ACCOUNTING
JEOPARDY
ACCOUNTING REVIEW
DOCSEDA
Debit/Credit Adjustments
Income
Statement
Balance
Sheet
Statement
of Equity
100
100
100
100
100
200
200
200
200
200
300
300
300
300
300
400
400
400
400
400
500
500
500
500
500
Debit/Credit
100
SOLD EQUIPMENT THAT COST $60,000 AND
HAS ACCUMULATED DEPRECIATION OF
$48,000 FOR $25,000.
A: What is a debit to Cash for 25,000, Accumulated
Depreciation-Equip for 48,000 and credits to Equip.
for 60,000 and Gain on Sale of Equip. for $13,000?
Docseda
Debit/Credit
200
ISSUED 60,000 $1 PAR VALUE COMMON
STOCK FOR $2.50 PER SHARE.
A: What is a debit to Cash for 150,000 and credits
to Common Stock for 60,000 and Paid-in-CapitalExcess over Par Value, Common for 90,000 ?
Docseda
Debit/Credit
300
SOLD 3,000 OF 8,000 TREASURY SHARES THAT
INITIALLY COST $10 FOR $12 PER SHARE.
A: What is a debit to Cash for 36,000 and credits to
Treasury Stock-Common for 30,000 and Paid-inCapital from Treasury Stock Transactions, Common
for 6,000?
Docseda
Debit/Credit
400
Declared a 100% stock dividend on $2 par value
common stock. Market price per share of
70,000 shares outstanding is $18.
A: What is a debit to Stock Dividends-Common
for 140,000 and credit to Stock Dividends to be
Issued for 140,000?
Docseda
Debit/Credit
500
Equipment that cost 60,000 and has accumulated depreciation
of 48,000 is exchanged for similar equipment with FMV of
20000 and 5000 cash is received.
A: What is a debit to Equipment-New for 9,600, Accumulated
Depreciation-Equip. for 48,000, Cash for 5,000 and Credits to Old
Equipment for 60,000 and Gain on Disposal of Equip. 2600 ?
[Cost – Acc.Dep = BV;
BV – FMV = Gain; ]
[60000 – 48000 = 12000; 12000-25000 =13000;]
[Gain recognized (2/10 × $13,000)=$ 2,600;]
Check:
Fair value - Deferred gain = Basis of new equipment;
20000 - 10400
Docseda
= 9,600
Adjustments
100
This entry represents Gaston’s accrued interest
payable as of 12/31/05. On 9/01/05, Gaston issued
note payable to Nat’l Bank in amount of $1,500,000,
bearing interest at 12%, and payable in 3 equal annual
principal payments of $500,000. First payment for
interest and principal was made on September 1, 2005.
A: What is debit to Interest Expense and credit to
Interest Payable for 40,000 (1,000,000×.12×1/3)?
Docseda
Adjustments
200
This entry represents Patton’s accrued payroll tax expense as of 10/31/04. Patton
Co.'s payroll for pay period ended 10/31/04 is summarized as follows:
Federal
Dept.
Total
Payroll
Wages
Income Tax
Withheld
Amount of Wages Subject
to Payroll Taxes
F.I.C.A.(8%)
Unemployment (4%)
Factory $ 75,000 $10,000
$66,000
$22,000
Sales
22,000
3,000
16,000
2,000
Office
18,000 2,000
8,000
$115,000 $15,000
$90,000
—
$24.000
A: What is debit to Payroll Tax Expense for 8,160 and credits to FICA
payable for 7,200 and FUTA/SUTA Payable for 960?
[($90,000×.08)+($24,000×.04)]
Docseda
Adjustments
300
This entry represents adjustment to Short-term
Investments in Stock account at 12/31/03. Trading
Security Portfolio consists of 300 shares of Schoff
Corporation $3 par value stock that initially cost
$10.50 and is currently valued at $12 per share.
A: What is debit to Short-term Investments in Stock and
credit to Unrealized Gain on Investments for 300 [(12*300)
- (10.50*300)]?
Docseda
Adjustments
400
This entry represents adjustment to Long-term
Investments in Stock account at 12/31/03. Portfolio
consists of 10,000 shares or 25% of Collins Corp
that initially cost $8 and is currently valued at $10.
Collins reported a net loss for 2003 of $20,000.
A: What is debit to Equity in Investee Loss and credit to
Long-term Investment in Stock for 5,000 [20,000*.25]?
Docseda
Adjustments
500
This entry represents a prior-period adjustment
initiated by Controller who discovered that
income tax expense was overstated by $50,000
in 2002.
A: What is debit to Income Tax Payable and credit to
Retained Earnings-Prior Period Adjustment for
50,000?
Docseda
Income Statement
100
This amount represents Nixon’s depletion expense for 2003. In
January of 2003, Nixon Corporation purchased a mineral mine for
$6,800,000 with removable ore estimated by geological surveys at
2,000,000 tons. The property has an estimated value of $400,000
after the ore has been extracted. The company incurred $2,000,000
of development costs preparing the mine for production. During
2003, 500,000 tons were removed and 400,000 tons were sold.
A: What is $1,680,000 [($6,800,000–$400,000 +
$2,000,000) ÷ 2,000,000] × 400,000?
Docseda
Income Statement
200
These amounts represent net income and related EPS based on following data:
Sales
160,000
Cos t of Goods Sold
80,000
Operating Expens es
66,000
Income Taxes -Continuing Operations
8,000
Dis continued Operations :
Income from Dis continued Segment
20,000
(net of taxes -5,000)
Los s on Dis pos al of Segment
(net of tax s avings -6,000)
14,000
Extraordinary Los s from fire (net of tax s avings -4,000
6,000
Cumulative Effect of Accounting Change
(net of taxes -2,000; credit balance)
8,000
Common Shares Outs tanding at 12/31/03
5,000
A: What is $14,000 Net Income and EPS of $2.80 ?
[160-80-66-8+20-14-6+8] and [14,000 / 5000]
Docseda
Income Statement
300
Using effective interest method, this amount represents
Dodge’s interest expense for 2003. On 1/2/03, Dodge
Corporation sold 8% bonds with face value of $1,500,000.
These bonds mature in 5 years, and interest is paid
semiannually on 6/30 and 12/31. Bonds were sold for
$1,384,000 to yield 10%.
A: What is $138,860? {[1,384,000×.05=69,200]
[1,384,000+($69,200 – $60,000)]×.05 =69,660]
138,860}
Docseda
Income Statement
400
Using treasury stock method for computing Edson’s Diluted
EPS , this amount represents increase of weighted average
number of outstanding shares due to assumed exercise of
warrants in following scenario. Edson Corporation has
warrants exercisable at $20 each to obtain 70,000 shares of
common stock during period when average market price of
common stock was $25.
A: What is $14,000 [70000–((70000×20)÷25)] ?
Docseda
Income Statement
500
This amount represents Fairly’s Diluted EPS for 2003. Fairly Co.
had 200,000 shares of common stock, 20,000 shares of
convertible preferred stock, and $1,000,000 of 10% convertible
bonds outstanding during 2003. The preferred stock is
convertible into 40,000 shares of common stock. During 2003,
Fairly paid dividends of $1.20 per share on common stock and
$4.00 per share on preferred stock. Each $1,000 bond is
convertible into 45 shares of common stock. Net income for
2003 was $800,000 and income tax rate was 30%.
A: What is $3.05? {800,000+($1,000,000×.10×.7)}
{200,000 + 45,000 + 40,000}
Docseda
Balance Sheet
100
This account is created when purchase
price of net assets exceeds fair market
value of net assets acquired.
A: What is Goodwill?
Docseda
Balance Sheet
200
Accounts Receivable Turnover and
Current Ratios are used to measure this
criteria of a company’s success.
A: What is Short-term Liquidity?
Docseda
Balance Sheet
300
Based on LIFO, this amount represents value of James’ ending
inventory for March. James Co. has following data related to
inventory items:
Inventory, March 1
Purchase, March 7
Purchase, March 16
Inventory, March 31
200 units @ $4.20
700 units @ $4.40
140 units @ $4.50
300 units
A: What is $1,280 [(200*4.20)+ (100*4.40)]?
Docseda
Balance Sheet
400
Unrealized Gains and Losses on Available
-For-Sale Securities are disclosed in this
section of Balance Sheet.
A: What is separate component of Stockholder’s
Equity after Total Contributed Capital and Retained
Earnings?
Docseda
Balance Sheet
500
Using Sum-of Years Digit depreciation method, this
amount represents balance of accumulated
depreciation on Riley’s machinery at 3/31/04. Riley
Co. purchased machinery on 4/01/02 for $480,000.
Machinery has estimated useful life of 5 years and a
salvage value of $30,000.
A: What is $270,000[(480-30)×(5/15 + 4/15)]?
Docseda
Statement of Equity
100
Preferred stockholders with this
feature are entitled to dividends in
arrears.
A: What is Cumulative?
Docseda
Statement of Equity
200
This amount represents Total Contributed Capital at 12/31/03 based on
data below regarding El Paso’s Stockholder’s Equity information.
Common Stock-$5 par value, 100,000 shares authorized,
50,000 shares issued and outstanding
Paid-in Capital in Excess of Par Value, Common
Retained Earnings
Total Stockholder's Equity at 12/31/02
During 2003, following transactions occurred:
Reacquired 2,500 shares at $7 per share
Sold 1,200 shares of treasury stock at $8 per share
Sold 500 shares of treasury stock at $6 per share
Net Income for 2003 amounted to $80,000.
No dividends were declared in 2003.
A: What is $375,700 [250,000+125,000+700] ?
[700=1200*(8-7(cost)) + 500*(6-7(cost))]
Docseda
250,000
125,000
400,000
775,000
Statement of Equity
300
This amount represents Treasury Stock balance as of
12/31/03 based on data below:
Common Stock-$5 par value, 100,000 shares authorized,
50,000 shares issued and outstanding
Paid-in Capital in Excess of Par Value, Common
Retained Earnings
Total Stockholder's Equity at 12/31/02
250,000
125,000
400,000
775,000
During 2003, following transactions occurred:
Reacquired 2,500 shares at $7 per share
Sold 1,200 shares of treasury stock at $8 per share
Sold 500 shares of treasury stock at $6 per share
Net Income for 2003 amounted to $80,000.
No dividends were declared in 2003.
A: What is $5,600 [2500-(1200+500)*$7)?
Docseda
Statement of Equity
400
This amount represents Total Stockholder’s Equity for
company as of 12/31/03 based on data below:
Common Stock-$5 par value, 100,000 shares authorized,
50,000 shares issued and outstanding
Paid-in Capital in Excess of Par Value, Common
Retained Earnings
Total Stockholder's Equity at 12/31/02
250,000
125,000
400,000
775,000
During 2003, following transactions occurred:
Reacquired 2,500 shares at $7 per share
Sold 1,200 shares of treasury stock at $8 per share
Sold 500 shares of treasury stock at $6 per share
Net Income for 2003 amounted to $80,000.
No dividends were declared in 2003.
A: What is $850,100 [250,000+125,000+700+480,000 –
5,600]?
Docseda
Statement of Equity
500
Assuming that $100,000 will be distributed as a dividend in
current year, this amount represents portion of dividend
received by common stockholders. Tomlin Inc. has
outstanding 200,000 shares of $2 par common stock and
40,000 shares of no-par 8% preferred stock with stated value
of $5. Preferred stock is cumulative and nonparticipating.
Dividends have been paid in every year except past two years
and current year.
A: What is $52,000 [100,000–(40,000×$5×.08×3)]?
Docseda