University of Maryland University College<\/b><\/p>\n
Final Examination<\/b><\/p>\n
Acct220: Principles of Accounting I \u2013 Section 1 of 2<\/b><\/p>\n
Do not forget, this is only Section 1 of your Final Exam. Section 2 consists of the 25 multiple choice questions located in the Final Exam location. Section 2 is worth 25% (1 point per question).<\/u><\/b><\/p>\n
USE THE SEPARATE DOCUMENT, Final Exam Answer Sheet to complete and submit your answers.<\/b><\/p>\n
For this exam, omit all general journal entry explanations.<\/b><\/p>\n
Ensure to include correct dollar signs and commas. <\/b><\/p>\n
Question 1: 40% points:<\/b><\/p>\n
Flip Company’s December 31, 2014 trial balance is as follows:<\/p>\n
Flip Corporation<\/p>\n
Trial Balance<\/p>\n
December 31, 2014<\/p>\n
Account<\/u><\/p>\n
Debit<\/u><\/p>\n
Credit<\/u><\/p>\n
Cash<\/p>\n
$43,500<\/p>\n
Accounts Receivable<\/p>\n
54,500<\/p>\n
Allowance for Doubtful Accounts<\/p>\n
500<\/p>\n
Notes Receivable<\/p>\n
30,000<\/p>\n
Merchandise Inventory<\/p>\n
55,000<\/p>\n
Land<\/p>\n
20,500<\/p>\n
Building<\/p>\n
150,000<\/p>\n
Accumulated Depreciation, Building<\/p>\n
$15,000<\/p>\n
Equipment<\/p>\n
50,000<\/p>\n
Accumulated Depreciation, Equipment<\/p>\n
21,000<\/p>\n
Goodwill<\/p>\n
26,000<\/p>\n
Accounts Payable<\/p>\n
24,500<\/p>\n
Long Term Notes Payable<\/p>\n
75,000<\/p>\n
Common Stock, $10 par, 2,000 shares authorized & outstanding<\/p>\n
20,000<\/p>\n
Retained Earnings<\/p>\n
147,000<\/p>\n
Sales Revenue<\/p>\n
700,000<\/p>\n
Salaries Expense<\/p>\n
150,000<\/p>\n
Utilities Expense<\/p>\n
3,500<\/p>\n
Cost of Goods Sold<\/p>\n
350,000<\/p>\n
Administrative Expenses<\/p>\n
55,000<\/p>\n
Sales Expenses<\/p>\n
15,000<\/u><\/p>\n
_______<\/u><\/p>\n
Totals<\/p>\n
$1,003,000<\/u><\/p>\n
$1,003,000<\/u><\/p>\n
Flip is a small company and records adjusting entries & closing entries only at fiscal (calendar) year end. Correcting and adjusting entries have not been recorded.<\/p>\n
Additional Information:<\/b><\/p>\n
a. Notes Receivable<\/u><\/b> is a 3-months, 6% note accepted on December 1, 2014.<\/p>\n
b. Long Term Notes Payable<\/u><\/b> is a 5-year, 5% note that was signed on July 1, 2014. Interest is payable annually.<\/p>\n
c. Building is depreciated at 3% per year. There is no salvage value.<\/p>\n
d. Equipment is depreciated at 15% year. There is no salvage value.<\/p>\n
e. Flip discovered, on December 30th, that the inexperienced bookkeeper recorded in the general journal and general ledger that day’s $1,500 cash sales as a debit to Accounts Receivable and a credit to Sales Revenue.<\/p>\n
f. The year-end physical count for Merchandise Inventory reflected a value of $52,500. Any difference in value is treated as shrinkage, and is included as part of Cost of Goods Sold.<\/p>\n
g. Salaries for the last half of December, payable in January, amount to $6,500.<\/p>\n
h. Flip determined that the balance in the Allowance for Doubtful Accounts should be $2,650 after an aging of A\/R schedule was completed.<\/p>\n
Required:<\/b><\/p>\n
1a. Prepare in journal form, any required correcting entries for Flip Corporation (There is only one)<\/p>\n
(2 points)<\/b><\/p>\n
1b. Prepare in journal form, all end-of-the period adjusting entries for Flip Corporation (There are 7)<\/p>\n
(14 points)<\/b><\/p>\n
1c. Prepare a December adjusted trial balance for Flip Corporation (9 points)<\/b><\/p>\n
NOTE: Students are encouraged to prepare their own T-accounts, on a separate scratch sheet of paper, and track from the beginning balance thru all journal transactions to ending balances for all accounts used in this problem. Do not turn in your separate scratch sheet of paper – those are student personal working papers and not part of any solution required for this exam.<\/b><\/p>\n
Question 1 (continued) \u2013 New Company for Parts d and e<\/b><\/p>\n
Below is a Correct <\/b>Adjusted Trial Balance for the year ended December 31, 2014, for Emily\u2019s Dress Shop, Inc.<\/p>\n
1d. Prepare a classified balance sheet in good form,<\/b> for the year ended December 31, 2014 for Emily\u2019s Dress Shop, Inc. (9 points)<\/b><\/p>\n
1e. Prepare in journal form, the closing entries for the year ended December 31, 2014 (No Dividends) for Emily\u2019s Dress Shop, Inc. (6 points)<\/b><\/p>\n
Emily\u2019s Dress Shop, Inc.<\/b><\/p>\n
Adjusted Trial Balance<\/b><\/p>\n
December 31, 2014<\/b><\/p>\n
Account Titles<\/u><\/b><\/p>\n
Debit<\/u><\/b><\/p>\n
Credit<\/u><\/b><\/p>\n
Cash<\/b><\/p>\n
81,000<\/p>\n
Accounts Receivable<\/b><\/p>\n
95,400<\/p>\n
Allowance for Doubtful Accounts<\/b><\/p>\n
4,770<\/p>\n
Interest Receivable<\/b><\/p>\n
270<\/p>\n
Notes Receivable (Due in 3 months)<\/b><\/p>\n
54,000<\/p>\n
Merchandise Inventory<\/b><\/p>\n
94,500<\/p>\n
Land<\/b><\/p>\n
36,900<\/p>\n
Building<\/b><\/p>\n
270,000<\/p>\n
Accumulated Depreciation, Building<\/b><\/p>\n
35,100<\/p>\n
Equipment<\/b><\/p>\n
90,000<\/p>\n
Accumulated Depreciation, Equipment<\/b><\/p>\n
51,300<\/p>\n
Goodwill<\/b><\/p>\n
46,800<\/p>\n
0<\/p>\n
Accounts Payable<\/b><\/p>\n
44,100<\/p>\n
Salaries Payable<\/b><\/p>\n
11,700<\/p>\n
Interest Payable<\/b><\/p>\n
3,375<\/p>\n
Long Term Notes Payable<\/b><\/p>\n
135,000<\/p>\n
Common Stock<\/b><\/p>\n
36,000<\/p>\n
Retained Earnings<\/b><\/p>\n
264,600<\/p>\n
Sales Revenue<\/b><\/p>\n
1,260,000<\/p>\n
Interest Revenue<\/b><\/p>\n
270<\/p>\n
Cost of Goods Sold<\/b><\/p>\n
634,500<\/p>\n
Salaries Expense<\/b><\/p>\n
281,700<\/p>\n
Utilities Expense<\/b><\/p>\n
6,300<\/p>\n
Administrative Expenses<\/b><\/p>\n
99,000<\/p>\n
Sales Expenses<\/b><\/p>\n
27,000<\/p>\n
Depreciation Expense<\/b><\/p>\n
21,600<\/p>\n
Interest Expense<\/b><\/p>\n
3,375<\/p>\n
Bad Debt Expense<\/b><\/p>\n
3,870<\/p>\n
Totals<\/b><\/p>\n
1,846,215<\/u><\/b><\/p>\n
1,846,215<\/u><\/b><\/p>\n
Question 2: 8 points: Inventory <\/b><\/p>\n
Flip uses the periodic method and had the following inventory events during January:<\/p>\n
Date<\/u><\/p>\n
Units Purchased<\/u><\/p>\n
Unit Cost<\/u><\/p>\n
Date<\/u><\/p>\n
Units Sold<\/u><\/p>\n
Unit Sales Price<\/u><\/p>\n
Jan. 1<\/p>\n
150<\/p>\n
$7.00<\/p>\n
Jan. 2<\/p>\n
100<\/p>\n
$10.00<\/p>\n
Jan. 5<\/p>\n
225<\/p>\n
7.25<\/p>\n
Jan. 7<\/p>\n
125<\/p>\n
10.00<\/p>\n
Jan. 10<\/p>\n
100<\/p>\n
7.50<\/p>\n
Jan. 12<\/p>\n
75<\/p>\n
12.00<\/p>\n
Jan. 15<\/p>\n
150<\/p>\n
7.50<\/p>\n
Jan. 17<\/p>\n
200<\/p>\n
12.00<\/p>\n
Jan. 20<\/p>\n
200<\/p>\n
7.75<\/p>\n
Jan. 24<\/p>\n
150<\/p>\n
15.00<\/p>\n
Jan. 25<\/p>\n
150<\/p>\n
8.00<\/p>\n
Jan. 30<\/p>\n
75<\/p>\n
8.25<\/p>\n
Note:<\/b> January 1 amount was the beginning inventory and unit value.<\/p>\n
(Round all total dollar values to the nearest dollar. Round all unit values to the nearest penny.)<\/p>\n
Required: <\/b><\/p>\n
a. Calculate cost of goods available for sale.<\/p>\n
b. Calculate the dollar value of sales.<\/p>\n
c. Calculate the value of Ending Inventory and Cost of Goods Sold under the following independent assumptions:<\/p>\n
1) LIFO method<\/p>\n
2) FIFO method<\/p>\n
3) Average-cost method<\/p>\n
Question 3: 7 points:<\/b><\/p>\n
Required: <\/b>Prepare Flip’s Supply Co. general journal entries for the following transactions:<\/p>\n
Jan. 1<\/p>\n
Accepted a customer\u2019s (Franks Co) 120 day, 10% note, as settlement of an outstanding $15,000 account receivable for goods sold last year (assume 30 days in January)<\/p>\n
Jan. 15<\/p>\n
Purchased $10,000 in equipment from Edwards Equipment, signing a 9 month, 12% note (15 days in January)<\/p>\n
Jan. 25<\/p>\n
Loaned Douglas Co. $30,000 cash, accepting a 90 days, 10% note (6 days in January)<\/p>\n
Jan. 31<\/p>\n
Prepared accrual adjusting entry for any interest revenue and interest expense. Use the 360-day calendar.<\/b><\/p>\n
Apr. 25<\/p>\n
Received payment in full from Douglas Co. for outstanding note & interest<\/p>\n
May 1<\/p>\n
Received payment in full from Franks Co. for outstanding note & interest<\/p>\n
Oct. 15<\/p>\n
Paid Edwards Equipment in full<\/p>\n
Question 4: 9 points:<\/b><\/p>\n
Flip Company purchased a refrigerated delivery truck for $65,000 on April 1<\/u><\/b>, 2016. The plan is to use the truck for 4 years and then replace it. At the end of its useful life the truck is expected to have a salvage value of $10,000.<\/p>\n
a. Prepare the depreciation table for Flip\u2019s truck assuming that the company uses the straight-line method for depreciation.<\/p>\n
b. Prepare the depreciation table for Flip\u2019s truck assuming that the truck was purchased on January 1<\/u><\/b>, 2016 and the company uses the double-declining-balance depreciation method.<\/p>\n
c. Compute the depreciation expense for 2016 for Flip\u2019s truck assuming the truck has an expected life of 200,000 miles and during 2016 the truck was driven 24,540 miles. Round your depreciation expense per mile to three decimal places.<\/p>\n
Question 5: 7 points:<\/b><\/p>\n
Medina Company received its February bank statement on March 6. The statement showed a balance of $316,500. Included on the statement were memoranda showing collections from Medina customers (A\/R), totaling $16,000.<\/p>\n
The statement also showed a returned check for a customer who paid the balance on his account, for $2,825. The bank charged a returned check fee of $75 for this NSF check. This $75 charge will be added to the customer\u2019s balance. There were other service charges for the monthly service charge and ATM fees, totaling $200. These are bank service charge expenses. Medina\u2019s accountant looked at her accounting records. At the end of February, the cash balance was $312,300. The statement did not reflect a deposit made late on February 28th, for $14,900. There were also some outstanding checks, totaling $6,200.<\/p>\n
Required:<\/b><\/p>\n
a. Determine the adjusted balance in the cash account after completing a bank reconciliation.<\/p>\n
b. Prepare three journal entries needed due to the reconciliation.<\/p>\n
Question 6: 4 points:<\/b><\/p>\n
Flip Company at the end of the fiscal 2014 year has the following information: Credit Sales, $2,500,000 Sales Returns & Allowances $25,000 Accounts Receivable $200,000 and Allowance for Doubtful Accounts with a credit of $1,500.<\/p>\n
Required:<\/b><\/p>\n
a. Prepare the general journal entry to record the end of the year adjusting entry if Flip uses 0.5% of Net Credit Sales as the basis for determining Bad Debt Expense.<\/p>\n
b. Prepare the general journal entry to record the end of the year adjusting entry if Flip uses 5% of Accounts Receivable as the basis for determining Bad Debt Expense.<\/p>\n
Do not forget, this is only Section 1 of your Final Exam. Section 2 consists of the 25 multiple choice questions located in the Final Exam location. Section 2 is worth 25% (1 point per question).<\/u><\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
University of Maryland University College Final Examination Acct220: Principles of Accounting I \u2013 Section 1 of 2 Do not forget, this is only Section 1 of your Final Exam. Section 2 consists of the 25 multiple choice questions located in Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-50351","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/50351","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=50351"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/50351\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=50351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=50351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=50351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}