Financial Accounting

Practice quiz 4 - Chapters 4, 5

15 Points NAME___________________________________

1. On August 1, Academy Supply had an inventory of 50 computer desks at a cost of

$125 each. The company uses a perpetual inventory system. During August, the

following transactions and events occurred.

Aug. 4 Purchased 10 desks at $125 each from Morris, terms 1/10, n/30.

Aug. 6 Received credit of $250 for the return of 2 desks purchased on Aug. 4 that were defective.

Aug. 9 Sold 12 desks for $175 each to Wonder School, terms 2/10, n/30.

Aug. 14 Paid Morris in full, less discount.

Aug. 15 Issued a credit to Wonder School for the return of 1 desk which is in usable condition and will be returned to stock.

Aug. 27 Received payment in full from Wonder School for the sale on Aug. 9.

Instructions:

a) On the form provided on the following page, journalize the August transactions

for Academy Supply. Omit explanations. (6 points)

b) Using the account form below, enter the Inventory balance at the beginning of

August and the August transactions that affect this account. Calculate the balance

at the end of August. (1 point)

Inventory

Date	Account Titles	Debit	Credit

2. a) Using the following information for Campbell Enterprises, prepare an annual:

Multiple-step income statement

Retained earnings statement

Classified balance sheet (7 points)

Campbell Enterprises, Inc.

Adjusted Trial Balance

December 31, 2016

Debit Credit

Cash 4,000

Accounts Receivable 15,000

Inventory 30,000

Prepaid Insurance 4,000

Supplies 3,000

Long-term Investment in Stock 6,000

Land 20,000

Buildings 120,000

Accumulated Depreciation

Buildings 20,000

Patents 10,000

Accounts Payable 10,000

Unearned Revenue 2,000

Bonds Payable (due in 2023) 20,000

Common Stock 80,000

Retained Earnings 44,000

Dividends 30,000

Sales Revenue 305,000

Interest Revenue 5,000

Sales Discounts 6,000

Sales Returns & Allowances 8,000

Cost of Goods Sold 188,000

Salaries and Wages Expense 21,000

Depreciation Expense 10,000

Utilities Expense 5,000

Insurance Expense 3,000

Supplies Expense 2,000

Interest Expense 1,000

486,000 486,000

Campbell Enterprises, Inc. Income Statement

Campbell Enterprises, Inc. Retained Earnings Statement
Campbell Enterprises, Inc. Balance Sheet

b) Using the above information, compute Campbells gross profit rate. Please show the details of

your computation: (1 point)

Gross profit rate ____________________________________________