BUS 214
Test No. 2
May 12, 2014
1. CASH – BANK RECONCILIATION
following information:
7,392
269
41
930
1,116
750
25
.
Determine the reconciled Cash Balance from the
Balance per Bank Statement
Outstanding Checks
Interest Revenue Earned on bank balance
EFT payment for utility expense
Deposit in Transit
Collection by bank for a note receivable
Bank service charge
2. CASH – BANK RECONCILIATION
following information:
8,401
269
41
930
1,116
750
23
Name .
Determine the reconciled Cash Balance from the
Balance per General Ledger
Outstanding Checks
Interest Revenue Earned on bank balance
EFT payment for utility expense
Deposit in Transit
Collection by bank for a note receivable
Bank service charge
.
3. CASH – BANK RECONCILIATION Use the information from either Problem 1 and 2,
whichever is appropriate to prepare the journal entry or entries you would make.
4. CASH – BANK RECONCILIATION Given the information in Problems 2, what balance would
you report on the balance sheet?
$
1-30 days
7,000
3,500
1.0%
31-60 days
61-90 days
1,800
3.0%
> 90 days
1,000
5.0%
700
30.0%
5. BAD DEBT EXPENSE (AGED ACCOUNTS RECEIVABLE APPROACH) Before any year-end
adjustments have been made, Cristie’s Cupcakes had a $7,000 balance in Accounts
Receivable and a $180 credit balance in Allowance for Uncollectible Accounts (ALLOW
FOR UNC.). Use the above aging schedule to determine the necessary adjusting Journal
Entry for Bad Debt Expense.
6. What amount will Cristie report for Accounts Receivable on their balance sheet (or how
much will Accounts Receivable increase total Current Assets)?
7. What effect does the Journal Entry in Problem 5 have on Net Income?
.
What effect does the Journal Entry have on Current Assets?
For 7)
Net Income
Current Assets
$__________
$___ ______
increase
increase
no effect
no effect
decrease
decrease
8. ALLOWANCE FOR BAD DEBTS (PERCENT OF SALES METHOD) Before any year-end
adjustments, Patti’s Pie Shop had a $16,000 balance in Accounts Receivable and a
$500 credit balance in Allowance for Uncollectible Accounts (ALLOW FOR UNC.). Sales for
the year totaled 80,000. Patti’s uses the percent of sales method to calculate Bad Debt
Expense and estimates Bad Debt Expense to be 3% of its sales. Prepare the adjusting
Journal Entry Patti’s needs to make.
9. Patti’s learns that a customer, Poly Cow Inc., has gone bankrupt. Poly Cow Inc. owes
them $750. Prepare the journal entry Patti’s needs to make.
10. What effect does the Journal Entry in Problem 9 have on Net Income?
.
What effect does the Journal Entry have on Current Assets?
11. After the entry in Problem 9, what amount should Patti’s should report in Accounts
Receivable on their balance sheet?
For 9)
Net Income
Current Assets
$__________
$__________
increase
increase
no effect
no effect
decrease
decrease
12. NOTES RECEIVABLE Prepare the journal entry on Aug. 1, 2013 when Froggie’s Pools
loans $200,000 to a customer on a 7%, 6-month.
13. Prepare the adjusting entry to accrue interest on Dec. 31st.
14. Prepare the journal entry when the customer pays off the note on Jan. 31, 2014.
15. INVENTORY Prepare the journal entry when we sell a car costing $31,500 to Mark Miller
on account for $34,000.
16. NET SALES
17. COST OF GOODS SOLD
18. GROSS PROFIT
Use the following table to calculate Net Sales.
Use the following table to calculate Cost of Goods Sold.
Use the following table to calculate Gross Profit.
Debit
Inventory on 1/1
Inventory at 12/31
Freight - IN
Freight - OUT
Purchase Discounts
Purchase Returns
Purchases
Sales Discounts
Sales Returns
Sales Revenue
Credit
100
85
5
17
3
4
600
9
12
923
units
Inventory on Jan. 1st
2/8 purchase
9/30 purchase
cost
5
8
3
extended
$34.00
$35.00
$36.00
16
Units sold in 2010
10
$170.00
$280.00
$108.00
$558.00
$70.00
19. INVENTORY Use FIFO to calculate Cost of Goods Sold and ending Inventory for the
data in the table. Clearly label your work.
20. INVENTORY Use Average Cost to calculate Cost of Goods Sold and ending Inventory for
the data in the table. Clearly label your work.
21. INVENTORY Use LIFO to calculate Cost of Goods Sold and ending Inventory for the data
in the table. Clearly label your work.
units
cost
Inventory on Jan. 1st
1/31 purchase
5/28 SALE
7/04 purchase
10/13 SALE
11/30 purchase
7
10
totals
37
$17.00
$19.00
extended
price
119.00
190.00
16
$21.00
336.00
4
$22.00
88.00
733.00
6
$40.00
$240.00
18
$40.00
$720.00
24
$960.00
22. INVENTORY Use FIFO to calculate Cost of Goods Sold for the Oct. 13hsale.
23. INVENTORY Use FIFO and prepare the journal entry for the Oct. 13th sale.
24. INVENTORY Use Average Cost to calculate Cost of Goods Sold for the Oct. 13th sale.
25. INVENTORY Use LIFO to calculate the balance in ending Inventory at 12/31.
26. As of Dec. 31, 2013 Lindsay’s Limos inventory had a recorded cost of $940 and the
replacement cost for its inventory was $900, At what amount should Lindsay’s report
inventory on the balance sheet?
$
Inventory
27. On Dec. 31, 2013, the replacement cost of Cristie’s Cupcakes ending inventory was
$1,040 and its recorded cost was $1,020. What amount should Cristie report on their
Dec. 31, 2013 balance sheet?
$
Inventory
Miller Motor Co.
Trial Balance
12/31/2013
debit
credit
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
Cash
Accounts receivable
Inventory
Supplies
Equipment
Accumulated depreciation
Accounts payable
Salaries payable
Unearned revenue
Common stock
Retained earnings
Dividends
Sales
Cost of Goods Sold
Depreciation expense
12/31/2012
debit
credit
170
150
130
30
600
40
120
114
4
600
180
45
24
93
500
53
120
61
42
102
500
0
25
1,095
732
60
365
60
28. INVENTORY Calculate the Current Ratio as of 12/31/13.
CUR ASSETS/ CUR LIABILITIES
29. DAYS SALES IN ACCOUNTS RECEIVABLE calculate the average collection period for 2013
Average accounts receivable / sales per day
30. INVENTORY Calculate inventory turnover for 2013.
Sales at cost (cogs) / ave. Inventory