ACT3391HomeworkFall2009Chs1to7 - HOMEWORK - Fall 2009...

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HOMEWORK - Fall 2009 – Chapters 1 through 7 ALL homework assignments must be completed by using some type of computer software program, e.g., word, excel. YOU WILL NOT RECEIVE FULL CREDIT FOR THE HOMEWORK UNLESS IT IS COMPLETED BY USING A COMPUTER. NO CREDIT WILL BE GIVEN FOR LATE HOMEWORK. When completing your homework assignments DO NOT use any abbreviations, e.g., spell out Governmental Accounting Standards Board instead of simply writing GASB. As discussed during class, you can work on these homework assignments in groups or as an individual. 1. (0.5 point each journal entry) Journalize the following events/transactions for Acme Company. (Omit explanations.) (The first item has already been answered.) a) Acme Borrowed $5,000,000 from Area Bank. Cash $5,000,000 Notes payable $5,000,000 b) Acme issued 100,000 shares of its common stock and received $1,000,000 (do not worry about stock issuance costs). c) Purchased $25,000 of office furniture (a fixed asset) on a cash basis. d) Acme purchased $100 of office supplies on an account basis. ( Debit an expense account .) e) Acme paid one month of office rent. Monthly rent is $3,500. ( Debit an asset account .) f) Acme performed $35,000 of services for customers on a cash basis. g) Acme performed $100,000 of services for customers on an account basis. h) Acme collected $25,000 of the $100,000 referred to in item g). i) Acme incurred and paid wage expenses of $10,000. 2. (0.5 point each item) For items a) through i) above, indicate the effect (increase, decrease, or no effect) the event/transaction has on total assets, total liabilities and total equity. (The first item has already been answered.) Item Total Assets Total Liabilities Total Equity (a) increase increase no effect (b) (c) (d) (e) (f) (g) (h) (i) 1
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3. (0.5 point each) Prepare the Adjusting Journal Entries (AJEs) that should be made on December 31, 2008, the end of the accounting year, for each of the following independent situations. If no AJE is required, indicate “none.” Assume the firm only makes AJEs at the end of the accounting year. a. On March 1, 2008, the firm collected $120,000 of rent for 12 months in advance. The journal entry to record the receipt included a credit to a revenue account. b. On February 28, 2008, the company borrowed $2,000,000 for one year at 6% simple interest. Interest and principle are due on March 1, 2009. c. On September 1, 2008, the company invested in a four-year, 8%, $12,000,000 bond. Interest will be received every three months with the first interest receipt taking place on December 1, 2008. d. On December 1, 2008, the firm paid $120,000 for a six-month insurance policy. The journal entry to record the payment included a debit to a permanent account. e.
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This note was uploaded on 03/03/2011 for the course ACCT 3391 taught by Professor Turpin during the Spring '10 term at Troy.

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ACT3391HomeworkFall2009Chs1to7 - HOMEWORK - Fall 2009...

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