Accounting problems

2.
$_______________ (Amount)

3.
$_______________ (Amount)

4.
$_______________ (Amount)

5.
Debit to
_______________ (Account Title)

For
$_______________ (Amount)

6.
$_______________ (Amount)

7.
$_______________ (Amount)

8.
_______________ (Method)

9.
_______________ (MC answer)

10.
$_______________ (Amount)

11.
$_______________ (Amount)

12.
$_______________ (Amount)

13.
$_______________ (Amount)

14.
$_______________ (Amount)

15.
$_______________ (Amount)

16.
$_______________ (Amount)

17.
$_______________ (Amount)

18.
$_______________ (Amount)

19.
$_______________ (Amount)

20.
$_______________ (Amount)

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:

Purchase

Purchase

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 highest amount 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

$___________