ACC311_PRACTICETEST2 - Exam #: Fall 2008, Exam II, Combined...

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Exam #: Fall 2008, Exam II, Combined Keys Ques. Form A 1. B 2. D 3. A 4. B 5. C 6. C 7. C 8. B 9. C 10. C 11. B 12. C 13. D 14. A 15. A 16. E 17. C 18. A 19. A 20. D 21. B 22. B 23. C 24. A 25. B
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SECTION II (50 points) You MUST show your work to receive credit for your answers and to receive partial credit. Please try to be as neat and organized as possible. PROBLEM 1 (22 points) The following summary events occur for Morris Engineering during 2008 and 2009, it’s first two years of operations. Requirement 1 : Record each of the following transactions. 1. During 2008 - Provided services to customers on account for $32,000. Accounts Receivable 32,000 Service Revenue 32,000 2. During 2008 - Received $22,000 from customers on account. Cash 22,000 Accounts Receivable 22,000 3. 12/31/2008 – Based on an aged trial balance, estimated that 30% of the balance in accounts receivable will not be collected. Bad Debt Expense 3,000 Allowance for Doubtful Accounts 3,000 4. During 2009 - Provided services to customers on account for $45,000. Accounts Receivable 45,000 Service Revenue 45,000 5. During 2009 - Received $6,000 from customers for services provided in 2008. Cash 6,000 Accounts Receivable 6,000 6. During 2009 - Wrote off the remaining amounts owed from services provided in 2008. Allowance for Doubtful Accounts 4,000 Accounts Receivable 4,000
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7. During 2009 - Received $40,000 from customers for services provided in 2009. Cash 40,000 Accounts Receivable 40,000 8. During 2009 - Collected $2,000 from a customer whose account had been previously written off. Accounts Receivable 2,000 Allowance for Doubtful Accounts 2,000 Cash 2,000 Accounts Receivable 2,000 1. 12/31/2008 – Based on an aged trial balance, estimated that 30% of the balance in accounts receivable will not be collected. Bad Debt Expense 500 Allowance for Doubtful Accounts 500 Requirement 2 : Calculate the net realizable value of accounts receivable at the end of each year. 2008 2009 Total accounts receivable $10,000 $5,000 Less: Allowance for uncollectible accounts 3,000 1,500 Net realizable value $ 7,000 $3,500
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PROBLEM 2 (12 points) of Midwest Corporation uses the periodic inventory method. Its inventory records reflected the following information for the month of August: Date Transaction Units Unit Cost 8/1 Beginning Inventory 600 $5 8/3 Purchase # 1 400 $5 8/5 Sale # 1 600 8/11 Purchase # 2 1,000 $8 8/17 Sale # 2 700 8/19 Purchase # 3 1,000 $9 8/21 Sale # 3 900 8/29 Purchase # 4 2,000 $10 The selling price for all units sold was $20. Required : (You Must Show Your Computations to Receive Credit) a. Determine the amount of Revenue, Cost of Goods Sold, and Ending Inventory (all in dollars) under each of the following methods assuming the periodic inventory system: Inventory Costing Method Revenue Cost of Goods Sold Ending Inventory Weighted Average $ 44,000 $ 18,480 $ 23,520 FIFO $ 44,000 $ 14,800 $ 27,200 LIFO $ 44,000 $ 21,800 $ 20,200 b. Based on the information above, compute Midwest Corporation’s gross profit percentage
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ACC311_PRACTICETEST2 - Exam #: Fall 2008, Exam II, Combined...

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