Solutions Sample Exam

Solutions Sample Exam - Solutions Sample Exam Question 1:...

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Solutions Sample Exam Question 1: 2012 Premium Inventory (6,000 x $0.90). ....................................................... 5,400 Cash (or Accounts Payable). ........................................................ 5,400 Cash (or Accounts Receivable) (200,000 x $3.50). ................................. 700,000 Sales. ............................................................................................ 700,000 Premium Expense. ................................................................................... 4,050 Premium Inventory. ..................................................................... 4,050 45,000 ÷ 10 = 4,500 × $0.90 = $4,050 Premium Expense. ................................................................................... 6,750 Estimated Liability for Premiums. ............................................... 6,750 200,000 × 60% = 120,000 coupons 120,000 – 45,000 redeemed = 75,000 ÷ 10 = 7,500 to be redeemed in 2013 7,500 × $0.90 = $6,750 Note total expense for year = 120,000 ÷10 = 12,000 x $0.90 = $10,800 ($4,050 + $6,750) 2013 Premium Inventory (8,000 x $0.90). ........................................................ 7,200 Cash (or Accounts Payable). ........................................................ 7,200 Cash (or Accounts Receivable) (300,000 x $3.75). ................................. 1,125,000 Sales. ............................................................................................ 1,125,000 Estimated Liability for Premiums (balance from 2012) 7,500 x $0.90. .... 6,750 Premium Expense 1,500 x $0.90. .............................................................. 1,350 Premium Inventory . ....................................................................... 8,100 90,000 ÷ 10 = 9,000 x $0.90 = $8,100 Premium Expense. ......................................................................................
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Solutions Sample Exam - Solutions Sample Exam Question 1:...

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