UCB+UGBA102A+Final+Exam+Summer+2009

# UCB+UGBA102A+Final+Exam+Summer+2009 - University of...

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University of California, Berkeley Walter A. Haas School of Business UGBA102A Introduction to Financial Accounting Final Exam; Summer 2009 Student Name: ____________________ Student ID ____________________ Please answer five (5) out of the following six (6) questions. Space is provided for answers on these sheets. Question 1. (20 points) The following independent transactions took place for a retail company: a. Purchased land and a building on the land for \$960,000. The appraised values of the land and building at the time of purchase are \$350,000 and \$650,000, respectively. b. Paid \$5,000 for a sewage system, \$15,000 for a parking lot, \$1,000 to tear down a shack on the land just purchased, and \$10,000 for a block wall. c. Purchased a truck two years ago for \$18,000 with an original six-year estimated useful life and \$3,000 residual value. After two full years of use, the residual value was revised to \$4,000 and the useful life was revised to a total of seven years. Record the depreciation for the third year assuming the straight-line method. d. Purchased a machine on May 1, 2007 for \$15,000. The machine has an estimated useful life of 10,000 hours and no residual value. Record depreciation for 2007 under the production method assuming the machine was used for 2,000 hours during 2007. The company uses a calendar-year reporting period. e. At the end of the third year, the company sold the truck in (c) above for \$10,000. Record the sale of the truck at the end of the third year. Required: Prepare journal entries for each transaction (omit explanations).

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Space for answer to Question 1. UGBA 102A Introduction to Financial Accounting / Geyer / Summer 2009 2
Question 2. (20 points) On March 1, 2007, Sklar Corporation issued 10-year bonds with a face value of \$400,000 dated January 1, 2007. The bonds had a stated interest rate of 12% that is payable each June 30 and December 31. The bonds were sold at face value plus accrued interest. The corporation’s

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## This note was uploaded on 10/24/2011 for the course UGBA 102A taught by Professor Udpa during the Summer '07 term at Berkeley.

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UCB+UGBA102A+Final+Exam+Summer+2009 - University of...

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