Reference no: EM131218825

Instruction:.

Chapters: 1, 2, 3, 4

Your assignment must be planned, organized, typed properly, no hand written assignment will be accepted. Use pdf file to send your assignment.

Please note that this assignment is an excellent summary of what you have learned so far, and a great structure for your Mid-Term Test-1.

Question 1. Journalize the following business transactions in general journal form. Identify each transaction by number.

1. The owner, Rose Wier, invests $35,000 in cash to start a real estate office operating as a sole proprietorship.
2. Purchased $400 of office supplies on credit.
3. Purchased office equipment for $6,000, paying $2,500 in cash and signed a 30-day, $3,500, note payable.
4. Real estate commissions billed to clients amounted to $4,000.
5. Paid $700 in cash for the current month's rent.
6. Paid $200 cash on account for office supplies purchased in transaction 2.
7. Received a bill for $500 for advertising for the current month.
8. Paid $2,200 cash for office salaries.
9. Rose Wier withdrew $1,200 from the business for living expenses.
10. Received a cheque for $3,000 from a client in payment on account for commissions billed in transaction 4.

Question 2. Journalize the following business transactions in general journal form. Identify each transaction by number.

1. Jennie Beagle invests $25,000 cash to start a law firm, Legal Beagles, operating as a proprietorship.
2. Paid $2,100 cash for the first three month's rent.
3. Purchased office equipment for $10,000, paying $3,500 in cash and signed a 30-day, 5% note payable for $6,500.
4. Paid $600 cash for the purchase of office supplies.
5. Received a bill for $500 for advertising for the current month.
6. Billed $4,000 to clients for legal services.
7. Paid $200 cash on account for the advertising in transaction 5.
8. Paid $2,500 cash for office salaries.
9. Jennie withdrew $1,200 cash.
10. Received a cheque for $2,000 from a client in payment on account for services billed in transaction 6.

Question 3. The total weekly payroll for Fly-By Airlines is $700,000 ($100,000 per day). The company operates seven days a week and pays employees each Wednesday for the previous Monday-Sunday work week. Salaries were last paid on Wednesday, January 28 for the pay period ended January 25. The next pay date is Wednesday February 4. The company's year end is January 31.

Instructions
Prepare the journal entries to record the following:

a. The payment of salaries on January 28
b. The adjusting entry to accrue salaries at year end
c. The payment of salaries on February 4

Question 4. The following amounts are taken from the unadjusted trial balance of Woodstock Company at its year end, April 30 and are their normal balance (debit or credit). Woodstock records all prepaid expenses and revenue in their respective expense or revenue accounts when paid or received. Woodstock records adjusting entries annually when preparing its year-end financial statements.

	Prepaid rent	0
	Supplies	250
	Unearned revenue	0
	Service revenue	75,200
	Rent expense	12,100
	Supplies expense	940

The following transactions are included in the above account balances:

1. On April 1, through a $2,100 cheque, Woodstock's accountant paid both April and May rent and posted the full amount to Rent Expense

2. On April 22 supplies were purchased on account for $740. On April 30 a count of actual supplies on hand shows the remaining supplies to be $81.

3. On January 1 a customer paid $8,000 in advance for a service contract. As of April 30 the work was 40% complete.

Instructions

a. Journalize the transactions described as (1) through (3). Include the date
b. Prepare any adjusting entries required at April 30.

Question 5. Chris's Florist Shop records all prepaid costs as assets and all revenue collected in advance as liabilities, and makes adjustments only at its fiscal year end, which is June 30. All of Chris's purchases are for cash unless stated otherwise. The following information relates to Chris's June 30, 2014 year end, its first year of operations.

1. On July 2, 2013, Chris purchased equipment for $12,000. The equipment is expected to have a useful life of 8 years.
2. On August 1, 2013 a one-year insurance policy was purchased for $1,740.
3. On February 1, 2014 a corporate customer paid $2,080 as full payment for a one year contract for fresh flowers to be delivered to its offices every Monday morning. At June 30, 21 of the required 52 deliveries had been completed.
4. On July 2, 2013 Chris purchased enough supplies to last the entire first year of operations for $4,400. At June 30, 2014, Chris counted the supplies on hand and calculated the cost, which amounted to $1,035.
5. On May 31, 2014 Chris borrows $20,000 from the bank to increase the amount of inventory and expand the business. The interest rate on the loan is 6% and requires monthly payments of interest on the first of each month. The principal is due in one year's time. The first interest payment is due July 1.
6 Chris pays her store assistant on alternate Fridays. The last pay day in June was June 20 and the first pay day after year end is July 4. The assistant worked 30 hours during this period, of which 20 were in July, and the rest in June. The assistant earns $9.50 an hour.
7. June 28 is a busy day and Chris has to make deliveries to numerous customers. On July 5 she reviews her June billings, and realizes that she made one large sale for $325 on June 30 for flowers that were delivered, but for which no invoice was issued. The sale was to a regular customer who will pay promptly when the invoice is sent.

Instructions:
a. For each transaction, prepare any adjusting entries required at June 30, 2014.

Question 6. The following are selected unadjusted account balances as at December 31, 2014, the year end of Joseph's Law Firm:

Accounts receivable	$50,600
Prepaid insurance	12,600
Salaries payable	-0-
Fee revenue	456,000
Insurance expense	8,200
Salaries expense	115,000

Additional information obtained from a review of the law firm's records:

1. Work done for clients in December that will be invoiced in January is $9,800.

2. Prepaid insurance includes $12,600 paid for a one-year policy that was effective December 1, 2014.

3. Salaries are paid monthly on the 15th of each month. The salaries earned by employees from December 16 to 31st total $5,000.

Instructions

a. Prepare the December 31, 2014 adjusting entries required for these items.

Question 7. The adjusted account balances of Stine Company, at December 31, 2014, are as follows:

Cash	$12,700		Accounts payable	$  12,000
Accounts receivable	22,000		Notes payable	7,000
Prepaid insurance	10,000		Accumulated depreciation-
Equipment	40,000		equipment	14,000
Depreciation expense	7,000		Service revenue	27,000
B. Stine, drawings	1,500		B. Stine, capital	22,000
Advertising expense	400		Unearned service revenue	16,000
Rent expense	1,800
Salary expense	2,000
Insurance expense	600
	$98,000			$98,000

Instructions

a. Prepare closing entries for December 31, 2014.

b. Determine the balance in B. Stine's capital account after the entries have been posted.

Question 8. At March 31, 2014, account balances after adjustments for Maddux Cinema are as follows:

			Account Balances
Accounts			(After Adjustment)
Cash		$    6,000
Concession supplies		4,000
Theatre equipment		50,000
Accumulated depreciation-theatre equipment		12,000
Accounts payable		5,000
N. Maddux, capital		20,000
N. Maddux, drawings		12,000
Admission ticket revenues		60,000
Popcorn revenues		37,000
Candy revenues		19,000
Advertising expense		12,000
Concession supplies expense		19,000
Depreciation expense		4,000
Film rental expense		16,000
Rent expense		12,000
Salaries expense		13,000
Utilities expense		5,000

Instructions

a. Prepare the closing journal entries for Maddux Cinema.
b. Prepare a post-closing trial balance.

Question 9. Journalize the following business transactions in general journal form. Identify each transaction by number.

1. Received $35,000 cash as investment from Roche Stone, the company's owner.
2. Purchased equipment for $50,000, paying $15,000 in cash and giving a note payable for the remainder.
3. Paid $3,000 for a one-year insurance policy.
4. Billed customers for $12,500 of services provided on account.
5. Paid monthly rent of $1,500.
6. Performed $7,000 of services and immediately received $7,000 cash.
7. Collected $2,000 from customers on account.
8. Hired a secretary.
9. Paid the secretary his first week's salary of $500.

Question 10. a. Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.

1. The owner, Hank Williams, invested $50,000 to start a record Company operating as a sole proprietorship.
2. Received a $10,000 deposit from a customer to produce a record.
3. Purchased $15,000 of sound equipment using cash and a $10,000 loan.
4. Paid 6 months rent in advance. Monthly rent is $750.
5. Provided services for $12,500, half of which was collected in cash at the time of the sale.
6. Paid staff salaries of $3,000.
7. Paid himself $2,500.
8. Collected the remaining outstanding balance on customer accounts.
9. Paid the outstanding loan, in full, from the purchase of the sound equipment.

Question 11. Transactions for the Triple H Services company for the month of November are presented below:

1. Henry Highhat invested an additional $36,000 cash in the business.
2. Purchased land costing $18,000 for cash.
3. Purchased equipment costing $15,000 for $4,500 cash and the remainder on account.
4. Purchased supplies on account for $800.
5. Paid $3,000 for a one-year insurance policy.
6. Received $2,000 cash for services performed.
7. Received $4,000 for services previously performed on account.
8. Paid wages to employees for $2,500.
9. Paid $400 to Henry Highhat, the company's owner.

Instructions
Journalize each transaction and identify each transaction by number. You may omit journal explanations.

Question 12. Mike's Bike Repairs opened for business on November 1, 2014. The following transactions occurred in November:

Nov. 1 Mike Smith invested $5,000 cash in the business and contributed equipment valued at $2,300.
Nov. 3 Purchased supplies for cash $560.
Nov. 5 Completed services for customers who paid cash $400.
Nov. 6 Paid $660 for a one-year insurance policy. The policy takes effect November 1 and will expire October 31, 2015.
Nov. 8 Completed services for a major customer and invoiced the customer $1,000.
Nov. 15 Paid for printing advertising brochures $125. The brochures were distributed the same day.
Nov. 20 Received a bill from the utilities company for November utilities in the amount of $70. The amount is due December 4.
Nov. 25 Entered into a contract with a new customer who will use Mike's services for repairs on their entire fleet of rental bikes. The customer paid $800 in advance for repairs to be completed in December.
Nov. 30 Mike withdrew $1,200 for personal use.
Nov. 30 Received $600 cash from the customer billed on November 8.

Instructions
Journalize the above transactions. Explanations are not required.

Question 13. The following ledger accounts are used by the Runway Race Track:
Cash
Accounts Receivable
Prepaid Printing
Prepaid Rent
Unearned Admissions Revenue
Note Payable
Interest payable
Admissions Revenue
Concessions Revenue
Interest Expense
Printing Expense
Rent Expense

Instructions
For each of the transactions below, prepare the journal entry (if one is required) to record the initial transaction and then prepare the adjusting entry, if any, required on November 30, the end of the fiscal year.

a. On November 1, paid rent on the track facility for three months, $105,000.
b. On November 1, sold season tickets for admission to the racetrack. The racing season is year-round with 25 racing days each month. Season ticket sales totalled $900,000.
c. On November 1, borrowed $150,000 from their bank by issuing a 6% note payable due in three months. Interest is payable at maturity.
d. On November 5, schedules for 20 racing days in November, 25 racing days in December and 15 racing days in January were printed for $3,000.
e. The accountant for the concessions company reported that gross receipts for November were $140,000. Ten percent is due to Runway and will be remitted by December 10.