Final_Exam Spring_2009

Final_Exam Spring_2009 - COMPREHENSIVE FINAL EXAMINATION...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
COMPREHENSIVE FINAL EXAMINATION 360 Points Instructor: Farima Fakoor Time Allowed: One Week Problem 1: 30 Points Adjusting and Reversing Entries. The following list of accounts and their balances represents the unadjusted trial balance of Alt Company at December 31, 2004: Cash $ 32,690 Short-term Investment 70,000 Accounts Receivable 69,000 Allowance for Doubtful Accounts $ 500 Merchandise Inventory 54,720 Prepaid Rent 30,000 Plant and Equipment 156,000 Accumulated Depreciation 14,740 Accounts Payable 11,370 Bonds Payable 90,000 Common Stock 170,000 Retained Earnings 97,180 Sales 218,400 Cost of Goods Sold 154,400 Transportation-Out 11,000 Salaries and Wages Expense 32,000 Interest Expense 2,040 Rent Revenue 18,000 Miscellaneous Expense 890 Insurance Expense 7,450 $620,190 $620,190 Additional Data: 1. The balance in the Insurance Expense account contains the premium costs of three policies: Policy 1, remaining cost of $2,550, 1-yr. term, taken out on May 1, 2003; Policy 2, original cost of $3,600, 3-yr. term, taken out on Oct. 1, 2004; Policy 3, original cost of $1,300, 1-yr. term, taken out on Jan. 1, 2004. 2. On September 30, 2004, Alt received $18,000 rent from its lessee for an eighteen month lease beginning on that date. 3. The regular rate of depreciation is 10% per year. Acquisitions and retirements during a year are depreciated at half this rate. There were no purchases during the year. On December 31, 2003, the balance of the Plant and Equipment account was $260,000. 4. On December 28, 2004, the bookkeeper incorrectly credited sales for a receipt on account in the amount of $10,000. 5. At December 31, 2004, salaries accrued but unpaid were $4,200.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6. Alt estimates that 2% of sales will become uncollectible. 7. On August 1, 2004, Alt purchased, as a short-term investment, 70 $1,000, 9% bonds of Allen Corp. at par. The bonds mature on August 1, 2005. Interest payment dates are July 31 and January 31. 8. On April 30, 2004, Alt rented a warehouse for $2,500 per month, paying $30,000 in advance. Instructions (a) Record the necessary correcting and adjusting entries. 20 Points (b) Indicate which of the adjusting entries may be reversed at the beginning of the next accounting period. 20 Points
Background image of page 2
Problem 2: 30 Points — Future Value and Present Value. In computing your answers to the cases below, you can round your answer to the nearest dollar. Present value tables in the text can be used. On January 1, 1998, Dodd Company sold $800,000 of 10% bonds, due January 1, 2008. Interest on these bonds is paid on July 1 and January 1 each year. According to the terms of the bond contract, Dodd must establish a sinking fund for the retirement of the bond principal starting no later than January 1, 2006. Since Dodd was in a tight cash position during the years 1998 through 2003, the first contribution into the fund was made on January 1, 2004. Case 1:
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/08/2010 for the course ACCOUNTING 50C taught by Professor Fakoor during the Spring '09 term at Golden Gate.

Page1 / 12

Final_Exam Spring_2009 - COMPREHENSIVE FINAL EXAMINATION...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online