Exam 2A Soltuion - 2012 Term 2A Marking Multiple Choice 1 2...

Info icon This preview shows pages 1–6. Sign up to view the full content.

2012 Term 2A Marking Multiple Choice: 1. A 2. D 3. A 4. A 5. C 6. A 7. C 8. D 9. A 10. A Question 1 Cost of Good Sold (45 @ $8) = $360 (75 @ $9) = $675 $1,035 2 marks Ending Inventory (75 @ $9) = $675 (65 @ $10 = 650 (50 @ $12 = 600 $1,925 2 marks
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Question 2 SHANNONVALE LTD. Statement of Earnings Year Ended December 31, 2009 Sales revenues Sales .................................................................................. $595,000 Less: Sales returns and allowances ................................... 20,000 Net sales ............................................................................. 575,000 1 Cost of goods sold .............................................................. 420,000 Gross profit ......................................................................... 155,000 1 Operating expenses ........................................................................ 82,000 Earnings from operations ............................................................... 73,000 1 Other revenues Interest revenue ...................................................................... $19,000 .5 Other expenses Interest expense ...................................................................... 20,000 .5 (1,000) Earnings before income tax ............................................................ 72,000 1 Income tax expense ....................................................................... 25,000 Net earnings ................................................................................... $ 47,000 1 Total 6 marks (in bold) (b) Gross profit margin: $155,000 ÷ $575,000 = 27% 1 mark Profit margin: $47,000 ÷ $575,000 = 8.2% 1 mark
Image of page 2
Question 3 (a) May 1 Delivery Truck .......................................................................... 42,000 Cash ............................................................................... 8,000 Notes Payable ................................................................ 34,000 (To record acquisition of delivery truck and signing of a 2-month, 6% note) (b) June 30 Depreciation Expense .............................................................. 700 Accumulated Depreciation—Delivery Truck ................. 700 (To record monthly depreciation; $42,000 ÷ 5 years ÷ 12 months= $700/month) June 30 Interest Expense ...................................................................... 170 Interest Payable ............................................................. 170 (To accrue interest on notes payable; $34,000 × 6% × 1/12 = $170) (c) Assets Delivery Truck $42,000 Less: Accumulated Depreciation—Delivery Truck 1,400 $40,600
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Question 4 Service Revenue .......................................................................................... 24,600 Income Summary .............................................................. 24,600 Income Summary ...........................................................................
Image of page 4
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 6
This is the end of the preview. Sign up to access the rest of the document.
  • Winter '11
  • K.R.Golding
  • Accounting, Revenue, ........., Generally Accepted Accounting Principles

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern