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1. Calculate the missing amounts for companies A to E A B C D E Cash $3,465 $ 1,860 $ ? $4,050 $300 Equipment 9,240 9,600 9,900 4,725 ?

/in /by

University of Maryland University College

Intermediate Accounting I

ACCT310

Exercises

1. Calculate the missing amounts for companies A to E

  A B C D E
Cash $3,465 $ 1,860 $    ? $4,050 $300
Equipment 9,240 9,600 9,900 4,725 ?
Accounts Payable 4,620 ? 3,713 2,025 540
Share capital ? 4,800 7,425 2,700 60
Retained earnings 5,775 1,600 1,238 ? 120

2. If total shareholders’ equity increased $12,000 and total assets decreased $9,000, what was the change in total liabilities?

ACCT310 Final Exam Continued: Page 2 of 3

3. The following account balances in the unadjusted trial balance at September 30, 2016 are presented below:

Prepaid insurance                $2,025

Unearned commissions revenue        500

Office supplies                     450

Prepaid rent                      2,250

Accumulated depreciation         12,000 

Salaries expense                  4,250

Additional information:

  1. A payment for six months’ rent of $2,250 was made on September 3, 2016 starting with the month of September 2016. 
  2. The inventory count for office supplies on hand at December 31, 2016 amounted to $125.
  3. A two year insurance policy was purchased on June 1, 2015 for $5,400.
  4. Unearned Commissions were the same for the months of September through December 2016 at $500 for each month; leaving a credit balance of $2,000 in the general ledger unearned commissions revenue account as of December 31, 2016 before any adjustments. All but $250 of this unearned commissions balance was earned. 
  5. The last three days of December 2016 salaries were earned but not paid, and have not been recorded. The total salaries for one day is $325.
  6. The monthly depreciation expense for each of the 12 months of 2016 was $600.

Assume that all adjusting entries have been made for the months of January through August 2016.

Required:

  1. Prepare the adjusting entries at December 31, 2016. Descriptions of the journal entry and account numbers are not required.
  2. If the adjusting entries were not recorded, what affect would this have on the net income for 2016 to include the amount understated or overstated?

4. Ramson Company worksheet for the preparation of its 2016 statement of cash flows included the following:

  2016
  December 31 January 1
Accumulated depreciation1 $124,000 $96,000
Accounts receivable 41,650 44,600
Allowance for uncollectible accounts 1,110 878
Prepaid rent expense 12,225 15,575
Accounts payable 37,187 29,950

Note #1: Assume that the only transactions affecting the increase in accumulated depreciation for 2016 was the recording of the annual depreciation expense.

Ramson’s 2016 net income is $325,500. What amount should Ramson include as net cash provided by operating activities in the statement of cash flows for 2016?

ACCT310 Final Exam Concluded: Page 3 of 3

5. Mary wants to make a deposit on 2/1/2015 to be able to withdraw $2,500 at the beginning of each year starting 2/1/2020 for five years. The interest rate is 8 percent.

Required:

What is the amount of the deposit that Mary needs to make on 2/1/2015?

6. Determine the market price of a $1,500,000, 12-year, 9% (pays interest semiannually) bond issue sold to yield an effective rate of 8%. Also, determine the amount of any possible bond premium or discount.

7. International Paper Inc. uses the conventional retail inventory method to account for inventory. The following information related to 2016 operations:

  Average
  Cost Retail
Beginning inventory and purchases $787,500 $1,750,000
Net markups   95,000
Net markdowns   82,000
Sales   1,000,000

Required: What amount should be reported as cost of sales for 2016?

8. A machine was purchased on January 1, 2012 for $870,000, estimated salvage value $125,000 and estimated service life of 10 years.

Required: If the annual depreciation expense for 2015 was $94,818; what depreciation method was used? Round all answers to the nearest whole dollar.

9. U.S. Steel Company purchased equipment for $200,000 on January 1, 2014 The estimated useful life is 8 years and the residual at the end of the eight years is $20,000. U.S. Stell uses the double-declining balance depreciation method. What will be the carrying value (book value) at December 31, 2017?

10. Assume a corporation has a cash surrender value of $28,000 at the beginning of the year. During the year, a premium of $150,000 is paid, and the cash surrender value at the end of the year is $50,000.

Required: Record the entry for the premium payment.

END OF ACCT310 FINAL EXAM

 
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