BUS 214
1.
Test No. 2
Mon., Nov. 3, 2014
CASH – BANK RECONCILIATION
the following information:
Name .
Determine the Adjusted or Actual Cash Balance from
5,900 Balance per Bank Statement
2,100 Collection of Note Receivable for us by the Bank
30 Interest Revenue Earned on bank balance
2.
CASH – BANK RECONCILIATION
the following information:
3,340
3,360
30
450
.
1,240 Outstanding Checks
1,600 Deposit in Transit
Determine the Adjusted or Actual Cash Balance from
Balance per General Ledger
Collection of Note Receivable for us by the Bank
Interest Revenue Earned on bank balance
NSF check (a payment from one of our customers)
20 Bank service charge
1,600 Deposit in Transit
1,240 Outstanding Checks
3.
CASH – BANK RECONCILIATION Given the information in the previous problem, what
journal entry, if any would you need to make in the General Journal?
4.
CASH – BANK RECONCILIATION Given the information in the Problem 2 and your answer
to Problem 2, what balance would you report on the balance sheet?
$_____
5. ALLOWANCE FOR BAD DEBTS (PERCENT OF SALES METHOD) On January 1st, Party Planners
had a $40,000 balance in Accounts Receivable and a $3,000 credit balance in Allowance
for Uncollectible Accounts (Allow for Unc.). Prepare the Journal Entries to record Party
Planners $100,000 credit sales and collections on their accounts of $94,000 during the
year.
6. Prepare the Journal Entry if Party Planners estimates Bad debt Expense as 2% of credit
sales.
7. Prepare the Journal Entry if Party Planners writes off uncollectible accounts totaling
$1,700.
8. What effect does the previous Journal Entry (in Problem 7) have on Net Income? What
effect does the previous Journal Entry have on Current Assets?
8) Net Income
Current Assets
increase
increase
no effect
no effect
decrease
decrease
dollar amount $____0_____
dollar amount $____0_____
9. ALLOWANCE FOR BAD DEBTS (AGING APPROACH) On December 31st, before any
adjustments, Sunset Honda had a $235,000 balance in Accounts Receivable and a
$7,400 credit balance in Allowance for Uncollectible Accounts (Allow for Unc.). Use the
following aging schedule for Sunset’s accounts receivables to calculate the required
balance for the Allowance for Uncollectible Accounts account.
10. Prepare the adjusting Journal Entry Sunset needs to make.
11. What effect does the previous Journal Entry have on Net Income?
previous Journal Entry have on Current Assets?
What effect does the
12. What is the Net Realizable Value and what amount should Sunset report on their balance
sheet for Accounts Receivable?
1-30 days
110,000
1.0%
11) Net Income
Current Assets
12)
31-90 days
over 90
110,000
10.0%
increase
increase
15,000
40.0%
235,000
estimated uncollectible
no effect
no effect
decrease
decrease
dollar amount $___
dollar amount $ __
$ _____________ Net Realizable Value
$ _____________ Accounts Receivable
13. DAYS SALES IN ACCOUNTS RECEIVABLE Use the schedule shown below to calculate the
average collection period for 2014
sales
accounts receivable at 12/31
2014
2013
30,848
506
27,433
375
14. NOTES RECEIVABLE (IF YOU PREFER, YOU MAY ASSUME A 360 DAY YEAR; 12 MONTHS WITH 30
DAYS EACH) Prepare the journal entry on Nov. 1, 2014 when Our Co. loans $50,000 to
Arrow Co. on a 6-month, 9% note.
15. Prepare the adjusting entry you would need to make on Dec. 31st.
16. Prepare the entry you would make when Arrow Co. pays off the note on Apr. 30, 2015.
17. INVENTORY Prepare the journal entry when Our Co. sells merchandise costing $50,000
for $72,000 on account to Big Customer.
18. INVENTORY Use the following information to calculate Cost of Goods Sold.
Inventory on 1/1
Inventory on 12/31
160,000
100,000
Freight-In
Purchases
Purchase Discounts
Purchase Returns
600,000
14,000
30,000
4,000
units
cost
Inventory on Jan. 1st
1/12 purchase
1/28 purchase
10
25
25
1/30 SALE
40
$10.00
$14.00
$18.00
extended
price
100.00
350.00
450.00
$30.00 $1,200.00
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.
FIFO
Average Cost
LIFO
units
Inventory on Jan. 1st
1/2 purchase
1/8 Sale
1/17 purchase
1/22 Sale
cost
10
40
-35
25
-32
extended
$19.00
$20.00
190.00
800.00
$21.00
525.00
price
extended
$36.00 $1,260.00
$36.00 $1,152.00
8
1,515.00
$2,412.00
22. INVENTORY Use Average Cost to calculate Cost of Goods Sold for the Jan. 22nd sale.
23. INVENTORY Use LIFO to calculate Cost of Goods Sold for the Jan. 22nd sale.
Average Cost
LIFO
2014
Net sales
Cost of goods sold
Gross profit
Inventory a t 12/31/14
Inventory a t 12/31/13
1,777
1,175
602
2013
1,725
1,155
570
369
366
24. INVENTORY Calculate the Gross Profit Percentage for 2014.
25. INVENTORY Calculate inventory turnover.
26. As of Dec. 31, 2014, the replacement cost of Jordan’s ending inventory was $12,000 and
its recorded cost was $14,000. Previously, on Dec. 31, 2013, the replacement cost of
Jordan’s ending inventory was $13,000 which exceeded its cost of $12,400. What
amount should Jordan report on their Dec. 31, 2014 balance sheet?
Miller Motor Co
Adjusted Trial Balance
Dec. 31, 2014
Accounts payable
Accounts receivable
accumulated depreciation
Building
Cash
Common stock
Depreciation expense
Dividends
Interest receivable
Interest revenue
Note receivable
Rental revenue
Retained earnings
Supplies
Supplies expense
Unearned rent revenue
Utilities expense
Wage expense
Wages payable
6,500
6,880
10,300
67,000
7,900
17,000
1,500
3,200
500
700
5,000
19,480
43,300
1,400
2,600
1,200
600
2,700
800
99,280
99,280
27. Prepare an Income Statement, with proper dating, from Miller Motor Co.’s trial balance.
28. Prepare a Statement of Retained Earnings, with proper dating, from Miller Motor Co.’s
trial balance.
29. Prepare a Balance Sheet, with proper dating, from Miller Motor Co.’s trial balance.