I. (12 points) Determine whether each of the following is true or false and briefly explain . 1. If the period revenues are less than the period expenses, and there are no gains or losses, then Retained Earnings must decrease during the period. 2. In a pre-closing trial balance, revenue and expense accounts must have a zero balance.. 3. If debits equal credits on the trial balance, you still cannot know with certainty that your records are correct. 4. At the end of the first year of ownership of a long-term asset, if an accelerated depreciation method is used, the net book value of the asset will always be equal to or less than the market value of the asset. 5. If prices are increasing then LIFO, compared with FIFO, will show a higher net income for the period. 6. At the end of the second year of ownership of a long-term asset, before the closing entry is made, the balance in the accumulated depreciation account must be equal to or greater than the balance in the depreciation expense account. II. (16 points) Sarah Jones started a new business in January, 2012. The following are selected events that occurred in the business during the first year of business. Please provide journal entries for these events (explanations are not necessary). 1. Sarah invested $65,000 to start the business, SaJon Inc. and received 100 shares of stock from the business. 2. Purchased inventory of $18,000 on account. 3. Signed a lease for two years for $24,000. The company paid $3,500 immediately; this was one month's rent in advance plus a security deposit. 4. Sold inventory, costing $15,000, on account for $29,000 (recognize both the revenue and the expense). 5. Paid for the inventory purchased in 2). 6. Received payment for the amount billed in 4). 7. Paid $5,300 in salaries. 8. Recognized the rent expense for the first month. III. (18 points) The ABC Company has the following inventory records. 2/1 Beginning balance 5@ $50 $ 250 2/5 Purchase 10@ 40 400 2/10 Sale 12@ 100 2/17 Purchase 20@ 35 700 2/23 Sale 18@ 100 2/25 Purchase 15@ 30 450 3/10 Purchase 14@ 20 280 3/15 Sale 28@ 100 3/19 Purchase 6@ 10 60 5 Required For the above data set please answer the following questions. Use the periodic inventory method. Compute, for each month separately, the cost of goods sold, using a) FIFO b) LIFO c) Weighted-average VI. (18 points) Assume the following events for the year 2011. 1. Credit sales $300,000 2. Cash sales 200,000 3. Accounts receivable balance 1/1/11 16,000 4. Accounts written off during the year were 2,600 5. Allowance for Uncollectibles balance 1/1/11 1,200 6. Eighty percent (80%) of this year's credit sales are collected during the year. Required Scenario One Use the above data set. Assume that the company estimates its annual bad debt expense at 3% of total sales. 1. Compute the Bad Debt Expense and provide the journal entry to show its recognition. 2. Provide the journal entry showing the write-off of bad debts. 3. Show the balance sheet presentation of net accounts receivable. Scenario Two Use the above data set. Ignore Scenario One. Assume that the company estimates that 5% of its accounts receivable will not get collected. 1. Compute the Bad Debt Expense and provide the journal entry to show its recognition. 2. Provide the journal entry showing the write-off of bad debts. 3. Show the balance sheet presentation of net accounts receivable. V. (12 points) The ABC Company, located in Boston, purchases a piece of equipment from a dealer in Chicago for $90,000. The cost of shipping the equipment, $8,000, will be paid for by ABC Co. It is estimated that the asset will last five years and at the end of its useful life will have a salvage value of $10,000. When the equipment arrives it has to be set up and adjusted, at a cost of $17,000. Required Compute the depreciation expense for year one and year two (do each year separately) using 1. Straight-line 2. Double-declining balance 3. This part is independent of parts one through three. Assume that a company purchased an asset for $400,000. At the end of four years the balance in the accumulated depreciation account is $160,000, at which time the asset is sold for $255,000. Required Provide the journal entry for the sale of the asset. 6. (8 points). Consider each of the following scenarios independently. 1. If the ending balance in Salaries Payable was $2,500, during the year the cash paid for salaries (earned both last year and this year) was $100,000, and the Salary Expense for the year was $90,000, what was the beginning balance in Salaries Payable? 2. On March 1, 2011 a four year insurance policy was purchased for $36,000. By mistake this entire cost was expensed immediately and this error was never corrected. Ignore taxes. At the end of 2014 is the Retained Earnings correctly stated and, if not, is it overstated or understated and by how much? 3. Assume the following. Net assets (assets minus liabilities) at the beginning of the year were $30,000 and at the end of the year they were $70,000; common stock increased (some were issued) during the year by $100,000; and dividends declared for the year were $ 120,000. What must have been the net income for the year? 4. The MNH Company had cost of goods sold equal to $40,000. If the beginning balance in inventory was $81,000 and the ending balance in inventory was $87,000, what were the purchases of inventory during the year?CLICK HERE TO GET THE ANSWER !!!! I. (12 points) Determine whether each of the following is true or false and briefly explain . 1. If the period revenues are less than the period expenses, and there are no gains or losses, then Retained Earnings must decrease during the period. 2. In a pre-closing trial balance, revenue and expense accounts must have a zero balance.. 3. If debits equal credits on the trial balance, you still cannot know with certainty that your records are correct. 4. At the end of the first year of ownership of a long-term asset, if an accelerated depreciation method is used, the net book value of the asset will always be equal to or less than the market value of the asset. 5. If prices are increasing then LIFO, compared with FIFO, will show a higher net income for the period. 6. At the end of the second year of ownership of a long-term asset, before the closing entry is made, the balance in the accumulated depreciation account must be equal to or greater than the balance in the depreciation expense account. II. (16 points) Sarah Jones started a new business in January, 2012. The following are selected events that occurred in the business during the first year of business. Please provide journal entries for these events (explanations are not necessary). 1. Sarah invested $65,000 to start the business, SaJon Inc. and received 100 shares of stock from the business. 2. Purchased inventory of $18,000 on account. 3. Signed a lease for two years for $24,000. The company paid $3,500 immediately; this was one month's rent in advance plus a security deposit. 4. Sold inventory, costing $15,000, on account for $29,000 (recognize both the revenue and the expense). 5. Paid for the inventory purchased in 2). 6. Received payment for the amount billed in 4). 7. Paid $5,300 in salaries. 8. Recognized the rent expense for the first month. III. (18 points) The ABC Company has the following inventory records. 2/1 Beginning balance 5@ $50 $ 250 2/5 Purchase 10@ 40 400 2/10 Sale 12@ 100 2/17 Purchase 20@ 35 700 2/23 Sale 18@ 100 2/25 Purchase 15@ 30 450 3/10 Purchase 14@ 20 280 3/15 Sale 28@ 100 3/19 Purchase 6@ 10 60 5 Required For the above data set please answer the following questions. Use the periodic inventory method. Compute, for each month separately, the cost of goods sold, using a) FIFO b) LIFO c) Weighted-average VI. (18 points) Assume the following events for the year 2011. 1. Credit sales $300,000 2. Cash sales 200,000 3. Accounts receivable balance 1/1/11 16,000 4. Accounts written off during the year were 2,600 5. Allowance for Uncollectibles balance 1/1/11 1,200 6. Eighty percent (80%) of this year's credit sales are collected during the year. Required Scenario One Use the above data set. Assume that the company estimates its annual bad debt expense at 3% of total sales. 1. Compute the Bad Debt Expense and provide the journal entry to show its recognition. 2. Provide the journal entry showing the write-off of bad debts. 3. Show the balance sheet presentation of net accounts receivable. Scenario Two Use the above data set. Ignore Scenario One. Assume that the company estimates that 5% of its accounts receivable will not get collected. 1. Compute the Bad Debt Expense and provide the journal entry to show its recognition. 2. Provide the journal entry showing the write-off of bad debts. 3. Show the balance sheet presentation of net accounts receivable. V. (12 points) The ABC Company, located in Boston, purchases a piece of equipment from a dealer in Chicago for $90,000. The cost of shipping the equipment, $8,000, will be paid for by ABC Co. It is estimated that the asset will last five years and at the end of its useful life will have a salvage value of $10,000. When the equipment arrives it has to be set up and adjusted, at a cost of $17,000. Required Compute the depreciation expense for year one and year two (do each year separately) using 1. Straight-line 2. Double-declining balance 3. This part is independent of parts one through three. Assume that a company purchased an asset for $400,000. At the end of four years the balance in the accumulated depreciation account is $160,000, at which time the asset is sold for $255,000. Required Provide the journal entry for the sale of the asset. 6. (8 points). Consider each of the following scenarios independently. 1. If the ending balance in Salaries Payable was $2,500, during the year the cash paid for salaries (earned both last year and this year) was $100,000, and the Salary Expense for the year was $90,000, what was the beginning balance in Salaries Payable? 2. On March 1, 2011 a four year insurance policy was purchased for $36,000. By mistake this entire cost was expensed immediately and this error was never corrected. Ignore taxes. At the end of 2014 is the Retained Earnings correctly stated and, if not, is it overstated or understated and by how much? 3. Assume the following. Net assets (assets minus liabilities) at the beginning of the year were $30,000 and at the end of the year they were $70,000; common stock increased (some were issued) during the year by $100,000; and dividends declared for the year were $ 120,000. What must have been the net income for the year? 4. The MNH Company had cost of goods sold equal to $40,000. If the beginning balance in inventory was $81,000 and the ending balance in inventory was $87,000, what were the purchases of inventory during the year? CLICK HERE TO GET THE ANSWER !!!!

I. (12 points)

     Determine whether each of the following is true or false and briefly explain .

1.   If the period revenues are less than the period expenses, and there are no gains or losses, then Retained Earnings must decrease during the period.

2.   In a pre-closing trial balance, revenue and expense accounts must have a zero balance..

3.   If debits equal credits on the trial balance, you still cannot know with certainty that your records are correct.

4.   At the end of the first year of ownership of a long-term asset, if an accelerated depreciation method is used, the net book value of the asset will always be equal to or less than the market value of the asset.

5.   If prices are increasing then LIFO, compared with FIFO,

     will show a higher net income for the period.

6.   At the end of the second year of ownership of a long-term

  asset, before the closing entry is made, the balance in the   accumulated depreciation account must be equal to or greater   than the balance in the depreciation expense account.

 

 

II. (16 points)

     Sarah Jones started a new business in January, 2012.  The following are selected events that occurred in the business during the first year of business.  Please provide journal entries for these events (explanations are not necessary).

 

1.   Sarah invested $65,000 to start the business, SaJon Inc.  and received 100 shares of stock from the business.

2.   Purchased inventory of $18,000 on account.

3.   Signed a lease for two years for $24,000.  The company paid $3,500 immediately; this was one month's rent in advance plus a security deposit.

4.   Sold inventory, costing $15,000, on account for $29,000 (recognize both the revenue and the expense).

5.   Paid for the inventory purchased in 2).

6.   Received payment for the amount billed in 4).

7.   Paid $5,300 in salaries.

8.   Recognized the rent expense for the first month.

 

 

 

 

III. (18 points)

     The ABC Company has the following inventory records.

2/1       Beginning balance        5@ $50        $ 250

2/5       Purchase                 10@  40          400

2/10      Sale                     12@  100          

2/17      Purchase                 20@  35          700

2/23      Sale                     18@  100         

2/25      Purchase                 15@  30          450

 

3/10      Purchase                 14@  20          280

3/15      Sale                     28@  100        

3/19      Purchase                 6@  10           60

5

Required

For the above data set please answer the following questions.  Use the periodic inventory method. Compute, for each month separately, the cost of goods sold, using

a) FIFO

b) LIFO

c) Weighted-average

 

VI. (18 points)

     Assume the following events for the year 2011.

1.   Credit sales                                 $300,000   

2.   Cash sales                                   200,000

3.   Accounts receivable balance 1/1/11            16,000

4.   Accounts written off during the year were       2,600

5.   Allowance for Uncollectibles balance 1/1/11     1,200

6.   Eighty percent (80%) of this year's credit sales are collected during the year.

 

Required

Scenario One

Use the above data set.  Assume that the company estimates its

annual bad debt expense at 3% of total sales. 

1. Compute the Bad Debt Expense and provide the journal entry

  to show its recognition.

2. Provide the journal entry showing the write-off of bad

  debts.

3. Show the balance sheet presentation of net accounts

  receivable.

Scenario Two

     Use the above data set.  Ignore Scenario One.  Assume that

the company estimates that 5% of its accounts receivable will not

get collected.

1. Compute the Bad Debt Expense and provide the journal entry

  to show its recognition.

2. Provide the journal entry showing the write-off of bad

  debts.

3. Show the balance sheet presentation of net accounts

  receivable.

    

V. (12 points)

     The ABC Company, located in Boston, purchases a piece of equipment from a dealer in Chicago for $90,000.  The cost of shipping the equipment, $8,000, will be paid for by ABC Co.  It is estimated that the asset will last five years and at the end of its useful life will have a salvage value of $10,000.  When the equipment arrives it has to be set up and adjusted, at a cost of $17,000.

 

Required

Compute the depreciation expense for year one and year two (do each year separately) using

 

1.      Straight-line

2.      Double-declining balance

3.      This part is independent of parts one through three.  Assume that a company purchased an asset for $400,000. At the end of four years the balance in the accumulated depreciation account is $160,000, at which time the asset is sold for $255,000.

 

     Required

     Provide the journal entry for the sale of the asset.

 

6.   (8 points). 

     Consider each of the following scenarios independently.

 

1. If the ending balance in Salaries Payable was $2,500, during the year the cash paid for salaries (earned both last year and this year) was $100,000, and the Salary Expense for the year was $90,000, what was the beginning balance in Salaries Payable?

 

2.  On March 1, 2011 a four year insurance policy was purchased for $36,000.  By mistake this entire cost was expensed immediately and this error was never corrected.  Ignore taxes.  At the end of 2014 is the Retained Earnings correctly stated and, if not, is it overstated or understated and by how much?

 

3.  Assume the following.  Net assets (assets minus liabilities) at the beginning of the year were $30,000 and at the end of the year they were $70,000; common stock increased (some were issued) during the year by $100,000; and dividends declared for the year were $ 120,000.  What must have been the net income for the year?

 

4.  The MNH Company had cost of goods sold equal to $40,000.  If the beginning balance in inventory was $81,000 and the ending balance in inventory was $87,000, what were the purchases of inventory during the year?

CLICK HERE TO GET THE ANSWER !!!!