipment on January 1, 2001, for $200,000. The company estimated the equipment would have a useful life of 10 years with $20,000 salvage value. Felling'harn uses . straight—line depreciation. Early in 2003, Fellingham reassessed the equ1pment’s condition and determined that its total useful life would be only six years and that it would have no salvage value. How much would Fellingham report as depreciation expense on this equipment for 2003? Rationale: This is a change in estimate, so the remaining depreciation will be spread over the remaining useful life. Accumulated depreciation at 12131102 = 2 at ($200,000 — 20,000)! 10 = $36,000 Book value through 12l3lf02 = $200,000 — 36,000 = $164,000 Annual depreciation after change in estimate = 5164,000/4 = $41,000 @ 110} The following data have been gathered for Batter Company to assist you in preparing the September 30, 20X6. bank reconciliation; a) The September 30 bank balance was $5460. b) The bank statement included $30 of service charges. 1:) There was an EFT deposit of $1,800 on the bank statement for the monthly rent due from a tenant. d) Checks #541 and #543 for $205 and $420, respectively, were not among the canceled checks returned with the statement. e] The September 30 deposit of $3800 did not appear on the bank statement. f) The bookkeeper had erroneously recorded a $500 check as $5,000. The check was written to a vendor to pay off an accounts payable. g) Included with the canceled checks was a check written by Bitter Company for $200 which was deducted from Batter Company's account. h) The bank statement included an NSF Check written by Tate Company for a $360 payment on account. 1) The cash account shOWed a balance of $2925 on September 30. Prepare the September 30, 20X6, bank reconciliation for Batter Company. Batter Company Bank Reconciliation September 30, 20th Answer: Bank balance. September 30, 20% $5460 Add: Deposit in transit $3800 Bank error “20—0 M $9460 Less: Outstanding checks #54} ‘ $ 205 #543 _‘lfl fl Adjusted bank balance, September 30, 20X6 M Book balance, September 30, mm $2925 Add: EFT deposit $1,800 Bookkeeper error 4500 6 300 $9225 Less: NSF check 55 360 Service charges __ 30 390 Adjusted book balance, September at}, 20)“: ifififi b) Lois Lane, an accounting clerk, is responsible for ripening the mail, recording and depositing cash receipts, as well as preparing the monthly bank reconciliation. Lois has not taken a vacation in 0V” “V" YEMS- identify the internal control weakness ['7 y” - _b) Lois is performing too many functions; there rs n0 separation of duties, and she has 5 d“ f' j' not taken a vacation in some time. Luis wuid be stealing money from the company 7 l i/ without being discovered. There are presently no double Cherks on Lois's work. One 7W6 possible solution is to separate some of Lei-4's duties. A matlronm clerk could open the mail. While another accounting clerk ('Uuid prepare the bank reconriliation. The Table 4 Company Could also EStabliSh a PONY requiring all employees to take vacation time each vear. Austin Company uses a periodic inventory system. Assume the following data {or 20x5: Beginning inventory to units at $7 each : ’7 9, March 18 purchase 15 units at $9 each [3 5 June 10 purchase 70 units at $10 each 3 p 0 October 30 purchase innits at Silt each / }2 5'7 rye/7 ram! On December 31, a physical count reveals 15 units in ending inventory, @ 54) Refer to Table 4. Under the LIFO method, ending inventory would be valued at: ’ a 557" M12 390 W n70 / 531 <3 : j; m, // wouldbe: ' ' ’ T/fl 5i 75' l/é‘W/V— /.l \(r// ‘ L32 6 .37 7'0 14,5 2/4 3 K70: 30 {6292 (MD wag/r917? _,,- i ’— ? C65 LutD’FA/Tofly /:.2 :1; w" @ 56) Referring to Table 4, under the average cost method, that of goods sold on the income statement wnuld be: M; , 346 for/2; 5379/ 742 x {54qu M“ MD WWW/2‘2 u / _ A 377/ *3??? Cé-g W ___’-— 112) Burton Company user; special journals along with the general journal to record its daily transactions. Using the following abbreviations, identifyr the appropriate journal in which to @ record each transaction. Sales Journal S Purchases Journal lJ \ Cash Recei ts Journal CR // f £1 Cash Paymints Iournal Cl’ and Jib/6’ i 0%! General ]ournal ] a} Purchased supplies on account, $375. I) b) Received $3,000 from a customer on account. _ Cl? c) Purchased inventory for cash, $2,300, C 00_ d) Returned merchandise previously bou ght on account for :r credit, $1,670. 9) Paid the weekly employees‘ wages, $5,300. l0 0 Sold merchandise [or cash, $2,460. 7 . g) Purchased office equipment for cash. A , _ h} Paid for merchandise previously bought on account, taking the 2% discount $2,345. EOE. i) Borrowed $10,000 from the bank by signing a note C R payable with interest at 8%. j) Made a $350 adjusting entry for expired insurance. “3-” 0 Table 2 Assume the following data for Smithsonian Company for 20X5: ,5) Beginning Inventory Wunits at $70 each March 18 sale B units 1 June 10 purchase 20’units at $80 each " {6 '0 October 30 sale [‘3 [5 15 units 30) Refer to Table 2. Under the perpetual FIFO method, ending inventory would be valued at: t {£6 WQ 7% *Eaclg’éfl nia- @ cl 5(3):) :l'L’zo é {EOClL/‘KD BONUS (+1 TO EPOlNTS). HOW LONG A PRISON SENTENCE DID JOSE GOMEZ RECEIVE? ; ,1 yée {:5 (way my / 5’ THIS TEST WAS ...
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