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Financial Accounting-548




Part A: Answer each of the following questions. Each answer is worth 20 points.;EXAMINATION NUMBER: 06169300;1. The following information was made available from the income statement and balance sheet of Lauren Company. Item 12/31/10 12/31/09 Accounts Receivable $53,400 58,600 Accounts Payable 35,600 32,700 Merchandise Inventory 85,000 79,000 Sales (2010) 243,000 Interest Revenue (2010) 5,600 Dividend Revenue (2010) 1,200 Tax Expense (2010) 12,300 Salaries Expense (2010) 28,000 COGS (2010) 65,000 Interest Expense (2010) 3,600 Operating Expenses 28,500;Complete the cash flow from operating activities section for Lauren Company using the direct method for the year ended December 31, 2010. Examination Examination;Financial Accounting;2. Given the following balance sheet, complete a horizontal analysis. Compute the percentage to the nearest tenth of a percent.;2;Jill?s Bikes Comparative Balance Sheet For Years Ended December 31, 2011 and 2010;(in thousands) 2011 2010 Difference Percentage;Assets Current Assets Cash and Equivalents $72 $94 Accounts Receivable, net 122 104 Inventory 288 232 Total Current Assets 482 430 Property, Plant and Equipment 638 358 Total Assets $1,120 $788 Liabilities Current Liabilities Accounts Payable $242 $148 Accrued Liabilities 48 66 Total Current Liabilities 290 214 Long-Term Liabilities 346 208 Total Liabilities 636 422 Stockholders? Equity Common Stock 70 60 Retained Earnings 414 306 Total Stockholders? Equity 484 366 Total Liabilities and Stockholders? Equity $1,120 $788;Final Examination 3;Part B: Answer each of the following questions. Each answer is worth 4 points.;1. Record the following transactions using the accounting equation.;Example: Assets = Liabilities + Equity XXXX(cash) XXXX(accounts payable) A. Amanda invests $17,000 cash into her merchandising business. B. She buys $6,500 of office equipment and $3,000 of office supplies with cash from Office Depot. C. Additional purchases were supplies for $35,000 on account from various suppliers.;2. Journalize the following transactions and omit the explana- tions. A. ABC Corporation purchased $15,000 of office furniture by putting $7,000 down in cash and the rest on account on April 8. B. The corporation paid $60,000 for a two-year lease on April 19. C. The corporation had sales of $45,000, of which $35,000 were on account on April 20. D. The corporation borrowed $25,000 by signing a note payable on April 22. E. The corporation paid $1,250 on one of its accounts payable on April 26.;3. Prepare a trial balance from the following information for Learn a New Language, Inc. for December 31, 2012. Accounts payable $5,012 Common stock $9,692 Cash $3,928 Notes payable $1,439 Wages expense $777 Marketing expense $493 Equipment $8,345 Accounts receivable $1,142 Inventory $8,074 Sales $6,616;Financial Accounting4;4. Compute the missing information from this post-closing trial balance.;5. Journalize the following transactions using the perpetual inventory method. Aug. 6 Purchased $830 of inventory on account from Johnston with terms of 2/10, n/30. Aug. 8 Purchased $2,611 of inventory for cash from Pillner Company. Aug.15 Paid for August 6 purchase from Johnston. Aug. 17 Purchased $1,743 of merchandise on account from Luis Company with Terms of 3/15, n/45.;6. Given the following information, prepare a balance sheet for Isaiah?s Tool Shed for the year ending December 31, 2012.;Cash $65,750 Retained Earnings $179,319 Common Stock $35,000 Equipment $27,500 Accounts Receivable $11,478 Accounts Payable $29,450 Land $30,000 Inventory $78,311 Prepaid Supplies $7,357 Income Taxes Payable $4,209 Office Computers $11,345 Other PPE $31,446 Accum. Depr. (all) $23,459 Prepaid Insurance $8,250;Cash $34,689 Accounts Receivable 9,467 Prepaid Rent 5,000 Prepaid Insurance (A) Supplies 944 Accounts Payable $5,389 Wages Payable (B) Common Stock 37,049 Retained Earnings 8,234 _______ _______ Total $52,356 $52,356;Final Examination 5;7. Rick Company?s beginning inventory and purchases during the fiscal year ended December 31, 2012, were as follows: (Note: The company uses a perpetual system of inventory.);What is the cost of goods sold for Rick Company for 2012 using LIFO?;8. Assume that in Year 1, the ending merchandise inventory is overstated by $30,000. If this is the only error in Years 1 and 2, fill in the items below, indicating which items will be understated, overstated, or correctly stated for Years 1 and 2. Item Year 1 Year 2 Ending inventory ___________ _____________ Beginning inventory ___________ _____________ Cost of goods sold;9. Below is a list of treatments of accounting topics. Place GAAP on the line if the treatment is GAAP-based and place IFRS on the line if the treatment is IFRS-based. A. Interest and dividend income are reported in the investing section of the cash flow statement.__________ B. Interest expense is reported in the financing section of the cash flow statement. ___________ C. The use of LIFO is prohibited.;Units Unit Price Total Cost January 1?Beginning inventory 18 $24 $432 March 12?Sold 13 April 11?Purchase 45 $29 $1,305 June 20?Sold 33 Aug 16?Purchase 35 $27 $945 Sept 11?Sold 29 Total Cost of Inventory Ending inventory is 23 units. $2,682;Financial Accounting6;10. Record the necessary journal entries from the following bank reconciliation information for July 31, 2011;11. Journalize the following transactions for Tammy Company: Sept. 1 Sold $3,500 of merchandise to Jim on account Oct. 1 Exchanged Jim?s account receivable for a four- month, 8% note for $3,500 Dec. 31 Recorded accrued interest on Jim?s note Feb. 1 Jim paid off his note with interest (round to nearest dollar);12. A truck was purchased on January 2 at a cost of $60,000. It?s expected to be used for five years and to have a residual value of $5,000 after 120,000 miles of service. The truck was driven for 23,000 miles the first year and 25,000 miles the second year. Calculate the depreciation expense to the nearest dollar for the first and second years. Method Year 1 Year 2 Straight-line ________ ________ Double-declining-balance ________ ________ Units-of-production;Bank Balance, July 31, 2011 $36,739 Checkbook Balance, July 31, 2011 36,444 Bank collection of note receivable 1,200 + 165 interest Bank service charge 35 Deposits in transit 2,400 Outstanding checks 1,245 NSF check from customer 330;Correction of book error (check #456 written for $160, recorded at $610)?gas expense;13. Prepare the general journal entries for the following transactions: Jan. 2, 2011 Purchased land with a building on it for $750,000. The land is worth $300,000. Paid $150,000 cash down and signed a mortgage payable for the balance. Dec. 31, 2011 Depreciation is computed using the straight-line method. The estimated salvage value of the building is $75,000 and has an estimated life of 20 years. July 1, 2012 The building and land are sold for $825,000 cash.;14. Journalize the following treasury stock transactions: June 3 Reacquired 350 shares of $12 par common stock at $10 per share. June 7 Sold 180 shares of treasury stock for $16 per share. June 8 Sold 150 shares of treasury stock for $9 per share.;15. Lowry Landscapes had net income of $50,000 for 2010. Land was sold for $40,000, of which $3,000 was a gain. The beginning cash balance was $53,000, and the ending cash balance was $151,000. Depreciation expenses were $11,000. Prepare a statement of cash flows for the year ended December 31, 2010, for Lowry Landscapes using the indirect method.


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