Reference no: EM131217452

ASSIGNMENT 1-

Q1. ABC, Co. has an account payable of $7,700 due XYZ, Inc. , one of its suppliers.  The amount was due to be paid on October 15, 2013.  ABC, Co. only had enough cash on hand then to pay $1,700 of the amount due, so ABC, Co.  and XYZ, Inc. agreed to sign a note payable (N/P) for the balance.  The note was dated October 15, 2013, had an interest in the amount of $20 that would be due on December 31, 2013.

Use the Horizontal Model to show the effect of:

a. The October 15, 2013 payment of $1,700 and the creation of a note payable for the balance owed.

b. The October 31, 2013 accrual of interest expense for the month of October.

c. The December 31, 2013 payment of the note and all of the interest due.  Interest for November and December had not been accrued.

Q2. On January 1, 2013, NDM paid $2,250 rent (Prepaid Rent) for a storage facility for the period from January 1 through May 31.  The rent charge is $ 450 per month. 

Use the Horizontal Model to show the:                                                                

a. Show the January transaction when rent was Prepaid.

b. The February 2013 rent expense.

Q3. Calculate Retained Earnings Balance as of February 28, 2013:

On January 1, 2013, the balance of Retained Earnings account of Corporation was $630,000.  Revenues for February totaled $123,000, of which $115,000 was collected in cash.  Expenses for February totaled $131,000, of which $108,000 was paid in cash.  Dividends declared and paid during February were $12,000.

ASSIGNMENT 2 -

Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases only one column may be affected because all of the specific accounts affected by the transaction are included in that category.

a. Accrued interest income of $30 on a note receivable.

b. Determined that the Allowance for Bad Debts account balance should be increased by $2,350.

c. Recognized bank service charges of $25 for the month.

d. Received $29 cash for interest accrued in a prior month.

e. Purchased 5 units of a new item of inventory on account at a cost of $36 each. Perpetual inventory is maintained.

f. Purchased 13 more units on account of the above item at a cost of $41 each. Perpetual inventory is maintained.

g. Sold 9 of the items purchased (in e and f) and recognized the cost of goods sold using the FIFO cost flow assumption. Perpetual inventory is maintained.

Attachment:- Assignment.rar