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Accounting Principles I - Online EXAM IV - Chapters 8, 9 & 11 Part II

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Accounting Principles I - Online

 

EXAM IV - Chapters 8, 9 & 11

 

Part II

 

 

Complete the following exam and save this file on your hard drive. Then submit your file to your instructor on Canvas.

 

 

NAME___

 

 

PART A (14 Points)

 

 

1. Greenview Food Store developed the following information in recording its bank statement for the month of March.

 

 

a. Outstanding checks total $1,380.

 

b. Deposits of March 30 and 31 not yet recorded by the bank $1,185.

 

c. NSF check of Joe Goofy, a customer, returned by the bank $420.

 

d. Check No. 210 for $161 was correctly issued and paid by the bank but incorrectly entered in the cash payments journal as a payment of Supplies for $116.

 

e. Bank service charge for March was $15.

 

f. The bank collected a note receivable for the company for $3,000 plus $200 interest revenue.

 

 

Required:Complete the bank reconciliation below to include proper explanations.

 

 

Greenview Food Store

 

Bank Reconciliation

 

March 31

 

 

Balance Per Bank Statement, March 31

 

 

$ 9,365

 

 

Add:

 

 

$

 

 

Subtotal:

 

 

$

 

 

Less:

 

 

Adjusted Balance Per Bank, March 31

 

 

$

 

 

Balance Per Books, March 31

 

 

$ 6,450

 

 

Add:

 

 

$

 

 

Subtotal:

 

 

$

 

 

Less:

 

 

$

 

 

Adjusted Balance Per Books, March 31

 

 

$

 

 

2. Record the general journal entry or entries necessary to adjust Greenview Food Store records as of March 31 in relation to the bank reconciliation above.

 

 

Date

 

 

Account Titles

 

 

Debit

 

 

Credit

 

 

PART B (12 Points)

 

 

Compute the maturity date and the maturity value associated with each of the following notes receivable. Use a 360-day year where applicable.

 

 

1. A $10,000, 9%, 5-month note dated January 31.

 

 

Maturity date__________ , Maturity value $____________

 

 

2. A $30,000, 8%, 75-day note dated August 13.

 

 

Maturity date__________, Maturity value $____________

 

 

3. A $1,460, 10%, 90-day note dated May 8.

 

 

Maturity date__________, Maturity value $____________

 

 

 

PART C ( 16 Points)

 

 

On October 1, Foster Company establishes a petty cash fund by issuing a check for $150 to Kim Mann, the custodian of the petty cash fund. On October 31, Kim Mann submitted the following paid petty cash receipts for replenishment of the petty cash fund when there is $6 cash in the fund:

 

 

Freight Out $15

 

Office Supplies Expense 40

 

Entertainment Expense 60

 

Postage Expense 25

 

 

 

Instructions:

 

In the space provided below prepare the journal entries required to establish the petty cash fund on October 1 and the replenishment of the fund on October 31.

 

 

Date

 

 

Account Title

 

 

Debit

 

 

Credit

 

 

 

 

PART D (16 Points)

 

 

The accounting records of Fasbe Company shows the following account balances:

 

 

DEBIT

 

 

CREDIT

 

 

Credit Sales

 

 

$400,000

 

 

Accounts Receivable

 

 

$70,000

 

 

Allowance for Doubtful Accounts

 

 

640

 

 

Required: Complete the following independent requirements:

 

 

1. Journalize the adjusting entry at December 31 assuming bad debts are expected to be 1% of Sales.

 

 

2. Journalize the adjusting entry at December 31 assuming bad debts are expected to be 6% of Accounts Receivable.

 

 

3. Journalize the adjusting entry at December 31 assuming that Allowance for Doubtful Accounts has a debit balance of $180and bad debts are expected to be 1.5% of Sales.

 

 

4. Journalize the adjusting entry at December 31 assuming that Allowance for Doubtful Accounts had a debit balance of $180 and bad debts are expected to be 9% of Accounts Receivable.

 

 

Date

 

 

Account Title

 

 

Debit

 

 

Credit

 

 

PART E (18 Points)

 

 

Dental Products Company pays an administrative salary of $1,500 to the company secretary for the

 

week ended 1/10. The following information pertains to payroll taxes:

 

 

Employee Employer

 

 

FICA Taxes……………………………………………….. 8% 8%

 

Federal Unemployment Taxes……………………………. .8%

 

State Unemployment Taxes………………………………. 5.4%

 

 

Other withholdings are as follows:

 

 

Federal Income Tax Withheld......................................... $175

 

Health Insurance Withheld.............................................. $ 30

 

 

Required:

 

(1) Prepare the journal entry to record the payroll on 1/10.

 

(2) Prepare the journal entry to record Dental Product’s payroll tax expense.

 

Date

 

 

Account Titles

 

 

Debit

 

 

Credit

 

 

 

 

PART F (16 Points)

 

 

On November 1 the Alps Company borrowed $30,000 from its bank by signing a 6-month, 12% interest

 

bearing Note Payable.

 

 

Required: Assuming interest expense is NOT accrued on a monthly basis,prepare the journal entry to record:

 

 

A. The issuance of the note

 

B. The year-end interest accrual at December 31.

 

C. The payment of the note on its maturity date.

 

Date

 

 

Account Titles

 

 

Debit

 

 

Credit

 

 

 

PART G (9 Points)

 

In providing accounting services to small businesses, you encounter the following situations pertaining to

 

cash sales.

 

 

1. Price Company rings up sales and sales taxes separately on its cash register. On November 15, the

 

register totals are sales $4,000 and sales taxes $240.

 

 

2. Leonard Company does not segregate sales and sales taxes. Its register total for November 15 is

 

$16,050, which includes a 7% sales tax.

 

 

Required: Prepare the journal entries to record the above sales transactions and related taxes for each

 

client.

 

Date

 

 

Account Titles

 

 

Debit

 

 

Credit

 

 

 

PART H ( 7 Points)

 

 

A company will incur product repair costs in the future if products that it sells currently under warranty are brought in for repair during the warranty period. The company will also incur bad debts expense in the future if customers who buy on credit currently are unable to pay their accounts. The accounting procedures for these two costs (warranty expense and bad debts expense) are related to the same accounting principle. (The answer I am looking for is NOT the full-disclosure principle.) Identify the principle and explain fully how these costs are related to or guided by that principle.

 

Paper#38650 | Written in 13-Dec-2015

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