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Misc. Accounting Problems

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Question;1. In analyzing the accounts of Porsha Corporation, the adjusting data listed below are determined on December 31, the end of an annual fiscal period. a) The prepaid insurance account shows a debit of $4,800, representing the cost of a 2-year fire insurance policy purchased and dated July 1. Therefore, the insurance policy needs to be adjusted to show the amount of insurance that still "prepaid" at the end of the year. b) On September 1, Rent Revenue was credited for $5,750, representing revenue from subrental for a 5-month period beginning on that date. At the end of the year, the 5 month contract has not been fulfilled. The adjustment needs to correct the amount of revenue actually earned during the year. c) Purchase of advertising materials for $2,475 during the year was recorded in the advertising expense account. On December 31, advertising materials costing $475 are on hand. Adjust the expense and prepaid amount to show the actual amount on hand. d) On November 1, $3,000 was paid for rent for a 5-month period beginning on that date. 2 months have been used as of the end of the year. e) Miscellaneous Office Expense was debited for office supplies of $1,350 purchased during the year. On December 31, office supplies of $250 are on hand. Adjust the expense and prepaid amount to show the actual amount on hand. a) The prepaid insurance account shows a debit of $4,800, representing the cost of a 2-year fire insurance policy purchased and dated July 1. Therefore, the insurance policy needs to be adjusted to show the amount of insurance that still "prepaid" at th Required: Give the adjusting entry for each item above.;2. The following information relates to ending balances of Stardust Company at the end of 2014: 2014 Accounts Payable 89,000 Accounts Receivable 64,500 Accumulated Depreciation - Buildings 57,000 Allowance for Bad Debts 4,000 Bad Debt Expense 2,800 Buildings 119,000 Capital Stock 300,000 Cash 44,000 Cost of Goods Sold 680,000 Depreciation Expense 12,000 Discontinued operations (loss from disposal) 40,000 Extraordinary Gain 34,000 Income Tax Expense 12,000 Insurance Expense 16,000 Interest Expense 19,500 Interest Payable 30,000 Intangible Assets 97,000 Inventory 245,000 Land 180,000 Long-term Investments 75,000 Mortgage Payable 210,000 Office Expenses 34,000 Prepaid Insurance 3,400 Retained Earnings (at end of year) 136,250 Salaries Expense 99,000 Sales 950,000 Sales Returns 24,500 Selling Expenses 49,000 Selling Expenses Payable 1,650 Supplies Expense 38,500 Tax Expense - Real Estate & Payroll 16,000 Number shares outstanding at end of year 4,200 Market value per share at end of year $16.50 1. Prepare a classified balance sheet for Stardust Company for 2014. 2. Prepare a multiple-step income statement for Stardust Company for 2014. 3. Prepare the following calculations (show your work): A. Current ratio B. Debt ratio C. Return on assets D. Return on equity E. Earnings per share F. Price-earnings ratio;3. The following statement is provided to assist you in preparation of the cash flow statement: Bunker Hill Company Balance Sheets 2014 and 2013 12/31/2014 12/31/2013 Cash and cash equivalents 498,000 675,000 Accounts receivable 455,500 345,000 Inventory 750,000 654,000 Prepaid insurance 4,500 6,000 Buildings and equipment 5,515,500 4,350,000 Accumulated depreciation (2,235,000) (1,995,000) Total assets 4,988,500 4,035,000 Accounts payable 688,500 945,000 Salaries payable 75,000 105,000 Notes payable - bank (current) 150,000 600,000 Notes payable - bank (long-term) 1,500,000 - Common stock 2,400,000 2,400,000 Retained earnings (deficit) 175,000 (15,000) Total liabilities & equity 4,988,500 4,035,000 Notes: Cash needed to purchase new equipment and to improve the company's working capital position was raised by borrowing from the bank with a long term note. Equipment costing $75,000 with a book value of $15,000 was sold for $18,000 - the gain was included in net income. The company paid cash dividends of $90,000. The company had net income of $280,000 for the year. Instructions: Prepare a statement of cash flows using the indirect method for 2013. Use the format below. Hint: don't forget to calculate depreciation expense (difference between Accum depreciation PY and CY + any accum depreciation on equipment sold during the year: cost less book value). Purchase of buildings & equipment - don't forget the cost of equipment sold during the year (given to you). 4. Because of the extreme deterioration in the financial condition of a customer, the customer's account in the amount of $7,500 was written off as uncollectible on July 23. by November 1, the customer's financial condition had improved such that the customer was able to pay the account in full. Make the journal entries necessary to write the account off on July 23 and then to record the collection of the account on November 1. 5. Historically, warranty expenditures have been equal to 5% of sales. Total sales for the year were $500,000. Actual warranty repairs made during the year total $27,500. Make the necessary journal entries to record this warranty-related information. 6. Moreheart Construction Co has the following contract: Contract term 3 years Total contract 3,300,000 Costs Billings Collections 2014 1,144,000 1,100,000 880,000 2015 1,001,000 990,000 935,000 2016 715,000 1,210,000 1,485,000 % Completed to date 40% 75% 100% Prepare the journal entries to record the costs incurred, the billings and the cash collections for each year. (Use the shaded cells for your inputs) 7. A. Rider Corporation sells merchandise on the installment sales basis and the uncertainty of cash collection make the use of the installment sales method necessary. The following data relate to 3 years operations. A. Calculate gross profit and gross profit percentage for use in the journal entries below. B. Prepare the journal entries during the year and at the end of the year to for the following: record the sales, record the cost of sales, record the cash collections, record the deferred gross profit, record the realized gross profit. Note: yellow shaded cells are your input cells

 

Paper#44134 | Written in 18-Jul-2015

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