Accounting Final Exam - Journal Entry Section (some short problems also)

Cullumber Company had the following two transactions related to its delivery truck. 1.Paid $51 for an oil change. 2.Paid $560 to install special shelving units, which increase the operating efficiency of the truck.

1. Debit: Maintenance and Repairs Expense 51 Credit: Cash 51 2. Debit: Equipment 560 Credit: Cash 560

On January 10, 2022, Shamrock, Inc. sold merchandise on account to Tompkins for $8,060, terms n/30. On February 9, Tompkins gave Shamrock, Inc. a 8% promissory note in settlement of this account.

1/10 Debit: A/R 8060 Credit: Sales Revenue 8060 2/9 Debit: N/R 8060 Credit: A/R 8060

On January 1, 2022, Blossom Company had a balance of $416,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions Jan. 2Purchased a patent (5-year life) $337,050. July 1 Acquired a 9-year franchise; expiration date July 1, 2031, $568,800. Sept. 1 Research and development costs $180,500.

1/2 Debit: Patents 337050 Credit: Cash 337050 7/1 Debit: Franchise 568800 Credit: Cash 568800 9/1 Debit: Research and Development Expense 180500 Credit: Cash 180500

Flint Corporation has 9,000 shares of common stock outstanding. It declares a $4 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend.

11/1 Debit: Cash Dividends 36000 (9000x4) Credit: Dividends Payable 36000 12/31 Debit: Dividends Payable 36000 Credit: Cash 36000

Crane Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. Nov.1 Loaned $52,800 cash to C. Bohr on a 12-month, 8% note. Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $3,600, 90-day, 9% note. Dec. 16 Received a $7,200, 180-day, 9% note to settle an open account from A. Murdock. Dec. 31 Accrued interest revenue on all notes receivable.

11/1 Debit: N/R 52800 Credit: Cash 52800 12/11 Debit: N/R 3600 Credit: Sales Revenue 3600 12/16 Debit: N/R 7200 Credit: A/R 7200 12/31 Debit: Interest Receivable 749 Credit: Interest Revenue 749 Math for 749: (52800 x 0.08 x 2/12) + (3600 x 0.09 x 20/360) + (7200 x 0.09 x 15/360)

Blossom Company markets CDs of numerous performing artists. At the beginning of March, Blossom had in beginning inventory 2,500 CDs with a unit cost of $8. During March, Blossom made the following purchases of CDs. March 5 2,200 @ $9 March 13 3,200 @ $10 March 21 4,900 @ $11 March 26 2,200 @ $12 During March 11,700 units were sold. Blossom uses a periodic inventory system. b) Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost).

15000-11700= 3300 units left FIFO: Ending Inventory: (2200x11) + (1100 x 12) = 38500 COGS= 152100-38500 = 113600 LIFO: Ending Inventory: (2500 x 8) + (800 x 9) = 27200 COGS= 152100-27200 = 124900 Average Cost: Ending Inventory = (3300)(10.14) = 33,462 COGS= 152100 - 33462 = 118638

Ivanhoe Company purchased a new machine on October 1, 2022, at a cost of $68,220. The company estimated that the machine has a salvage value of $6,540. The machine is expected to be used for 70,400 working hours during its 6-year life. Compute the depreciation expense under the straight-line method for 2022 and 2023, assuming a December 31 year-end.

2022---> 2,570 2023---> 10280 Math: (68220-6540)/6540 = 10280 (10280)(3/12) = 2570 The 3/12 comes from October 1 to December 31 (3 months)

Blue Spruce Corp. took a physical inventory on December 31 and determined that goods costing $229,500 were on hand. Not included in the physical count were $30,000 of goods purchased from Blossom Company, FOB, shipping point, and $25,500 of goods sold to Splish Brothers Inc. for $33,000, FOB destination. Both the Blossom purchase and the Splish Brothers sale were in transit at year-end. What amount should Blue Spruce report as its December 31 inventory?

229500+30000+25500= 285000

Cullumber Company incurs these expenditures in purchasing a truck: cash price $26,070, accident insurance (during use) $1,780, sales taxes $1,550, motor vehicle license $320, and painting and lettering $2,050. What is the cost of the truck?

29670 26070+1550+2050

These transactions took place for Nash's Trading Post, LLC 2021 May 1 Received a $7,400, 12-month, 6% note in exchange for an outstanding account receivable from R. Stoney. Dec.31 Accrued interest revenue on the R. Stoney note. 2022 May 1 Received principal plus interest on the R. Stoney note. (No interest has been accrued since December 31, 2021.)

5/1/21 Debit: N/R 7400 Credit: A/R 7400 12/31/21 Debit: Interest Receivable 296 ((7400/12) x0.06)x8 Credit: Interest Revenue 296 5/1/22 Debit: Cash 7844 (7400+148+296) Credit: Interest Revenue 148 (296/2) Credit: Interest Receivable 296 Credit: Notes Receivable 7400

These expenditures were incurred by Blossom Company in purchasing land: cash price $57,780, assumed accrued taxes $5,440, attorney's fees $2,880, real estate broker's commission $3,170, and clearing and grading $4,790. What is the cost of the land?

74060 57780+5440+2880+3170+4790

Journal Entry for Collection of Electronic Funds Transfer

Debit: Cash (EFT # given) Credit: A/R (EFT # given)

Blossom Company markets CDs of numerous performing artists. At the beginning of March, Blossom had in beginning inventory 2,500 CDs with a unit cost of $8. During March, Blossom made the following purchases of CDs. March 5 2,200 @ $9 March 13 3,200 @ $10 March 21 4,900 @ $11 March 26 2,200 @ $12 During March 11,700 units were sold. Blossom uses a periodic inventory system. a) Calculate The cost of goods available for sale and Average Cost

COG Available For Sale = (2500x8)+(2200x9)+(3200x10)+(4900x11)+(2200x12) = 152100 Total Units = 2500+2200+3200+4900+2200= 15000 Average Cost = 152100/15000 = 10.14

Journal Entry to Record a Book Error

Debit: Cash (value of error of recording check) Credit: A/P (value of error of recording check)

On March 6, Wildhorse Company returned $105,700 of the merchandise purchased on March 2. The cost of the merchandise returned was $68,600. (BUYER)

Debit: A/P 105700 Credit: Inventory 105700

Paid creditor $220 cash on account.

Debit: A/P 220 Credit: Cash 220

On June 19, Skysong Company pays Sheridan Company in full, less the purchase discount. Both companies use a perpetual inventory system. (buyer)

Debit: A/P 6900 (7700-800) Debit: Inventory 207 (6900-6693) Credit: Cash 6693 (6900 x 0.97---> from the 3% at the beginning)

Paid $770 due for supplies previously purchased on account.

Debit: A/P 770 Credit: Cash 770

Goods totaling $800 are returned to Sheridan for credit on June 12. (buyer)

Debit: A/P 800 Credit: Inventory 800

On March 12, Windsor Company received the balance due from Wildhorse Company. (BUYER)

Debit: A/P 841900 (947600-105700) Credit: Inventory 25257 (841900-816643) Credit: Cash 816643 (841900 x 0.97)

Journal Entry to Record NSF Check

Debit: A/R (NSF Check value) Credit: Cash (NSF Check value)

Billed customers $4,650 for services performed. (star)

Debit: A/R 4650 Credit: Service Revenue 4650

On June 10, Skysong Company purchased $7,700 of merchandise from Sheridan Company, on account, terms 3/10, n/30. The merchandise purchased by Skysong on June 10 cost Sheridan $2,440. (seller)

Debit: A/R 7700 Credit: Service Revenue 7700 Debit: COGS 2440 Credit: Inventory 2440

On March 2, Oriole Company sold $878,600 of merchandise to Sage Hill Company on account, terms 3/10, n/30. The cost of the merchandise sold was $562,200. (SELLER)

Debit: A/R 878600 Credit: Service Revenue 878600 Debit: COGS 562200 Credit: Inventory 562200

Paid $230 cash for advertising at the start of the business.

Debit: Advertising Expense 230 Credit: Cash 230

Journal Entry for Bank Charge Expense

Debit: Bank Charge Expense (Bank Charge Expense value) Credit: Cash (Bank Charge Expense value)

On July 4, Cullumber's Restaurant accepts a Visa card for a $1,350 dinner bill. Visa charges a 2% service fee. Journal Entry?

Debit: Cash 1323 (1350-27) Debit: Service Charge Expense 27 (1350 x 0.02) Credit: Sales Revenue 1350

Sold 140 coupon books for $10 each in cash. Each book contains 10 coupons that enable the holder to play one round of miniature golf or to hit one bucket of golf balls. (Hint: The revenue should not be recognized until the customers use the coupons.)

Debit: Cash 1400 (140x10) Credit: Unearned Service Revenue 1400

Received $1,470 cash from customers billed in transaction (star)

Debit: Cash 1470 Credit: A/R 1470

Issued stock to investors for $16,800 in cash.

Debit: Cash 16800 Credit: Common Stock 16800

Teal Mountain Inc. issues $259,000, 10-year, 8% bonds at 99. Prepare the journal entry to record the sale of these bonds on March 1, 2022.

Debit: Cash 256410 (259000 x 0.99) Debit: Discount on Bonds Payable 2590 (259000-256410) Credit: B/P 259000

On May 10, Flint Corporation issues 2,900 shares of $4 par value common stock for cash at $12 per share. Journalize the issuance of the stock.

Debit: Cash 34800 (2900 x 12) Credit: PIC of Excess Par Value-Common Stock 23200 (34800-11600) Credit: Common Stock 11600 (2900x4)

On June 19, Skysong Company pays Sheridan Company in full, less the purchase discount. Both companies use a perpetual inventory system. (seller)

Debit: Cash 6693 (6900 x 0.97) Debit: Sales Discount 207 (6900-6693) Credit: A/R 6900 (7700-800)

On March 12, Oriole Company received the balance due from Sage Hill Company. (SELLER)

Debit: Cash 737006 (759800 x 0.97) Credit: Sales Discount 22794 (759800-737006) Credit: A/R 759800 (878600-118800)

Paid dividends of $320 cash to stockholders.

Debit: Dividends 320 Credit: Cash 320

Purchased used car for $11,000 cash for use in business.

Debit: Equipment 11000 Credit: Cash 11000

Skysong pays the freight costs of $430 on June 11. (buyer)

Debit: Inventory 430 Credit: Cash 430

On June 10, Skysong Company purchased $7,700 of merchandise from Sheridan Company, on account, terms 3/10, n/30. (buyer)

Debit: Inventory 7700 Credit: A/P 7700

On March 2, Windsor Company sold $947,600 of merchandise to Wildhorse Company on account, terms 3/10, n/30. The cost of the merchandise sold was $534,200. (BUYER)

Debit: Inventory 947600 Credit: A/P 947600

Purchased Snead's Golf Land for $43,200 cash. The price consists of land $24,700, building $9,650, and equipment $8,850.

Debit: Land 24700 Debit: Buildings 9650 Debit: Equipment 8850 Credit: Cash 43200

Received bill for equipment repairs of $900.

Debit: Maintenance and Repairs Expense 900 Credit: Cash 900

Paid $1,150 for 12 months of insurance policy. Coverage begins June 1.

Debit: Prepaid Insurance 1150 Credit: Cash 1150

On July 1, 2022, Ivanhoe Company pays $13,000 to Sunland Company for a 1-year insurance contract. Both companies have fiscal years ending December 31.

Debit: Prepaid Insurance 13000 Credit: Cash 13000 Debit: Insurance Expense 6500 (13000/2) Credit: Prepaid Insurance 6500

Paid employees $520 in cash.

Debit: Salaries and Wages Expense 520 Credit: Cash 520

On March 6, Sage Hill Company returned $118,800 of the merchandise purchased on March 2. The cost of the merchandise returned was $61,000. (SELLER)

Debit: Sales R+A 118800 Credit: A/R 118800 Debit: Inventory 61000 Credit: COGS 61000

Goods totaling $800 are returned to Sheridan for credit on June 12. Assume that the goods returned cost Sheridan $270. (seller)

Debit: Sales R+A 800 Credit: A/R 800 Debit: Inventory 270 Credit: COGS 270

Purchased supplies on account for $250.

Debit: Supplies 250 Credit: A/P 250

Ivanhoe Company's trial balance at December 31 shows Supplies $8,770 and Supplies Expense $0. On December 31, there are $2,130 of supplies on hand.

Debit: Supplies Expense 6640 (8770-2130) Credit: Supplies 6640

On July 1, Shamrock, Inc. purchases 510 shares of its $5 par value common stock for the treasury at a cash price of $8 per share. Journalize the treasury stock transaction.

Debit: Treasury Stock 4080 (510x8) Credit: Cash 4080

Paid utilities $420.

Debit: Utilities Expense 420 Credit: Cash 420

On January 6, Blossom Company sells merchandise on account to Harley Inc. for $11,500, terms 3/10, n/30. On January 16, Harley pays the amount due. Prepare the entries on Blossom Company's books to record the sale and related collection.

Jan.6 Debit: A/R 11500 Credit: Sales Revenue 11500 Jan.16 Debit: Cash 11155 (11500x0.97) Debit: Sales Discount 345 (11500-11155) Credit: A/R 11500

Hires an administrative assistant at an annual salary of $32,160.

No Entry No Entry

Skysong pays the freight costs of $430 on June 11. (seller)

No Entry No Entry

Cullumber Company reports the following information (in millions) during a recent year: net sales, $11,898.0; net earnings, $396.6; total assets, ending, $5,825.0; and total assets, beginning, $4,090.0. Calculate the (1) return on assets, (2) asset turnover, and (3) profit margin.

Return on Assets = 396.6/ [(5,825+4090)/2] = 8.0% Asset Turnover = 11,898 / [(5825+4090)/2] = 2.4 Profit Margin = 396.6/11898.0 = 3.3%

In its first month of operations, Vaughn Manufacturing made three purchases of merchandise in the following sequence: (1) 300 units at $4, (2) 400 units at $5, and (3) 500 units at $8. a) Calculate average unit cost b) Compute the cost of the ending inventory under the average-cost method, assuming there are 200 units on hand at the end of the period.

a) (300x4)+(400x5)+(500x8)= 7200 300+400+500=1200 7200/1200=6 b) (200)(6)=1200

(a) On July 1, Carla Vista Co. sold merchandise on account to Stacey Inc. for $25,230, terms 4/10, n/30. (b) On July 8, Stacey Inc. returned merchandise worth $5,230 to Carla Vista Co. (c) On July 11, Stacey Inc. paid for the merchandise.

a) Debit: A/R 25230 Credit: Sales Revenue 25230 b) Debit: Sales R+A 5230 Credit: A/R 5230 c) Debit: Cash 19200 (20000x0.96) Credit: Sales Discount 800 (20000-19200) Credit: A/R 20000 (25230-5230)

(a)Crane Company retires its delivery equipment, which cost $52,900. Accumulated depreciation is also $52,900 on this delivery equipment. No salvage value is received. (b)Assume the same information as in part (a), except that accumulated depreciation for the equipment is $37,130 instead of 52,900.

a) Debit: AD- Equip. 52900 Credit: Equipment 52900 b) Debit: AD-Equip. 37130 Debit: Loss on Disposal PA 15770 (52900-37130) Credit: Equipment 52900

Assume that after calculating the estimated value of bad debts, you get a total of 12,430. a) Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined above. Assume the unadjusted balance in Allowance for Doubtful Accounts is a $3,800 debit. b) Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. c)The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in part (c). Prepare the journal entries necessary to (1) restore the account and (2) record the cash collection.

a) Debit: Bad Debt Expense 16230 Credit: Allowance for Doubtful Accounts 16230 b) Debit: Allowance for Doubtful Accounts 5000 Credit: A/R 5000 c) Debit: A/R 5000 Credit: Allowance for Doubtful Accounts 5000 Debit: Cash 5000 Credit: A/R 5000

The ledger of Marin Inc. at the end of the current year shows Accounts Receivable $86,000; Credit Sales $800,000; and Sales Returns and Allowances $44,000. (a)If Marin uses the direct write-off method to account for uncollectible accounts, journalize the entry if on December 31 Marin determines that Matisse Company's $700 balance is uncollectible. (b)If Allowance for Doubtful Accounts has a credit balance of $1,300 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable. (c)If Allowance for Doubtful Accounts has a debit balance of $450 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.

a) Debit: Bad Debt Expense 700 Credit: A/R 700 b) Debit: Bad Debt Expense 7300 Credit: Allowance for Doubtful Accounts 7300 c) Debit: Bad Debt Expense 7330 Credit: Allowance for Doubtful Accounts 7330

At December 31, 2022, the trial balance of Kingbird, Inc. contained the following amounts before adjustment. Accounts Receivable debited for $189,400 Allowance for Doubtful Accounts credited for $1,370 Sales Revenue credited for $812,100 (a) Prepare the adjusting entry at December 31, 2022, to record bad debt expense, assuming that the aging schedule indicates that $9,570 of accounts receivable will be uncollectible. (b) Repeat part (a), assuming that instead of a credit balance there is a $1,370 debit balance in Allowance for Doubtful Accounts. (c) During the next month, January 2023, a $2,010 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off. (d) Repeat part (c), assuming that Kingbird, Inc. uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.

a) Debit: Bad Debt Expense 8200 (9570-1370) Credit: Allowance for Doubtful Accounts 8200 b) Debit: Bad Debt Expense 10940 (9570+1370) Credit: Allowance for Doubtful Accounts 10940 (9570+1370) c) Debit: Allowance for Doubtful Accounts 2010 Credit: A/R 2010 d) Debit: Bad Debt Expense 2010 Credit: A/R 2010

Indigo Corporation was organized on January 1, 2022. It is authorized to issue 19,200 shares of 7%, $50 par value preferred stock and 470,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year. a) Issued 75,000 shares of common stock for cash at $5 per share. b) aIssued 1,300 shares of preferred stock for cash at $55 per share.

a) Debit: Cash 375000 (75000x5) Credit: Common Stock 150000 (75000x2) Credit: PIC of Excess Stated Value- CS 225000 (375000-150000) b) Debit: Cash 71500 (1300 x 55) Credit: Preferred Stock 65000 (1300 x 50) Credit: PIC of Excess Stated Value- PS 6500 (71500-65000)

The cash register tape for Windsor Industries reported sales of $8,383.20. Record the journal entry that would be necessary for each of the following situations. (a) Sales per cash register tape exceeds cash on hand by $61.91. (b) Cash on hand exceeds cash reported by cash register tape by $34.54.

a) Debit: Cash 8321.29 (8383.20-61.91) Debit: Cash Over and Short 61.91 Credit: Sales Revenue 8383.20 b) Debit: Cash 8417.74 (8383.20+34.54) Debit: Cash Over and Short 34.54 Credit: Sales Revenue 8383.20

On June 1, Sandhill Co. Ltd. borrows $90,000 from Acme Bank on a 6-month, $90,000, 8% note. The note matures on December 1. a) Prepare the entry for June 1 b) Prepare the entry for June 30 c) Prepare the entry for December 1

a) Debit: Cash 90000 Credit: N/P 90000 b) Debit: Interest Expense 600 [(90000x0.080/12] Credit: Interest Payable 600 c) Debit: N/P 90000 Debit: I/P 3600 (600x6)---> 6 months (June-Dec.) Credit: Cash 93600 (90000+3600)