Strayer ACC557 Full Course Latest 2015

Strayer ACC557 Full Course Latest 2015 Oct [ All Discussions all homework [ week 2,4,,8,and 9 ] and Midterm Exam in $139 only

week 1

“General Accounting Principles” Please respond to the following:

Watch the video titled, “Bookkeeping” (5 min 46 s) from the lynda.com video series Accounting Fundamentals with Kay Stice and Jim Stice athttp://www.lynda.com/Business-Accounting-tutorials/Bookkeeping/158665/176132-4.html?org=strayer.edu. Next, consider the following statement: “Bookkeeping and accounting are the same.” In terms of your role in the provision of financial services, present data to support the accuracy of this statement and support your position.
Watch the video titled “The Basic Accounting Equation” https://www.youtube.com/watch?v=cLG7K6Sq9K4 (6 min 33 s). Next, analyze the accounting equation as a concept that underpins the work of professional accountants and how an understanding of the equation can impact business decision making.

week 2


“Accounting for a Specific Circumstance” Please respond to the following:

Use the Internet or the Strayer Library to research companies who have potential (1) pollution problems, (2) environmental-disposal problems, or (3) demolition issues (specifically big-box stores). Next, analyze how you, as the Chief Financial Officer (CFO) of a “big box store” that has potential pollution, environmental-disposal, or demolition problems, would handle these costs in your financial statements and communicate this proposed plan to your colleagues on the management team. Indicate how any resistance would be overcome. Support your stance with the information that you obtained through your research.
Recommend the advantages and disadvantages of recording the above-referenced costs in the financial statements and how this might alter the company’s public image.

week3

“Researching Financial Information” Please respond to the following:

Go to the Securities and Exchange Commission Website, located at http://searchwww.sec.gov/EDGARFSClient/jsp/EDGAR_MainAccess.jsp?search_text=*&sort=Date&formType=Form10K&isAdv=true&stemming=true&numResults=100&numResults=100. Analyze the section showing typical stock information and financial positions of companies. Next, analyze one company’s financial position and determine whether or not the stock potential will rise, remain stable, or decrease in value. Determine whether you would invest in it or not at this time. Provide a rationale for your response.
Assess how profitable the company has been over the past five (5) years and determine how you would advise the company about its future profitability potential.

week 4

“Accounting Methods and Inventories” Please respond to the following:

Create a corporate policy designed to minimize inventory shrinkage related to theft, stocking errors, shipping errors, etc., indicating how the policy will be enforced and procedures that may need to be implemented.
Inventory control requires constant attention. Propose a set of guidelines that reflect the necessary monitoring controls for three distinct types of business (e.g., a shoe retailer, a physician’s office, and a food vending truck) to minimize loss and waste. Indicate how each control will minimize risk of inventory loss.

week 5

“Internal Controls and Receivables” Please respond to the following:

Use the Internet or the Strayer Library to research companies who have experienced misappropriation of assets or loss of customer information within the last five (5) years. Next, analyze the situation from the company you selected and the internal controls that may have been compromised to allow the problem to occur and the resulting financial impact to the business. Propose a plan to prevent this type of situation in the future.
Assess the external and internal factors that influence credit policy and decision making within a company that extends credit to its customer when providing a good or service on account. Indicate the factor of most significance in today’s business environment. Provide support for your rationale.

week 6
“Information Protection and Privacy” Please respond to the following:

Use the Internet or the Strayer Library to research current articles related to personal information privacy violations including customer database hacking and related privacy breaches. Next, evaluate the circumstances that contributed to the privacy violation, the consequence to the company to the breach, and management’s response to the breach, indicating the appropriateness of the response. Suggest how the company may have presented the breach and / or responded differently once the breach was discovered. Provide support for your rationale.
Assess the ethical considerations for information privacy, indicating how these considerations should be addressed with a corporate policy. Provide support for your rationale.

week 7
“Retained Earnings” Please respond to the following:

The items contained in the Retained Earnings section of a balance sheet are often complex and confusing. Suggest an improvement for the reporting on this information that will help the users of the statement to have a better understanding of the activity. Provide support for your suggestion.
Evaluate what a cumulative loss in the retained earnings section of a company’s balance sheet might indicate about the financial performance in the future, indicating how this may influence decisions made about the company. Provide support for your answer.

Week 8 Discussion

Use the Internet or the Strayer Library to identify a business recently acquired or financed by a venture capitalist. Next, evaluate the business decision to use a venture capitalist to raise funds, indicating whether or not you believe the company will benefit from this decision in the long run. Provide support for your position.”Venture Capital” Please respond to the following:

Assess the challenges for businesses using the resources of a venture capitalist, given that significant returns on the investment are likely to be impacted by the firm. Indicate how a business can manage these expectations. Provide support for your rationale.

week 9
“Cash Flow Reporting” Please respond to the following:

Use the Internet or the Strayer Library to research the difference in the cash flow reporting requirements between US GAAP and IFRS. Given the complexities related to preparing and interpreting the statement of cash flow, evaluate the current requirement under GAAP and IFRS, indicating improvements that you would make to each method’s requirement to better serve the users of the information. Provide a rationale for your changes.
Analyze the impact of erroneous classifications in the Operating Activities section of the statement of cash flows, detailing how the distortion can impact the decisions made by financial statement users. Suggest how these errors may be minimized.

week 10

“Financial Analyst Skills” Please respond to the following:

Go to the CFO Website and read the article titled “Good Financial Analysts Are Made Not Born,” dated June 20, 2012 located athttp://www3.cfo.com/article/2012/6/training_fpa-raiswell-financial-planning-analysis-corporate-executive-board. Next, recommend the skills that are required to be a successful Financial Analyst, indicating how the role of a Financial Analyst adds value to a company. Provide support for your answer.
Assess the key ratios used by Financial Analyst to evaluate the financial performance of company, indicating the ratio that you believe to be most indicative of future performance. Provide support for your rationale.

week 11

“Course Wrap-Up” Please respond to the following:
Explain two concepts in this course that provided the most value to you.
Indicate how these two new areas of knowledge will benefit you in your current job or future career / endeavors.

week 2

Due Week 2 and worth 95 points

Directions: Answer the following questions in a separate Microsoft Word or Excel document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in Blackboard.

Exercises

E1-11.Two items are omitted from each of the following summaries of balance sheet and income statement data for two corporations for the year 2015, Plunkett Co. and Herring Enterprises.

Instructions

Determine the missing amounts.

E2-9.Selected transactions from the journal of Kati Tillman, investment broker, are presented below.

Instructions

a) Post the transactions to T-accounts.

b) Prepare a trial balance at August 31, 2015.

E2-11.Presented below is the ledger for Higgs Co.

Instructions

a) Reproduce the journal entries for the transactions that occurred on October 1, 10, and 20, and provide explanations for each.

b) Determine the October 31 balance for each of the accounts above, and prepare a trial balance at October 31, 2015.

E3-7.The ledger of Perez Rental Agency on March 31 of the current year includes the selected accounts, shown below, before quarterly adjusting entries have been prepared.

An analysis of the accounts shows the following.

1. The equipment depreciates $400 per month.

2. One-third of the unearned rent revenue was earned during the quarter.

3. Interest totaling $500 is accrued on the notes payable for the quarter.

4. Supplies on hand total $900.

5. Insurance expires at the rate of $200 per month.

Instructions

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense.

E3-11.A partial adjusted trial balance of Gehring Company at January 31, 2015, shows the following.

Instructions

Answer the following questions, assuming the year begins January 1.

a) If the amount in Supplies Expense is the January 31 adjusting entry, and $1,000 of supplies was purchased in January, what was the balance in Supplies on January 1?

b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for one year, what was the total premium and when was the policy purchased?

c) If $3,500 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2014?

Problems

P1-2A.On August 31, the balance sheet of La Brava Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, Common Stock $13,000, and Retained Earnings $700. During September, the following transactions occurred.

1. Paid $2,900 cash for accounts payable due.

2. Collected $1,300 of accounts receivable.

3. Purchased additional equipment for $2,100, paying $800 in cash and the balance on account.

4. Recognized revenue of $7,300, of which $2,500 is collected in cash and the balance is due in October.

5. Declared and paid a $400 cash dividend.

6. Paid salaries $1,700, rent for September $900, and advertising expense $200.

7. Incurred utilities expense for month on account $170.

8. Received $10,000 from Capital Bank on a 6-month note payable.

Instructions

a) Prepare a tabular analysis of the September transactions beginning with August 31 balances. The column headings should be as follows: Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings + Revenues – Expenses – Dividends.

b) Prepare an income statement for September, a retained earnings statement for September, and a balance sheet at September 30.

P2-2A.Julia Dumars is a licensed CPA. During the ?rst month of operations of her business, Julia Dumars, Inc., the following events and transactions occurred.

May 1 Stockholders invested $20,000 cash in exchange for common stock.

2 Hired a secretary-receptionist at a salary of $2,000 per month.

3 Purchased $1,500 of supplies on account from Vincent Supply Company.

7 Paid of?ce rent of $900 cash for the month.

11 Completed a tax assignment and billed client $2,800 for services performed.

12 Received $3,500 advance on a management consulting engagement.

17 Received cash of $1,200 for services performed for Orville Co.

31 Paid secretary-receptionist $2,000 salary for the month.

31 Paid 40% of balance due Vincent Supply Company.

Julia uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 311Common Stock, No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.

Instructions

a) Journalize the transactions.

b) Post to the ledger accounts.

c) Prepare a trial balance on May 31, 2015.

P3-1A.Deanna Nardelli started her own consulting ?rm, Nardelli Consulting, on May 1, 2015. The trial balance at May 31 is as follows.

In addition to those accounts listed on the trial balance, the chart of accounts for Nardelli Consulting also contains the following accounts and account numbers: No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 717 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense.

Other data:

1. $900 of supplies have been used during the month.

2. Utilities expense incurred but not paid on May 31, 2015, $250.

3. The insurance policy is for 2 years.

4. $400 of the balance in the unearned service revenue account remains unearned at the end of the month.

5. May 31 is a Wednesday, and employees are paid on Fridays. Nardelli Consulting has two employees, who are paid $900 each for a 5-day work week.

6. The equipment has a 5-year life with no salvage value. It is being depreciated at $190 per month for 60 months.

7. Invoices representing $1,700 of services performed during the month have not been recorded as of May 31.

Instructions

a) Prepare the adjusting entries for the month of May. Use J4 as the page number for your journal.

b) Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column. Post the adjusting entries to the ledger accounts.

c) Prepare an adjusted trial balance at May 31, 2015.

week 4

Due Week 4 and worth 105 points

Directions: Answer the following questions on a separate Microsoft Word or Excel document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in Blackboard.

Exercises

E4-7.Kay Magill Company had the following adjusted trial balance.

Instructions

a) Prepare closing entries at June 30, 2015.

b) Prepare a post-closing trial balance.

E4-13.Keenan Company has an inexperienced accountant. During the ?rst 2 weeks on the job, the accountant made the following errors in journalizing transactions. All entries were posted as made.

1. A payment on account of $840 to a creditor was debited to Accounts Payable $480 and credited to Cash $480.

2. The purchase of supplies on account for $560 was debited to Equipment $56 and credited to Accounts Payable $56.

3. A $500 cash dividend was debited to Salaries and Wages Expense $500 and credited to Cash $500.

Instructions

Prepare the correcting entries.

E5-4.On June 10, Tuzun Company purchased $8,000 of merchandise from Epps Company, FOB shipping point, terms 2/10, n/30. Tuzun pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Epps for credit on June 12. The fair value of these goods is $70. On June 19, Tuzun pays Epps Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Instructions

a) Prepare separate entries for each transaction on the books of Tuzun Company.

b) Prepare separate entries for each transaction for Epps Company. The merchandise purchased by Tuzun on June 10 had cost Epps $4,800.

E5-7.Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $60,000, Inventory $15,000, Operating Expenses $29,000, Sales Revenue $115,000, Sales Discounts $1,200, and Sales Returns and Allowances $1,700. A physical count of inventory determines that merchandise inventory on hand is $13,900.

Instructions

a) Prepare the adjusting entry necessary as a result of the physical count.

b) Prepare closing entries.

E6-1.Tri-State Bank and Trust is considering giving Josef Company a loan. Before doing so, management decides that further discussions with Josef’s accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of $297,000. Discussions with the accountant reveal the following.

1. Josef sold goods costing $38,000 to Sorci Company, FOB shipping point, on December 28. The goods are not expected to arrive at Sorci until January 12. The goods were not included in the physical inventory because they were not in the warehouse.

2. The physical count of the inventory did not include goods costing $95,000 that were shipped to Josef FOB destination on December 27 and were still in transit at year-end.

3. Josef received goods costing $22,000 on January 2. The goods were shipped FOB shipping point on December 26 by Solita Co. The goods were not included in the physical count.

4. Josef sold goods costing $35,000 to Natali Co., FOB destination, on December 30. The goods were received at Natali on January 8. They were not included in Josef’s physical inventory.

5. Josef received goods costing $44,000 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $297,000.

Instructions

Determine the correct inventory amount on December 31.

E6-6.Kaleta Company reports the following for the month of June.

Instructions

a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO and (2) LIFO.

b) Which costing method gives the higher ending inventory? Why?

c) Which method results in the higher cost of goods sold? Why?

Problems

P4-3A.The completed ?nancial statement columns of the worksheet for Fleming Company are shown on below.

Instructions

a) Prepare an income statement, a retained earnings statement, and a classi?ed balance sheet.

b) Prepare the closing entries.

c) Post the closing entries and underline and balance the accounts. (Use T-accounts.) Income Summary is account No. 350.

d) Prepare a post-closing trial balance.

P5-2A.Latona Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Latona showed Cash of $5,000 and Common Stock of $5,000.

May 1 Purchased merchandise on account from Gray’s Wholesale Supply $4,200, terms 2/10, n/30.

2 Sold merchandise on account $2,100, terms 1/10, n/30. The cost of the merchandise sold was $1,300.

5 Received credit from Gray’s Wholesale Supply for merchandise returned $300.

9 Received collections in full, less discounts, from customers billed on sales of$2,100 on May 2.

10 Paid Gray’s Wholesale Supply in full, less discount.

11 Purchased supplies for cash $400.

12 Purchased merchandise for cash $1,400.

15 Received refund for poor quality merchandise from supplier on cash purchase $150.

17 Purchased merchandise from Amland Distributors $1,300, FOB shipping point, terms 2/10, n/30.

19 Paid freight on May 17 purchase $130.

24 Sold merchandise for cash $3,200. The merchandise sold had a cost of $2,000.

25 Purchased merchandise from Horvath, Inc. $620, FOB destination, terms 2/10, n/30.

27 Paid Amland Distributors in full, less discount.

29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $30.

31 Sold merchandise on account $1,000 terms n/30. The cost of the merchandise sold was $560.

Latona Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Instructions

a) Journalize the transactions using a perpetual inventory system.

b) Enter the beginning cash and common stock balances and post the transactions. (Use J1 for the journal reference.)

c) Prepare an income statement through gross pro?t for the month of May 2015.

P6-3A.Ziad Company had a beginning inventory on January 1 of 150 units of Product 4-18-15 at a cost of $20 per unit. During the year, the following purchases were made.

Mar. 15 400 units at $23 Sept. 4 350 units at $26

July 20 250 units at $24 Dec. 2 100 units at $29

1,000 units were sold. Ziad Company uses a periodic inventory system.

Instructions

a) Determine the cost of goods available for sale.

b) Determine (1) the ending inventory, and (2) the cost of goods sold under each of the assumed cost ?ow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods.

c) Which cost ?ow method results in (1) the highest inventory amount for the balance sheet, and (2) the highest cost of goods sold for the income statement?

week 8

Due Week 8 and worth 70 points
Directions: Answer the following questions on a separate Microsoft Word or Excel document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in Blackboard.

Exercises

E11-7.Quay Co. had the following transactions during the current period.

Mar. 2 Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill for $30,000 for services performed in helping the company to incorporate.

June 12 Issued 60,000 shares of $5 par value common stock for cash of $375,000.

July 11 Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.

Nov. 28 Purchased 2,000 shares of treasury stock for $80,000.

Instructions

Journalize the transactions.

E11-13.On January 1, Guillen Corporation had 95,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred.

Apr. 1 Issued 25,000 additional shares of common stock for $17 per share.

June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30.

July 10 Paid the $1 cash dividend.

Dec. 1 Issued 2,000 additional shares of common stock for $19 per share.

15 Declared a cash dividend on outstanding shares of $1.20 per share to stockholders of record on December 31.

Instructions

a) Prepare the entries, if any, on each of the three dividend dates.

b) How are dividends and dividends payable reported in the ?nancial statements prepared at December 31?

E12-8.Presented below are two independent situations.

1. Gambino Cosmetics acquired 10% of the 200,000 shares of common stock of Nevins Fashion at a total cost of $13 per share on March 18, 2015. On June 30, Nevins declared and paid a $60,000 dividend. On December 31, Nevins reported net income of $122,000 for the year. At December 31, the market price of Nevins Fashion was $15 per share. The stock is classi?ed as available-for-sale.

2. Kanza, Inc., obtained signi?cant in?uence over Rogan Corporation by buying 40% of Rogan’s 30,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2015. On June 15, Rogan declared and paid a cash dividend of $30,000. On December 31, Rogan reported a net income of $80,000 for the year.

Instructions

Prepare all the necessary journal entries for 2015 for (a) Gambino Cosmetics and (b) Kanza, Inc.

E12-12.Uttinger Company has the following data at December 31, 2015.

The available-for-sale securities are held as a long-term investment.

Instructions

a) Prepare the adjusting entries to report each class of securities at fair value.

b) Indicate the statement presentation of each class of securities and the related unrealized gain (loss) accounts.

Problems

P11-3A.The stockholders’ equity accounts of Castle Corporation on January 1, 2015, were as follows.

Preferred Stock (8%, $50 par, cumulative, 10,000 shares authorized) $ 400,000

Common Stock ($1 stated value, 2,000,000 shares authorized) 1,000,000

Paid-in Capital in Excess of Par—Preferred Stock 100,000

Paid-in Capital in Excess of Stated Value—Common Stock 1,450,000

Retained Earnings 1,816,000

Treasury Stock (10,000 common shares) 50,000

During 2015, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb. 1 Issued 25,000 shares of common stock for $120,000.

Apr. 14 Sold 6,000 shares of treasury stock—common for $33,000.

Sept. 3 Issued 5,000 shares of common stock for a patent valued at $35,000.

Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of $6,000.

Dec. 31 Determined that net income for the year was $452,000.

No dividends were declared during the year.

Instructions

a) Journalize the transactions and the closing entry for net income.

b) Enter the beginning balances in the accounts, and post the journal entries to the stockholders’ equity accounts. (Use J5 for the posting reference.)

c) Prepare a stockholders’ equity section at December 31, 2015, including the disclosure of the preferred dividends in arrears.

P12-6A.The following data, presented in alphabetical order, are taken from the records of Nieto Corporation.

The investment in Sasse common stock is considered to be a long-term available-for-sale security.

Instructions

Prepare a classi?ed balance sheet at December 31, 2015.

Due Week 9 and worth 50 points
Directions: Answer the following questions on a separate Microsoft Word or Excel document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in Blackboard.

Exercises

E13-3.Cushenberry Corporation had the following transactions.

1. Sold land (cost $12,000) for $15,000.

2. Issued common stock at par for $20,000.

3. Recorded depreciation on buildings for $17,000.

4. Paid salaries of $9,000.

5. Issued 1,000 shares of $1 par value common stock for equipment worth $8,000.

6. Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200.

Instructions

For each transaction above, (a) prepare the journal entry, and (b) indicate how it would affect the statement of cash ?ows using the indirect method.

E13-4.Gutierrez Company reported net income of $225,000 for 2015. Gutierrez also reported depreciation expense of $45,000 and a loss of $5,000 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.

Instructions

Prepare the operating activities section of the statement of cash ?ows for 2015. Use the indirect method.

Problems

P13-3A.The income statement of Whitlock Company is presented here.

Additional information:

1. Accounts receivable increased $200,000 during the year, and inventory decreased $500,000.

2. Prepaid expenses increased $150,000 during the year.

3. Accounts payable to suppliers of merchandise decreased $340,000 during the year.

4. Accrued expenses payable decreased $100,000 during the year.

5. Operating expenses include depreciation expense of $70,000.

Instructions

Prepare the operating activities section of the statement of cash ?ows for the year ended November 30, 2015, for Whitlock Company, using the indirect method.

P13-7A.Presented below are the ?nancial statements of Nosker Company.

Additional data:

1. Dividends declared and paid were $20,000.

2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.

3. All depreciation expense, $14,500, is in the operating expenses.

4. All sales and purchases are on account.

Instructions

a) Prepare a statement of cash ?ows using the indirect method.

b) Compute free cash ?ow.

Due Week 4 and worth 105 points

Directions: Answer the following questions on a separate Microsoft Word or Excel document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in Blackboard.

Exercises

E4-7.Kay Magill Company had the following adjusted trial balance.

Instructions

a) Prepare closing entries at June 30, 2015.

b) Prepare a post-closing trial balance.

E4-13.Keenan Company has an inexperienced accountant. During the ?rst 2 weeks on the job, the accountant made the following errors in journalizing transactions. All entries were posted as made.

1. A payment on account of $840 to a creditor was debited to Accounts Payable $480 and credited to Cash $480.

2. The purchase of supplies on account for $560 was debited to Equipment $56 and credited to Accounts Payable $56.

3. A $500 cash dividend was debited to Salaries and Wages Expense $500 and credited to Cash $500.

Instructions

Prepare the correcting entries.

E5-4.On June 10, Tuzun Company purchased $8,000 of merchandise from Epps Company, FOB shipping point, terms 2/10, n/30. Tuzun pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Epps for credit on June 12. The fair value of these goods is $70. On June 19, Tuzun pays Epps Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Instructions

a) Prepare separate entries for each transaction on the books of Tuzun Company.

b) Prepare separate entries for each transaction for Epps Company. The merchandise purchased by Tuzun on June 10 had cost Epps $4,800.

E5-7.Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $60,000, Inventory $15,000, Operating Expenses $29,000, Sales Revenue $115,000, Sales Discounts $1,200, and Sales Returns and Allowances $1,700. A physical count of inventory determines that merchandise inventory on hand is $13,900.

Instructions

a) Prepare the adjusting entry necessary as a result of the physical count.

b) Prepare closing entries.

E6-1.Tri-State Bank and Trust is considering giving Josef Company a loan. Before doing so, management decides that further discussions with Josef’s accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of $297,000. Discussions with the accountant reveal the following.

1. Josef sold goods costing $38,000 to Sorci Company, FOB shipping point, on December 28. The goods are not expected to arrive at Sorci until January 12. The goods were not included in the physical inventory because they were not in the warehouse.

2. The physical count of the inventory did not include goods costing $95,000 that were shipped to Josef FOB destination on December 27 and were still in transit at year-end.

3. Josef received goods costing $22,000 on January 2. The goods were shipped FOB shipping point on December 26 by Solita Co. The goods were not included in the physical count.

4. Josef sold goods costing $35,000 to Natali Co., FOB destination, on December 30. The goods were received at Natali on January 8. They were not included in Josef’s physical inventory.

5. Josef received goods costing $44,000 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $297,000.

Instructions

Determine the correct inventory amount on December 31.

E6-6.Kaleta Company reports the following for the month of June.

Instructions

a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO and (2) LIFO.

b) Which costing method gives the higher ending inventory? Why?

c) Which method results in the higher cost of goods sold? Why?

Problems

P4-3A.The completed ?nancial statement columns of the worksheet for Fleming Company are shown on below.

Instructions

a) Prepare an income statement, a retained earnings statement, and a classi?ed balance sheet.

b) Prepare the closing entries.

c) Post the closing entries and underline and balance the accounts. (Use T-accounts.) Income Summary is account No. 350.

d) Prepare a post-closing trial balance.

P5-2A.Latona Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Latona showed Cash of $5,000 and Common Stock of $5,000.

May 1 Purchased merchandise on account from Gray’s Wholesale Supply $4,200, terms 2/10, n/30.

2 Sold merchandise on account $2,100, terms 1/10, n/30. The cost of the merchandise sold was $1,300.

5 Received credit from Gray’s Wholesale Supply for merchandise returned $300.

9 Received collections in full, less discounts, from customers billed on sales of$2,100 on May 2.

10 Paid Gray’s Wholesale Supply in full, less discount.

11 Purchased supplies for cash $400.

12 Purchased merchandise for cash $1,400.

15 Received refund for poor quality merchandise from supplier on cash purchase $150.

17 Purchased merchandise from Amland Distributors $1,300, FOB shipping point, terms 2/10, n/30.

19 Paid freight on May 17 purchase $130.

24 Sold merchandise for cash $3,200. The merchandise sold had a cost of $2,000.

25 Purchased merchandise from Horvath, Inc. $620, FOB destination, terms 2/10, n/30.

27 Paid Amland Distributors in full, less discount.

29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $30.

31 Sold merchandise on account $1,000 terms n/30. The cost of the merchandise sold was $560.

Latona Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Instructions

a) Journalize the transactions using a perpetual inventory system.

b) Enter the beginning cash and common stock balances and post the transactions. (Use J1 for the journal reference.)

c) Prepare an income statement through gross pro?t for the month of May 2015.

P6-3A.Ziad Company had a beginning inventory on January 1 of 150 units of Product 4-18-15 at a cost of $20 per unit. During the year, the following purchases were made.

Mar. 15 400 units at $23 Sept. 4 350 units at $26

July 20 250 units at $24 Dec. 2 100 units at $29

1,000 units were sold. Ziad Company uses a periodic inventory system.

Instructions

a) Determine the cost of goods available for sale.

b) Determine (1) the ending inventory, and (2) the cost of goods sold under each of the assumed cost ?ow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods.

c) Which cost ?ow method results in (1) the highest inventory amount for the balance sheet, and (2) the highest cost of goods sold for the income statement?

week 6

Due Week 6 and worth 70 points

Directions: Answer the following questions on a separate Microsoft Word or Excel document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in Blackboard.

Exercises

E9-9.Presented below are selected transactions at Ridge Company for 2015.

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2005. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value.

June 30 Sold a computer that was purchased on January 1, 2012. The computer cost $45,000. It had a useful life of 5 years with no salvage value. The computer was sold for $14,000.

Dec. 31 Discarded a delivery truck that was purchased on January 1, 2011. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.

Instructions

Prepare Pryce Company’s journal entries to record the sale of the equipment in these four independent situations.

a) Sold for $31,000 on January 1, 2015.

b) Sold for $31,000 on May 1, 2015.

c) Sold for $11,000 on January 1, 2015.

d) Sold for $11,000 on October 1, 2015.

E9-11.On July 1, 2015, Friedman Inc. invested $720,000 in a mine estimated to have 900,000 tons of ore of uniform grade. During the last 6 months of 2015, 100,000 tons of ore were mined and sold.

Instructions

a) Prepare the journal entry to record depletion expense.

b) Assume that the 100,000 tons of ore were mined, but only 80,000 units were sold. How are the costs applicable to the 20,000 unsold units reported?

E10-12.Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2015. The bonds pay interest twice a year.

Instructions

a) (1) Prepare the journal entry to record the issuance of the bonds.

(2) Compute the total cost of borrowing for these bonds.

b) Repeat the requirements from part (a), assuming the bonds were issued at 105.

E10-15.Jernigan Co. receives $300,000 when it issues a $300,000, 10%, mortgage note payable to ?nance the construction of a building at December 31, 2015. The terms provide for semiannual installment payments of $25,000 on June 30 and December 31.

Instructions

Prepare the journal entries to record the mortgage loan and the ?rst two installment payments.

Problems

P9-7A.The intangible assets section of Sappelt Company at December 31, 2015, is presented below.

The patent was acquired in January 2015 and has a useful life of 10 years. The franchise was acquired in January 2012 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2016.

Jan. 2 Paid $27,000 legal costs to successfully defend the patent against infringement by another company.

Jan.–June Developed a new product, incurring $140,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.

Sept. 1 Paid $50,000 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials will air in September and October.

Oct. 1 Acquired a franchise for $140,000. The franchise has a useful life of 50 years.

Instructions

a) Prepare journal entries to record the transactions above.

b) Prepare journal entries to record the 2016 amortization expense.

c) Prepare the intangible assets section of the balance sheet at December 31, 2016.

P10-1A.On January 1, 2015, the ledger of Accardo Company contains the following liability accounts.

Accounts Payable $52,000

Sales Taxes Payable 7,700

Unearned Service Revenue 16,000

During January, the following selected transactions occurred.

Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.

12 Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.)

14 Paid state revenue department for sales taxes collected in December 2014 ($7,700).

20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax.

21 Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note.

25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.

Instructions

a) Journalize the January transactions.

b) Journalize the adjusting entry at January 31 for the outstanding note payable. (Hint: Use one-third of a month for the Girard Bank note.)

c) Prepare the current liabilities section of the balance sheet at January 31, 2015. Assume no change in accounts payable.

midterm

• Question 1

3 out of 3 points

Radio Moscow Industries purchased supplies for $1,000. They paid $400 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $600. Which of the following would be the correct way to complete the recording of the transaction?

• Question 2

3 out of 3 points

The first step in posting involves

• Question 3

3 out of 3 points

Credits

• Question 4

3 out of 3 points

The first step in the recording process is to

• Question 5

3 out of 3 points

Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co. for $3,100 cash. The entry for this transaction will include a

28 . The chart of accounts is a

a. list of accounts and their balances at a given time.

b. device used to prove the mathematical accuracy of the ledger.

c. listing of the accounts and the account numbers which identify their location in the ledger.

d. required step in the recording process.

• Question 6

3 out of 3 points

The chart of accounts is a

• Question 7

3 out of 3 points

Equipment is classified in the balance sheet as

.• Question 8

3 out of 3 points

The first required step in the accounting cycle is

• Question 9

3 out of 3 points

The operating cycle of a company is the average time that is required to go from cash to

• Question 10

3 out of 3 points

Correcting entries are made

• Question 11

3 out of 3 points

The information for preparing a trial balance on a worksheet is obtained from

• Question 12

3 out of 3 points

A post-closing trial balance will show

• Question 13

3 out of 3 points

All of the following statements about the post-closing trial balance are correct except it

• Question 14

3 out of 3 points

Which one of the following is not

an enhancing quality of useful information?

• Question 15

3 out of 3 points

Accounts often need to be adjusted because

• Question 16

3 out of 3 points

Dinosaur Junior Corporation purchased a one-year insurance policy in January 2015 for $75,000. The insurance policy is in effect from May 2015 through April 2016. If the company neglects to make the proper year-end adjustment for the expired insurance

• Question 17

3 out of 3 points

The balance in the Prepaid Rent account before adjustment at the end of the year is $21,000, which represents three months’ rent paid on December 1. The adjusting entry required on December 31 is to

• Question 18

3 out of 3 points

A law firm received $3,000 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Service Revenue. If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause

• Question 19

0 out of 3 points

If an adjusting entry is not made for an accrued revenue,

• Question 20

3 out of 3 points

Financial information that is capable of making a difference in a decision is

• Question 21

0 out of 3 points

Fat Possum’s Service Shop started the year with total assets of $330,000 and total liabilities of $2400,000. During the year, the business recorded $630,000 in revenues, $420,000 in expenses, and paid dividends of $60,000.

The net income reported by Fat Possum’s Service Shop for the year was

• Question 22

3 out of 3 points

The accounting process involves all of the following except

• Question 23

3 out of 3 points

Accounting consists of three basic activities which are related to economic events of an organization. These include

• Question 24

3 out of 3 points

The final step in solving an ethical dilemma is to

• Question 25

3 out of 3 points

Revenues would not result from

• Question 1

3 out of 3 points

Sales revenue less cost of goods sold is called

• Question 2

3 out of 3 points

The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit

• Question 3

3 out of 3 points

A merchandising company using a perpetual system will make

• Question 4

3 out of 3 points

Net income is gross profit less

• Question 5

3 out of 3 points

Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using

• Question 6

3 out of 3 points

A company just starting business made the following four inventory purchases in June:

June 1 150 units $ 390

June 10 200 units 585

June 15 200 units 630

June 28 150 units 510

$2,115

A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is

• Question 7

3 out of 3 points

Alfalfa Company developed the following information about its inventories in applying the lower-of-cost-or-market (LCM) basis in valuing inventories:

Product Cost Market

A $112,000 $120,000

B 80,000 76,000

C 155,000 162,000

• Question 8

3 out of 3 points

Inventoriable costs include all of the following except the

• Question 9

3 out of 3 points

Romanoff Industries had the following inventory transactions occur during 2015:

Units Cost/unit

2/1/15 Purchase 54 $45

3/14/15 Purchase 93 $47

5/1/15 Purchase 66 $49

The company sold 150 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company’s gross profit using FIFO? (rounded to whole dollars)

• Question 10

3 out of 3 points

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a

• Question 11

3 out of 3 points

Which of the following receivables would not be classified as an “other receivable”?

• Question 12

3 out of 3 points

When a note receivable is dishonored,

• Question 13

3 out of 3 points

Claims for which formal instruments of credit are issued as proof of the debt are

• Question 14

3 out of 3 points

The financial statements of Danielle Manufacturing Company report net sales of $750,000 and accounts receivable of $60,000 and $90,000 at the beginning and end of the year, respectively. What is the accounts receivable turnover for Danielle?

• Question 15

3 out of 3 points

Syfy Company on July 15 sells merchandise on account to Eureka Co. for $5,000, terms 2/10, n/30. On July 20 Eureka Co. returns merchandise worth $2,000 to Syfy Company. On July 24 payment is received from Eureka Co. for the balance due. What is the amount of cash received?

• Question 16

3 out of 3 points

A customer charges a treadmill at Annie’s Sport Shop. The price is $4,000 and the financing charge is 6% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 days and a finance charge is added to the customer’s account.

What is the amount of the finance charge?

• Question 17

3 out of 3 points

If a company sells its accounts receivables to a factor,

• Question 18

3 out of 3 points

Maximum benefit from independent internal verification is obtained when

• Question 19

3 out of 3 points

The daily cash count of cash register receipts made by department supervisors is an example of

• Question 20

3 out of 3 points

Control over cash disbursements is generally more effective when

• Question 21

3 out of 3 points

Cash equivalents could include each of the following except

• Question 22

3 out of 3 points

The cash account shows a balance of $40,000 before reconciliation. The bank statement does not include a deposit of $9,200 made on the last day of the month. The bank statement shows a collection by the bank of $3,960 and a customer’s check for $1,300 was returned because it was NSF. A customer’s check for $1,380 was recorded on the books as $1,920, and a check written for $318 was recorded as $390. The correct balance in the cash account was

• Question 23

3 out of 3 points

Candy Claws Company gathered the following reconciling information in preparing its August bank reconciliation:

Cash balance per books, 8/31 $19,500

Deposits in transit 900

Notes receivable and interest collected by bank 4,800

Bank charge for check printing 120

Outstanding checks 12,000

NSF check 1,020

The adjusted cash balance per books on August 31 is

• Question 24

3 out of 3 points

The custodian of a company asset should

• Question 25

3 out of 3 points

A petty cash fund of $100 is replenished when the fund contains $4 in cash and receipts for $93. The entry to replenish the fund would

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