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1. The unadjusted trial balance amount for the Prepaid Rent account on December 31, 2013, is $3,600. The rental is for extra office space for 12 months. The rental started on April 1, 2013 and the $3,600 rental fee was paid on that date. The required adjusting entry on December 31, 2013 would require a
Debit to _______________ (Account Title)
For
$___________
____ (Amount)
2.
Ned Sales had net credit sales in June of $100,000. On June 30, 2013 (before any adjustments) Accounts receivable are $20,000 and Allowance for Doubtful Accounts has a $100 debit balance. If Ned Sales estimates bad debt losses as 4% of net credit sales, the net realizable value of the Accounts Receivable AFTER the June 30, 2013 adjusting entry is:
$_____________
__ (Amount)
3.
If Mel Corporation sells 60,000 shares of its new $1 par value common stock to investors for $14 per share, the required journal entry would require a credit to Common Stock for:
$_______________ (Amount)
4.
Jen Industries purchased specialized equipment on July 1, 2011, that cost $85,000, has a residual value of $5,000, and a useful life of four years. Jen uses the sum of the year’s digits method. The depreciation expense for the year 2013 is:
$_______________ (Amount)
5. On September 1, 2013, five months’ rent income totaling $5,000 was received on an office rental. The advance collection was originally recorded by a credit to Rental Revenue. The required adjusting entry at December 31, 2013 would require a:
Debit to _______________ (Account Title) For $_______________ (Amount)
USE THE FOLLOWING INFORMATION FOR QUESTIONS 6 and 7:
Janet Inc., has an inventory for notebooks on January 1 and purchases of this item during 2013 as follows:
|
Jan. 1 |
Beginning inventory……………………. |
500 units @ $3.00 |
||
|
Mar. 5 |
Purchase……………………………………. |
600 units @ $4.00 |
||
|
Sept. 3 |
900 units @ $5.00 |
|||
|
Nov. 4 |
700 units @ $7.00 |
During 2013, Janet sold 1,200 notebooks at $10.00 each. Assume Janet uses a Periodic Inventory System.
6.
Using FIFO, compute the cost of goods sold on December 31, 2013. $_________.
7.
Using LIFO, compute the cost of the ending inventory on December 31, 2013. $_________.
8.
During a period of falling prices, the cost flow assumption that will generally result in the highestamount of income taxes paid is: (State correct Inventory Cost Flow Method)
____________________
9.
How would this year’s total owners’ equity be affected by a common “stock” (not cash) dividend that had been declared and distributed this year?
a.
Decrease
b.
No effect
c.
cannot tell based on this information
d.
Increase
(Enter your multiple choice answer A, B, C, D for question 9)
(USE THE FOLLOWING INFORMATION FOR QUESTIONS 10 and 11)
Bill Company (which uses a periodic inventory system)
has the following account balances after adjusting entries at December 31, 2013:
Cash $ 220,000
Depreciation Expense 20,000
Paid-in Capital from Treasury Stock Transactions, Common 50,000
Other Operating Expenses 45,000
Sales Discounts 5,000
Accumulated Depreciation- Equipment 30,000
Treasury Stock, Common (22,000 shares) 42,000
Preferred Stock 6% ($10 par) 85,000
Merchandise Inventory (1/1/2013) 100,000
Equipment 170,000
Accounts Receivable 90,000
Paid-in Capital in Excess of Par Value, Preferred 27,000
Purchases 700,000
Interest Expense 20,000
Unearned Revenue 8,000
Purchases Returns and Allowances 15,000
Salary Expense 80,000
Paid-in Capital in Excess of Par Value, Common 90,000
Dividends 10,000
Common Stock ($1 par) 167,000
Sales 940,000
Rent Expense 67,000
Bonds Payable (due 2042) 50,000
Accounts Payable 27,000
Retained Earnings (1/1/2013) 80,000
Merchandise inventory on December 31, 2013 is $130,000
10.
The total stockholders’ equity at December 31, 2013 is:
$_____________ (amount)
11.
The net income for 2013 is:
$_____________ (amount)
QUESTIONS 12- AND 13 ARE BASED ON THE FOLLOWING INFORMATION:
The stockholders’ equity accounts (normal balances) of the Vermont Corp. as of December 31, 2013, appeared as follows:
Common stock, $1 par (100,000 shares authorized, 64,000 shares issued) $64,000
Preferred Stock, 10%, $5 Par (40,000 shares authorized, 10,000 shares issued) 50,000
Paid-in capital–excess over par value, common 70,000
Retained earnings 36,000
Treasury Stock (3,000 shares of common stock) 8,000
12.
A stockholders’ equity section prepared at December 31, 2013, would report total stockholders’ equity of: $___________.
13. At December 31, 2013, the book value per share of the common stock is
(Assume no preferred dividends are in arrears) (round to nearest cent)
$___________.
USE THE FOLLOWING INFORMATION FOR QUESTIONS 14 – 16.
Selected balance sheet account balances are: MO COMPANY
December 31
2013 2012
Cash $ 200,000 $ 300,000
Accounts Payable 45,000 60,000
Accounts Receivable 125,000 140,000
Salaries Payable 8,000 4,000
Land 120,000 140,000
Merchandise Inventory 130,000 150,000
Prepaid Rent 52,000 45,000
Income statement items for the year are:
Sales $800,000
Cost of Goods Sold 380,000
Salary Expense 90,000
Depreciation Expense 40,000
Rent Expense 100,000
14. Cash payments to suppliers for merchandise inventory during 2013 is
$ _____________
15. Cash collections from customers during 2013 is
$ _____________
16. Cash payments to employees for salary during 2013 is
$_____________
USE THE FOLLOWING INFORMATION FOR QUESTIONS 17 – 20.
Assume that the following information is relevant for one of the bond issues of Fran Company:
Face value $900,000
Bond term 20 years
Stated interest rate 10% (paid semiannually)
Market interest rate 8%
Issue date July 1, 2013
Interest payment dates June 30 and December 31
Present Value Factors: 4% 5% 8% 10%
Present value of 1 for 20 periods 0.456 0.377 0.215 0.149
Present value of 1 for 40 periods 0.208 0.142 0.046 0.022
Present value of annuity for 20 periods 13.590 12.462 9.818 8.514
Present value of annuity for 40 periods 19.793 17.159 11.925 9.779
(Use only the present value factors shown above to make calculations.)
17.
On July 1, 2013, the amount the bonds should sell for is
$___________
18.
The total amount of bond interest to be paid in cash over the life of the bonds is:
$_____________
19.
The amount of interest expense for 2013 using the effective interest method of amortization is
$__________ (show exact amount including cents)
20.
The amount of bond interest paid in cash for 2014 is
$___________
