Assignment
ANSWER ALL QUESTIONS
Question #1
The adjusted Trial Balance ofCorporation for the year ended December 2016, are as follows:
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Adjusted Trial Balance
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Dr
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Cr
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Cash
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$14,500.00
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Accounts receivable
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$11,100.00
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Inventory
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$29,000.00
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Prepaid Insurance
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$2,500.00
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Equipment
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$95,000.00
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Accumulated depreciation- Equipment
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$18,000.00
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Accounts payable
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$10,600.00
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Notes payable
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$25,000.00
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Owner's capital
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$81,000.00
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Owner's drawings
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$12,000.00
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Sales revenue
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$536,800.00
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Interest revenue
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$2,500.00
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Sales returns and allowances
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$6,700.00
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Sales discounts
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$5,000.00
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Cost of goods sold
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$363,400.00
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Freight out
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$7,600.00
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Advertising expense
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$12,000.00
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Salaries and wages expense
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$56,000.00
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Utilities expense
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$18,000.00
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Rent expense
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$24,000.00
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Depreciation expense
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$9,000.00
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Insurance expense
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$4,500.00
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Interest expense
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$3,600.00
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$673,900.00
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$673,900.00
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Instruction:
a. Prepare a multi-step income statement
b. Prepare a closing entry
Question #2
Company record all purchases and sales on gross methods and thus provide you with following transactions:
1/1/2016. Purchased 1,200 tables on account from Wood Carpentry Company, F.O.B destination with terms 2/10, n/30 at cost of $15 each.
1/5/2016. Purchased 1,000 tables costing $20 each from James Wall Inc., on account. Freight charges added to the invoice totaled $800. The agreement of the purchase was F.O.B shipping point, terms 3/10, n/30. James Wall Inc. policy is not to allow discount on freight charges charged to customers.
1/9/2016. Sold a total of $12,000 worth of tables to Sunny Depot on account. The customer was provided with terms of 2/10, n/30
1/10/2016. Made full payment for Jan 1, 2016 purchase
1/17/2016. Sold 800 tables at $25 each to ABC Company on account with terms 2/10, n/30. The company sold the table F.O.B. destination, and paid freight charges of $500
1/20/2016. ABC Company representative called to complain about the Jan. 17, purchase stating that the items was damaged. In promoting good customer relation, Page Corporation allow the customer a 25% reduction in invoice price.
1/22/2016. Paid John Wall Inc. for the purchase of January 5th
1/25/2016. Sunny Depot paid for the purchase of January 9th
1/26/2016. ABC Company made full payment for the January 15, purchases
Instruction:
Prepare journal entries to record each of the above transactions
Question #3
As the new accountant for Corporation, the controller provide you with the company's bank statement showing the following data:
Balance per bank statement June 30 $14,280
Balance June1 $12,650
Debit memorandum:
NSF check $175
Credit memorandum:
Collection of note receivable $505
Balance per company records at end of June $13,319
The inspection of the data revealed the following items
1. The NSF check was from a customer named Jayhawk Enterprises
2. The note collected by the bank was a $500, 3-month, 12% note. The bank charged a $10 collection fee. Interest of $15 has not been recorded.
3. Outstanding checks for the month total $2,410
4. Deposit in transit at month end total $1,752
5. A customer check for $352, dated June 10, cleared the bank, but the bank in error record the check in the amount of $325
Instruction:
a. Prepare a bank reconciliation as at June 30
b. Journalize the entries required by the reconciliation
Question #4
a. ABC Corporation has the following notes and terms as at January 1, 2016:
1. $730, 18%, 120 days
2. $1,000, 15%, 6 months
3. $2,000, 12%, 1 year
Instruction:
Assuming a 360 days in a year; what is ABC Corporation total interest revenue as at 12/31/2016 for all of the notes above?
b.
Age Amount % of Estimated to be uncollectible
Under 60 days old $460,000 4%
60-90 days old $18,000 15%
91-120 days $14,000 20%
Over 120 days $55,000 25%
Instruction
a. Prepare an aging analysis and show how accounts receivable and related allowance should appear on the balance sheet as at 12/31/2016
b. Prepare the necessary journal entry to update the allowance for uncollectible, assuming $1,200 credit balance.
c. Prepare the necessary journal entry to update the allowance for uncollectible, assuming $500 debit balance.
Question #5
a. On November 1, 2013 Denzel Washington Inc. borrowed $20,000 from $ABC Inc. by signing a $20,000, 9%, 3-month note.
Instruction: Prepare (a) Denzel's November 1, 2013 journal entry (b) December 31st, 2013 annual adjusting entry and (c) the February 1, 2014, entry
b. Day Dream Corporation made credit sales of $60,000. The credit sales are subject to Maryland sales tax of 6%. Day Dream Corporation also made cash sales totaled $41,340 which includes the 6% sales tax.
Instruction: Prepare (a) the entry to record the credit sale (b) the entry to record cash sales.
c.,(a) XYZ Company designates a petty cash custodian, and gives the custodian $300 from which to make payment. Prepare journal entry to record transfer of funds to petty cash
c. (b) The petty cash custodian obtains signed receipts from each individual and presents to the controller the following expenses paid out:
Supplies expense $42
Postage expense $53
Miscellaneous expense $76
Cash shortage $2
Instruction: Record the petty cash transactions.