- The ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated
Depreciation-Equipment $ 8,400
Notes Payable 20,000
Unearned Rent 9,900
Rent Revenue 60,000
Interest Expense -0-
Wages Expense 14,000
An analysis of the accounts shows the following:
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $700.
5. Insurance expires at the rate of $200 per month.
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly.
Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and
Supplies Expense.
2. Write a Journal Entry to estimate the uncollectible accounts at the beginning of each year?
3. Calculate Earning per share from the information given below:
Net Income for the year - $25000
Dividends paid to preference shareholders - $8000
Dividends paid to common stockholders - $5000
No. of Outstanding Share = 50000
4. Prepare Statement of Retained Earnings from the given information:
The company had an opening balance of Retained Earnings as $1050000. The Company earned an income of $36000 during the year. In the previous year the income was understated because of the error in calculation of Inventory. The amount from which the income was understated was $50000. During the year the company declared and paid the cash dividend and stock dividend of $100000 and $200000 respectively.
5.Calculate the break even point in units and dollars from the below mentioned information.The company sells its products at $22 per unit, while the variable cost is $7, the company incurs $5000 as a fixed cost.
6.Journalizing stockholders equity transactions. Airborne Manufacturing Co. complete the following transactions during 2009 Jan 16- Declared a cash dividend on the 4%, $102 par preferred stock (1,050 shares outstanding) Declared a $0.55 per share dividend on the 95,000 shares of common stock outstanding. The date of record is January 31, and the payment due date is February 15. Feb15- Paid the cash dividends June 10 Split common stock 2 for 1. Before the split, airborne had 95,000 shares of $10 par common stock outstanding Jul 30 Distributed a 25% stock dividend on the common stock. The market value of the common stock was $10 per share Oct 26 Purchased 3,000 shares of treasury stock at $15 per share Nov 8 Sold 1,500 shares of treasury stock for $20 per share Nov 30 Sold 1,500 shares of treasury stock for $9 per share
Requirement: Record the transactions in Airbornes general journal
7. Cost-Volume Profit analysis cannot be performed when:
a. Costs can be accurately separated into fixed and variable components.
b. Fixed and variable costs change over different activity levels.
c. Contribution margin is based on the difference between selling price and variable costs.
d. Breakeven point is calculated based upon the fixed costs divided by the contribution margin.
8. Calculate the current ratio from the given information:
|
Assets
|
Amount
|
Liabilities
|
Amount
|
|
Current Assets
|
|
Current Liabilities
|
|
|
Cash and cash equivalent
|
12000
|
Accounts Payable
|
8000
|
|
Inventories
|
8700
|
Accrued Salaries
|
780
|
|
Short term securities
|
7800
|
Income tax payable
|
800
|
|
Total Current Assets
|
28500
|
Total Current Liabilities
|
9580
|
|
Furniture, net
|
5200
|
Long term debts
|
5200
|
|
Equipment, net
|
4800
|
Total Liabilities
|
14780
|
|
Goodwill
|
8000
|
Shareholder's Equity
|
31720
|
|
Total Assets
|
46500
|
Total Liabilities and shareholder's equity
|
46500
|
9.5. Paid cash for income tax at the rate of 30 percent of income before taxes.
Required
a.Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow.
b. Use a vertical model to prepare the 2012 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before preparing the statements.)
10. A common size income statement would typically be prepared by dividing:
A) All items on income statement in Year t by their corresponding value in Year t-1
B) All items on income statement in Year t by their corresponding balance sheet account in Year t
C) All items on income statement in Year t by net income in Year t-1
D) All items on income statement in Year t by sales in Year t