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Acct 220 Final Exam




Acct220: Principles of Accounting I;Problem 1: 15% points;The account balances appearing on the trial balance (below) were taken from the general ledger of Flip's Copy Shop at June 30, 2012.;Additional information for the month of June which has not yet been recorded in the accounts is as follows;(a) A physical count of supplies indicates $300 on hand at June 30.;(b) The amount of insurance that expired in the month of June was $200.;(c) Depreciation on equipment for June was $400.;(d) Rent owed on the copy shop for the month of June was $600 but will not be paid until July.;Flip?s Copy Shop;Trial Balance;June 30, 2012;Account Titles;Debit;Credit;Cash;$1,000;Supplies;1,100;Prepaid Insurance;2,200;Equipment;24,000;Accum. Depreciation, Equipment;$4,500;Accounts Payable;2,400;Notes Payable;4,000;Flip?s Capital;15,300;Flip?s Drawings;2,400;Service Revenue;4,900;Utilities Expense;400;Totals;$31,100;$31,100;Instructions;a. Prepare in journal form, without explanations, the end of month adjusting entries for Flip's opy Shop for the month of June.;b. Prepare a partial adjusted trial balance for the accounts provided.;c. Prepare in journal form, without explanations, the end of month closing entries for Flip's Copy Shop for the month of June.;Problem 2: 15% points;The following information is available for Flip Company;Beginning inventory 600 units at $5;First purchase 900 units at $6;Second purchase 500 units at $7.25;Assume that Flip uses a periodic inventory system and that there are 700 units left at the end of the month. (Round all final answers to the nearest dollar.);Instructions;a. Compute the cost of goods available for sale.;b. Compute the value of ending inventory and Cost of Good Sold under the;(1) LIFO method.;(2) FIFO method.;(3) Average-cost method;Problem 3: 15% points;The following items were taken from the December 31, 2013 adjusted trial balance of Flip Company. (All balances are normal.);Mortgage payable $ 1,443 Accumulated depreciation 3,655;Prepaid expenses 880 Accounts payable 1,444;Equipment 11,000 Notes payable after 2015 1,200;Long-term investments 1,100 Flip?s capital 11,480;Short-term investments 3,690 Accounts receivable 1,696;Notes payable in 2014 1,000 Inventories 1,756;Cash 2,100 Service Revenue 9,000;Rent Expense 1,000 Wages Expense 5,000;Utilities Expense 1,000;Instructions: Prepare a classified balance sheet in good form as of December 31, 2013.;Problem 4: 10% points;Prepare journal entries to record the following transactions entered into by Flip Company;2012;June 1 Accepted a $10,000, 12%, 1-year note from Flop as full payment on her account.;Nov. 1 Sold merchandise on account to Flap, Inc. for $12,000, terms 2/10, n/30.;Nov. 5 Flap, Inc. returned merchandise worth $500.;Nov. 9 Received payment in full from Flap, Inc.;Dec. 31 Accrued interest on Flop's note.;2013;June 1 Flop honored her promissory note by sending the face amount plus interest. No interest has been accrued in 2013;Problem 5: 10% points;Flip Company purchased equipment on January 1, 2011 for $90,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life;Instructions;Answer the following independent questions.;1. Compute the amount of depreciation expense for the year ended December 31, 2011, using the straight-line method of depreciation.;2. If 16,000 units of product are produced in 2011 and 24,000 units are produced in 2012, what is the book value of the equipment at December 31, 2012? The company uses the units-of-activity depreciation method.;3. If the company uses the double-declining-balance method of depreciation, what is the balance of the Accumulated Depreciation?Equipment account at December 31, 2013?;Problem 6: 10% points;Flip earns a salary of $7,500 per month during the year. FICA taxes are 8% on the first $100,000 of gross earnings. Federal unemployment insurance taxes are 6.2% of the first $7,000, however, a credit is allowed equal to the state unemployment insurance taxes of 5.4% on the $7,000. During the year, $25,600 was withheld for federal income taxes and $5,700 was withheld for state income taxes.;Instructions;(a) Prepare a journal entry summarizing the payment of Flip?s total salary during the year.;(b) Prepare a journal entry summarizing the employer payroll tax expense on Flip?s salary for the year.;(c) Determine the cost of employing Flip for the year.;Multipe Choice Question;;Question 7: Which of the following are the same under both GAAP and IFRS?;a. The journal.;b. The ledger.;c. The chart of accounts.;d. All of the above.;e. Only a & c.;Question 8: Which of the following is true?;a. Transaction analysis is completely different under IFRS and GAAP.;b. Most transactions are recorded differently under IFRS and GAAP.;c. Transaction analysis is the same under IFRS and GAAP, but some transactions are recorded differently.;d. All transactions are recorded the same under IFRS and GAAP.;Question 9: Revenue recognition under IFRS is;a. substantially different from revenue recognition under GAAP.;b. generally the same as revenue recognition under GAAP, but with more detailed guidance.;c. generally the same as revenue recognition under GAAP, but with less detailed guidance.;d. exactly the same as revenue recognition under GAAP.;Question 10: Both IFRS and GAAP require disclosure about;a. accounting policies followed.;b. judgements that management has made in the process of applying the entity's accounting policies.;c. the key assumptions and estimation uncertainty.;d. all of the above.;e. only b & c.;Question 11: The use of fair value to report assets;a. is not allowed under GAAP or IFRS.;b. is required by GAAP and IFRS.;c. is increasing under GAAP and IFRS, but GAAP has adopted it more broadly.;d. is increasing under GAAP and IFRS, but IFRS has adopted it more broadly.;Question 12: A $100 petty cash fund has cash of $16 and receipts of $81. The journal entry to replenish the account would include a;a. debit to Cash for $81.;b. credit to Petty Cash for $84.;c. debit to Cash Over and Short for $3.;d. credit to Cash for $81.;Question 13: In preparing its bank reconciliation for the month of April 2013, Flip, Inc. has available the following information.;Balance per bank statement, 4/30/13 $39,300;NSF check returned with 4/30/13 bank statement 470;Deposits in transit, 4/30/13 5,000;Outstanding checks, 4/30/13 5,200;Bank service charges for April 30;What should be the adjusted cash balance at April 30, 2013?;a. $38,630.;b. $38,800.;c. $39,010.;d. $39,100.;39,300+5,000-5,200 = $39,100;Question 14: If a check correctly written and paid by the bank for $591 is incorrectly recorded on the company?s books for $519, the appropriate treatment on the bank reconciliation would be to;a. deduct $72 from the book?s balance.;b. add $72 to the book?s balance.;c. deduct $72 from the bank?s balance.;d. deduct $591 from the book?s balance.;Question 15: Flip Company had net credit sales during the year of $1,200,000 and cost of goods sold of $720,000. The balance in accounts receivable at the beginning of the year was $180,000, and the end of the year it was $120,000. What was the accounts receivable turnover ratio?


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