ACCT110

Accounting Principles 1

Fi

nal Exam: Part I & II

This assessment is worth 15% of your overall grade.

Completing this assessment will help to:

Course Outcomes:

Recognize the importance of accounting ethics and interpersonal skills

when resolving accounting issues.

Create and analyze basic financial statements using computerization.

Develop and evaluate cash control operations including bank

reconciliation and petty cash.

Construct a complete accounting cycle including the analysis, recording

process from source documents, transaction summary, through post

-

closing trial balance for a

service business using computerization.

Program Outcome

s:

Record and report financial information using Generally Accepted

Accounting Principles (GAAP).

Integrate theory, knowledge and technology to interpret financial and

non

-

financial information to aid decision makers within an organization

Institutional Outcomes

:

Relational Learning

: Transfer knowledge, skills and behaviors acquired

through formal and informal learning and life experiences to new

situations.

Thinking Abilities

:

Employ strategies

for reflection on learning and

practice in order to adjust learning processes for continual improvement.

Quantitative and Scientific Reasoning

: Follow established methods of

inquiry and mathematical reasoning to form conclusions and make

decisions.

Deadline

:

Due

by

the end of week 7.5

11:59

pm

,

ET

.

Par II Directions

: the assessment contains 25 questions. It is untimed and you

have one attempt.

Part I

Directions

:

Payroll is usually the largest expense of a business. It is very important to know

what

taxes to withhold and when they need to be paid. It is also very important

to be able to record payroll transactions correctly.

This assessment assesses your ability to determine which taxes to withhold and

how to record them correctly in your company bo

oks.

1. Payroll Problem

75 points

Guides Co. has four employees. FICA

Social Security

taxes are

6.2% of the first

$110,100 paid to each employee, and FICA Medicare taxes are1.45% of gross pay.

Also, for the first $7,000 to each employee the companys FUTA taxes are 0.8%

and SUTA taxes are 1.75%. The company is preparing its payroll calculations for

the week ended September 30. Payroll Records show the following for the

companys four employees.

Gross Pay

Current pay

Name

Through 9/23

Gross

Pay

Income Tax

Withholding

State Tax

Withholding

Ahmed

$108,500

$2,500

$198

$50

Carlos

36,650

1.515

182

45

June

6,650

475

32

10

Marie

22,200

1,000

68

23

In addition to gross pay, the company must pay one

-

half of the $50 per employee

weekly

health insurance

;

each employee pays the remaining one

-

half

. The

company also contributes an extra 5% of each employees gross pay (at no cost to

employees) to a pension fund.

Employees also paid 6.88 per week in union dues

with the exception of Ahmed sin

ce he is a supervisor.

Required:

Compute the following for the week ended September 30 (round amounts to the

nearest cent).

1.

Each employees FICA withholdings for Social Security.

2.

Each employees FICA withholding for Medicare.

3.

Employers FICA taxes for

Social Security.

4.

Employers FICA taxes for Medicare.

5.

Employers FUTA taxes.

6.

Employers SUTA taxes.

7.

Each employees net (take

-

home) pay.

8.

Employers total payroll

-

related expense for each employee.

2.

Bank Reconciliation

25 points

Wright Company deposits

all cash receipts on the day when they are received

and it makes all cash payments by check. At the close of business on May 31,

2013, its Cash account shows a $27,5

00 debit balance. The company

May

s

bank

statement shows $25,800 on deposit in the bank.

a)

The May 31 bank statement included a $100 debit memorandum for bank

services; the company has not yet recorded the cost of these services.

b)

Outstanding checks as of May 31 total $5,600.

c)

May 31 cash receipts of $6,200 were placed in the banks night deposit

ory

after banking hours and were not recorded on the May 31 bank statement.

d)

In reviewing the bank statement, a $400 check written by Smith Company

was mistakenly drawn against Wrights account.

e)

A debit Memorandum for $600 refers to a $600 NSF check from a

customer; the company has not yet recorded this NSF check.

Prepare a bank reconciliation for the company using the above information.