ACC291T Week 5 Apply Exercise SCORE 100 PERCENT

Question 1

For the current fiscal year, Purchases were $210,000, Purchase Returns and Allowances were $3,600 and Freight In was $15,000. If the beginning merchandise inventory was $140,000 and the ending merchandise inventory was $81,000, the Cost of Goods Sold is:

 

Multiple Choice

    $280,400

    $132,400

    $250,400

    $287,600

 

Question 2

The worksheet of Bridget's Office Supplies contains the following revenue, cost, and expense accounts. The merchandise inventory amounted to $59,475 on January 1, 2019, and $52,425 on December 31, 2019. The expense accounts numbered 611 through 617 represent selling expenses, and those numbered 631 through 646 represent general and administrative expenses.
 

	Accounts
401	Sales	$	247,000	Cr.
451	Sales Returns and Allowances		4,320	Dr.
491	Miscellaneous Income		370	Cr.
501	Purchases		103,300	Dr.
502	Freight In		1,945	Dr.
503	Purchases Returns and Allowances		3,570	Cr.
504	Purchases Discounts		1,770	Cr.
611	Salaries Expense—Sales		45,000	Dr.
614	Store Supplies Expense		2,280	Dr.
617	Depreciation Expense—Store Equipment		1,480	Dr.
631	Rent Expense		13,200	Dr.
634	Utilities Expense		2,970	Dr.
637	Salaries Expense—Office		20,800	Dr.
640	Payroll Taxes Expense		5,700	Dr.
643	Depreciation Expense—Office Equipment		540	Dr.
646	Uncollectible Accounts Expense		690	Dr.
691	Interest Expense		680	Dr.

The worksheet of Bridget's Office Supplies contains the following owner's equity accounts. No additional investments were made during the period.
 

	Accounts
301	Bridget Swanson, Capital	$	63,460	Cr.
302	Bridget Swanson, Drawing		40,550	Dr.

Net income for the year $42,755.

Prepare a statement of owner's equity for the year ended December 31, 2019.

 

 

Question 3

The worksheet of Bridget's Office Supplies contains the following revenue, cost, and expense accounts. The merchandise inventory amounted to $58,875 on January 1, 2019, and $51,825 on December 31, 2019. The expense accounts numbered 611 through 617 represent selling expenses, and those numbered 631 through 646 represent general and administrative expenses.
 

	Accounts
401	Sales	$	245,800	Cr.
451	Sales Returns and Allowances		4,260	Dr.
491	Miscellaneous Income		310	Cr.
501	Purchases		102,700	Dr.
502	Freight In		1,885	Dr.
503	Purchases Returns and Allowances		3,510	Cr.
504	Purchases Discounts		1,710	Cr.
611	Salaries Expense—Sales		44,400	Dr.
614	Store Supplies Expense		2,220	Dr.
617	Depreciation Expense—Store Equipment		1,420	Dr.
631	Rent Expense		12,600	Dr.
634	Utilities Expense		2,910	Dr.
637	Salaries Expense—Office		20,200	Dr.
640	Payroll Taxes Expense		5,100	Dr.
643	Depreciation Expense—Office Equipment		480	Dr.
646	Uncollectible Accounts Expense		630	Dr.
691	Interest Expense		560	Dr.

Prepare a classified income statement for this firm for the year ended December 31, 2019.

 

Question 4

The following selected accounts were taken from the financial records of Los Olivos Distributors at December 31, 2019. All accounts have normal balances.
 

Cash	$	19,740
Accounts receivable		47,400
Note receivable, due 2020		9,200
Merchandise inventory		35,400
Prepaid insurance		2,320
Supplies		1,380
Equipment		43,200
Accumulated depreciation, equipment		23,200
Note payable to bank, due 2020		32,000
Accounts payable		15,780
Interest payable		320
Sales		528,500
Sales discounts		2,900
Cost of goods sold		355,680

Accounts Receivable at December 31, 2018, was $54,300. Merchandise inventory at December 31, 2018, was $58,200. Based on the account balances above, calculate the following:
 

1. The gross profit percentage.
2. Working capital.
3. The current ratio.
4. The inventory turnover.
5. The accounts receivable turnover. All sales were on credit.

 

Question 5

A company reported gross profit of $92,000, total operating expenses of $49,000 and interest income of $3,700. What is the income from operations?

 

Multiple Choice

 

    $35,600

    $43,000

    $46,700

    $39,300

 

Question 6

The Adjusted Trial Balance section of the worksheet for Van Zant Janitorial Supplies follows. The owner made no additional investments during the year.
 

Accounts		Debit			Credit
Cash	$	19,600
Accounts Receivable		60,800
Allowance for Doubtful Accounts				$	220
Merchandise Inventory		187,200
Supplies		7,240
Prepaid Insurance		3,160
Equipment		52,000
Accumulated Depreciation—Equipment					18,800
Accounts Payable					9,700
Social Security Tax Payable					1,490
Medicare Tax Payable					410
Steven Van Zant, Capital					281,640
Steven Van Zant, Drawing		75,000
Income Summary		181,000			187,200
Sales					778,000
Sales Returns and Allowances		15,400
Purchases		487,900
Freight In		6,400
Purchases Returns and Allowances					9,500
Purchases Discounts					6,300
Rent Expense		34,800
Telephone Expense		6,340
Salaries Expense		124,140
Payroll Taxes Expense		12,700
Supplies Expense		7,600
Insurance Expense		1,660
Depreciation Expense—Equipment		9,100
Uncollectible Accounts Expense		1,220
Totals	$	1,293,260		$	1,293,260

 

Prepare a postclosing trial balance for the firm on December 31, 2019.

 

 

Question 7

At the end of the year Stan Still Stationery Store had the following balances: Sales $710,000; Sales Discounts $2,660; Sales Returns and Allowances $15,800; Sales Salaries Expense $77,000. The Net Sales for the year are:

 

Multiple Choice

 

    $691,540

    $614,540

    $707,340

    $694,200

Hint: Sales – sales discount – Sales return and allowances

 

Question 8

Solomon Company reports the following in its most recent year of operations:
 

• Sales, $1,070,000 (all on account)
• Cost of goods sold, $623,100
• Gross profit, $446,900
• Accounts receivable, beginning of year, $97,000
• Accounts receivable, end of year, $117,000
• Merchandise inventory, beginning of year, $62,000
• Merchandise inventory, end of year, $72,000.

Based on these balances, compute:

1. The accounts receivable turnover.
2. The inventory turnover.

 

Question 9

				Debit			Credit
2019			(Adjustment a)
	Dec.	31	Uncollectible Accounts Expense		2,864.00
			Allowance for Doubtful Accounts					2,864.00
			To record estimated loss from Uncollectible accounts based on 0.4% of net credit sales, $716,000
			(Adjustment b)
		31	Supplies Expense		3,800.00
			Supplies					3,800.00
			To record supplies used during the year
			(Adjustment c)
		31	Insurance Expense		1,080.00
			Prepaid Insurance					1,080.00
			To record expired insurance on 1-year $4,320 policy purchased on Oct. 1
			(Adjustment d)
		31	Depreciation. Exp.—Store Equipment		13,400.00
			Accum. Depreciation—Store Equip.					13,400.00
			To record depreciation
			(Adjustment e)
		31	Salaries Expense—Office		1,900.00
			Salaries Payable					1,900.00
			To record accrued salaries for Dec. 29–31
			(Adjustment f)
		31	Payroll Taxes Expense		145.35
			Social Security Tax Payable					117.80
			Medicare Tax Payable					27.55
			To record accrued payroll taxes on accrued salaries: social security, 6.2% × 1,900 = $117.80; Medicare, 1.45% × 1,900 = $27.55
			(Adjustment g)
		31	Interest Expense		110.00
			Interest Payable					110.00
			To record accrued interest on a 4-month, 6% trade note payable dated Nov. 1: $11,000 × 0.06 × 2/12 = $110.00
			(Adjustment h)
		31	Interest Receivable		158.00
			Interest Income					158.00
			To record interest earned on 6-month, 8% note receivable dated Oct. 1: $7,900 × 0.08 × 3/12 = $158.00

Examine the above adjusting entries and determine which ones should be reversed. Show the reversing entries that should be recorded in the general journal as of January 1, 2020. (Record the entries in the order given. Round your answers to 2 decimal places.)

 

 

Question 10

For the current fiscal year, Purchases were $345,000, Purchase Returns and Allowances were $9,900, Purchase Discounts were $3,900 and Freight In was $49,000. If the beginning merchandise inventory was $70,000 and the ending merchandise inventory was $95,000, the Cost of Goods Sold is:

 

Multiple Choice

    $380,200

    $405,200

    $355,200

    $382,800