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Principles of Accounting I Exam II Chapters 5-10

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Question;PrinciplesofAccountingI;ExamIIChapters5-10;300Points;Besuretoshowallcalculationsonexamforpossiblepartial;credit.;Problem#1(90points);Thefollowing;dataareavailable;forAtlanticCo.forthemonthofOctober;October1,Balance;October10,purchase;October18,purchase;October27purchase;October31unitsinendinginventory;30units@$14each20units@$15each35units@$16each20units@$17each15units;Required;1) CalculatetheCostofGoodsAvailable;forSale(30points);2) Calculatetheendinginventory;amountunder:(30points);a);FIFO;b) LIFO;c) AverageCost;3);CalculateCostofGoodssoldfor:(30points);a) FIFO;b) LIFO;c) AverageCost;Showallcalculationsandcircleyourfinalanswer.;Problem#2(60points);OnApril1,2014,Sneezy;Corppurchasedandplacedinservicea plantasset. Thefollowinginformationisavailableregardingthe plantasset;Acquisitioncost EstimatedSalvage;Value EstimatedUseful;Life;130,000;15,000;5years;Makethenecessary;adjustingjournalentries;at12/31/14and 12/31/15torecorddepreciationforeachyearunderthe straight-linemethod;Date;Account;Debit;Credit;MultipleChoice(150points);Circletheletterof theappropriateanswer.;(10pointseach);UsethefollowingsituationforQuestions1,2&3;GreenCompany;purchased$100,000worthofinventory;fromBlueCompanywiththe terms;of1/1O,n/30. Greenusedtheperpetual;inventorysystem.;1);Thejournalentrytorecordthepurchaseoftheinventory;is;a Inventory;AccountsPayable-Green;99,000;99,000;b Inventory;AccountsPayable-GreenPurchaseDiscounts;100,000;99,000;1,000;c Inventory;AccountsPayable-Green;100,000;100,000;d Inventory;PurchaseDiscounts;AccountsPayable-Green;99,000;1,000;100,000;2);Thejournalentrytorecord;thereturnof$10,000worthofmerchandiseis;a;Inventory;AccountsPayable-Green;10,000;10,000;b;AccountsPayable-Green;PurchaseDiscounts;10,000;1,000;Inventory;9,000;c;PurchaseReturns;Inventory;10,000;10,000;d;AccountsPayable-GreenInventory;10,000;10,000;3);Thejournal;entrytorecord;thepaymentforthemerchandise(lessthereturn) withinthediscountperiodis;a AccountsPayable-Green 100,000;Inventory 100,000;b Cash 100,000;AccountsPayable-Green 99,100;PurchaseDiscount 900;c;AccountsPayable-Green 100,000;Cash 99,100;Inventory 900;d;AccountsPayable-Green 90,000;Cash 89,100;Inventory 900;4) Aninventorycountattheendoftheyearisnecessarybecause;a Anactualamountisneeded;toverifyperpetual;inventoryaccountingrecords b Some;itemsmaybeunaccountedfordueto theft.;c;Theremaybesomeobsoleteitems(likeanoldcomputer);thatneedtobediscarded.;d;Theremaybesomeitemsthatarespoiled(suchasfooditems)thatneedtobediscarded.;e Alloftheabove;5) ThetermFOBDestinationmeans;a Ownershipofmerchandisetransfers;upondeliverytotheseller's;loadingdock. b Ownershipofmerchandisetransfers;upondeliverytothebuyer'splaceof;business.;c Shippingcostsshouldbepaidbythebuyer. d Shippingcostsshouldbepaidbytheseller. e Both;a&c.;f Bothb&d.;6);Asellerofinventory;recordsallreturnsofmerchandiseinthe account.;a;Sales;b;Inventory;c;SalesDiscounts;d;SalesReturns&Allowances e Noneoftheabove;7);Whenrecordingasaleofinventory;thejournalentries;wouldinclude: a AdebittoInventory.;b;AdebittoCostofGoodsSold.;c;AcredittoAccounts;Payable d AcredittoTradeDiscounts;8);SpecificIdentificationmethodofinventoryvaluation;wouldmostlikelybeused by;a QuickTrip conveniencestore b Wal-Martdiscountstore;c HonestMarsha'sUsedCarLot d PriceChopper;grocerystore;e Noneoftheabove;9)Asinterest;ratesrise,thepriceofbonds;a Rise;b;Fall;c;Staythesame;d;Notenoughinformationtodetermine;10)Happycompanyissued3-year8%bondswithaparvalueof$400,000whenthe marketratewas8.5%.;Thecompanyreceived$372,064;incashproceeds.;ThebondspayinterestsemiannuallyonJanuary1and;July1.;Theentrytorecord;thesaleofthebondson1/1/14is;a BondsPayable 400,000;Cash 400,000;b Cash 400,000;BondsPayable 400,000;c Cash 372,064;DiscountonBondsPayable 27,936;BondsPayable 400,000;d Cash 372,064;BondsPayable 372,064;11) Maryreceives$750ingrosspayfortheweek. What;istheamountofMary'snetpay assumingthefollowing;Federalwithholding;Statewithholding FICAwithholding;(Roundtonearestpenny);10%;4%;7.65%;a $750.00b $162.38c $587.63d None oftheabove12)Theemployermustpaypayroll;taxesforwhichofthefollowing: a FICA-SocialSecurityb FederalUnemploymentTax(FUTA) c StateUnemploymentTax(SUTA)d;FICA-Medicaree;Alloftheabove13)Amainaccountingissueforplantassetsis: a Computingthecostoftheplantassets.b Recordingdepreciation(use)oftheplantasset.c Accountingforrepairsandimprovementstoplantassets. d Thedisposalofplantassets.e Allof theabove.14)Acompanysoldamachine thatoriginallycost$100,000;for$60,000cash.Theaccumulateddepreciationonthemachine;was$40,000. Thecompanyshould;recognizea:a $0gainorloss.b $20,000gainc $20,000lossd $40,000losse $60,000gain15)Acompanydiscarded;adisplaycaseoriginallypurchasedfor$8,000.Theaccumulateddepreciationwas$7,200. thecompanyshouldrecognizea(n):a;$0gainorlossb;$8001ossc;$800gaind;$8,000loss;e;$7,200loss;="margin-top:2.55pt,margin-right:0cm,margin-bottom:0cm,margin-left:>

 

Paper#41543 | Written in 18-Jul-2015

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