Help
1. On March 1, a business paid $3,600 for a twelve month liability insurance policy. On April 1 the same business entered into a twoyear rental contract for equipment at a total cost of $18,000. Determine the following amounts: (a) insurance expense for the month of March (b) prepaid insurance as of March 31 (c) equipment rent expense for the month of April (d) prepaid equipment rental as of April 30 Answer: 2. On January 1st, Great Designs Company had a debit balance of $1,450 in the Office Supplies account. During the month, Great Designs purchased $115 and $160 of office supplies and journalized them to the Office Supplies asset account upon purchasing. On January 31st, an inspection of the office supplies cabinet shows that only $350 of Office Supplies remains in the locker. Prepare the January 31st adjusting entry for Office Supplies. Answer: 3. Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Cash Accounts Receivable Office Supplies Land Interest Receivable Building Accumulated Depreciation Office Equipment Depreciation Expense - Office Equipment Accounts Payable Interest Payable Insurance Payable Utilities Expense Notes Payable Capital Stock Prepaid Insurance Service Revenue Owner Capital Insurance Expense Utilities Payable Office Supplies Expense Unearned Service Revenue Dividends Interest Expense Transactions Account(s) Debited a. Utility bill is received; payment will be made in 10 days. b. Paid the utility bill previously recorded in transaction (a). c. Bought a three year insurance policy and paid in full. d. Made an entry to adjust for the expired portion of the insurance premium (for the policy mentioned in transaction (c). e. Received $7,000 from a contract to perform accounting services over the next two years. f. Made an entry to adjust for half of the services performed in (e). g. Purchased office supplies, paying part cash and charging the balance on account. h. Borrowed money from a bank and signed a note payable due in six months. i. Recorded onemonth's accrued interest on the note payable in (h). j. Depreciation is recorded Account(s) Credited on office equipment. 4. The following is the adjusted trial balance for Nadia Company. Nadia Company Adjusted Trial Balance December 31, 2010 Cash Accounts Receivable Prepaid Expenses Equipment Accumulated Depreciation Accounts Payable Notes Payable Due on June 30, 2011 Nadia Porter, Capital Nadia Porter, Drawing Fees Earned Wages Expense Rent Expense Utilities Expense Depreciation Expense Miscellaneous Expense Totals 5,130 3,300 550 12,400 2,200 700 4,000 13,000 700 9,930 2,450 1,900 1,475 1,150 775 29,830 29,830 Prepare an Income Statement, Balance Sheet, and Statement of Owner's Equity (include financial statement headings for each). Assume that the capital account started with a beginning balance of $10,000. Answer: 5. Based upon the following data, determine the cost of merchandise sold for August. Merchandise Inventory August 1 Merchandise Inventory August 31 Purchases Purchases Returns & Allowances Purchases Discounts Freight In $ 75,560 96,330 373,880 14,760 10,900 4,135 Answer: 6. Determine the amount to be paid in full settlement of each invoice, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Using Taccounts is very helpful. Merchandise a $8,200 b $3,250 Answer: Freight Freight Terms Returns and Paid by Allowances Seller $180 FOB Shipping $1,200 Point, 1/10, net 30 $65 FOB $450 Destination, 2/10, net 45 7. Based on the information below, journalize the entries for the Seller and the Buyer. Both use a perpetual inventory system. (a) (b) (c) Seller sells Buyer on account merchandise costing $245 for $645, terms 2/10, net 30, FOB destination. The freight charge is $45. Buyer returns as defective $145 worth of the $645 merchandise received. The seller's cost is $70. Buyer pays within the discount period. Seller Accounts DR CR Buyer Accounts DR CR 8. The bank statement for Gatlin Co. indicates a balance of $7,735.00 on June 30, 2010. After the journals for June had been posted, the cash account had a balance of $4,098.00. Prepare a bank reconciliation and required journal entries on the basis of the following reconciling items: (a) (b) (c) (d) (e) (f) Cash sales of $742 had been erroneously recorded in the cash receipts journal as $724. Deposits in transit not recorded by bank, $425.00. Bank debit memo for service charges, $35.00. Bank credit memo for note collected by bank, $2,475 including $75 interest. Bank debit memo for $256.00 NSF (not sufficient funds) check from Janice Smith, a customer. Checks outstanding, $1,860.00. Answer: 9. The following journal entries would be used in one of the two methods of accounting for uncollectible receivables that are written off. Identify each. (a) Bad Debt Expense Accounts ReceivableBillings (b) Allowance for Doubtful Accounts Accounts ReceivableGrover 450 450 450 450 Answer: 10. At the end of the current year, Accounts Receivable has a balance of $900,000; Allowance for Doubtful Accounts has a debit balance of $3,500; and net sales for the year total $4,000,000. Bad debt expense is estimated at 1/2 of 1% of net sales. Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable. Answer: (a) (b) (c) 11. Journalize the following transactions for Solley Company that occurred during 2011 and 2012. November 14, 2011 Received a $4,800.00, 90day, 9% note from Alan Hibbetts in payment of his account. December 31, 2011 Accrued interest on the Hibbetts note. February 12, 2012 Received the amount due from Hibbetts on his note. Date Description Post Ref Debit Credit 12. Providence Medical Center bought equipment on January 2, 2013, for $15,000. The equipment was expected to remain in service for four years and to perform 1,000 surgeries. At the end of the equipment's useful life, Providence estimates that its residual value will be $3,000. The equipment performed 100 surgeries the first year, 300 the second year, 400 the third year, and 200 the fourth year. Prepare a schedule of depreciation expense per year for the equipment under the three methods. Straightline Units of Production Double Declining Balance Year 1: Year 1: Year 1: Year 2: Year 2: Year 2: Year 3: Year 3: Year 3: Year 4: Year 4: Year 4: 13. Stagecoach Van Lines purchased a building for $700,000 and depreciated it on a straightline basis for over a 40year period. The estimated salvage value was $100,000. After using the building for 15 years, Stagecoach realized that wear an tear on the building would force the company to replace it before 40 years. Starting with the 16 th year, Stagecoach began depreciating the building over a revised total life of 30 years and increased the estimated salvage value to $175,000. Record depreciation expense on the building for years 15 and 16. Year 15: Year 16
