1. (TCO A) Listed below are several information, characteristics, and accounting principles and assumptions. Match the term with the appropriate phrase that states its application. (Points : 30) |
Potential Matches: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 : Earning process completed and realized or realizable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 : Presentation of error-free information with representational faithfulness | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 : Notes as part of necessary information to a fair presentation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 : Affairs of the business distinguished from those of its owners | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 : Valuing assets at amounts originally paid for them | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 : Business enterprise assumed to have a long life | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 : Accruals and deferrals in adjusting and closing process | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 : Yearly financial reports | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9 : Application of the same accounting principles as in the preceding year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 : Stable dollar assumption
2. (TCO B) Adjusting Entries: Unearned rent at 1/1/1X was $10,300 and at 12/31/1X was $10,000. The records indicate cash receipts from rental sources during 201X amounted to $50,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit. (Points : 10)
3. (TCO B) Adjusting Entries: Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the changes in the balances are not given.) You are asked to supply the missing journal entries which would logically account for the changes in the account balances. Interest receivable at 1/1/1X was $5,000. During 201X cash received from debtors for interest on outstanding notes receivable amounted to $5,000. The 201X income statement showed interest revenue in the amount of $4,900. You are to provide the missing adjusting entry that must have been made, assuming reversing entries are not made. For each journal entry write Dr. for debit and Cr. for credit. (Points : 10)
4. (TCO B) Adjusting Entries: Accumulated depreciation-machinery at 1/1/1X was $150,000. At 12/31/1X, the balance of the account was $300,000. During 201X, one piece of equipment was sold. The equipment had an original cost of $100,000 and was 1/2 depreciated when sold. You are to prepare the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit. (Points : 10)
5. (TCO B) Adjusting Entries: Allowance for doubtful accounts on 1/1/1X was $70,000. The balance in the allowance account on 12/31/1X after making the annual adjusting entry was $70,000 and during 201X bad debts written off amounted to $40,000. You are to provide the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit. (Points : 10)
1. (TCO B) Adjusting Entries: Prepaid rent at 1/1/1X was $50,000. During 201X rent payments of $110,000 were made and charged to “rent expense.” The 201X income statement shows as a general expense the item “rent expense” in the amount of $140,000. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made. For each journal entry write Dr. for debit and Cr. for credit. (Points : 10)
2. (TCO B) Adjusting Entries: Retained earnings at 1/1/1X were $150,000 and at 12/31/1X it was $260,000. During 201X cash dividends of $60,000 were paid and a stock dividend of $50,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry. For each journal entry write Dr. for debit and Cr. for credit. (Points : 10)
3. (TCO C) Presented below is information related to Square Company.
Instructions: Prepare in good form a multiple-step income statement for the year 2011. Assume a 30% tax rate and that 100,000 shares of common stock were outstanding during the year (Points : 40)
4. (TCO D) The following balance sheet was prepared by the bookkeeper for Stripes Company as of December 31, 201X Stripes Company Balance Sheet as of December 31, 201X is as follows.
The following additional information is provided:
(3) Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.
5. (TCO E) Jack Sawyer is presently leasing a copier from John Office Equipment Company. The lease requires 11 annual payments of $4,500 at the end of each year and provides the leaser (John) with an 8% return on its investment. You may use the following 8% interest factors.
Instructions
7. (TCO G) Rye Company was formed on December 1, 2010. The following information is available from Rye’s inventory record for Product Bread.
A physical inventory on March 31, 2011, shows 3,000 units on hand.
8. (TCO H) A truck was acquired on July 1, 2009 at a cost of $216,000. The truck had a 6-year useful life and an estimated salvage value of $24,000. The straight-line method of depreciation was used. On January 1, 2012, the truck was overhauled at a cost of $20,000, which extended the useful life of the truck for an additional 2 years beyond that originally estimated (salvage value is still estimated at $24,000). In computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned. |