The General Ledger account balances as of December 31, 20XX, for the Cougar Detective Agency

The General Ledger account balances as of December 31, 20XX, for the Cougar Detective Agency are entered in the Trial Balance columns of the work sheet on pages 78 and 79.

REQUIRED: Complete the work sheet, using the following additional data, and then answer questions 6 through 9. DO NOT send the work sheet to us.

Additional data as of December 31, 20XX (ADJUSTING ENTRIES):

a. Depreciation of $1,050 on the vehicle and $305 on office equipment hasn’t been recorded for the current year $1,355

b. Salaries due but unpaid at year end 250

c. A physical count of unused office supplies showed a balance of $180 180

d. Interest due on notes payable 30

e. Services billed to clients for December haven’t yet been recorded 740

6. On the Balance Sheet for the Cougar Detective Agency, the balance in the Office Supplies account will be shown as a

A. debit of $180. C. debit of $340.

B. credit of $180. D. credit of $340.

7. The balance to be shown in the Fee Revenue account on the Income Statement for the Cougar Detective Agency is a

A. debit of $23,705. C. debit of $24,445.

B. credit of $23,705. D. credit of $24,445.

8. What is the net income for the Cougar Detective Agency for the year ended December 31, 20XX?

A. $8,815. C. $10,170.

B. $9,155. D. $14,175.

9. The balance to be shown in the Accumulated Depreciation—Vehicle account on the Balance Sheet for the Cougar Detective Agency is a credit of

A. $1,050. C. $2,200.

B. $2,100. D. $2,405.

 Base your answers to questions 10 through 15 on the following information:

The Mid-Valley Accounting Agency, owned and operated by Jeffery Thomas, organized for business on January 1, 20XX. It’s assumed, in this problem, that 11 months have elapsed since the company began operations, and that the January 1 through November 30 transactions have been entered in the journal and posted to the ledger. The company’s chart of accounts is as follows:

MID-VALLEY ACCOUNTING AGENCY

10. On December 26, cash in the amount of $175 was received for work performed. When you record this transaction in the General Journal, to which account should the credit entry be made?

A. Cash C. Interest Income

B. Accounts Payable D. Fee Income

11. What is the correct adjusting entry for the expired insurance premium as of December 31?

A. Insurance Expense 1,800

Prepaid Insurance 1,800

B. Prepaid Insurance 1,800

Insurance Expense 1,800

C. Insurance Expense 900

Prepaid Insurance 900

D. Prepaid Insurance 900

Insurance Expense 900

12. What is the net income for the Mid-Valley Accounting Agency for the year ended December 31, 20XX?

A. $13,440. C. $15,240.

B. $14,105. D. $16,350.

13. The balance in the Cash account, as shown on the work sheet in the Balance Sheet debit column, is

A. $4,305. C. $2,995.

B. $3,895. D. $2,305.

14. The balance in the Fee Income account, as shown on the work sheet in the Income Statement credit column, is

A. $35,295. C. $37,860.

B. $37,685. D. $38,130.

15. From the information on the work sheet, determine what the balance in the Jeffery Thomas, Capital account would be if a post-closing trial balance is prepared as of December 31, 20XX.

A. $21,490 C. $10,000

B. $15,185 D. $6,250

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for the Donald Ruddy Company as of December 31, 20XX (A+ Guaranteed)

Here’s a list of adjusted account balances, in alphabetical order, for the Donald Ruddy Company as of December 31, 20XX. Complete an Income Statement for the year ended December 31, 20XX, using the work sheet provided at the back of this unit.

1. The cost of goods sold is

A. $44,580. C. $38,580.

B. $41,580. D. $33,580.

2. The net cost of purchases are

A. $39,080. C. $39,750.

B. $39,580. D. $39,830.

3. The cost of goods available for sale is

A. $39,080. C. $41,580.

B. $39,330. D. $44,580.

4. Net sales for the period amount to

A. $59,830. C. $60,380.

B. $60,180. D. $60,930.

5. What are the total operating expenses?

A. $10,105 C. $10,700

B. $10,490 D. $11,000

A trial balance as of December 31, 20XX, for the Sylvia Goody Company is entered on the work sheet at the back of this unit. Complete the work sheet, using the following data.

6. On the work sheet prepared for the Sylvia Goody Company as of December 31, the debit total under Adjustments is

A. $1,039. C. $926.

B. $1,015. D. $913.

7. Which one of the following statements is true for the ending inventory balance?

A. It will appear as a debit in the Trial Balance column.

B. It will appear as a debit in the Adjusted Trial Balance column.

C. It will appear as a credit in the Balance Sheet column.

D. It will appear as a credit in the Income Statement column.

8. Which one of the following statements applies to the $714 in the Transportation-in account?

A. It will appear in the debit column of the Income Statement.

B. It will appear in the credit column of the Income Statement.

C. It will appear in the debit column of the Balance Sheet.

D. It will appear in the credit column of the Balance Sheet.

9. The cost of goods purchased that would appear on a formal income statement prepared for the Sylvia Goody Company, based on the information in the work sheet, would be

A. $20,939. C. $20,221.

B. $20,423. D. $19,709.

10. The net income for the Sylvia Goody Company for the period ending December 31, 20XX, is

A. $10,382. C. $11,120.

B. $10,406. D. $14,206.

11. When a firm is using a periodic inventory procedure, the cost of goods purchased is equal to

A. Beginning Inventory + Purchases – Purchase Returns and Allowances – Purchase

Discounts + Transportation-in.

B. Ending Inventory + Purchases – Purchase Returns and Allowances – Purchase

Discounts + Transportation-in.

C. Purchases – Purchase Returns and Allowances – Purchase Discounts +

Transportation-in.

D. Purchases – Purchase Returns and Allowances – Purchase Discounts –

Transportation-in.

12. An example of a contra-revenue account found on the Income Statement is the

A. Uncollectible Accounts Expense.

B. Transportation-in.

C. Purchase Returns and Allowances.

D. Sales Returns and Allowances.

13. Company A records purchases using the net price method. If an item is purchased from a supplier for $800 on terms of 3/10, n/30, the correct accounting entry would be

A. Purchases 776

Purchase Discounts 24

Accounts Payable 800

B. Purchases 776

Accounts Payable 776

C. Accounts Payable 800

Purchases 776

Purchase Discounts 24

D. Purchases 800

Accounts Payable 800

in 1,100

Ending Inventory 7,400

Sales 53,500

Beginning Inventory 9,500

Purchases 27,200

14. What account will be debited to record an accounts receivable amount considered to be a bad debt if the direct write-off method of accounting is used?

A. Uncollectible Accounts Expense
B. Cash
C. Allowance for Doubtful Accounts
D. Sales

Base your answers to questions 15 and 16 on the following data:
Here’s a partial record of the J. Shafer Company as of December 31, 20XX.
Purchase Returns $ 1,500
Sales Discounts 900
Operating Expenses 20,000
Transportation-in 1,100
Ending Inventory 7,400
Sales 53,500
Beginning Inventory 9,500
Purchases 27,200

15. The cost of goods sold is

A. $37,800. C. $29,800.

B. $36,700. D. $28,900.

16. The company’s net income is

A. $17,400. C. $4,600.

B. $16,800. D. $3,700.

17. The term used to designate that the buyer of merchandise is responsible for the transportation costs of shipping the merchandise is

A. E.O.M. shipping point. C. E.O.M. destination.

B. F.O.B. shipping point. D. F.O.B. destination.

18. Gross profit on sales minus operating expenses equals

A. net operating income. C. net sales.

B. cost of goods sold. D. net operating expenses.

19. The following information about the Wells Company’s merchandising accounts is available:

Beginning Inventory . . . . . . . . . . . . $100,000

Ending Inventory. . . . . . . . . . . . . . . 40,000

Purchase Discounts . . . . . . . . . . . . . 4,000

Transportation-in . . . . . . . . . . . . . . . 7,500

Purchases. . . . . . . . . . . . . . . . . . . . 55,000

Cost of Goods Sold . . . . . . . . . . . . . 115,000

The information on Purchase Returns and Allowances has been misplaced, and it’s up
to you to determine its final balance from the information given above. The amount of
Purchase Returns and Allowances must be

A. $3,500. C. $11,000.

B. $7,500. D. $15,000.

20. All but one of the following accounts would be credited in the closing process. Which account would not be credited in the closing entries?

A. Sales Discounts

B. Purchases

C. Transportation-in

D. Purchase Returns and Allowances

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Worthington Company issued $1,000,000 face value, six-year

Worthington Company issued $1,000,000 face value, six-year, 10% bonds on July 1, 2012, when the market rate of interest was 12%. Interest payments are due every July 1 and January 1. Worthington uses a calendar year-end.

Required:

Prepare the journal entry to record the issuance of the bonds on July 1, 2012.
Prepare the adjusting journal entry on December 31, 2012, to accrue interest expense.
Prepare the journal entry to record the interest payment on January 1, 2013.
Calculate the amount of cash that will be paid for the retirement of the bonds on the maturity date.

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P3-43 and P4-38 (Haupt Consulting) – The problem continues the Haupt Consulting situation

Assignment 3: Excel Problems

At the end of each module, you will apply the module’s concepts by completing comprehensive assignments from the textbook.

Complete problems P3-43 (p. 185) and P4-38 (p. 252) in your text book.

The problem continues the Haupt Consulting situation from problem 2-64 of chapter 2.  Start from the trial blance and the posted T accounts that Haupt Consulting prepared December 18 as follows:

 

HAUPT CONSULTING

TRIAL BALANCE

DECEMBER 18, 2010

 

                                    BALANCE

ACCOUNTS TITLE                                                              DEBIT                        CREDIT

CASH                                                                                     8100

ACCOUNTS RECEIVABLE                                                            1700

SUPPLIES                                                                              300

EQUIPMENT                                                                         2400

ACCUMULATED DEPRECIATION-EQUIPMENT

FURNITURE                                                                         3600

ACCUMULATED DEPRECIATION- FURNITURE

ACCOUNTS PAYABLE                                                                               3900

SALARY PAYABLE

UNEARNED SERVICE REVENUE

CARL HAUPT, CAPITAL                                                                            10000

CARL HAUPT, WITHDRAWALS

SERVICE REVENUE                                                                                   2500

RENT EXPENSE                                                                   500

UTILITIES EXPENSE                                                          200

SALARY EXPENSE

DEPRECIATION EXPENSE-EQUIPMENT

DEPRECIATION EXPENSE-FURNITURE

SUPPLIES EXPENSE

TOTAL                                                                                   16400              16400

 

Later in December, the business completed these transactions as follows:

Dec. 21  Received $900 in advance for clientr service to be performed evenly over the next 30 days

21 Hired a secretary to be paid $1500 on the 20th day of each month.  The secretary begins work immediately.

26 Paid $300 on account

28 Collected $600 on account

30 Owner withdrew $1600

 

P4-38  This problem continues the Haupt Consulting situation from Problem 3-43.  Start from the posted T-accounts and the adjusted trial balance that Haupt Consulting prepared for the company at December 31:

Haupt Consulting

Adjusted Trial Balance

December 18, 201031, 2010

 

Balance

Account Title                     Debit              Credit

Cash                               $7,700

Accounts Receivable         1,500

Supplies                             100

Equipment                         2,000

Accumulated depreciation – equipment     $33

Furniture                            3,600

Accumulated depreciation -furniture            60

Accounts Payable                               $3,600

Salary Payable                                       700

Unearned service revenue                       600

Carl Haupt, Capital                               10,000

Carl Haupt, Withdrawals     1,600

Service Revenue                                  3,200

Rent expense                                        500

Utilities expense                       200

Salary Expense                        700

Depreciation expense -equipment   33

Depreciation expense -furniture      60

Supplies expense                       200

Total                                 $18,193                 $18,193

Required:

1.  Complete the accounting work sheet at December 31.

2.  Journalize and post the closing entries at December 31.  Denote each closing amount as Clo and an account balance as Bal.

3.  Prepare a classified balance sheet at December 31.

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Aulman Inc. has a number of divisions, including a Furniture Division and a Motel Division

Aulman Inc. has a number of divisions, including a Furniture Division and a Motel Division. The Motel Division owns and operates a line of budget motels located along major highways. Each year, the Motel Division purchases furniture for the motel rooms. Currently, it purchases a basic dresser from an outside supplier for $40. The manager of the Furniture Division has approached the manager of the Motel Division about selling dressers to the Motel Division. The full product cost of a dresser is $29. The Furniture Division can sell all of the dressers it makes to outside companies for $40. The Motel Division needs 10,000 dressers per year; the Furniture Division can make up to 50,000 dressers per year.

Refer to the information for Aulman Inc. above.

Required:

1. Which division sets the maximum transfer price? Which division sets the minimum transfer price?

2. Suppose the company policy is that all transfers take place at full cost. What is the transfer price?

3. Conceptual Connection: Do you think that the transfer will occur at the company-mandated transfer price? Why or why not?

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Ida Sidha Karya Company is a family-owned company located in the village of Gianyar

Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The sounding bars are cast from brass and hand-filed to attain just the right sound. The bars are then mounted on an intricately hand-carved wooden base. The gamelans are sold for 850 (thousand) rupiahs. (The currency in Indonesia is the rupiah, which is denoted by Rp.) Selected data for the company’s operations last year follow (all currency values are in thousands of rupiahs):

Units in beginning inventory 0
Units produced 250
Units sold 225
Units in ending inventory 25
Variable costs per unit:
Direct materials Rp100
Direct labor Rp320
Variable manufacturing overhead Rp40
Variable selling and administrative Rp20
Fixed costs:
Fixed manufacturing overhead Rp60,000
Fixed selling and administrative Rp20,000
________________________________________

The absorption costing income statement prepared by the company’s accountant for last year appears below (all currency values are in thousands of rupiahs):

Sales Rp191,250
Cost of goods sold 157,500
Gross margin 33,750
Selling and administrative expenses 24,500
Net operating income Rp9,250
________________________________________

Requirement 1:
Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.

Requirement 2:
Prepare an income statement for the year using the variable costing method. Explain the difference in net operating income between the two costing methods.

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Aracel Engineering completed the following transactions in the month of June

Aracel Engineering completed the following transactions in the month of June.

a. Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company.
b. The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a long-term note payable for $42,700.
c. The company purchased a portable building with $55,000 cash and moved it onto the land acquired in b.
d. The company paid $3,000 cash for the premium on an 18-month insurance policy.
e. The company completed and delivered a set of plans for a client and collected $6,200 cash.
f. The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500.
g. The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days.
h. The company purchased $1,150 of additional office equipment on credit.
i. The company completed engineering services for $22,000 on credit.
j. The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days.
k. The company collected $7,000 cash in partial payment from the client described in transaction g.
l. The company paid $1,200 cash for wages to a drafting assistant.
m. The company paid $1,150 cash to settle the account payable created in transaction h.
n. The company paid $925 cash for minor maintenance of its drafting equipment.
o. Jenna Aracel withdrew $9,480 cash from the company for personal use.
p. The company paid $1,200 cash for wages to a drafting assistant.
q. The company paid $2,500 cash for advertisements on the Web during June.

Required
1. Prepare general journal entries to record these transactions (use the account titles listed in part 2).
2. Open the following ledger accounts— their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); J. Aracel, Capital (301); J. Aracel, Withdrawals (302); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). Post the journal entries from part 1 to the accounts and enter the balance after each posting.
3. Prepare a trial balance as of the end of June.

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For Turgo Company, variable costs are 55% of sales, and fixed costs are $170,900

For Turgo Company, variable costs are 55% of sales, and fixed costs are $170,900. Management’s net income goal is $129,925.

Compute the required sales in dollars needed to achieve management’s target net income of $129,925.

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Holden Graham started The Graham Co., a new business that began operations on May 1

Holden Graham started The Graham Co., a new business that began operations on May 1. The Graham Co. completed the following transactions during its first month of operations.

H. Graham invested $45,000 cash in the company in exchange for its common stock.
The company rented a furnished office and paid $2,300 cash for May’s rent.
The company purchased $1,890 of office equipment on credit.
The company paid $790 cash for this month’s cleaning services.
The company provided consulting services for a client and immediately collected $5,400
The company provided $2,600 of consulting services for a client on credit.
The company paid $750 cash for an assistant’s salary for the first half of this month.
The company received $2,600 cash payment for the services provided on May 12.
The company provided $3,700 of consulting services on credit.
The company received $3,700 cash payment for the services provided on May 22.
The company paid $1,890 cash for the office equipment purchased on May 3.
The company purchased $85 of advertising in this month’s (May) local paper on credit payment is due June 1.
The company paid $750 cash for an assistant’s salary for the second half of this month
The company paid $350 cash for this month’s telephone bill.
The company paid $300 cash icr this month’s utilities.
The company paid $1,500 cash in dividends to the owner (sole shareholder).

Required:
2. Enter the amount of each transaction on individual items of the accounting equation.
3.1 Prepare Holden Graham Company’s income statement for May.
3.2 Prepare Holden Graham company’s statement of Retained Earnings for May.
3.3 Prepare Holden Graham Company’s Balance Sheet for May 31.
3.4 Prepare Holden Graham Company’s statemant of Cash Flows For Month Ended May 31

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BBP, Inc., with sales of $500,000, has the following balance sheet

BBP, Inc., with sales of $500,000, has the following balance sheet:

BBP, Incorporated
Balance Sheet
as of 12/31/X0

Assets Liabilities
Cash $ 25,000 Accounts Payable $ 15,000
Accounts Receivable $ 50,000 Accruals $ 20,000
Inventory $ 75,000 Notes Payable $ 0
Current Assets $150,000 Current Liabilities $ 85,000
Fixed Assets $200,000 Common Stock $100,000
Retained Earnings $165,000
Total Assets $350,000 Total Liabilities/Equity $350,000

The firm earns 15% on sales and distributes 25% of its earnings. Using the percent of sales method, forecast the new balance sheet for sales of $600,000 assuming that cash changes with sales and that the firm is not operating at capacity. Will the firm need external; funds? Would your answer be different if the firm distributed all of its earnings?

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