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University of Maryland University College Final Examination Acct220: Principles of Accounting I

For this exam, omit all general journal entry explanations.

Note: Ensure to include correct dollar signs, commas, underlines & double

underlines where required.

Note: Students may not communicate any part of this exam to anyone except the

professor of this class. To do so at any time will be considered a violation the UMUC

academic honesty policy.

U ni ver s i ty of Mary l a nd U ni ver s i ty Co ll ege Final Examination Acct220: Principles of Accounting I For this exam, omit all general journal entry explanations. Note: Ensure to include correct dollar signs, commas, underlines & double underlines where required. Note: Students may not communicate any part of this exam to anyone except the professor of this class. To do so at any time will be considered a violation the UMUC academic honesty policy. Question 1: 30% points: Alpha Company's December 31, 2016 trial balance is as follows: Alpha Corporation Trial Balance December 31, 2016 Account Debit Credit Cash $43,500 Accounts Receivable 53,500 Allowance for Doubtful Accounts 1,500 Notes Receivable 30,000 Merchandise Inventory 55,000 Land 20,000 Building 150,000 Accumulated Depreciation, Building $15,000 Equipment 50,000 Accumulated Depreciation, Equipment 20,000 Goodwill 26,000 Accounts Payable 35,500 Long Term Notes Payable 65,500 Common Stock, $5 par, 4,000 shares authorized & outstanding 20,000 Retained Earnings 197,000 Sales Revenue 650,000 Wages & Salaries Expense 160,000 Repair & Maintenance Expense 4,500 Cost of Goods Sold 349,000 Administrative Expenses 35,000 Sales Expenses 25,000 _______ Totals $1,003,000 $1,003,000 Alpha is a small company and records adjusting entries & closing entries only at fiscal (calendar) year end. Correcting and adjusting entries have not been recorded. Acct220 Page 1 0f 7
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Additional Information: a. Notes Receivable is a 3-months, 5% note accepted on November 1, 2016. b. Long Term Notes Payable is a 5-year, 6% note, that was signed on July 1, 2016. Interest is payable annually. c. Building is depreciated at 3% per year. There is no salvage value. d. Equipment is depreciated at 15% year. There is no salvage value. e. Alpha discovered, on December 30 th , that the inexperienced bookkeeper recorded in the general journal and general ledger that day's $2,550 cash sales as a debit to Accounts Receivable and a credit to Sales Revenue. f. The year-end physical count for Merchandise Inventory reflected a value of $51,500. Any difference in value will not be considered theft or loss. g. Wages & Salaries for the last half of December, payable in January, amount to $5,500. h. Alpha estimates that of the Accounts Receivable 6% will not be collectable. Required: a. Prepare in journal form, any required correcting entries b. Prepare in journal form, all end-of-the period adjusting entries c. Prepare a December adjusted trial balance d. Prepare a classified balance sheet for the year ended December 31, 2016 e. Prepare in journal form, the closing entries for the year ended December 31, 2016 NOTE: Students are encouraged to prepare their own T-accounts, on a separate scratch sheet of paper, and track from the beginning balance thru all journal transactions, to ending balances for all accounts used in this problem. Do not turn in any separate scratch sheet of paper - those are student working papers and not part of any solution required for this exam. Question 2: 8% points: Inventory Alpha uses the period method and had the following inventory events during January: Date Units Purchased Unit Cost Date Units Sold Unit Sales Price Jan. 1 150 $7.00 Jan. 2 100 $10.00 Jan. 5 225 7.20 Jan. 7 125 10.00 Jan. 10 100 7.50 Jan. 12 75 12.20 Jan. 15 150 7.80 Jan. 17 200 12.50 Jan. 20 200 7.90 Jan. 24 150 16.00 Jan. 25 150 8.10 Jan. 30 75 8.20 Note: January 1 amount was the beginning inventory and unit value. (Round all total dollar values to the nearest dollar. Round all unit values to the nearest penny.) Acct220 Page 2 0f 7
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