UNVA ACTG 500 MID-TERM EXAM CHAPTERS 1-5 NAME Fabiana Barbeiro CHAPTER ONE

Ex. 176

Determine the missing amount for each of the following. Assets = Liabilities + Stockholders' Equity 1. (a) $50,000 $95,000 2. $125,000 (b) $85,000 3. $140,000 $65,000 (c)
Solution 176

1. 2. 3.

(a) = $145,000 (b) = $40,000 (c) = $75,000

Ex. 177

For the items listed below, fill in the appropriate code letter to indicate whether the item is an asset, liability, or stockholders' equity item. Code Asset A Liability L Stockholders' Equity SE SE_ _ 1. Rent Expense _ A _____ 2. Office Equipment L_____ 3. Accounts Payable SE____ 4. Retained Earnings SE____ 5. Insurance Expense A_____ 6. Cash A_____ 7. Accounts Receivable SE____ 8. Dividends SE____ 9. Service Revenue L_____ 10. Notes Payable

Ex. 198

Indicate in the space provided by each item whether it would appear on the Income Statement (IS), Balance Sheet (BS), or Retained Earnings Statement (RE): a. IS____ Service Revenue b. IS____ Utilities Expense c. BS___ Cash d. BS___ Accounts Payable e. BS___ Office Supplies f. IS____ Wage Expense g. BS___ Accounts Receivable h. RE___ Retained Earnings (ending) i. BS___ Equipment j. IS____ Advertising Expense k. RE___ Dividends l. BS___ Notes Payable

Ex. 194 Prepare an income statement, a retained earnings statement, and a balance sheet for the dental practice of Ted Terner, DDS, Inc. from the items listed below for the month of September.

Retained Earnings, September 1 Common Stock Accounts payable Equipment Service revenue Dividends Dental supplies expense Cash Utilities expense Dental supplies Salaries expense Accounts receivable Rent expense WRITE THE ACCOUNT NAMES AND AMOUNTS IN YOUR ANSWER.

$22,000 20,000 7,000 30,000 25,000 6,000 3,500 6,000 700 2,800 9,000 14,000 2,000

TED TERNER, DDS, INC. Income Statement For the Month Ended September 30, 2008

Revenues Expenses Salary Expense Rent Expense Utility Expense Dental Supplies Total expenses Net income TED TERNER, DDS, INC. Retained Earnings Statement For the Month Ended September 30, 2008

$25,000 $9,000 $2,000 $700 $3,500 $15,200 $9.800

Retained Earnings, September 1 Add: Net Income

$22,000 $9,800 $31,800

Less: Dividends Retained Earnings, September 30

$6,000 $25,800

TED TERNER, DDS, INC. Balance Sheet September 30, 2008

Assets Cash Accounts Receivable Equipments Dental Supplies Total assets Liabilities and Stockholders' Equity Liabilities Accounts Payable Stockholders' Equity Common Stock Retained Earnings $20,000 $25,800 _________ $45,800 $52,800 $7,000 $6,000 $14,000 $30,000 $2.800 $52,800

Total liabilities and stockholders' equity

CHAPTER TWO
Ex. 164

For the accounts listed below, indicate if the normal balance of the account is a debit or credit. Normal Balance Accounts Debit or Credit 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Service Revenue Rent Expense Accounts Receivable Accounts Payable Common Stock Office Supplies Insurance Expense Dividends Office Building Notes Payable Credit Debit Debit Credit Credit Debit Debit Debit Debit Credit

Ex. 172

Transactions for Ed Petry Company for the month of October are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations. 1.Issued stock in exchange for $40,000 cash. 2. Purchased land costing $28,000 for cash. 3. Purchased equipment costing $12,000 for $3,000 cash and the remainder on credit. 4. Purchased supplies on account for $800. 5. Paid $1,000 for a one-year insurance policy. 6. Received $3,000 cash for services performed. 7. Received $4,000 for services previously performed on account. 8. Paid wages to employees for $2,500. 9. Paid dividends of $1,000.

Solution 172
1 Cash Common Stock 2 Cash Land 3 Cash Equipment 4 Supplies Accounts Payable 5 Pre-paid Insurance Policy Cash 6 Cash Service Revenue 7 Service Revenue Accounts Relievable Wages Expense Cash Dividends Cash 4,000 4,000 2,500 2,500 1,000 1,000 1,000 3,000 3,000 12,000 800 800 1,000 28,000 3,000 debit 40,000 credit 40,000 28,000

Ex. 183

The ledger account balances for Jenkins Company are listed below. Accounts Payable Accounts Receivable Cash Common Stock Retained Earnings Dividends Repair Revenue Salaries Expense Unearned Revenue Utilities Expense $ 8,000 7,000 13,000 3,000 8,000 4,000 40,000 25,000 2,000 12,000

Instructions Prepare a trial balance in proper form for Jenkins at December 31, 2008.
Solution 183

JENKINS COMPANY Trial Balance December 31, 2008

Cash Accounts Receivable Accounts Payable Common Stock Dividends Retained Earnings Repair Revenue Unearned Revenue Utilities Expense Salaries Expense

Debit 13,000 7,000

Credit

8,000 3,000 4,000 8,000 40,000 2,000 25,000 12,000 ___________________________ 61,000 61,000

CHAPTER THREE
Ex. 187

Welch Company prepares monthly financial statements. Below are listed some selected accounts and their balances in the September 30 trial balance before any adjustments have been made for the month of September. WELCH COMPANY Trial Balance (Selected Accounts) September 30, 2008 Debit Credit Office Supplies......................................................................................... $ 2,700 Prepaid Insurance..................................................................................... 4,200 Office Equipment..................................................................................... 16,200 Accumulated DepreciationOffice Equipment...................................... $1,000 Unearned Rent Revenue.......................................................................... 1,200 (Note: Debit column does not equal credit column because this is a partial listing of selected account balances) An analysis of the account balances by the company's accountant provided the following additional information: 1. A physical count of office supplies revealed $1,000 on hand on September 30. 2. A two-year life insurance policy was purchased on June 1 for $4,800. 3. Office equipment depreciated $6,000 per year. 4. The amount of rent received in advance that remains unearned at September 30 is $500. Instructions Using the above additional information, prepare the adjusting entries that should be made by Welch Company on September 30.
Solution 187
1 September,30 Supplies Expense Supplies Insurance Expense Pre-paid Insurance Depreciation on Equipment Accumulated Depreciation on Equipment Unearned Revenue Rent Revenue 1,700 1,700 4,800 600 500 500 700 700

September,30

September,30

September,30

Ex. 171

Prepare the necessary closing entries based on the following selected accounts. Accumulated Depreciation Depreciation Expense Retained Earnings Dividends Salaries Expense Service Revenue
Solution 171
Service Revenue Retained earnings Retained Earnings Salaries Expense Depreciation Expense Accumulated Depreciation Retained earnings Dividends 30,000 30,000 33,000 18,000 5,000 10,000 12,000 12,000

$10,000 5,000 20,000 12,000 18,000 30,000

CHAPTER 4
Ex. 169

Ogleby Boat Company's bank statement for the month of September showed a balance per bank of $7,000. The company's Cash account in the general ledger had a balance of $5,459 at September 30. Other information is as follows: (1) Cash receipts for September 30 recorded on the company's books were $5,700 but this amount does not appear on the bank statement. (2) The bank statement shows a debit memorandum for $40 for check printing charges. (3) Check No. 119 payable to Lann Company was recorded in the cash payments journal and cleared the bank for $248. A review of the accounts payable subsidiary ledger shows a $36 credit balance in the account of Lann Company and that the payment to them should have been for $284. (4) The total amount of checks still outstanding at September 30 amounted to $6,000. (5) Check No. 138 was correctly written and paid by the bank for $409. The cash payment journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $490. (6) The bank returned an NSF check from a customer for $360. (7) The bank included a credit memorandum for $1,560 which represents collection of a customer's note by the bank for the company; principal amount of the note was $1,500 and interest was $60. Interest has not been accrued. Instructions (a) Prepare a bank reconciliation for Ogleby Boat Company at September 30. (b) Prepare any adjusting entries necessary as a result of the bank reconciliation.
Solution 169

(a)

OGLEBY BOAT COMPANY

Bank Reconciliation September 30 Bank: Balance 09/01 Add: (1) Deposit in Transit Less: (4) Outstanding checks Adjusted cash balance per books Books: Balance 09/01 Add: (5) Accounts Payable error (7) Collect $1,500 note and interest $60 Less: (2) Check printing (6) NSF Check Adjusted cash balance per books Ps.: (3) is not a reconciling item. (b) 09/30 Cash Accounts payable Cash Notes Receivable Interest Revenue Miscellaneous Expenses Cash 40 40 1,560 1,500 60 81 81 $81.00 $1,560.00 $40.00 $360.00 $400.00 $6,700.00 $1,641.00 $7,100.00 $5,459 $ 7,000.00 $5,700.00 $ 12,700.00 $6,000.00 $6,700.00

CHAPTER 5
Ex. 181

Stone Furniture Store has credit sales of $400,000 in 2008 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2008, $130,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $3,000 will prove to be uncollectible. On March 4, 2009, the credit manager authorizes a write-off of the $1,000 balance owed by A. Lowell. Instructions (a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2008. (b) Show the balance sheet presentation of accounts receivable on December 31, 2008. (c) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $2,000. Make the appropriate entry to record the write-off of the Lowell account. Also show the balance sheet presentation of accounts receivable before and after the write-off.
Solution 181

(a)

Bad Debts Expense ($5,000 + $600) ...............3,600 Allowance for Doubtful Accounts.............. 3,600

(b) Accounts Receivable 130,000 Less Allowance For Doubtful3,000 $127,000 ======= (c) Allowance for Doubtful Accounts .1,000 Accounts Receivable 1,000

Ex. 139

On April 1, Smith Company buys 3,000 shares of Thomas common stock for $60,000, plus brokerage fees of $900. On October 1, Smith sells 1,000 shares of Thomas stock for $23,000, less brokerage fees of $500. Instructions Prepare journal entries for the purchase and sale of the Thomas common stock.
Solution 139

Apr. 1

Cash Common Stock Brokerage Fee

60,000 60,000 900

Oct. 1 Sold Common Stock Less: Brokerage Fee

23,000 500