The General's Favorite Fishing Hole - Period 2

The General's Favorite Fishing Hole - Period 2 (Month of May)

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Comprehensive Problem. Heintz and Parry. College Accounting 19th Edition and 20th Edition.

PERIOD 2

Bob Night’s fishing camp, “The General’s Favorite Fishing Hole,” is in the second month of operation. The camp is open from April through September, which allows for many college basketball coaches to attend during their off-season. The camp’s attendees arrive on Sunday afternoon and return home the following Saturday afternoon. Each attendee pays a registration fee that includes room and board, the use of fishing boats, and professional instruction in fishing techniques. Based on suggestions from clients, Night plans to expand the facilities and provide additional services. The post-closing trial balance as of April 30, and chart of accounts are provided below.
The General’s Favorite Fishing Hole
The following transactions took place during May 20--
The General’s Favorite Fishing Hole
REQUIRED
1. Enter the above transactions in a general journal. Enter transactions from May 1-4 on page 5, May 5-28 on page 6, and the remaining entries on page 7.
2. Post the entries to the general ledger. (If you are not using the working papers that accompany this text, you will need to enter the account titles and account numbers in the general ledger accounts.)
3. Prepare a trial balance on a work sheet.
4. Complete the work sheet.
5. Prepare the income statement.
6. Prepare the statement of owner’s equity
7. Prepare the balance sheet.
8. Journalize the adjusting entries on page 8 of the general journal.
9. Post the adjusting entries to the general ledger.
10. Journalize the closing entries on page 9 of the general journal.
11. Post the closing entries to the general ledger.
12. Prepare a post-closing trial balance.

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The General's Favorite Fishing Hole - Period 1

The General's Favorite Fishing Hole - Period 1 (Month of April)

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Comprehensive Problem. Heintz and Parry. College Accounting 19th Edition and 20th Edition.

PERIOD 1

The Account Cycle
Bob night opened "The general's favorite Fishing Hole" The fishing camp is open from April through September and attracts many famous college basketball coaches during the off-season. Guests typically register for one week, arriving on Sunday afternoon and returning home the following Saturday afternoon. The registration fee includes room and board, the use of fishing boats, and professional instruction in fishing techniques. The chart of accounts for the camping operations is provided below.

Required:
1 Enter the above transactions in a general journal. Enter transactions from April 1-5 on pages 1, April 7-8 on page 2, April 21-29 and the first two entries for April 30 on page 3, and the remain entries for April 30 on page 4.
2 Post the entries to the general ledger.(if you are not using the working papers that accompany this text, you will need to enter the account titles and account numbers in the general leger accounts).
3 Prepare a trial balance on a work sheet.
4 Complete the work sheet.
5 Prepare the income statement.
6 Prepare the statement of owner's equity
7 Prepare the balance sheet.
8 Journalise the adjusting entries (page 5)
9 Post the adjusting entries to the general ledger.
10 Journalise the closing entries (page 5 and 6)
11 Post the closing entries to the general ledger.
12 Prepare a post-closing trial balance.

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FIN 200: Assignment Workbook Week 9 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 9 Solution

Week 9 Checkpoint: Time Value of Money

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You must use the Present Value and Future Value Appendixes in your textbook in order to receive credit. You must also show your work.

1 What is the present value of:
a . $25,000 in 7 years at 8 percent?
b . $37,500 in 5 years at 10 percent?
c . $19,000 in 25 years at 6 percent?
d . $1,000,000 in 50 years at 16 percent?

2 Your aunt offers you a choice of:

Amount $ 60,000 in 40 years
Or
$ 850 today
Discount Rate 11%

From a pure financial perspective, which should you choose?

3 You invest a single amount of:
$ 15,000 for 5 years at 10%.
At the end of 5 years you take the proceeds and invest them for 12 years at 15
percent. How much will you have after 17 years?

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FIN 200: Assignment Workbook Week 7 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 7 Solution

Week 7 Assignment: Loan Scenarios

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The Niara Corporation is negotiating a loan from Manhattan Bank and Trust. The financial details are as follows:

Niara needs to borrow: $ 600,000
Bank Rate 7.00%
Compensating Balance 12%
Term (yrs) 1

Or

Bank Rate 9.00%
Fees $ 1 2,000
Term (yrs) 1

In either case the rate on the loan is floating (changes as the prime interest rate changes).

a. Which loan carries the lower effective rate? Consider fees to be the equivalent of other interest.
b. If the loan with a compensating balance requirement were to be paid off in 12 monthly payments, what would the effective rate be? (Principal equals amount borrowed minus the compensating balance.)
c. Assume the proceeds from the loan with the compensating balance requirement will be used to take cash discounts.
Disregard part b about installment payments and use the loan cost from part a.
If the terms of the cash discount are 1.5/10, net 50, should the firm borrow the funds to take the discount?
d. Assume the firm actually takes 80 days to pay its bills and would continue to do so in the future if it did not take the cash discount. Should the company take the cash discount?
e. Because the interest rate on the loans is floating, it can go up as interest rates go up. Assume that the
prime rate goes up by 2 percent and the quoted rate on the loan goes up the same amount.
What would then be the effective rate on the loan with compensating balances?
Convert the interest to dollars as the first step in your calculation.
f. In order to hedge against the possible rate increase described in part e, the The Niara Corporation decides to hedge its position in the futures market. Assume it sells $500,000 worth of 12‐month futures contracts on Treasury bonds.
One year later, interest rates go up 2 percent across the board and the Treasury bond futures have gone down to $485,000.
Has the firm effectively hedged the 2 percent increase in interest rates on the bank loan as described in part e?
Determine the answer in dollar amounts.
You must show your work to get credit.

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FIN 200: Assignment Workbook Week 6 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 6 Solution

Week 6 Checkpoint: Credit Policy Decisions

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The Niara Corporation Office Supplies division is considering a more liberal credit policy to increase sales. Pertinant financial data follows:

Uncollectible Accounts 9%
Collection Costs (% of new sales) 6%
Production and Selling Costs (% of new sales) 65%
Accounts Receivable Turnover 3
Inventory Turnover 5
Income Taxes 35%
Sales Increase $ 45,000
No other asset buildup will be required to service the new accounts

a. What is the level of accounts receivable to support this sales expansion?
b. What would be The Niara Corporation’s incremental aftertax return on investment?
c. Should The Niara Corporation liberalize credit if a 15 percent aftertax return on investment is required?
d. What would be the total incremental investment in accounts receivable and inventory to support an increase in sales?
e. Given the income determined in part b and the investment determined in part d, should The Niara Corporation extend more liberal credit terms?

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FIN 200: Assignment Workbook Week 5 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 5 Solution

Week 5 Assignment: Alternative Financing Plans

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The Niara Corporation has the following financials:
Permanent Current Assets $ 675,000
Total Current Assets $ 905,000
Fixed Assets $ 550,000
Long‐term Financing Cost 9%
Short‐term Financing Cost 2%
EBIT $ 330,000
Tax Rate 40%

Please note that Permanent Current Assets plus Temporary Current Assets equal Total Current Assets. Please assume that all Current Assets are either financed long term or short term.

a. The Niara Corporation wishes to finance all fixed assets and half of its permanent current assets with long‐term financing. Determine The Niara Corporation’s earnings after taxes under this financing plan.
b. As an alternative, The Niara Corporation might wish to finance all fixed assets and permanent current assets plus half of its temporary current assets with long‐term financing. What will be the Niara Corporation’s earnings after taxes?
c. What are some of the risks and cost considerations associated with each of these alternative financing strategies?

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FIN 200: Assignment Workbook Week 4 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 4 Solution

Week 4 Checkpoint: Breakeven Analysis

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A business unit of The Niara Coporation sells beans to the military. The following is the associated financial data:

Quantity (Q) 25 lb
Sales Price (P) $ 8 per bag
Fixed Costs (FC) $ 75,000
Variable Costs (VC) $ 0.07 per pound
Interest Expense (I) $ 8,000

a . What is the break‐even point in bags?
b . Calculate the profit or loss on:
7,500 bags
15,000 bags
c. Calculate the degree of operating leverage at:
15,000 bags
24,000 bags
Why does the degree of operating leverage change as the quantity sold increases?
d. Calculate the degree of financial leverage at both sales levels in question c.
e. What is the degree of combined leverage at both sales levels in question c?
You must show your work to receive credit.

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FIN 200: Assignment Workbook Week 3 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 3 Solution

Week 3 Assignment: Pro Forma Financial Statements

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The Niara Corporation
The balance sheet items of The Niara Corporation that vary directly with sales and the profit margin are as follows:

Percent
Cash 9%
Accounts receivable 11%
Inventory 22%
Net fixed assets 32%
Accounts payable 12%
Accruals 9%
Profit margin after taxes 5%

2009 Sales $2,200 thousand
2010 Sales Increase 14%
Dividend Payout Ratio 40%
2009 Retained Earnings Balance 620.00 thousand
Common Stock 120.00 thousand
Long Term Bonds 80.00 thousand
Notes Payable 346.00 thousand

You must show your work in order to receive credit
a . How much additional external capital will be required for next year given the sales increase as noted above? (Assume that the company is already operating at full capacity.)
b . What will happen to external fund requirements if The Niara Corporation reduces the payout ratio, grows at a slower rate, or suffers a decline in its profit margin? Discuss each of these separately.
c. Prepare a pro forma balance sheet for 2010 assuming that any external funds being acquired will be in the form of notes payable. Disregard the information in part b in answering this question (that is, use the original information and part a in constructing your pro forma balance sheet).

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FIN 200: Assignment Workbook Week 2 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 2 Solution

Week 2 CheckPoint: Financial Ratios

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Using the financial statements for The Niara Corporation, calculate the 13 basic ratios found in the chapter.
You must show your work to get credit.

Niara Corporation
Income Statement
For the Year Ended December 31, 2009
Sales $ 2,200,000
Cost of goods sold 1,300,000
Gross profits 900,000
Selling and administrative expense 420,000
Depreciation expense 150,000
Operating income 330,000
Interest expense 90,000
Earnings before taxes 240,000
Taxes 80,000
Earnings after taxes 160,000
Preferred stock dividends 10,000
Earnings available to common stockholders $ 150,000
Shares outstanding 120,000
Earnings per share $1.25

Statement of Retained Earnings
For the Year Ended December 31, 2009
Retained earnings, balance, January 1, 2009 $ 500,000
Add: Earnings available to common stockholders, 2009 150,000
Deduct: Cash dividends declared and paid in 2009 30,000
Retained earnings, balance, December 31, 2009 $ 620,000

Niara Corporation
Balance Sheet
December 31, 2009
Year‐End
Assets 2009
Current assets:
Cash $ 135,000
Accounts receivable (net) 340,000
Inventory 405,000
Prepaid expenses 25,000
Total current assets 905,000
Investments (long‐term securities) 50,000
Plant and equipment 2,450,000
Less: Accumulated depreciation 1,150,000
Net plant and equipment 1,300,000
Total assets $ 2,255,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 475,000
Notes payable 400,000
Accrued expenses 60,000
Total current liabilities 935,000
Long‐term liabilities:
Bonds payable, 2009 80,000
Total liabilities 1,015,000
Stockholders’ equity:
Preferred stock, $100 par value 90,000
Common stock, $1 par value 120,000
Capital paid in excess of par 410,000
Retained earnings 620,000
Total stockholders’ equity 1,240,000
Total liabilities and stockholders’ equity $ 2,255,000

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FIN 200: Assignment Workbook Week 1 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 1 Solution

Week 1 Assignment: Cash Flow Preparation

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Prepare a statement of cash flows for The Niara Corporation.
Follow the general procedures indicated in Table 2–10 on page 38 in your textbook.
You must show your work in order to receive credit.

Niara Corporation
Income Statement
For the Year Ended December 31, 2009
Sales $ 2,200,000
Cost of goods sold 1,300,000
Gross profits 900,000
Selling and administrative expense 420,000
Depreciation expense 150,000
Operating income 330,000
Interest expense 90,000
Earnings before taxes 240,000
Taxes 80,000
Earnings after taxes 160,000
Preferred stock dividends 10,000
Earnings available to common stockholders $ 150,000
Shares outstanding 120,000
Earnings per share $1.25

Statement of Retained Earnings
For the Year Ended December 31, 2009
Retained earnings, balance, January 1, 2009 $ 500,000
Add: Earnings available to common stockholders, 2009 150,000
Deduct: Cash dividends declared and paid in 2009 30,000
Retained earnings, balance, December 31, 2009 $ 620,000

Comparative Balance Sheets
For 2008 and 2009
Year‐End Year‐End
Assets 2008 2009
Current assets:
Cash $ 80,000 $ 135,000
Accounts receivable (net) 310,000 340,000
Inventory 400,000 405,000
Prepaid expenses 55,000 25,000
Total current assets 845,000 905,000
Investments (long‐term securities) 85,000 50,000
Plant and equipment 2,000,000 2,450,000
Less: Accumulated depreciation 1,000,000 1,150,000
Net plant and equipment 1,000,000 1,300,000
Total assets $ 1,930,000 $ 2,255,000
Current liabilities:
Accounts payable $ 275,000 $ 475,000
Notes payable 400,000 400,000
Accrued expenses 65,000 60,000
Total current liabilities 740,000 935,000
Long‐term liabilities:
Bonds payable, 2009 70,000 80,000
Total liabilities 810,000 1,015,000
Stockholders’ equity:
Preferred stock, $100 par value 90,000 90,000
Common stock, $1 par value 120,000 120,000
Capital paid in excess of par 410,000 410,000
Retained earnings 500,000 620,000
Total stockholders’ equity 1,120,000 1,240,000
Total liabilities and stockholders’ equity $ 1,930,000 $ 2,255,000

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ACC 281 Week 2: P6-7A The management of Utley Inc. asks

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Two Solution

Learning Team Assignment

P6-7A Journalize, post, and prepare trial balance and partial income statement using periodic approach
The management of Utley Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2008 the accounting records show these data. Inventory, January 1 (10,000 units) $ 35,000 Cost of 120,000 units purchased Selling price of 100,000 units sold Operating expenses 504,500 665,000 130,000 Units purchased consisted of 35,000 units at $4.00 on May 10; 60,000 units at $4.20 on August 15; and 25,000 units at $4.50 on November 20. Incom taxes are 28%. Hint: Compute ending inventory, prepare income statements, and answer questions using FIFO and LIFO. (SO 2 and SO 3)
Instructions
(a) Prepare comparative condensed income statements for 2008 under FIFO and LIFO. (Show computations of ending inventory.) Gross profit: FIFO $259,000 LIFO $240,500
(b) Answer the following questions for management in the form of a business letter. 1. Which inventory cost flow method produces the most meaningful inventory amount for the balance sheet? Why? 2. Which inventory cost flow method produces the most meaningful net income? Why? 3. Which inventory cost flow method is most likely to approximate the actual physical flow of the goods? Why? 4. How much more cash will be available for management under LIFO than under FIFO? Why? 5. How much of the gross profit under FIFO is illusionary in comparison with the gross profit under LIFO?

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ACC 281 Week 4: P11-7A On July 1, 2008, Rossillon Company

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Four Solution

Learning Team Assignment

P11-7A On July 1, 2008, Rossillon Company issued $4,000,000 face value, 8%, 10-year bonds at $3,501,514.This price resulted in an effective-interest rate of 10% on the bonds. Rossillon uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1.
Instructions (Round all computations to the nearest dollar.)
(a) Prepare the journal entries to record the following transactions. (1) The issuance of the bonds on July 1, 2008. (2) The accrual of interest and the amortization of the discount on December 31, 2008. (3) The payment of interest and the amortization of the discount on July 1, 2009, assuming no accrual of interest on June 30. (4) The accrual of interest and the amortization of the discount on December 31, 2009.
(b) Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2009, balance sheet.
(c) Provide the answers to the following questions in letter form. (1) What amount of interest expense is reported for 2009? (2) Would the bond interest expense reported in 2009 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used? (3) Determine the total cost of borrowing over the life of the bond. (4) Would the total bond interest expense be greater than, the same as, or less than the total interest expense that would be reported if the straight-line method of amortization were used?

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ACC 281 Week 4: E11-8 Jim Thome has prepared

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Four Solution

Individual Assignment

E11-8 Jim Thome has prepared the following list of statements about bonds. 1. Bonds are a form of interest-bearing notes payable. 2. When seeking long-term financing, an advantage of issuing bonds over issuing common stock is that stockholder control is not affected. 3. When seeking long-term financing, an advantage of issuing common stock over issuing bonds is that tax savings result. 4. Secured bonds have specific assets of the issuer pledged as collateral for the bonds. 5. Secured bonds are also known as debenture bonds. 6. Bonds that mature in installments are called term bonds. 7. A conversion feature may be added to bonds to make them more attractive to bond buyers. 8. The rate used to determine the amount of cash interest the borrower pays is called the stated rate. 9. Bond prices are usually quoted as a percentage of the face value of the bond. 10. The present value of a bond is the value at which it should sell in the marketplace.
Instructions Identify each statement above as true or false. If false, indicate how to correct the statement. Evaluate statements about bonds

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ACC 281 Week 3: P10-5A At December 31, 2008, Jimenez Company

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Three Solution

Learning Team Assignment

P10-5A At December 31, 2008, Jimenez Company reported the following as plant assets. Land $ 4,000,000 Buildings $28,500,000 Less: Accumulated depreciation—buildings 12,100,000 16,400,000 Equipment 48,000,000 Less: Accumulated depreciation—equipment 5,000,000 43,000,000 Total plant assets $63,400,000 During 2009, the following selected cash transactions occurred. April 1 Purchased land for $2,130,000. May 1 Sold equipment that cost $780,000 when purchased on January 1, 2005.The equipment was sold for $450,000. June 1 Sold land purchased on June 1, 1999, for $1,500,000.The land cost $400,000. July 1 Purchased equipment for $2,000,000. Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 1999. No salvage value was received.
Instructions
(a) Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.
(b) Record adjusting entries for depreciation for 2009.
(c) Prepare the plant assets section of Jimenez’s balance sheet at December 31, 2009.

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ACC 281 Week 2: E6-5 Catlet Co. uses a periodic

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Two Solution

Individual Assignment

E6-5 Catlet Co. uses a periodic inventory system. Its records show the following for the month of May, in which 65 units were sold. Units Unit Cost Total Cost May 1 Inventory 30 $ 8 $240 15 Purchases 25 11 275 24 Purchases 35 12 420 Totals 90 $935 Compute inventory and cost of goods sold using FIFO and LIFO.
Instructions
Compute the ending inventory at May 31 and cost of goods sold using the FIFO and LIFO methods. Prove the amount allocated to cost of goods sold under each method.

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ACC 281 Week 2: P5-7A At the beginning of the current season

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Two Solution

Learning Team Assignment

P5-7A Journalize, post, and prepare trial balance and partial income statement using periodic approach
At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,500; Merchandise Inventory $1,700; and Common Stock $4,200. The following transactions were completed during April.
Apr. 4 Purchased racquets and balls from Denton Co. $740, terms 3/10, n/30.
6 Paid freight on Denton Co. purchase $60.
8 Sold merchandise to members $900, terms n/30.
10 Received credit of $40 from Denton Co. for a damaged racquet that was returned.
11 Purchased tennis shoes from Newbee Sports for cash $300.
13 Paid Denton Co. in full.
14 Purchased tennis shirts and shorts from Venus's Sportswear $600, terms 2/10, n/60.
15 Received cash refund of $50 from Newbee Sports for damaged merchandise that was returned.
17 Paid freight on Venus's Sportswear purchase $30.
18 Sold merchandise to members $1,000, terms n/30.
20 Received $500 in cash from members in settlement of their accounts.
21 Paid Venus's Sportswear in full.
27 Granted an allowance of $30 to members for tennis clothing that did not fit properly.
30 Received cash payments on account from members $500.
The chart of accounts for the tennis shop includes Cash; Accounts Receivable; Merchandise Inventory; Accounts Payable; Common Stock; Sales; Sales Returns and Allowances; Purchases; Purchase Returns and Allowances; Purchase Discounts; and Freight-in.

Instructions

(a) Journalize the April transactions using a periodic inventory system.
(b) Using T accounts, enter the beginning balances in the ledger accounts and post the April Transactions.
(c) Prepare a trial balance on April 30, 2008.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $2,296.

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ACC 281 Week 4: P11-1A On January 1, 2008, the ledger of Mane Company

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Four Solution

Learning Team Assignment

P11-1A Prepare current liability entries, adjusting entries, and current liabilities section.
On January 1, 2008, the ledger of Mane Company contains the following liability accounts.
Accounts Payable $52,000
Sales Taxes Payable 7,700
Unearned Service Revenue 16,000
During January the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $22,680, which includes 8% sales taxes.
12 Provided services for customers who had made advance payments of $10,000. (Credit Service Revenue.)
14 Paid state revenue department for sales taxes collected in December 2007 ($7,700).
20 Sold 800 units of a new product on credit at $50 per unit, plus 8% sales tax.
21 Borrowed $18,000 from UCLA Bank on a 3-month, 8%, $18,000 note.
25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.
Instructions
(a) Journalize the January transactions.
(b) Journalize the adjusting entries at January 31 for the outstanding notes payable. (Hint: Use one-third of a month for the UCLA Bank note.)
(c) Prepare the current liabilities section of the balance sheet at January 31, 2008. Assume no change in accounts payable.

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ACC 281 Week 4: E11-18 Hrabik Corporation issued

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Four Solution

Individual Assignment

E11-18 Prepare entries for issuance of bonds, payment of interest, and amortization of discount using effective-interest method
Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2008, for $562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize bond premium or discount.
Instructions
Prepare the journal entries to record the following. (Round to the nearest dollar.)
(a) The issuance of the bonds.
(b) The payment of interest and the discount amortization on July 1, 2008, assuming that interest was not accrued on June 30.
(c) The accrual of interest and the discount amortization on December 31, 2008

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ACC 281 Week 4: E11-2 On June 1, Melendez Company borrows

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Four Solution

Individual Assignment

E11-2 Prepare entries for interest bearing notes
On June 1, Melendez Company borrows $90,000 from First Bank on a 6-month, $90,000, 12% note.
Instructions
(a) Prepare the entry on June 1.
(b) Prepare the adjusting entry on June 30.
(c) Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30.
(d) What was the total financing cost (interest expense)?

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ACC 281 Week 4: Questions 1 and 2

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Four Solution

Individual Assignment

Chapter 11 Questions 1 and 2
1. Jill Loomis believes a current liability is a debt that can be expected to be paid in one year. Is Jill correct? Explain.

2. Frederickson Company obtains $40,000 in cash by signing a 9%, 6-month, $40,000 note payable to First Bank on July 1. Frederickson’s fiscal year ends on September 30. What information should be reported for the note payable in the annual financial statements?

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ACC 281 Week 3: P10-3A On January 1, 2008, Pele Company

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Three Solution

Learning Team Assignment

P10-3A Compute depreciation under different methods.
On January 1, 2008, Pele Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,000. Related expenditures included: sales tax $1,700, shipping costs $150, insurance during shipping $80, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Pele estimates that the useful life of the machine is 5 years with a $5,000 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B: The recorded cost of this machine was $160,000. Pele estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period.
Instructions
(a) Prepare the following for Machine A.
(1) The journal entry to record its purchase on January 1, 2008.
(2) The journal entry to record annual depreciation at December 31, 2008.
(b) Calculate the amount of depreciation expense that Pele should record for machine B each year of its useful life under the following assumptions.
(1) Pele uses the straight-line method of depreciation.
(2) Pele uses the declining-balance method.The rate used is twice the straight-line rate.
(3) Pele uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2008, 45,000 units; 2009, 35,000 units; 2010, 25,000 units; 2011, 20,000 units.
(c) Which method used to calculate depreciation on machine B reports the highest amount of depreciation expense in year 1 (2008)? The highest amount in year 4 (2011)? The highest total amount over the 4-year period?

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ACC 281 Week 3: P9-2A Information related to Hermesch Company

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Three Solution

Learning Team Assignment

P9-2A Compute bad debts amounts. Information related to Hermesch Company for 2008 is summarized below.
Total credit sales $2,200,000
Accounts receivable at December 31 825,000
Bad debts written off 33,000
Instructions
(a) What amount of bad debts expense will Hermesch Company report if it uses the direct writeoff method of accounting for bad debts?
(b) Assume that Hermesch Company estimates its bad debts expense to be 2% of credit sales. What amount of bad debts expense will Hermesch record if it has an Allowance for Doubtful Accounts credit balance of $4,000?
(c) Assume that Hermesch Company estimates its bad debts expense based on 6% of accounts receivable.What amount of bad debts expense will Hermesch record if it has an Allowance for Doubtful Accounts credit balance of $3,000?
(d) Assume the same facts as in (c), except that there is a $3,000 debit balance in Allowance for Doubtful Accounts.What amount of bad debts expense will Hermesch record?
(e) What is the weakness of the direct write-off method of reporting bad debts expense?

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ACC 281 Week 3: E10-13 Herzogg Company, organized in 2008

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Three Solution

Individual Assignment

E10-13 Prepare entries to set up appropriate accounts for different intangibles; amortize intangible assets
Herzogg Company, organized in 2008, has the following transactions related to intangible assets.
1/2/08 Purchased patent (7-year life) $560,000
4/1/08 Goodwill purchased (indefinite life) 360,000
7/1/08 10-year franchise; expiration date 7/1/2018 440,000
9/1/08 Research and development costs 185,000
Instructions
Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2008, recording any necessary amortization and reporting all intangible asset balances accurately as of that date.

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ACC 281 Week 3: E10-9 Presented below are selected transactions

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Three Solution

Individual Assignment

E10-9 Journalize entries for disposal of plant assets.
Presented below are selected transactions at Ingles Company for 2008.
Jan. 1 Retired a piece of machinery that was purchased on January 1, 1998. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value.
June 30 Sold a computer that was purchased on January 1, 2005. The computer cost $40,000. It had a useful life of 5 years with no salvage value. The computer was sold for $14,000.
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2004. The truck cost $39,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.

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ACC 281 Week 3: E10-7 Brainiac Company purchased

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Three Solution

Individual Assignment

E10-7 Compute depreciation using different methods.
Brainiac Company purchased a delivery truck for $30,000 on January 1, 2008.The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years.Actual miles driven were 15,000 in 2008 and 12,000 in 2009.
Instructions
(a) Compute depreciation expense for 2008 and 2009 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method.
(b) Assume that Brainiac uses the straight-line method.
(1) Prepare the journal entry to record 2008 depreciation.
(2) Show how the truck would be reported in the December 31, 2008, balance sheet.

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ACC 281 Week 3: E10-2 Trudy Company incurred the following costs

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Three Solution

Individual Assignment

E10-2 Determine property, plant, and equipment costs.
Trudy Company incurred the following costs.
1. Sales tax on factory machinery purchased $5,000
2. Painting of and lettering on truck immediately upon purchase 700
3. Installation and testing of factory machinery 2,000
4. Real estate broker’s commission on land purchased 3,500
5. Insurance premium paid for first year’s insurance on new truck 880
6. Cost of landscaping on property purchased 7,200
7. Cost of paving parking lot for new building constructed 17,900
8. Cost of clearing, draining, and filling land 13,300
9. Architect’s fees on self-constructed building 10,000
Instructions
Indicate to which account Trudy would debit each of the costs

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ACC 281 Week 3: E9-3 The ledger of Hixson Company

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Three Solution

Individual Assignment

E9-3 Journalize entries to record allowance for doubtful accounts using two different bases.
The ledger of Hixson Company at the end of the current year shows Accounts Receivable $120,000, Sales $840,000, and Sales Returns and Allowances $30,000.
Instructions
(a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable

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ACC 281 Week 2: P5-4A J. Hafner, a former professional tennis star, operates Hafner’s Tennis Shop

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Two Solution

Learning Team Assignment

P5-4A J. Hafner, a former professional tennis star, operates Hafner’s Tennis Shop at the Miller Lake Resort. At the beginning of the current season, the ledger of Hafner’s Tennis Shop showed Cash $2,500, Merchandise Inventory $1,700, and Common Stock $4,200. The following transactions were completed during April.
Apr. 4 Purchased racquets and balls from Wellman Co. $840, FOB shipping point, terms 2/10, n/30.
6 Paid freight on purchase from Wellman Co. $40.
8 Sold merchandise to members $1,150, terms n/30. The merchandise sold had a cost of $790.
10 Received credit of $40 from Wellman Co. for a damaged racquet that was returned.
11 Purchased tennis shoes from Venus Sports for cash, $420.
13 Paid Wellman Co. in full.
14 Purchased tennis shirts and shorts from Serena’s Sportswear $900, FOB shipping point, terms 3/10, n/60.
15 Received cash refund of $50 from Venus Sports for damaged merchandise that was returned.
17 Paid freight on Serena’s Sportswear purchase $30.
18 Sold merchandise to members $810, terms n/30.The cost of the merchandise sold was $530.
20 Received $500 in cash from members in settlement of their accounts.
21 Paid Serena’s Sportswear in full.
27 Granted an allowance of $30 to members for tennis clothing that did not fit properly.
30 Received cash payments on account from members, $660.
The chart of accounts for the tennis shop includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Merchandise Inventory, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales, No. 412 Sales Returns and Allowances, No. 505 Cost of Goods Sold.
(a) Net income $30,100
Retained earnings $62,100
Total assets $356,100
Journalize, post, and prepare a trial balance.
Instructions
(a) Journalize the April transactions using a perpetual inventory system.
(b) Enter the beginning balances in the ledger accounts and post the April transactions. (Use J1 for the journal reference.)
(c) Prepare a trial balance on April 30, 2008.

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ACC 281 Week 2: E6-12 Staley Watch Company

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Two Solution

Individual Assignment

E6-12 Staley Watch Company reported the following income statement data for a 2-year period.
2008 2009
Sales $210,000 $250,000
Cost of goods sold
Beginning inventory 32,000 44,000
Cost of goods purchased 173,000 202,000
Cost of goods available for sale 205,000 246,000
Ending inventory 44,000 52,000
Cost of goods sold 161,000 194,000
Gross profit $ 49,000 $ 56,000
Staley uses a periodic inventory system. The inventories at January 1, 2008, and December 31, 2009, are correct. However, the ending inventory at December 31, 2008, was overstated 5,000.
Instructions
(a) Prepare correct income statement data for the 2 years.
(b) What is the cumulative effect of the inventory error on total gross profit for the 2 years?
(c) Explain in a letter to the president of Staley Company what has happened—i.e., the nature of the error and its effect on the financial statements.

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ACC 281 Week 2: E6-7 Jones Company had 100 units

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Two Solution

Individual Assignment

E6-7 Jones Company had 100 units in beginning inventory at a total cost of $10,000.The company
purchased 200 units at a total cost of $26,000. At the end of the year, Jones had 80 units in
ending inventory.
Instructions
(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2)
LIFO, and (3) average-cost.
(b) Which cost flow method would result in the highest net income?
(c) Which cost flow method would result in inventories approximating current cost in the balance
sheet?
(d) Which cost flow method would result in Jones paying the least taxes in the first year?

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ACC 281 Week 2: E5-16 This information relates to Martinez

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Two Solution

Individual Assignment

E5-16 This information relates to Martinez Co.
1. On April 5 purchased merchandise from D. Norlan Company for $20,000, terms 2/10, net/30, FOB shipping point.
2. On April 6 paid freight costs of $900 on merchandise purchased from D. Norlan Company.
3. On April 7 purchased equipment on account for $26,000.
4. On April 8 returned some of April 5 merchandise to D. Norlan Company which cost $2,800.
5. On April 15 paid the amount due to D. Norlan Company in full.
Instructions
(a) Prepare the journal entries to record these transactions on the books of Martinez Co. using a
periodic inventory system.
(b) Assume that Martinez Co. paid the balance due to D. Norlan Company on May 4 instead of
April 15. Prepare the journal entry to record this payment.

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ACC 281 Week 2: E5-3 On September 1, Howe Office Supply

ACC 281

Axia College of University of Phoenix (UoP)

Financial Accounting Transaction Analysis

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 281 Week Two Solution

Individual Assignment

E5-3 On September 1, Howe Office Supply had an inventory of 30 calculators at a cost of $18 each.The company uses a perpetual inventory system. During September, the following transactions occurred.
Sept. 6 Purchased 80 calculators at $20 each from DeVito Co. for cash.
9 Paid freight of $80 on calculators purchased from DeVito Co.
10 Returned 2 calculators to DeVito Co. for $42 credit (including freight) because they did not meet specifications.
12 Sold 26 calculators costing $21 (including freight) for $31 each to Mega Book Store, terms n/30.
14 Granted credit of $31 to Mega Book Store for the return of one calculator that was not ordered.
20 Sold 30 calculators costing $21 for $31 each to Barbara’s Card Shop, terms n/30.
Instructions
Journalize the September transactions.

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XACC 280 Week Seven Solution

XACC 280

Axia College of University of Phoenix (UoP)

Financial Accounting Concepts and Principles

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

XACC 280 Week 7 Solution

4. CheckPoint: Ratio, Vertical and Horizontal Analysis
The calculations you perform for this CheckPoint form the basis of your analysis of your capstone project.

• Write an essay in 250 to 300 words an explanation of the three tools of financial statement analysis and the function of each.

• Examine PepsiCo, Inc.’s Consolidated Balance Sheet on p. A6 in Appendix A of Financial Accounting, especially its Current Assets, Current Liabilities, and Total Assets for years 2005 and 2004.

• Calculate the following for PepsiCo, Inc. and show your work:

o The Current Ratio for 2005
o The Current Ratio for 2004
o Two measures of vertical analysis—for example, compute the current assets divided by total assets for each year, and express your result as a percentage
o Two measures of horizontal analysis—for example, compute the total change in assets by percentage, by dividing current assets in 2005 by current assets in 2004. Compute a similar percentage for current liabilities

• Examine The Coca-Cola Company’s Consolidated Balance sheet on p. B2 in Appendix B of Financial Accounting, especially its Current Assets, Current Liabilities, and Total Assets for years 2005 and 2004.

• Post your explanation and calculations.
• Due Date: Day 3 [post to your Individual forum]

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XACC 280 Week Six Solution

XACC 280

Axia College of University of Phoenix (UoP)

Financial Accounting Concepts and Principles

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

XACC 280 Week 6 Solution

3. Assignment: Comprehensive Problem
• Complete the Comprehensive Problem on pp. 189–190 of Financial Accounting.
• Use the templates in Appendix G to complete the problem; complete all six tabs.
• Post the completed Appendix G as an attachment.
• Due Date: Day 6 [post to your Individual forum]

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Comprehensive Problem Julie Molony opened Julie’s Maids Cleaning Service Inc. on July 1, 2008. During July, the company completed the following transactions.
July 1 Issued $14,000 of common stock for $14,000 cash.
1 Purchased a used truck for $10,000, paying $3,000 cash and the balance on account.
3 Purchased cleaning supplies for $800 on account.
5 Paid $1,800 on a one-year insurance policy, effective July 1.
12 Billed customers $3,800 for cleaning services.
18 Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies.
20 Paid $1,600 for employee salaries.
21 Collected $1,400 from customers billed on July 12.
25 Billed customers $1,500 for cleaning services.
31 Paid gas and oil for the month on the truck, $400.
31 Paid a $600 cash dividend.

The chart of accounts for Julie’s Maids Cleaning Service contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No.157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas and Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense.

Instructions
(a) Journalize and post the July transactions. Use page J1 for the journal.
(b) Prepare a trial balance at July 31 on a worksheet.
(c) Enter the following adjustments on the worksheet, and complete the worksheet.
(1) Earned but unbilled fees at July 31 were $1,300.
(2) Depreciation on equipment for the month was $200.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $100 of cleaning supplies on hand at July 31.
(5) Accrued but unpaid employee salaries were $500.
(d) Prepare the income statement and a retained earnings statement for July, and a classified balance sheet at July 31, 2008.
(e) Journalize and post the adjusting entries. Use page J2 for the journal.
(f ) Journalize and post the closing entries, and complete the closing process. Use page J3 for the journal.
(g) Prepare a post-closing trial balance at July 31.

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XACC 280 Week Five Solution

XACC 280

Axia College of University of Phoenix (UoP)

Financial Accounting Concepts and Principles

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

XACC 280 Week 5 Solution

4. CheckPoint: Reversing Entry
• Post your answers to BE4-12 on p. 176 of Financial Accounting.
• Due Date: Day 3 [post to your Individual forum]

5. CheckPoint: Closing Entries and a Post-closing Trial Balance
• Complete E4-4 on p. 177 of Financial Accounting. Use the templates in Appendix F and complete all three tabs.
• Post the completed Appendix F as an attachment.
• Due Date: Day 6 [post to your Individual forum]

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BE4-12 At October 31, Nathan Company made an accrued expense adjusting entry of $1,400 for salaries. Prepare the reversing entry on November 1, and indicate the balances in Salaries Payable and Salaries Expense after posting the reversing entry.

E4-4 Worksheet data for Goode Company are presented in E4-2.
Instructions
(a) Journalize the closing entries at April 30.
(b) Post the closing entries to Income Summary and Retained Earnings. Use T accounts.
(c) Prepare a post-closing trial balance at April 30.

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XACC 280 Week Four Solution

XACC 280

Axia College of University of Phoenix (UoP)

Financial Accounting Concepts and Principles

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

XACC 280 Week 4 Solution

2. Assignment: Preparing a Financial Statement Worksheet
• Complete E4-1 on pp. 176–177 of Financial Accounting.
• Use the template in Appendix E to complete the 10-column worksheet.
• Post the completed worksheet as an attachment.

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E4-1 The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are as follows:

BRISCOE COMPANY
Worksheet
For the Month Ended June 30, 2008
Trial Balance
Account Titles Dr. Cr.
Cash $2,320
Accounts Receivable 2,440
Supplies 1,880
Accounts Payable $1,120
Unearned Revenue 240
Common Stock 3,600
Service Revenue 2,400
Salaries Expense 560
Miscellaneous Expense 160
$7,360 $7,360

Other data:
1. A physical count reveals $300 of supplies on hand.
2. $100 of the unearned revenue is still unearned at month-end.
3. Accrued salaries are $280.

Instructions
Enter the trial balance on a worksheet and complete the worksheet.

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XACC 280 Week Three Solution

XACC 280

Axia College of University of Phoenix (UoP)

Financial Accounting Concepts and Principles

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

XACC 280 Week 3 Solution

4. CheckPoint: Adjusting Entries, Posting, and Preparing an Adjusted Trial Balance
• Complete parts a, b and c of P3-1A on pp. 128–129 of Financial Accounting.
• Use the templates in Appendix D. Complete all three tabs.
• Post the completed Appendix D as an attachment.

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P3-1A MASASI COMPANY, INC. Trial Balance June 30, 2008 Account Number Debit Credit 101 Cash $ 7,150 112 Accounts Receivable 6,000 126 Supplies 2,000 130 Prepaid Insurance 3,000 157 Office Equipment 15,000 201 Accounts Payable $ 4,500 209 Unearned Service Revenue 4,000 311 Common Stock 21,750 400 Service Revenue 7,900 726 Salaries Expense 4,000 729 Rent Expense 1,000 Total $38,150 Total $38,150 In addition to those accounts listed on the trial balance, the chart of accounts for Masasi Company,Inc. also contains the following accounts and account numbers:No. 158 Accumulated Depreciation—Office Equipment, No. 212 Salaries Payable,No. 244 Utilities Payable,No. 631 Supplies Expense,No. 711 Depreciation Expense,No. 722 Insurance Expense, and No. 732 Utilities Expense. Other data: 1. Supplies on hand at June 30 are $600. 2. A utility bill for $150 has not been recorded and will not be paid until next month. 3. The insurance policy is for a year. 4. $2,500 of unearned service revenue has been earned at the end of the month. 5. Salaries of $2,000 are accrued at June 30. 6. The office equipment has a 5-year life with no salvage value. It is being depreciated at $250 per month for 60 months. 7. Invoices representing $1,000 of services performed during the month have not been recorded as of June 30. Instructions (a) Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal. (b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column. (c) Prepare an adjusted trial balance at June 30, 2008.

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XACC 280: Week Two Solution

XACC 280

Axia College of University of Phoenix (UoP)

Financial Accounting Concepts and Principles

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

XACC 280 Week 2 Solution

2. Assignment: Journalizing, Posting and Preparing a Trial Balance
• Complete P2-2A on p. 81 of Financial Accounting, using the templates in Appendix C for your answers. Each part of the problem corresponds to one tab in Appendix C. Complete all three tabs of Appendix C.

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P2-2A Jane Kent is a licensed CPA. During the first month of operations of her business, Jane Kent, Inc., the following events and transactions occurred. May 1 Stockholders invested $25,000 cash in exchange for common stock. 2 Hired a secretary-receptionist at a salary of $2,000 per month. 3 Purchased $2,500 of supplies on account from Read Supply Company. 7 Paid office rent of $900 cash for the month. 11 Completed a tax assignment and billed client $2,100 for services provided. 12 Received $3,500 advance on a management consulting engagement. 17 Received cash of $1,200 for services completed for H. Arnold Co. 31 Paid secretary-receptionist $2,000 salary for the month. 31 Paid 40% of balance due Read Supply Company. Jane uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies,No. 201 Accounts Payable,No. 205 Unearned Revenue,No. 311 Common Stock,No. 400 Service Revenue, No. 726 Salaries Expense, and No. 729 Rent Expense

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XACC 280: Week One Solution

XACC 280

Axia College of University of Phoenix (UoP)

Financial Accounting Concepts and Principles

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

XACC 280 Week 1 Solution

6. CheckPoint: The Accounting Equation
• Complete E1-5, E1-6 and E1-7 on pp. 34 and 35 of Financial Accounting.

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E1-5 Meredith Cleaners has the following balance sheet items. Accounts payable, Accounts receivable Cash, Notes payable Cleaning equipment, Salaries payable Cleaning supplies, Common stock Instructions Classify each item as an asset, liability, or stockholders’ equity.

E1-6 Selected transactions for Evergreen Lawn Care Company are listed below. 1. Sold common stock for cash to start business. 2. Paid monthly rent. 3. Purchased equipment on account. 4. Billed customers for services performed. 5. Paid dividends. 6. Received cash from customers billed in (4). 7. Incurred advertising expense on account. 8. Purchased additional equipment for cash. 9. Received cash from customers when service was performed. Instructions List the numbers of the above transactions and describe the effect of each transaction on assets, liabilities, and stockholders’ equity. For example, the first answer is: (1) Increase in assets and increase in stockholders’ equity.

E1-7 Brandon Computer Timeshare Company entered into the following transactions during May 2008. 1. Purchased computer terminals for $20,000 from Digital Equipment on account. 2. Paid $4,000 cash for May rent on storage space. 3. Received $15,000 cash from customers for contracts billed in April. 4. Provided computer services to Fisher Construction Company for $3,000 cash. 5. Paid Northern States Power Co. $11,000 cash for energy usage in May. 6. Stockholders invested an additional $32,000 in the business. 7. Paid Digital Equipment for the terminals purchased in (1) above. 8. Incurred advertising expense for May of $1,200 on account. Instructions Indicate with the appropriate letter whether each of the transactions above results in: (a) an increase in assets and a decrease in assets. (b) an increase in assets and an increase in stockholders’ equity. (c) an increase in assets and an increase in liabilities. (d) a decrease in assets and a decrease in stockholders’ equity. (e) a decrease in assets and a decrease in liabilities. (f) an increase in liabilities and a decrease in stockholders’ equity. (g) an increase in stockholders’ equity and a decrease in liabilities.

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