Accounting Systems
Take- Home Assignment – due Jan 7, 2015
Question 1
Please do this using Journal Entries, Ledgers, Trial Balance, Income Statement,
and Balance Sheet in Excel.
Excel Atol is a small enterprise. Its trial balance as at Dec 31, 2009 is as follows:
Excel Atol
Trial Balance
Dec. 31, 2009
Debit
Cash
Accounts Receivable
Prepaid Insurance
Supplies
Office Furniture
Accounts Payable
Unearned Service Revenue
45,400
Common Stock
Service Revenue
Salaries Expense
Rent Expense
$
Credit
60,800
32,000
35,600
10,500
123,000
$ 30,500
192,000
45,000
45,000
15,000
$
312,900
Aside from the accounts shown, the following will also be needed:
Accumulated Depreciation – Office Furniture
Travel Payable
Salaries Payable
Depreciation Expense
Insurance Expense
Travel Expense
Supplies Expense
312,900
The following needs to be entered:
1.
2.
3.
4.
$5000 of Supplies were used during the month
Travel costs incurred but not paid were $2000
The insurance policy is paid for three years
Only $12,000 of the Unearned Service Revenue was still Unearned by the
end of the month
5. Dec 31 is a Wednesday, and employees are paid on Friday (5 day week).
There are 20 employees, each earning $600 per week.
6. The office furniture is being depreciated straight line over 5 years at $2500
per month.
7. There are still $2,000 of services to be booked at the end of the month.
Instructions:
1.
2.
3.
4.
5.
6.
Prepare T-Accounts for the above
Make journal entries for the end of month
Re-do the trial balance
Prepare a closing journal entry
Prepare an income statement and balance sheet
Work out the debt/equity ratio, return on assets, return on equity and
the profit margin for this company.
Question 2
A merchandising company shows the following on its trial balance as at Dec 31,
2009:
Accounts Payable
$
75,000
Accounts Receivable
46,300
Accumulated Depreciation – Building
52,500
Accumulated Depreciation – Equipment 42,600
Building
190,000
Cash
50,000
Common Stock
150,000
Cost of Goods Sold
395,000
Depreciation Expense – Building
10,400
Depreciation Expense – Equipment
13,000
Dividends
28,000
Equipment
100,000
Insurance Expense
7,200
Interest Expense
11,000
Interest Payable
10,000
Interest Revenue
4,300
Merchandise Inventory
75,000
Mortgage Payable
97,000
Office Salaries Expense
32,000
Prepaid Insurance
4,400
Property Taxes Payable
4,800
Property Taxes Expense
4,800
Retained Earnings
26,600
Sales Salaries Expense
76,000
Sales
610,000
Sales Commission Expense
14,500
Sales Commissions Payable
3,500
Sales Returns and Allowances
8,000
Utilities Expense
11,000
Note: $20,000 of the mortgage payable is due next year.
Instructions:
a) Prepare a multiple-step income statement, a retained earnings
statement, and a balance sheet
b) Calculate the net profit margin and the gross profit margin
Question 3
A company has made 13,000,000 CZK in credit sales over the past year. Its
policy is to maintain a reserve of .5% for losses on its credit sales. There is a
balance of 15,000 CZK in the reserve account at present. Prepare the
transaction to complete the reserve
Question 4
Your company is closing its books on December 31 of this year. You have
noticed the following:
a) Salaries are paid on the 15th of the month, and the salaries for
December will be paid on time, and the necessary entries be made to
adjust them for the remaining two weeks. The head of payroll thinks
that the adjustments made at the end of the year can be forgotten. The
amount involved is 15,732 CZK on sales of 500,000 CZK. What is you
opinion? Show the journal entry.
b) The bank has a loan outstanding for CZK 3,000,000, which is paying
12%. Interest. The payment date is the 20th of each month. Calculate
the accrued interest, and prepare a journal entry to adjust the records.
c) What is the role of accruals? Which accounting concepts do they
respect?
Question 5 Condensed financial data of Fairchild Company for 2010 and 2009 are
presented below.
Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No
plant assets were sold in 2010. Cash dividends were $260.
Instructions
Prepare a statement of cash flows using the indirect method.
Good Luck!!