Financial accounting-Chapter 6,8,9,10,11,12
Entity C uses the periodic inventory method and had the following inventory information available:
Units Unit Cost Total Cost
1/1 Beginning Inventory 100 $3 $ 300
1/20 Purchase 500 $4 2,000
7/25 Purchase 100 $5 500
10/20 Purchase 300 $6 1,800
A physical count of inventory on December 31 revealed that there were 380 units on hand.
Answer the following independent questions and show computations supporting your answers.
1. Assume that the company uses the FIFO method. Compute the values of the ending inventory at December 31 and the cost of goods sold.
2. Assume that the company uses the average cost method. Compute the value of the ending inventory on December 31.
3. Assume that the company uses the LIFO method. Compute the value of the ending inventory on December 31 and the cost of goods sold.
Entity D uses the lower-of-cost-or-market basis for its inventory. The following data are available at December 31.
What amount should be reported on Entity D's financial statements, assuming the lower-of-cost-or-market rule is applied item-by item?
Should the following items be included (I) or excluded (E) from Entity E's inventory at December 31?
_____ 1. Goods held on consignment that belong to Charleston Co.
_____ 2. Goods that were shipped F.O.B destination to a customer on December 30. The goods arrived at the customer's location on January 2.
_____ 3. Entity E purchased goods from an out-of-state supplier on December 30. The goods were shipped F.O.B. shipping point, but did not arrive at Entity E's warehouse until January 6.
_____ 4. Office supplies were included in the merchandise inventory.
_____ 5. Goods that were shipped F.O.B destination to Entity E on December 30. The goods arrived the next day.
MGMT 202 Ch 8: Exercises
Item 1: Entity G uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 6% of accounts receivable will eventually be uncollectible. Selected account balances at December 31, 2018, and December 31, 2019, appear below:
Net Credit Sales $400,000 $500,000
Accounts Receivable 80,000 100,000
Allowance for Doubtful Accounts 4,000 ?
Set up a T-account for Allowance for Doubtful Accounts beginning with the balance in ADA as of 12/31/2018 and then post the following transactions:
Dr.___Allowance for Doubtful Accounts___Cr.
Aug. 10 Determined that the account of Kurt West for $900 is uncollectible.
Sept. 12 Determined that the account of Jill Lynch for $3,000 is uncollectible.
Oct. 10 Received a check for $300 as payment on account from Kurt West, whose account had previously been written off as uncollectible.
(b) Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2019.
(c) Prepare a partial balance sheet for Accounts Receivable after the December 31, 2019 adjustment:
Prepare journal entries to record the following transactions entered into by Entity H:
June 1 Received a $10,000, 6%, 1-year note from Dan Gore as full payment on his account.
Dec. 31 Accrued interest on Dan Gore's note.
June 1 Dan Gore honored his promissory note by payment of the face amount plus interest.
MGMT 202 Ch 9: Exercises
Item 1: Entity I purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows:
Purchase price $55,000
Broker’s fees 6,000
Title search and other fees 5,000
Demolition of an old building on the property, 5,700
Digging foundation for the road 3,000
Laying and paving driveway 25,000
List the items and amounts that should be included in the Land account.
Item 2: Equipment with a cost of $480,000 has an estimated salvage value of $30,000 and an estimated life of 4 years. Compute the annual depreciation and then show what this asset looks like on the balance sheet at the end of the second year.
Item 3: Equipment that cost $72,000 and on which $60,000 of accumulated depreciation has been recorded was disposed of for $18,000 cash. Make the entry to record this transaction. Hint: Compute BV and then gain (loss).
Item 4: Equipment costing $60,000 with a salvage value of $8,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 5 years and no change in the salvage value, compute the revised annual depreciation expense and make the entry.
MGMT 202 Ch 10: Exercises
Part A: Entity J issued $400,000, 10%, 10-year bonds on January 1, 2018, at 105. Interest is payable annually on December 31. Entity J uses the straight-line method of amortization and has a calendar year end.
Prepare all journal entries made in 2018 related to the bond issue and a partial balance sheet showing the bonds at December 31.
Part B: On September 1, Entity K borrows $80,000 from New National Bank by signing a 6-month, 6%, interest-bearing note.
Prepare the necessary entries below associated with the note payable on the books of Cooper Company.
(b) Prepare any adjusting entries necessary on December 31 in order to prepare the financial statements. Assume no other interest accrual entries have been made.
(c) Prepare the entry to record payment of the note at maturity.
MGMT 202 Ch 11: Exercises
Item 1: On January 1, 2017, Entity L had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:
Mar. 1 Issued 90,000 shares of common stock for $675,000
June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15
June 30 Paid the $2.00 cash dividend
Dec. 1 Purchased 5,000 shares of common stock for the treasury for $18 per share
Instructions: Prepare journal entries to record the above transactions.
Item 2: The December 31, 2018 balance sheet of Entity M showed the following:
Treasury stock (30,000 shares)............................................................... $ 630,000
Paid-in capital in excess of par value – common stock.......................... 27,000,000
8% preferred stock, $20 par value, cumulative,
30,000 shares authorized; 15,000 shares issued............................... $ 300,000
Common stock, $10 par value, 3,000,000 shares authorized;
1,950,000 shares issued, ____? shares outstanding......................... 19,500,000
Paid-in capital in excess of par value – preferred stock......................... 60,000
Retained earnings ............................................................................. 7,650,000
Instructions: What is total stockholders’ equity? Prepare the stockholders’ equity section of the balance sheet.
Item 1: Classify each transaction as either an operating activity “OA”, an investing activity “IA,” or a financing activity “FA,” or (d) a noncash investing and financing activity “NC.”
Selected transactions for the Entity N Company are listed below.
_____ 1. Collected accounts receivable.
_____ 2. Declared and paid dividends on common stock.
_____ 3. Sold long-term investments for cash.
_____ 4. Issued stock for equipment.
_____ 5. Repaid five year note payable.
_____ 6. Paid employee wages.
_____ 7. Converted bonds payable to common stock.
_____ 8. Acquired long-term investment with cash.
_____ 9. Sold buildings and equipment for cash.
______10. Sold merchandise to customers.
Entity O reported net income of $225,000 for the current year. Depreciation recorded on buildings and equipment amounted to $75,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year
Cash $20,000 $15,000
Accounts receivable 22,000 32,000
Inventory 72,000 60,000
Accounts payable 12,000 18,000
Taxes payable 5,000 3,000
Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.
Purchase the answer to view it