SALEM STATE COLLEGE
FINANCIAL AND MANAGERIAL ACCOUNTING
SPRING 1998 - MELROSE CAMPUS
1ST EXAM - PROFESSOR MCGEE
EX703-14
NAME
For each multiple choice questions, select the best/correct answer by indicting your choice on the answer sheet provided.
1. All of the following are forms of business organizations except:
2. The accounting concept that, absent any information to the contrary, the business will continue into the foreseeable future is known as the:
3. If total assets were $50,000 and total liabilities were $35,000, the owner's equity would be:
4. The payment of an accounts payable would:
5. All of the following are components of owner's equity except:
6. A trial balance is:
7. Under the revenue principle, revenue is recorded
8. Long-lived tangible assets used in the operations of a business are called:
9. A depreciation adjustment would have the following effect on the financial statements:
10. ___________________ is transferred from the income statement to the statement of owner's equity
11. DAL Co. purchased $2,400 of merchandise on account, terms 2/10, n/60. If payment was made within the discount period, the entry to record the payment would include a:
12. The buyer is responsible for the shipping costs when the shipping terms are:
13. The largest single expense of most businesses that sell merchandise is:
14. The return of merchandise previously sold on account would result in a:
15. What is the future value of a 5-year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate?
16. You are given the following cash flows. What is the present value (T= 0) if the discount rate is 12 percent?
Year Cash Flow
0 $10,000
1 15,000
2 15,000
3 15,000
4 15,000
5 20,000
17. If $100 is placed in an account that earns 4 percent per year, and it is compounded quarterly, what will it be worth in 5 years?
18. Rhonda has signed a contract to buy a tract of land on March 1, 1996. The contract calls for her to make three annual payments of $3,500 starting March 1, 1997, and a final payment of $5,000 on March 1, 2000. Rhonda can borrow money at 7 percent. What price did Rhonda pay for the land?
19. Carrying a building on the balance sheet at its fair market value would violate the:
20. A new business is starting. The president wished to wait until significant contracts have been fulfilled before reporting the results of the business's operations. Which underlying concept serves as the basis for preparing financial statements at regular intervals?
PROBLEMS - PLEASE USE BLUE BOOK
1. Journalize the following transactions for Millenium Company.
2. For the following accounts identify:
A. Type of account (i. e. assets, liability, contra, equity, revenue or expense).
B. Which statement the account would appear on
- a. Salaries expense
- b. Unearned revenue
- c. Cash
- d. Commission earned
- e. Accumulated depreciation
- f. owner's equity
- g. Depreciation expense
- h. Accrued interest payable
- i. Furniture and fixtures
- j. Accounts receivable
3. Zoe & Company had the following trial balance as of June 30, 1996:
Zoe & Company |
||||||
Trial Balance |
||||||
June 30, 1997 |
||||||
Debit |
Credits |
|||||
Cash |
$10,000 |
|||||
Accounts receivable |
6,500 |
|||||
Supplies |
2,300 |
|||||
Prepaid insurance |
1,800 |
|||||
Equipment |
24,000 |
|||||
Accumulated Depr'n - equipment |
3,500 |
|||||
Accounts payable |
7,800 |
|||||
Unearned service revenue |
6,400 |
|||||
Zoe, Capital |
15,000 |
|||||
Zoe, Withdrawals |
8,200 |
|||||
Service revenue |
37,500 |
|||||
Salaries expense |
14,800 |
|||||
Utilities expense |
2,600 |
|||||
Total |
$70,200 |
$70,200 |
||||
Additional information:
Required: Prepare adjusting entries as of June 30, 1997.
4. Following is a random list of accounts with normal balances for the Barbra Company,
as of July 31, 1998, the company's fiscal year end.
Sales
discounts 18,000 Ending
inventory 76,500 Interest
revenue 14,000 Land 80,000 Cash 22,500 Supplies
expense 9,000 Unearned
revenue 11,000 Mortgage
payable 80,000 Accounts
payable 36,000 Accounts
receivable 34,000 Equipment 46,000 Wages
expense 23,000 Interest
expense 6,000 Accum.
Depr'n-bldg 17,000 Sales
revenue 285,000 Prepaid
insurance 8,000 Cost
of goods sold 156,000 Barbra,
withdrawals 15,000 Insurance
expense 21,000 Interest
receivable 5,000 Supplies 4,000 Accum.
Depr'n-Equip 12,000 Sales
R & A 13,000 Wages
payable 6,000 Interest
payable 14,000 Depreciation
expense 16,000 Delivery
expense 7,000 Utilities
expense 8,000 Barbra,
Capital 208,000 Building 115,000 Required: (a) Prepare a multistep income statement for Barbra Co. for the
year ended July 31, 1998. (b) Prepare a balance sheet as of July 31, 1998 5. Beginning inventory and purchases
Date Units Cost Total Sales
Units Jan 1 Inventory 1,400 $19
$26,600
4 Sale 300 8 Purchase 600 20 12,000 10 Sale 1,300 12 Purchase 900 21 18,900 15 Sale 150 18 Purchase 500 22 11,000 24 Purchase 800 23 18,400 31 Sale 1,350 Totals 4,200 $86,900
3,100 1. Assuming that the company uses the periodic inventory system, compute (a) the cost of goods sold using (b) the cost that should be assigned to ending inventory using 2. Assuming that the company uses the perpetual inventory system, compute (a) the cost of goods sold using (b) the cost that should be assigned to ending inventory using Mail to Paul McGee, CPA
80 Maple Street
Stoneham, Ma. 02180
Tel (978) 438-8780 Fax (978) 438-7909