Question # 3: (5 points) (CLO 3) Yara Company has the following balances in selected accounts on December 31 2018 Accumulated Depreciation- Equipment Notes Payable Prepaid Insurance Supplies Unearned Spraying Revenues 6,650- 20,000- 2,400 2,940 36,000 Al otthe accounts havenomal belances, The information below has been gathered at December 31, 2018. 1. Depreciation on the equipment for 2018 is 1,250. 2. Yara Company borrowed 20,000 by signing a 10% oneyear note on July 1. 3. Yara Company paid 2,400 for 12 months of insurance coverage on October 4. Yara Company performed disinfecting services for a client in December 2018. 5. A count of supplies on December 31, 2018, indicates that supplies of 950 2018. 1, 2018. The client will be billed 3,000 are on hand. Instructions Using the above additional information, prepare the adjusting entries that should be made by Yara Company on December 31. Solution Date Accounts Titles Amount Answer the following questions. All salculations must appear on the answer sheet Question #1: (4 points) (CLO 2) Prepare journal entries for each of the following transactions. 1. Performed services for customers on account 5,000 2. Purchased 20,000 of equipment on account 3. Received 3,000 from customers in transaction 1 4. The company paid dividends of 1,000. Solution Date Accounts Titles Amount Question # 2: (6 points) (CLO 3) MERA Enterprises purchased computer equipment on January 1, 2014 for $14,000 The company expects to use the equipment for 7 years. What is the book value of the equipment at the end of the third year? Solution Answer the following questions. All salculntions mast appear on the answer sheet. Question 1: 2 points) ledger account balances for MALA Company are listed below Accounts Payable 8,000 7,000 11,000 9,000 4,000 8000 40,000 25,000 8000 Accounts Receivable Cash Share Capital-Ordinary Dividends Salaries Payable Repair Revenue Salaries Expense Prepaid Insurance Expense Unearned Revenue 2,000 Utilities Expense 12,000 Instructions Prepare a trial balance in proper form for MALA at December 31, 2011 DR Account Account-py Accounts Receivable aL al - ordinsty 3 00 salaries payable Repair Revenue salari es Expense-1 25,000 TOTAL Onntut4i (8 points) MULTIPLE CHOICE QUESTIONS (CO 1,2 nd 3) 1. The time period assumption states that a a transaction can only affect one period of time b estimates should not be made # a transaction afflects more than one tim penod C. aqistrerts tothe enterprises accounts can only be made in d. the economic ife of a business can be divided into period when the business terminates its operations arficial ime periods 2 An adjusting entry a aflects two statement of financial position accounts b. affects two income statement accounts c affects a statement of financial position account and an income statement account d is always a compound entry 3. Uneamed revenues are a received and recorded as liabilities before they are eamed b. earned and recorded as liabilities before they are received. c eaned but not yet received or recorded d. earned and aready received and recorded a an expense account , an equity a court. ca iability account d. a contra asset account. 5. Rusthe Company showed the following balances at the end of its first year s 14,000 1,400 7,000 5,600 8400 2,800 1,400 42,000 35,000 Cash Prepaid insurance Notes payable Share What did Rusthe Company show as total credits on its trial balance? a. $60,200 b. $58,800 C. $57,400 d. $61,600 1,800. During December, Gibson had credit revenues of 7,500 and collected accounts receivable of 6,000. At December 31, 2011, the accounts 6. At December 1, 2011, Gibson Company's accounts receivable balance was a. 1,800 debit. b. 3,300 debit C. 9,300 debit. d. 3,300 credit. Question #2: (6 points) Transactions for YARA Company for the month of October are presented below lize each transaction and then detrmine the ending balance for cash only 1. Issued ordinary shares in exchange for $52,000 cash.ts 2. Purchased land costing $18,000 for cashsel 3. Purchased supplies on account for $750ceat 4. Paid $4,000 for a one-year insurance policy 5. Received $12,000 for services previously performed on account Solution DR CR 2. 3. 5. Dr CASH CR Question # 3; (5 points) MULTIPLE CHOICE QUESTIONS 1. Which of the following rules is incorrect? a. Credits decrease the dividends account b. Debits increase the share capital-ordinary account. c. Credits increase revenue accounts 2 Answer the following questions. All calculations must appear on the answer sheet. Question # 1 : (4 points) Latitudes Company had the following adjusted trial balance. LATITUDES COMPANY Adjusted Trial Balance for the month ended June 30, 2011 Account titles Debits Credits Cash Accounts Receivable $ 3,700 3,900 500 Supplies 1,800 200 5,000 800 Accounts Payable Unearned Revenue Share Capital-Ordinary Retained Earnings Dividends Service Revenue Salaries Expense Miscellaneous Expense Supplies Expense Salary Payable 300 4.100 1.300 300 2,300 400 $12.300 $12.300 (a) Prepare closing entries at June 30, 2011. Date Accounts Titles Amount Question # 2i (2 points) For each of the following, determine the missing amounts. Cost of Operating 1,000,000 200,000 50,000 2. 950,000 1,800,000 700,000 Question 3:(3 points) An inexperienced accountant for Leyland Company made the following errors in recording merchandising transactions 1. A E225 refund to a customer for faulty merchandise was debited to Sales 225 and credited to Cash $225 A E280 credit purchase of supplies was debited to Merchandise Inventory 280 and credited to Cash 280 2. 3. A 160 sales return was debited to Sales 4. A cash payment of 30 for freight on merchandise purchases was debited to Freight-out 300 and credited to Cash 300 Instructions Prepare separate correcting entries for each error, assuming that the incorrect entry is not reversed Date Accounts Titles Amount Dr Cost of 1 1.000,000 300.000 100,000 Qoestion 3:3 points Prepare the necessary jourmal entries to record the following transactions, assuming Hewiltt Company uses a perpetual inventory system (a) Purchased $35,000 of merchandise on account, terms 2/10, n/30 (b) Returned $500 of damaged merchandise for credt ) Paid for the merchandise purchased within 10 days Date Accounts Titles Amount Ouestion4: (6points) Prepare the necessary journal entries to record the following transactions, assuming Darby Company uses a perpetual inventory system (a) Darby sells $50,000 of merchandise, terms 1/10, n/30. The merchandise cost $30,000. The customer in (a) returned $5,000 of merchandise to Darby. The merchandise returned cost $3,000 (b) (c) Darby received the balance due within the discount period