Mgmt 200 Fall 2010 Exam 1 Solution

Mgmt 200 Fall 2010 Exam 1 Solution - First name: _ Last...

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First name: _________________ Last name: ____________________ PUID: ________________________ Purdue University Krannert School of Management MGMT 200 – Introductory Financial Accounting Fall 2010 Exam 1 – October 6, 2010 - SOLUTION This exam consists of 4 questions on 12 pages (excluding this cover page) for a total of 100 points. Time allowed: 90 minutes. Answer all questions. To ensure full credit and to maximize partial credit, clearly show all supporting calculations. The exam is closed book. A calculator is permitted. GOOD LUCK . Question 1 (25 points) ________ Question 2 (30 points) ________ Question 3 (20 points) ________ Question 4 (25 points) ________ TOTAL (100 points) ________
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Question 1. Journal entries and ledger accounts (25 points) Pele Soccer Academy (PSA) was formed in early 2010 to provide additional one- on-one or small group soccer coaching for high school student athletes looking to earn a university scholarship. The following transactions occurred during 2010. Required: a. Prepare the journal entry (entries) for each of the following transactions that occurred during 2010. 1. PSA issued 1,000 common shares to a small group of individuals for $22 per share. Cash 22,000 Common stock 22,000 2. PSA presented a business plan to the small company division of the local bank and was able to negotiate a bank loan for $15,000. Cash 15,000 Note payable 15,000 3. PSA negotiated a 10-year lease on a piece of property suitable for its business. The rent payment for the first year is $750 per month and PSA paid a full year’s rental in advance. Prepaid rent 9,000 Cash 9,000 Question 1 continued over . . . Mgmt 200 – Exam 1 – Fall 2010 – page 1
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Question 1 continued 4. PSA purchased sports equipment (goals, balls, etc) to equip their new facility. The equipment cost $18,500 and was paid in cash. Equipment 18,500 Cash 18,500 5. PSA purchased supplies to be used in running the business operations. The supplies cost $2,700 and were purchased on account. Supplies inventory 2,700 Accounts payable 2,700 6. PSA purchased a one-year general liability insurance policy for $1,200 cash. Prepaid insurance 1,200 Cash 1,200 7. PSA provided soccer coaching to several promising local players and received $8,400 in cash. Cash 8,400 Coaching revenue 8,400 Question 1 continued over . . . Mgmt 200 – Exam 1 – Fall 2010 – page 2
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Question 1 continued 8. PSA paid wages to part-time employees of $1,500. Wage expense 1,500 Cash 1,500 9. PSA paid for the supplies purchased in transaction 5 above. Accounts payable 2,700 Cash 2,700 10. PSA received $800 from the parent of a local player for coaching lessons to be provided in early 2011. Cash
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This note was uploaded on 10/17/2011 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University-West Lafayette.

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Mgmt 200 Fall 2010 Exam 1 Solution - First name: _ Last...

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