short answer acct exam

Below are amounts found in the income statements of three companies. For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) net income. For each company, calculate the gross profit ratio and indicate which company has the most favorable ratio.

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Bingerton Industries began the year with inventory of $85,000. Purchases of inventory on account during the year totaled $310,000. Inventory costing $335,000 was sold on account for $520,000. Required: Record transactions for the purchase and sale of inventory using a perpetual system.

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Calculate receivables ratios (LO5-8) E5-18 Below are amounts (in millions) from three companies' annual reports. Required: For each company, calculate the receivables turnover ratio and the average collection period (rounded to one decimal place). Which company appears most efficient in collecting cash from sales?

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E5-17 On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $600,000 to its supplier using a 12-month, 11% note. Record the following transactions for Shoemaker Corporation. The loan of $600,000 and acceptance of the note receivable on April 1, 2021. The adjustment for accrued interest on December 31, 2021. Cash collection of the note and interest on April 1, 2022.

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Lewis Incorporated and Clark Enterprises report the following amounts for the year. Lewis Clark Inventory (beginning): $24,000$ 50,000 Inventory(ending): 18,000 60,000 Purchases: 261,000 235,000 Purchase returns: 15,000 60,000 Calculate cost of goods sold for each company. Calculate the inventory turnover ratio for each company. Calculate the average days in inventory for each company. Explain which company appears to be managing its inventory more efficiently.

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Littleton Books has the following transactions during May. May 2 Purchases books on account from Readers Wholesale for $3,300, terms 1/10, n/30 .May 3 Pays cash for freight costs of $200 on books purchased from Readers. May 5 Returns books with a cost of $400 to Readers because part of the order is incorrect. May 10 Pays the full amount due to Readers. May 30 Sells all books purchased on May 2 (less those returned on May 5) for $4,000 on account. Required: Record the transactions of Littleton Books, assuming the company uses a perpetual inventory system. Assume that payment to Readers is made on May 24 instead of May 10. Record this payment.

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On October 31, 2021, Damon Company's general ledger shows a checking account balance of $8,397. The company's cash receipts for the month total $74,320, of which $71,295 has been deposited in the bank. In addition, the company has written checks for $72,467, of which $70,982 has been processed by the bank. The bank statement reveals an ending balance of $11,727 and includes the following items not yet recorded by Damon: bank service fees of $150, note receivable collected by the bank of $5,000, and interest earned on the account balance plus from the note of $320. After closer inspection, Damon realizes that the bank incorrectly charged the company's account $300 for an automatic withdrawal that should have been charged to another customer's account. The bank agrees to the error. Required: Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2021. Record the necessary entries to adjust the balance for cash.

13567 Cash 5,000 Note rec 5,000 Intrest rev 320 Service fee 150 Cash 150

On April 25, Foreman Electric installs wiring in a new home for $3,500 on account. However, on April 27, Foreman's electrical work does not pass inspection, and Foreman grants the customer an allowance of $600 because of the problem. The customer makes full payment of the balance owed, excluding the allowance, on April 30. Required: Record the credit sale on April 25. Record the sales allowance on April 27. Record the cash collection on April 30. Calculate net sales associated with these transactions.

4/25 acct rec 3,500 sales rev 3,500 4/27 Sales Allowance 600 acct rec. 600 4/30 Cash 2,9000 Acct rec 2,900 Net sales = 2,900 revenues - allowance

e4On August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,944. Cash receipts yet to be deposited into the checking account total $3,338, and checks written by the academy but not yet processed by the bank total $1,425. The company's balance of cash does not reflect a bank service fee of $35 and interest earned on the checking account of $46. These amounts are included in the balance of cash of $6,042 reported by the bank as of the end of August. Required: Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2021. Record the necessary entry(ies) to adjust the balance for cash.

7955 service fee exp. 35 cash. 35

During 2021, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2021, cash collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be uncollectible. In 2022, the company writes off uncollectible accounts of $10,000. Required: Record the adjustment for uncollectible accounts on December 31, 2021. Record the write-off of accounts receivable in 2022 and calculate the balance of Allowance for Uncollectible Accounts at the end of 2022 (before adjustment in 2022). Assume the same facts as above but assume actual write-offs in 2022 were $15,000. Record the write-off of accounts receivable in 2022 and calculate the balance of Allowance for Uncollectible Accounts at the end of 2022 (before adjustment in 2022).

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Below are cash transactions for Goldman Incorporated, which provides consulting services related to mining of precious metals. Cash used for purchase of office supplies, $2,400. Cash provided from consulting to customers, $50,600. Cash used for purchase of mining equipment, $83,000. Cash provided from long-term borrowing, $70,000. Cash used for payment of employee salaries, $25,000. Cash used for payment of office rent, $13,000. Cash provided from sale of equipment purchased in c. above, $23,500. Cash used to repay a portion of the long-term borrowing in d. above, $45,000. Cash used to pay office utilities, $5,300. Purchase of company vehicle, paying $11,000 cash. Calculate cash flows from operating activities. Calculate cash flows from investing activities.

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