Reference no: EM13854613

1. Using the following transactions, calculate (A) the ending balance of Cash, (B) the ending balance of Accounts Receivable, (C) total liabilities, and (D) Stockholders' Equity at the end of the period. For parts a, b, and d, indicate whether each balance is debit or credit.

a. Began doing business by selling shared of common stock to investors for $50,000 in cash.

b. Billed customers for services rendered, $10,000.

c. Paid for six months' subscription in advance, $2,500.

d. Received advertising bill, to be paid next week, $500

e. Dividends of $4,000 were paid to common stock holders.

f. Received $7,500 from customers billed in b.

g. Paid half of advertising bill.

h. Received $1,000 in advance of performing a service.

2. Using the alphabetical list of account balances presented below, all of which are normal, prepare a trial balance for Cookies and Cream Company at June 30, 20x5, in proper order. Compute the balance of the Cash account.

Accounts Payable	$280
Accounts Receivable	560
Cash	?
Equipment	800
Office Expense	360
Common Stock	880
Service Revenue	600

3. In the journal provided, prepare journal entries without explanations for the following transactions. Write "no entry" if none is needed.

a. Received a $1,000 invoice for this month's electricity. Payment will be made in 2 weeks.

b. Paid $1,200 for insurance premiums to cover the next six months.

c. Dividends of $700 were paid.

d. The utility bill from part "a" is paid.

e. Purchased land for $23,000. The company paid half in cash and issued a promissory note for the other half.

General Journal				Page 1
Date	Description	Post. Ref.	Debit	Credit

4. In the journal provided, prepare adjusting entries for the following items. Omit explanations.

a. Depreciation on machinery is $940 for the accounting period.

b. Interest incurred on a loan but not paid or recorded is $635.

c. Office supplies of $600 were on hand at the beginning of the period. Purchases of office supplies during the period totaled $200. At the end of the period, $80 in office supplies remained.

d. Commissions amounting to $540 were earned but not recorded or collected by year end.

e. Prepaid Rent had an $8,000 normal balance prior to adjustment. By year end, 40 percent had expired.

General Journal					Page 1
Date		Description	Post. Ref.	Debit	Credit

5. In the journal provided, prepare adjusting entries for the following items. Omit explanations.

a. Unrecorded interest on savings bonds is $680.

b. Property taxes incurred but not paid or recorded amount to $540.

c. Legal fees of $5,000 were collected in advance. By year end, 60 percent were still unearned.

d. Prepaid Insurance had a $1,600 debit balance prior to adjustment. By year end, 40 percent was still unexpired.

e. Salaries incurred by year end but not yet paid or recorded amounted to $1,375.

f. Services totaling $900 have been performed but not yet recorded or billed.

General Journal					Page 1
Date		Description	Post. Ref.	Debit	Credit

6.    Given the adjusted trial balance below, prepare (in good form) an income statement, statement of retained earnings, and balance sheet. To do so you will need to determine the missing amounts for A, B, C, and D.  The name of the business is Oak Manufacturing and the accounting period coincides with the calendar year.  The balance in the Retained Earnings account as of December 31, 20X5 is $6,600.

Oak Manufacturing
Adjusted Trial Balance
December 31, 20x5
Cash	$   1,590
Accounts Receivable	3,600
Supplies	60
Prepaid Insurance	60
Office Equipment	6,000
Accumulated Depreciation-Office Equipment		$ "B"
Accounts Payable		1,600
Salaries Payable		210
Common Stock		2,000
Retained Earnings		"D"
Service Revenue		6,600
Salaries Expense	"A"
Supplies Expense	240
Insurance Expense	300
Depreciation Expense-Office Equipment	300	______
	$"C"	$15,510

7. Using the following data, prepare a classified balance sheet for Blanchard Company as of December 31, 20x5.

Cash	$   200		Accumulated Depreciation- Building	$  1,000
Investments in Short-Term Government Securities	400		Franchise	1,800
Accounts Receivable	800		Accounts Payable	1,600
Inventory	3,000		Revenues Received in Advance	400
Prepaid Rent	100		Notes Payable (in two years)	4,000
Investment in Land Held for future use	2,700		Common Stock	12,000
Land	2,000
Building	8,000

8. Use the information from the following single-step income statement to prepare a multistep income statement in proper form.

Midway Industries
Income Statement
For the Year Ended December 31, 20x5
Revenues
	Net sales	$10,000
	Interest income	300
	Total revenues			$10,300
Costs and expenses
	Costs of goods sold	$ 5,000
	Selling expenses	3,000
	General and administrative expenses	1,800
	Interest expense	800
	Total costs and expense		10,600
Net income (loss)			($     300)

9. Highland, Inc. entered into the transactions listed below. In the journal provided, prepare Highland's entries, assuming use of the perpetual inventory system. Omit explanations.

Mar.	2	Purchased $450 of merchandise on credit, terms n/30.
	6	Returned $75 of the items purchased on March 2.
	8	Paid freight charges of $25 on the items purchased March 2.
	16	Sold merchandise on credit for $600, terms n/15. The merchandise had a cost in inventory of $375.
	17	Of the merchandise sold on March 16, $50 of it was returned. The items had cost to Highland of $15.
	25	Received payment in full from the customer of March 16.
	31	Paid for the merchandise purchased on March 2.

General Journal					Page 1
Date		Description	Post. Ref.	Debit	Credit

10. Given the following information, prepare in good form the cost of goods sold section of an income statement for 20x5.

Freight-In	$  4,000
Merchandise Inventory, December 31, 20x4	15,000
Merchandise Inventory, December 31, 20x5	16,000
Purchases	38,000
Purchases Returns and Allowances	1,800