midterm_f2007

midterm_f2007 - UNIVERSITY OF WATERLOO School of...

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UNIVERSITY OF WATERLOO School of Accountancy AFM 101 Professor Duane Kennedy Mid-Term Examination Fall 2007 Date and Time: October 19, 2007, 4:45 – 6:15pm Pages: 16, including cover Tutorial Number and Time: ___________________ Instructions: 1) Cordless calculators may be used. The calculator must be standalone with no other communication or data storage features. 2) Answers for the multiple-choice questions must be recorded on the UW answer card. All other questions must be answered in the space provided on the examination paper. Answers written outside of the provided space will not be graded. You must submit both this examination paper and the UW answer card. 3) Show details of all calculations. 4) The final page of the examination contains a list of ratios. For your convenience, this page may be detached from the examination paper. 5) Please verify that this examination paper has the appropriate number of pages. Question Maximum Marks Mark Awarded 1 14 2 20 3 12 4 10 5 8 6 21 Total 85
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Question 1 (14 marks) Hawthorn Landscaping Corporation is a small company which specializes in the design and construction of unique lawns and gardens for businesses and individuals. At the end of June 2007, the company had $250,000 of net assets and $121,000 of liabilities. Required: Provide the journal entries required to record the following transactions that occurred in July 2007. You do not need to include explanations. Answers must appear in the space provided. A) The company received a deposit of $1,500 from a customer, J. Thomson, for work to be done in August. B) The company sold an old dump truck for $4,250, received in cash. The truck had an original cost of $35,500 and accumulated amortization of 24,800. C) The company received an electric and gas utility bill of $575 for the month of July which is due to be paid in August. 2
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D) Salaries of $8,750 for the month of July were paid. E) Paid $5,800 on account for landscaping supplies which were delivered in June. F) Completed a landscaping project for R. Brown. The invoice price was $11,300. The customer had paid a deposit of $2,000 in June and the remainder of the invoice will be billed on account for collection in August. G) The company purchased a new tractor for use in the business. The cost was $22,400. The company paid $5,000 in cash and signed a short-term note for the remainder. 3
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Question 2 (20 Marks) The following information relates to activities for Houston Limited for 2007. a) Net income for the year ended December 31, 2007, was $22,500. b) The company borrowed $23,000 on a long-term note from the bank. Interest is payable annually and the interest expense is included in net income. c) An additional piece of land was purchased on November 30, 2007. The seller of the land accepted a mortgage as full payment. d)
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This note was uploaded on 01/30/2011 for the course AFM 101 taught by Professor Kennedy during the Spring '08 term at Waterloo.

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midterm_f2007 - UNIVERSITY OF WATERLOO School of...

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