Reference no: EM13339862
Complete the following exam by answering the questions and compiling your answers into a word-processing document. When you're ready to submit your answers, refer to the instructions at the end of your exam booklet. Be certain to indicate the proper question number before each of your answers. Remember to show your work if an answer requires a mathematical solution.
Part A: Answer each of the following questions.
Complete the cash flow from operating activities section for Lauren Company using the direct method for the year ended December 31, 2010.
2. Given the following balance sheet, complete a horizontal analysis. Compute the percentage to the nearest tenth of a percent.
Part B: Answer each of the following questions.
1. Record the following transactions using the accounting equation.
Example:
Assets = Liabilities + Equity
XXXX(cash) XXXX(accounts payable)
A. Amanda invests $17,000 cash into her merchandising business.
B. She buys $6,500 of office equipment and $3,000 of office supplies with cash from Office Depot.
C. Additional purchases were supplies for $35,000 on account from various suppliers.
2. Journalize the following transactions and omit the explanations.
A. ABC Corporation purchased $15,000 of office furniture by putting $7,000 down in cash and the rest on account on April 8.
B. The corporation paid $60,000 for a two-year lease on April 19.
C. The corporation had sales of $45,000, of which $35,000 were on account on April 20.
D. The corporation borrowed $25,000 by signing a note payable on April 22.
E. The corporation paid $1,250 on one of its accounts payable on April 26.
3. Prepare a trial balance from the following information for
Learn a New Language, Inc. for December 31, 2012.
4. Compute the missing information from this post-closing trial balance.
5. Journalize the following transactions using the perpetual inventory method.
Aug. 6 Purchased $830 of inventory on account from Johnston with terms of 2/10, n/30.
Aug. 8 Purchased $2,611 of inventory for cash from
Pillner Company.
Aug.15 Paid for August 6 purchase from Johnston.
Aug. 17 Purchased $1,743 of merchandise on account
from Luis Company with Terms of 3/15, n/45.
6. Given the following information, prepare a balance sheet for Isaiah's Tool Shed for the year ending December 31, 2012.
7. Rick Company's beginning inventory and purchases during the fiscal year ended December 31, 2012, were as follows:
What is the cost of goods sold for Rick Company for 2012 using LIFO?
8. Assume that in Year 1, the ending merchandise inventory is overstated by $30,000. If this is the only error in Years 1 and 2, fill in the items below, indicating which items will be understated, overstated, or correctly stated for Years 1 and 2.
9. Below is a list of treatments of accounting topics. Place GAAP on the line if the treatment is GAAP-based and place IFRS on
the line if the treatment is IFRS-based.
A. Interest and dividend income are reported in the investing section of the cash flow statement.__________
B. Interest expense is reported in the financing section of the cash flow statement. ___________
C. The use of LIFO is prohibited. ___________
10. Record the necessary journal entries from the following bank reconciliation information for July 31, 2011:
11. Journalize the following transactions for Tammy Company:
Sept. 1 Sold $3,500 of merchandise to Jim on account Oct. 1 Exchanged Jim's account receivable for a four- month, 8% note for $3,500
Dec. 31 Recorded accrued interest on Jim's note
Feb. 1 Jim paid off his note with interest (round to nearest dollar)
12. A truck was purchased on January 2 at a cost of $60,000. It's expected to be used for five years and to have a residual value of $5,000 after 120,000 miles of service. The truck was driven for 23,000 miles the first year and 25,000 miles the second year. Calculate the depreciation expense to the nearest dollar for the first and second years.
Method Year 1 Year 2
Straight-line ________ ________
Double-declining-balance ________ ________
Units-of-production ________ ________
13. Prepare the general journal entries for the following transactions:
Jan. 2, 2011 Purchased land with a building on it for $750,000. The land is worth $300,000.
Paid $150,000 cash down and signed a mortgage payable for the balance.
Dec. 31, 2011 Depreciation is computed using the straight-line method. The estimated salvage value of the building is $75,000
and has an estimated life of 20 years.
July 1, 2012 The building and land are sold for $825,000 cash.
14. Journalize the following treasury stock transactions:
June 3 Reacquired 350 shares of $12 par common stock at $10 per share.
June 7 Sold 180 shares of treasury stock for $16 per share.
June 8 Sold 150 shares of treasury stock for $9 per share.
15. Lowry Landscapes had net income of $50,000 for 2010.
Land was sold for $40,000, of which $3,000 was a gain.
The beginning cash balance was $53,000, and the ending cash balance was $151,000. Depreciation expenses were $11,000. Prepare a statement of cash flows for the year ended December 31, 2010, for Lowry Landscapes using the indirect method.