Acct220: principles of accounting i

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University of Maryland University College

Final Examination

Acct220: Principles of Accounting I

For this exam, omit all general journal entry explanations.

Ensure to include correct dollar signs, underlines & double underlines.

Question 1: 40% points:

On December 1, 2014, Flip Distributing Company had the following account balances. No additional owner investments or withdrawals were made during 2014.

Account

Debit

Account

Credit

Cash

$7,200

Accu. Depn., Equipment

$2,200

Accounts Receivable

4,600

Accounts Payable

4,500

Inventory

12,000

Salaries & Wages Payable

1,000

Supplies

1,200

Owner’s Capital

39,300

Equipment

22,000

     Total

$47,000

     Total

$47,000

 

 

During December, the company completed the following transactions. All end-of-the month adjusting entries were made on November 30, 2014.

Dec. 6

Paid $1,600 for salaries and wages due employees, of which $600 is for December and $1,000 is for November salaries and wages payable.

Dec. 8

Received $1,900 cash from customers in payment of account (no discount allowed).

Dec. 10

Sold merchandise for cash $6,300. The cost of the merchandise sold was $4,100.

Dec. 13

Purchased merchandise on account from Flim Co. $9,000, terms 2/10, n/30.

Dec. 15

Purchased supplies for cash $2,000.

Dec. 18

Sold merchandise on account $12,000, terms 3/10, n/30. The cost of the merchandise sold was $8,000.

Dec. 20

Paid salaries and wages $1,800.

Dec. 23

Paid Flim Co. in full, less discount.

Dec. 27

Received collections in full, less discounts, from customers billed on December 18.

December adjusting entry data:

1. Accrued salaries and wages payable $800.

2. Depreciation $200 per month.

3. Supplies on hand $1,500.

 

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Instructions:

  1. Prepare in journal form, without explanations, the December transactions using a perpetual inventory system.
  2. Prepare in journal form, without explanations, the December adjusting entries.
  3. Prepare a December adjusted trial balance.
  4. Prepare a classified balance sheet for year ending December 31, 2014.
  5. Prepare in journal form, without explanation, the closing entries for the year ended December 31, 2014.

 

NOTE: Students are encouraged to prepare their own T-accounts, on a separate scratch sheet of paper, and track from the beginning balance thru all journal transactions to ending balances for all accounts used in this problem. Do not turn in your separate scratch sheet of paper – those are student personal working papers and not part of any solution required for this exam.

 

Question 2: 14% points:

The following information is available for Flip Company:

Beginning inventory               600 units at $5

First purchase                          900 units at $6

Second purchase                     500 units at $7.25

 

Assume that Flip uses a periodic inventory system and that there are 700 units left at the end of the month. (Round all final answers to the nearest dollar.)

 

Instructions:

a. Compute the cost of goods available for sale.

b. Compute the value of ending inventory and Cost of Good Sold under the

(1) LIFO method.

(2) FIFO method.

        (3) Average-cost method

 

 

 

 

 

 

 

 

 

 

 

 

 

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Question 3: 5% points:

 

Flip’s Supply Co. has the following transactions related to notes receivable during the last 2 months of 2014.

 

Nov.   1       Loaned $20,000 cash to Flop on a 1-year, 12% note.

Dec. 11        Sold goods to Flim, Inc., receiving a $11,700, 90-day, 8% note.

        16        Received an $12,000, 6-month, 9% note in exchange for Flam’s outstanding accounts receivable.

         31        Accrued interest revenue on all notes receivable.

 

Instructions

(a)      Journalize the transactions for Flip’s Supply Co.

(b)      Record the collection of the Flop note at its maturity in 2015.

 

 

Question 4: 9% points:

 

Flip Company purchased equipment on July 1, 2011 for $90,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 4-year useful life. It is also estimated that the equipment will produce 100,000 units over its 4-year life.

Instructions

Answer the following independent questions.

1.   Compute the amount of depreciation expense for the year ended December 31, 2011, using the straight-line method of depreciation.

2.   If 10,000 units of product are produced in 2011 and 26,000 units are produced in 2012, what is the book value of the equipment at December 31, 2012? The company uses the units-of-activity depreciation method.

3.   If the company uses the double-declining-balance method of depreciation, what is the balance of the Accumulated Depreciation—Equipment account at December 31, 2013?

 

 

Acct220                                                                                                          Page 3 of 9

Question 5: 7% points:

Assume that the payroll records of Flip Company provided the following information for the weekly payroll ended November 30, 2014.

Employee

Hours

Rate

Fed Tax

Dues

Earnings Year-to-Date

 Flop

44

$45

$362

$9

$111,000 

 Flim

46

15

97

5

23,200 

 Flam

40

25

148

 

5,700 

 Floozy

42

30

230

7

49,500 

Additional information: All employees are paid overtime at time and a half for hours worked in excess of 40 per week. The FICA (total social security & medicare) tax rate is 7.65% for the first $110,100 of each employee’s annual earnings. The employer pays unemployment taxes of 6.2% (5.4% for state and .8% for federal) on the first $7,000 of each employee’s annual earnings.

 

Instructions:

a. Prepare the payroll register for the pay period.

b. Prepare a schedule to show calculation for any payroll taxes.

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