ACCT 2010 Final Exam (Test 1, 2, 3, and terms for 7/11)

MyBnB started a home rental company on January 1. As of November 30, MyBnB reported the following balances. The company does not yet have a balance in Retained Earnings because this is its first year of operations so no net income has been reported in prior years. Accounts Payable 300 Equipment 2,400 Cash 1 ,000 Repairs Expense 200 Cleaning Expense 900 Service Revenue 2,000 Common Stock 3,000 Wages Expense 800 What is net profit margin?

Net profit margin = net income/revenues 100/2000 =0.05 or 5%

16. Merchandise costing $2,000 is sold for $3,000 on terms 2/30, n/60. If the customer pays within the discount period, what amount will be reported on the income statement as net sales and as gross profit?

Net sales = Sales - Sales discount = $3,000 - ($3,000 * 2%) = $2,940 Gross profit = Net sales - Cost of goods sold = $2,940 - $2,000 = $940

If I own stock in Apple and sell it to Mary Jane does Apple record a journal entry?

No

Does par value = market value?

No Par value is an arbitrary amount assigned to each share of stock when it is authorized =/ Market price is the amount that each share of stock will sell for in the market. Note: Par value is typically a very nominal amount such a $0.01 per share.

13. Corey's Campus Store has $4,800 of inventory on hand at the beginning of the month. During the month, the company buys $50,600 of merchandise and sells merchandise that had cost $34,800. At the end of the month, $15,400 of inventory is on hand. How much shrinkage occurred during the month?

Beginning Inventory: 4,800 Purchases: 50,600 - Cost of goods sold: 34,800 Ending Inventory: 15,400 = 5200 Inventory Equation: (Ending Inventory [balance sheet] & cost of goods sold [income statement]) BI + P - EI = COGS or BI + P - COGS = EI

The balance sheet of mister ribs restaurant current assets of 38000 and current liabilities of 20,000 calculate the current ration does it appear that mr ribs will be able to pay its current liabilities as they come due in the next year?

CA/CL = current ratio .... 38,000/20,000 = 1.9 Yes, because a positive/high current ratio indicates that a company has a strong ability to pay.

Inventory Turnover Ratio

COGS/Average Inventory

Classify the following accounts as current asset, asset, current liability, liability, stock. eq. (current means it will be used up within 6 months - 1 year) Salaries and Wages payable accounts payable accounts receivable buildings cash common stock land income taxes payable equipment notes payable (due in 6 months) retained earnings supplies

Salaries and Wages payable CL accounts payable CL accounts receivable CA buildings A cash CA common stock SE land A income taxes payable CL equipment A notes payable (due in 6 months) CL retained earnings SE supplies CA

Define Initial public offering (IPO)

The first time a corporation issues stock to the public.

The following are transactions for the Sky Blue Corporation: Collected $3,600 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1. Paid $2,160 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount. Used a machine purchased on October 1 for $52,800. The company estimates annual depreciation of $5,280.

(LOOK at phone pic)

Gross Profit Percentage

(Net Sales Revenue - Cost of Goods Sold) / Net Sales Revenue

Match each situation below to two applicable reasons that require an adjustment to be made. A Revenue has been generated. B Expense has been incurred. C Liability has been incurred. D Liability has been fulfilled. E Asset has been acquired. F Asset has been used up

1. Delta Airlines provided flights this month for customers who paid cash last month for tickets. AD 2. GSD + M completed work on an advertising campaign that will be collected next month. AE 3. Snap received a telephone bill for services this month, which must be paid next month. BC 4. The Tiger Woods Foundation used up some of the benefits of its 35,000-square-foot building. CD

The value of inventory can fall below its recorded cost for two reasons:

1. It is easily replaced by identical goods at a lower cost 2. It has become outdated or damaged When the value of inventory falls below its recorded cost, the amount recorded for inventory is written down to its lower market/net realizable value. This is known as the lower of cost or market/net realizable value (LCM/NRV) rule.

7. What are the two main internal control limitations?

- Benefits must exceed the costs (you aren't going to pay 3 mill for fraud management to prevent 2 mill) - Human error or fraud

What are the four inventory methods?

- Specific identification - first in first out (FIFO) - Weighted average - Last in first out (LIFO)

8. In what two ways can a business receive cash?

1. At the time of sale from person 2. Remotely via mail or electronically

3 Primary goals of inventory managers:

1. Maintain sufficient QUANTITY to meet needs of consumers 2. Ensure QUALITY meets consumers' expectations 3. Minimize COST of acquiring and carrying the inventory

Dividend Dates

1.Declaration Date 1a. The ex dividend date (last date you can buy a stock) 2.Date of Record 3.Date of Payment 4.Year End

The following transactions are July activities of Bill's Extreme Bowling, Incorporated, which operates several bowling centers. If revenue is to be recognized in July, indicate the amount. a. Bill's collected $18,800 from customers for services related to games played in July. b. Bill's billed a customer for $565 for a party held at the center on the last day of July. The bill is to be paid in August. c. The men's and women's bowling leagues gave Bill's advance payments totaling $1,600 for the fall season that starts in September. d. Bill's received $2,300 from credit sales made to customers last month (in June).

18,800 565 0 0

Days to Sell

365/inventory turnover ratio

How does a trial balance work as a check to see if your T accounts or journal entries were done correctly?

A trial balance takes account for credits and debits to make sure they equal each other.

For each of the following, state whether it is on the income statement or balance sheet, then state type of account... Cash Accounts Payable Accounts receivable income tax expense sales revenue notes payable retained earnings

BS - Asset BS - liability BS - asset IS - stockholder's equity IS - stockholder's equity BS - liability BS - stockholder's equity

Advantages of equity and debt financing

Advantages of equity •Equity does not have to be repaid. •Dividends are optional. Advantages of debt •Interest on debt is tax deductible. •Debt does not change stockholder control.

15. Inventory at the beginning of the year cost $13,000. During the year, the company purchased (on account) inventory costing $82,000. Inventory that had cost $78,000 was sold on account for $93,400. At the end of the year, inventory was counted and its cost was determined to be $17,000. Show the cost of goods sold equation using these numbers. What was the dollar amount of gross profit?

BI (13,000) + P (82,000) - EI (17000) = COGS (78000) Gross Profit = Revenue - cost of goods sold Sales Revenue (93,400) - (78000) = 15,400

Match each element with appropriate financial statement... ELEMENT Cash flow from financing activities expenses cash flow from investing activities assets dividends revenues cash flow from operating activities liabilities

Cash Flow Income Cash Flow BS Retained Income Cash Flow BS

11. What is the difference between a perpetual and periodic inventory system?

Companies can record inventory using either a periodic or perpetual inventory system: - perpetual inventory will be CONTINUALLY updated as goods are received and sold (often use barcodes and optical - periodic inventory means goods will be recorded as purchases and adjustments are made to the inventory account at the END of the accounting period (quarterly, annually, etc.) / (to make sure company knows how much inventory is sold/on hand, company requires it to be counted by employees at end of period

The following transactions are July activities of Bill's Extreme Bowling, Incorporated, which operates several bowling centers. Bill's collected $12,200 from customers for services related to games played in July. Bill's billed a customer for $620 for a party held at the center on the last day of July. The bill is to be paid in August. The men's and women's bowling leagues gave Bill's advance payments totaling $2,000 for the fall season that starts in September. Bill's received $2,200 from credit sales made to customers last month (in June).

Cr Cash 12200 Dr Service Revenue 12200 Cr Accounts Receivable 620 Cr Service Revenue 620 Dr Cash 2000 Cr Deferred Revenue 2000 Dr Cash 2200 Cr Accounts Receivable 2200

Match each definition with its related term by selecting the appropriate term from the dropdown options that follow each definition. Expenses, Prepaid expenses, revenue, deferred revenue A. A liability account used to record the obligation to provide future services or return cash that has been received before services have been provided. B. Costs that result when a company sacrifices resources to generate revenues in the current period. C. A type of asset account used to record the benefits obtained, when cash is paid before expenses are incurred. D. The amount charged to customers for providing goods or services.Ee

DR E PE R

21. If net sales are $410,000, cost of goods available for sales is $342,000, and gross profit percentage is 35%, what is the amount of ending inventory?

Net Sales: 410000 Gross profit: 143500 (410000x0.35) Cogs = 410000 - 143500 = 266500 Cost of goods available = 342000 Cost of goods available - cogs = 342000 - 266500 = 75500

For each of the following independent situations, prepare journal entries to record the initial transaction on December 31 and the adjustment required on January 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Magnificent Magazines received $12,000 on December 31, 2021, for subscription services related to magazines that will be published and distributed in January through December 2022. Walker Window Washing paid $1,200 cash for supplies on December 31, 2021. As of January 31, 2022, $200 of these supplies had been used up. Indoor Raceway received $3,000 on December 31, 2021, from race participants for providing services for three races. One race is held January 31, 2022, and the other two will be held in March 2022.

Dec 31 Dr Cash 12000 Cr Deferred Rev 1200 Jan 31 Dr Deferred Revenue 1000 Cr Service Revenue 1000 Dec 31 Dr Supplies 1200 Cr Cash 1200 Jan 31 Dr Supplies Expense 1200 Cr Supplies 1200 Dec 31 Dr Cash 3000 Cr Deferred Revenue 3000 Jan 31 Dr Deferred Revenue 3000 Cr Service Revenue 3000

Define - Cash Dividends

Declared by board of directors Not legally required Creates liability at declaration Requires sufficient Retained Earnings and Cash Cash dividends are declared by the board of directors. There is no legal obligation to declare a cash dividend, but once declared, there is a legal obligation to pay the dividend. Most corporations that pay cash dividends pay them quarterly. To pay a cash dividend, a corporation must have two things: 1. Sufficient Retained Earnings to absorb the dividend without going negative 2. Sufficient Cash

The following transactions are February activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern United States. Swing Hard collected $17,200 from customers for lesson services given in February. Swing Hard sold a gift card for golf lessons for $110 cash in February. Swing Hard received $6,600 from services provided on account to customers in January. Swing Hard collected $3,500 in advance payments for services to start in June. Swing Hard billed a customer $140 for services provided between February 25 and February 28. The bill is to be paid in March.

Dr Cash 17200 Cr Service Revenue 17200 Dr Cash 110 Cr Deferred Revenue 110 Dr Cash 6600 Cr Accounts Receivable 6600 Dr Cash 3500 Cr Deferred Revenue 3500 Dr Accounts Receivable 140 Cr Service Revenue 140

Katy Williams is the manager of Blue Light Arcade. The company provides entertainment for parties and special events. Blue Light Arcade received $76 cash on account for a birthday party held two months ago. Agreed to hire a new employee at a monthly salary of $3,800. The employee starts work next month. Paid $2,800 for a table top hockey game purchased last month on account. Repaid a $5,800 bank loan that had been outstanding for six months. The company purchased an air hockey table for $5,400, paying $2,600 cash and signing a short-term notes for $2,800.

Dr Cash 76 Cr Accounts Receivable 76 No journal entry Dr Accounts Payable 2800 Cr Cash 2800 Dr Notes Payable 5800 Cr Cash 5800 Dr Equipment 5400 Cr Cash 2600 Cr Accounts payable 2800

The following are transactions for the Sky Blue Corporation: Collected $3,600 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1. Paid $2,160 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount. Used a machine purchased on October 1 for $52,800. The company estimates annual depreciation of $5,280. For each of the above transactions for the Sky Blue Corporation, prepare the adjusting journal entries required on October 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Dr Deferred Revenue 1200 Cr Rent Expense 1200 Dr Prepaid Insurance 90 Cr Insurance Expense 90 Dr Depreciation Expense 440 Cr Accumulated Depreciation 440

The following transactions are July activities of Bill's Extreme Bowling, Incorporated, which operates several bowling centers. Bill's paid $2,000 to plumbers for repairing a broken pipe in the restrooms. Bill's paid $3,600 for the June electricity bill and received the July bill for $4,400, which will be paid in August. Bill's paid $5,525 to employees for work in July. What is the net income

Dr Repairs and Maintenance Expense 2000 Cr Cash 2000 Dr Electricity Expense 3600 Cr Cash Dr Utilities Expense 4400 Cr Accounts Payable 4400 Dr Salaries and Wages Expense 5525 Cr Cash 5525 Net income = $50

Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Supplies for office use were purchased during the year for $500, of which $100 remained on hand (unused) at year-end. Interest of $250 on a note receivable was earned at year-end, although collection of the interest is not due until the following year. At year-end, salaries and wages payable of $3,600 had not been recorded or paid. At year-end, one-half of a $2,000 advertising project had been completed for a client, but nothing had been billed or collected. Redeemed a gift card for $600 of services.

Dr Supplies Expense 400 Cr Supplies 400 Dr Interest Receivable 250 Cr Interest revenue 250 Dr Salaries and Wages Expense 3600 Cr Salaries and Wages payable 3600 Dr Accounts Receivable 1000 Cr Service Revenue 10000 Dr Deferred Revenue 600 Cr Service Revenue 600

For each of the following transactions for New Idea Corporation, prepare the adjusting journal entries required on July 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Received a $690 utility bill for electricity usage in July to be paid in August. Owed wages to 15 employees who worked three days at $190 each per day at the end of July. The company will pay employees at the end of the first week of August. On July 1, loaned money to an employee who agreed to repay the loan in one year along with $1,740 for one full year of interest. No interest has been recorded yet.

Dr Utilities Expense 690 Cr Cash 690 Dr Salaries and Wages Expense 8550 Cr Salaries and Wages Payable 8550 Dr Interest Receivable 145 Cr Interest Revenue 145

3. The petty cash custodian reported the following transactions during the month. Prepare the journal entry to record the replenishment of the fund. A $11 cash payment is made to Starbucks to purchase coffee for a business client, a $42 cash payment is made for supplies purchased from Office Depot, and a $31 cash payment is made to UPS to deliver goods to a customer.

Entertainment Expense (Dr: 11) Cash (Cr: 11) Supplies Expense (Dr: 42) Cash (Cr: 42) Delivery Expense (Dr: 31) Cash (Cr: 31)

6. List the five components of internal control:

Establish Responsibility - assign each task to only one employee, ex: give separate cash register to each cashier at beginning of each shift Segregate Duties - do not make one responsible for all parts of a process, ex: inventory buyers do not also approve payments to suppliers Restrict Access - do not provide access to assets or information unless it is needed to fulfill assigned information, ex: secure valuable assets such as cash and restrict access to computer systems (via passwords, firewalls) Document Procedures - prepare documents to show activities that have occurred, ex: suppliers using prenumbered checks and digitally documented electronic fund transfers Independently verify - check others' work, ex: compare the cash balance in the company's accounting records to the cash balance reported by the bank and account for any differences

Explain the difference between FOB Shipping and FOB Destination and why does it matter:

FOB (free on board) FOB Shipping Point - the sale is recorded when goods loaded on to truck FOB destination - sale is recorded when goods are at buyer's premises and ready to be unloaded This matters as ownership is transferred differently for each way...shipping point ownership transfers as goods are placed on the truck, so the company selling is no longer liable, whereas destination transfers ownership at the point of delivery, so company is liable to delivery (Ex: amazon has to use destination or it would go out of business)

Stone culture was organized on Jan 1, 2020. For its first two years of operations, it reported the following: Net income for 2020 40,000 Net income for 2021 45,000 Dividends for 2020 15,000 Dividends for 2021 20,000 Total asset at end of 2020 125,000 Total asset at end of 2021 242,000 Prepare retained earnings statement for both 2020 and 2021

For the Year ended December 31, 2020 Retained Earnings 1/1/20 $0 Add: 40,000 Less: 15,000 Retained earnings 12/31/20: 25,000 For the Year ended December 31, 2021 Retained Earnings 1/1/20 $25,000 Add: 45,000 Less: 20,000 Retained earnings 12/31/20: 50,000

20. Sellall Department Stores reported the following amounts as of its December 31 year-end: Administrative Expenses, $1,600; Cost of Goods Sold, $19,800; Income Tax Expense, $2,300; Interest Expense, $2,800; Interest Revenue, $320; General Expenses, $1,800; Net Sales Revenue, $36,000; and Delivery (freight-out) Expense, $420.

Income Statement For the year ended December 31

Order/description of the financial statements....

Income Statement (revenue / expenses, profit and loss over a period of time) rev - exp = net income Statement of retained earnings (net income - dividends) Balance Sheet (summary of ALE at a point in time) Statement of cash flow (cash inflows + external investments, cash coming and leaving, can be manipulative [operating, investing, and financing activities])

9. What is a bank limitation and why is it needed?

Internal report prepared to verify the accuracy of both the bank account and cash account of a business or an individual (Why it is needed in depth) Your Bank May not know about: 1. Errors made by the bank 2. Time lags (deposits you made recently and checks wrote recently) You May not know about: 1. Interest bank put into your account 2. ETFs 3. Service charges taken out of your account 4. Customer checks you deposited for which customer did not have sufficient funds (NSF) 5. Errors made by you

Define Treasury Stock

Is a corporation's own stock, reacquired after having been issued and fully paid

18. During its first year of operations, Drone Zone Corporation (DZC) bought goods from a manufacturer on account at a cost of $60,000. DZC returned $9,000 of this merchandise to the manufacturer for credit on its account. DZC then sold $48,000 of the remaining goods at a selling price of $74,600. DZC records sales returns as they occur and then records estimated additional returns at year-end. During the year, customers returned goods and were issued gift cards that had been sold at a price of $7,800. These goods were in perfect condition, so they were put back into DZC's inventory at their cost of $5,000. At year-end, DZC estimated $10,010 of current year merchandise sales would be returned to DZC in the following year; DZC estimates $6,300 as its cost of this merchandise. Prepare journal entries to record DZC's transactions and estimates, assuming DZC uses a perpetual inventory system

Journal Entries Inventory Dr 60,000 Accounts Payable Cr 60,000 Accounts Payable Dr 9,000 Inventory Cr 9,000 Cash Dr 74,600 Sales Revenue Cr 74,600 COGS Dr 48,000 Inventory Cr 48,000 Sales returns and allowances Dr 7,800 Deferred Revenue Cr 7,800 Inventory Dr 5,000 COGS Cr 5,000 Sales return and allowance Dr 10,010 Refund Liability Cr 10,010 Inventory Estimated Return 6,300 COGS 6,300

22. On October 5, your company buys and receives inventory costing $6,900, on terms 2/30, n/60. On October 20, your company pays the amount owed relating to the October 5 purchase. Prepare the journal entries needed on October 5 and 20, assuming the company uses a perpetual system and records purchase discounts using the GROSS method.

Oct 5 Inventory Dr 6900 Cash Cr 6900 Oct 20 Accounts Payable Dr 6900 Cash Cr 6762 Inventory Cr 138 NET METHOD.... Oct 5 Inventory Dr 6762 Cash Cr 6762 Oct 20 Accounts Payable Dr 6762 Cash Cr 6762

5. What are the three sides of the fraud triangle?

Opportunity, Incentive, Rationalization

14. Dillard's, Inc. operates department stores located primarily in the Southwest, Southeast, and Midwest. In its 2019 second-quarter report, the company reported Cost of Goods Sold of $1,030 million, ending inventory for the second quarter of $1,600 million, and ending inventory for the previous quarter of $1,830 billion.

P = COGS + EI - BI 1030 + 1600 - 1830 = 800 million in purchases

COGS equation for periodic and perpetual

Periodic: BI + P - EI = COGS Perpetual: BI + P - COGS = EI

For each of the following independent situations, prepare journal entries to record the initial transaction on September 30 and the adjustment required on October 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Hockey Helpers paid $2,800 cash on September 30 to rent an arena for the months of October and November. Super Stage Shows received $14,800 on September 30 for season tickets that admit patrons to a theatre event that will be held twice (on October 31 and November 30). Risky Ventures paid $2,100 on September 30 for insurance coverage for the months of October, November, and December.

Sept 30 Dr Prepaid Rent 2800 Cr Cash 2800 Oct 31 Dr Rent Expense 1400 Cr Repaid Rent 1400 Sept 30 Dr Cash 14800 Cr Deferred Revenue 14800 (haven't earned it yet) Oct 31 Dr Deferred Revenue 7400 Cr Service Revenue 7400 Sept 30 Dr Prepaid Insurance 2100 Cr Cash 2100 Oct 31 Dr Insurance Expense 700 Cr Prepaid Insurance 700

10. What is the difference between a service and merchandising company?

Service: Sell Service -> Collect Cash Merchandise: Buy inventory -> sell inventory -> Collect Cash(both pay operating expenses) Service sells time/skill, whereas merchandise sells good/product

What are the three forms of organization and what are the pros/cons of each of them?

Sole Proprietorship - one person owns the business and keeps all profit, yet they are personally liable for all debts of the company (taxed once) Partnership - two people split the profit, yet both are personally liable for all the debt the company takes on (taxed once) Corporation - the owners are stockholders and split the profit amongst many people, however, they are not liable for any debt (taxed twice)

Define Stock options

Stock options allow employees to purchase stock at a later date from the corporation at a fraction of the stock's market price.

The following transactions are February activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern United States. If revenue is to be recognized in February, indicate the amount. Swing Hard collected $22,800 from customers for lesson services given in February Swing Hard sold a gift card for golf lessons for $185 cash in February Swing Hard received $4,800 from services provided on account to customers in January Swing Hard collected $3,300 in advance payments for services to start in June Swing Hard billed a customer $210 for services provided between February 25 and February

Swing Hard collected $22,800 from customers for lesson services given in February 22,800 Swing Hard sold a gift card for golf lessons for $185 cash in February 0 Swing Hard received $4,800 from services provided on account to customers in January 0 Swing Hard collected $3,300 in advance payments for services to start in June 0 Swing Hard billed a customer $210 for services provided between February 25 and February 28 210

19. A company that usually sells satellite TV equipment for $74 and two years of satellite TV service for $650 has a special, time-limited offer in which it sells the equipment for $420 and gives the two years of satellite service for "free." If the company sells one of these packages on July 1, how much revenue should the company recognize on July 1 when it delivers the equipment and receives the full price in cash?

TV + Service = 74 + 650 = 724 / Bundle = 420 Equipment = 74/725 = 10% , 650/725 = 90% Company should recognize the equipment being sold as a two service is not earned yet, so 420 x 10% = 42 dollars, which should be recognized as the revenue for the equipment

4. On September 30, Hector's petty cash fund of $125 is replenished. At the time, the cash box contained $23 cash and receipts for taxi fares ($50), delivery charges ($17), and office supplies ($35). Prepare the journal entry to record the replenishment of the fund.

Travel Expense (Dr: 50), Delivery Expense (Dr: 17), Supplies Expense (Dr: 35) / Cash (Cr: 102)

If a company forgot to record depreciation on equipment for a period, Total Assets would be overstated, and Total Stockholders' Equity would be overstated on the Balance Sheet.

True

Bantam company calculated its net income to be $38,775 based on the unadjusted trial balance. The following adjusting entries were then made for: Salaries and wages owed but not yet paid of $395. Interest earned but not received from investments of $375. Prepaid insurance premiums amounting to $275 have expired. Deferred revenue in the amount of $375 has now been earned.

Unadjusted net income − Increase in salaries and wages expense + Increase in interest earned − Increase in insurance expense + Increase in revenues earned = $38,775 − $395 + $375 − $275 + $375 = $38,855.

2. Use the following bank statement and T-account to identify outstanding checks that should be included in the May 31 bank reconciliation

When looking at bank statement and T-account, in order to point out outstanding checks, simply look at credit for checks and check if their checks have been cashed in the date column.

Under accrual basis accounting, expenses are recognized when incurred. The following transactions occurred in January: Required: For each of the transactions, if an expense is to be recognized in January, indicate the amount. (Enter your answers in dollars but not in millions.)

a. American Express paid its salespersons $3,500 in commissions related to December sales of financial advisory services. Answer from American Express's standpoint. 0 b. On January 31, American Express determined that it will pay its salespersons $4,200 in commissions related to January sales. The payment will be made in early February. Answer from American Express's standpoint. 4200 c. The city of Omaha hired Waste Management, Inc., to provide trash collection services beginning January 1. The city paid $12 million for the entire year. Answer from the city's standpoint. 1 mill d. The University of Florida paid $10,000 in advance for refundable airline tickets to fly the baseball team to a tournament in California. The first game will be played in March. Answer from the university's standpoint. 0 e. A Houston Community College employee worked eight hours, at $15 per hour, on January 31; payday is not until February 3. Answer from the college's point of view. 120 f. Wang Company paid $3,600 for a fire insurance policy on January 1. The policy covers 12 months beginning on January 1. Answer from Wang's point of view. 300 g. Ziegler Company, a farm equipment company, received a phone bill for $230 of January calls. The bill has not been paid to date. 230

1. For the following transactions, prepare journal entries needed to adjust the company's books. Outstanding check's of $13,300 Bank service charge of $35 Deposit in transit of $3600 Interest earned of $18

a. No Journal Entry Required b. Bank Charges Expense (Dr: 35) Cash (Cr: 35) c. No Journal Entry Required d. Cash (Dr: 18) Interest Revenue (Cr: 18)

Which of the following accounts will have a zero balance on a post-closing trial balance?

dividends

17. Nord Store's perpetual accounting system indicated ending inventory of $21,000, cost of goods sold of $105,000, and net sales of $160,000. A year-end inventory count determined that goods costing $15,500 were actually on hand. A. Calculate the cost of shrinkage B. Calculate an adjusted cost of goods sold (assuming shrinkage is charged to cost of goods sold). C. Calculate gross profit percentage before shrinkage. D. Calculate gross profit percentage after shrinkage.

gross profit % = gross profit / net sales x 100% Cost of Shrinkage: Ending Inventory (based on perpetual) $ 21,000 Less: Actual Ending Inventory $ 15,500 Shrinkage$ 5,500 Adjusted Cost of Good Sold = Cost of good Sold + Shrinkage 105000+5500=110500 (net sales - cogs)/net sales (160000-105000)/(160000)=0.34375=34.38% adjusted (160000-110500)/(160000)=0.309375=30.94%

What are the two types of inventory?

merchandising - buy finished goods, sell finished goods manufacturing - buy raw materials, produce and sell finished goods (Raw materials - materials waiting to be processed, Work in process - partially completed products, Finished goods - completed goods awaiting sale)

Lakeside Indoor Tennis Club (LITC) sells a tennis membership for $2,400 per year, which entitles members to 50 "free" court bookings. The price for nonmembers is $40 per court booking. LITC's membership also allows members to participate in a competitive league without charge, whereas nonmembers pay a league fee of $500. How many different types of performance obligations exist for LITC when it sells a tennis membership?

two

What are stockholder benefits?

voting rights, dividends, residual claims, preemptive rights