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mid1_s04_q - Name ID Accounting 15.501/516 Spring 2004...

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Name__________________________________________ ID#____________ Accounting 15.501/516 Spring 2004 Midterm 1 Exam Guidelines 1. Fill in your name above. Exams without names will not be graded. If you do not have an ID number, leave the corresponding space blank. 2. This exam has 14 pages including the cover page. Please make sure you have every page. 3. You are not allowed to refer to any material in answering this exam. 4. The exam has to be completed in 80 minutes. The total number of points is also 80, so you have approximately 1 point / minute. Budget your time accordingly. 5. Work in a clear, readable manner. Ample space is provided for every answer 6. Show computations for partial credit. 7. If you feel assumptions are necessary to answer a question, state all assumptions clearly. 8. Laptops and computers are prohibited. You may use calculators. 9. Do not fill in the following table. Question Total points Points received 1: Balance sheet equation 32 2: Accounts receivables & revenue recognition 16 3: Inventories 17 4: Cash flow statement 15 Total 80 1
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Question 1 32 points Wilbur Retailers is a retail grocery store that always sells for cash. The following is a list of transactions and accounting entries for the half-year ended June 30, 2003. Using the Balance-Sheet-Equation Worksheet provided next page, record the dollar effect of every accounting entry. The first row provides you with the beginning balances in every account. Providing ending balances for every column. Assume Wilbur records all adjusting entries at the end of every six months. 1. On Jan 1, 2003 Wilbur Retailers purchases merchandise on account for $349,000. 2 points 2. On Jan 1, 2003, Wilbur also pays rent for the next twelve months @ $1,200 per month. 2 points 3. On March 1, Wilbur acquires new cash registers and price-scan equipment during the year for $15,000. It makes $8,000 down payment and promises to pay the rest in a bulk amount seven months from now. 3 points 4. On May 1, the company reaches an agreement with a supplier, Fast & Fresh for a long-term supply contract. Under this agreement, the company will source in July its remaining inventory requirements of $ 357,000 for the rest of the year from Fast & Fresh in return for a 10% discount. 2 points 5. During the first half of 2003, Wilbur makes sales worth $ 550,000, all in cash.
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