158_715_test2b - The Fall 2005 Accounting Tribe The Second...

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The Fall 2005 Accounting Tribe The Second Encounter Version A Rules: No Cheating No Marking on PV Table Instructor : Circle Mrs. Kirch Mrs. Freeland ___________________________ Name ____________________________ PID or SSN ____________________________ Days &Time of Your Class
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The following data is for Bella Corporation: Balance Balance 12/31/04 12/31/05 Cash 15,000 45,000 Accounts Receivable 40,000 75,000 Allowance for Doubtful Accounts 5,000 10,000 Inventory 50,000 70,000 Equipment 200,000 250,000 Accumulated Depreciation 20,000 30,000 Land 60,000 Accounts Payable 40,000 64,000 Wages Payable 10,000 6,000 Note Payable 100,000 80,000 Common Stock ($1 each) 50,000 110,000 Retained Earnings 80,000 200,000 Sales 1,000,000 Cost of Goods Sold 500,000 Wage Expense 200,000 Rent Expense 36,000 Office Expenses 22,000 Depreciation Expense 20,000 Bad Debt Expense 10,000 Interest Expense 8,000 Income Tax Expense 60,000 Loss on Sale of Equipment 4,000 The land was acquired on October 1, 2005 by exchanging 40,000 shares of common stock worth $40,000 and cash for the balance of the purchase price. The additional common stock (other than that issued for the purchase of the land) was sold on April 1, 2005 for $1 per share. The company sold only one piece of equipment during the year. The equipment which was sold originally cost $20,000 and had accumulated depreciation of $10,000 at the date of the sale. All equipment purchased during the year was purchased for cash. The retained earnings balance for both years is after all closing entries have been made. The market price per share at December 31, 2005 was $25. The Note Payable requires payments of $20,000 principal plus interest at 10% on December 31 st of each year. Prepare, in good form, an Income Statement for Bella Corporation. (60 points)
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Prepare, in good form, a Statement of Cash Flows using the indirect method for Bella Corporation.
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(100 points)
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Multiple Choice Circle answer on exam AND bubble in on scan sheet. (5 points each) The next 6 questions refer to Bella Corporation. Where appropriate, use a 365 day year. 1) At December 31, 2005, the current ratio is approximately A. 2.00 B. 2.11 C. 2.57 D. 2.71 E. some other number 2) For 2005, return on equity was approximately A. 30.43% B. 45.16% C. 63.64% D. 70.00% E. some other number 3) For 2005, the return on assets was approximately A. 30.43% B. 37.84% C. 45.16% D. 50.00% E. some other number 4) For 2005, the average collection period was (for this question, ignore the allowance for doubtful accounts) A. 17 days B. 23 days C. 25 days D. 20 days E. 32 days 5) For 2005, the inventory turn was approximately:
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This note was uploaded on 09/12/2010 for the course ACCT 101 taught by Professor Drkirch during the Spring '10 term at Ohio University- Athens.

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158_715_test2b - The Fall 2005 Accounting Tribe The Second...

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