Reference no: EM13493056
3.1) Listed below in random order are the eight steps compromising a complete accounting cycle:
Prepare a trial balance.
Journalize and post the closing entries
Prepare financial statements.
Post transaction data to the ledger
Prepare an adjusted trial balance
Make end of period adjustments
Journalize transactions
Prepare an after closing trial balance
A) List these steps in the sequence in which they would normally be performed .
B) Describe ways in which the information produced through the accounting cycle is used by a company's management and employees
3.3) Brown Consulting services organized as a corporation on January 18 and engaged in the following transactions during its first two weeks of operation:
Jan 18: Issued capital stock in exchange for $30,000 cash.
Jan 22: Borrowed $20,000 from its bank by issuing a note payable
Jan23: Paid $100 for a radio advertisement aired on January 5
Jan 25: Provided $1,000 of service to clients for cash.
Jan 26: Provided $2,000 of services to clients on account
Jan 31: Collected $800 cash from clients for the services provided on January 26
A) Record each of these transactions.
B) Determine the balance in the Cash account on January 31. Be certain to state whether the balance is debit or credit.
3.5) Jackson Corporations retained earnings account balance was 75,000 on January 1. During January, the company recorded revenue of $100,000, expenses of $60,000, and dividends of $5,000. The company also purchased land during the period for $20,000 cash.
Determine the company's Retained Earning account balance on January 31.
4.3) The Golden Goals, a professional soccer team, prepares financial statements on a monthly basis.
The soccer season begins in May, but in April the team engaged in the following transactions:
1: Paid $1,200,000 to the municipal stadium as advance rent for use of the facilities for the five month period from May 1 through September 30. This payment was initially recorded as Prepaid Rent.
2: Collected $4,500,000 cash from the sale of season tickets for the team 's home games. The entire amount was initially recorded as Unearned Ticket Revenue. During the month of May the Golden goals played several home games at which $148,000 of the season tickets sold in April were used by fans.
4.4) Carnival Corporation is the world's largest cruise line company. In printing costs for brochures are initially recorded as Prepaid advertising and are later charged to Advertising Expense when they are mailed. Passenger deposits for upcoming cruises are considered unearned revenue and are recorded as Customer Deposits as cash is received. Deposited amounts are later converted to cruise revenue as voyages are completed.
A. Where in its financial statements does Carnival Corporation reports prepaid advertising?
Where in its financial statements does it report Customer Deposits?
B. Prepare the adjusting entry necessary when brochures costing $18 million are mailed.
C. In its most recent annual report. Carnival Corporations reported Customer Deposits in excess of 2.8 billion. Prepare the adjusting entry necessary in the following year as $90 million of this amount is earned.
D. Consider the entire adjusting process at Carnival Corporation. Which adjusting entry do you think results in the most significant expense reported in the company's income statement?
4.5) The geological consulting firm of Gilbert, Marsh, & Kester prepares adjusting entries on a monthly basis. Among the items requiring adjustments on December 31, 2011, are the following:
1. The company has outstanding a $50,000, 9 percent, two year note payable issued on July 1. 2010. Payment of the $50,000 note, plus all accrued interest for the two year loan period is due in full on June 30, 2012.
2. The firm is providing consulting services to Texas Oil Company at an agreed-upon rate of $1,000 per day. At December 31, 10 days of unbilled consulting services have been provided.
A. Prepare the two adjusting entires required on December 31 to record the accrued interest expense and the accrued consulting revenue earned.
B. Assume that the $50,000 note payable plus all accrued interest are paid in full on June 30, 2012. What portion of the total interest expense associated with this note will be reported in the firms 2012 income statement?
C. Assume that on January 30, 2012, Gilbert, Marsh, &Kester receive $25,000 from Texas Oil Company in full payment of the consulting services provided in December and January. What portion of this amount constitutes revenue earned in January?
5.1) During the current year, the total assets of Mifflinburg Corporation decreased by $60,000 and total liabilities decreased by $300,000. The company issued $100,000 of new stock, and its net income for the year was $250,000. No other changes to stockholders equity occurred during the year Determine the dollar amount of dividends declared by the company during the year.
5.3) Indicate in which section of the balance sheet each of the following accounts is classified. Use the symbols CA for current assets, NCA for noncurrent assets, CL for current liabilities, LTL for long term liabilities and SHE for stockholders equity.
a. Prepaid Rent f. Mortgage Payable(due in 15 years)
b. Dividends Payable g. Unearned service revenue
c. Salaries Payable h. Accounts Recievable
d. Accumulated Depreciation: Equipment i. Land
e. Retained Earning j. Office Supplies
5.4) Indicate whether a debit or credit is required to close each of the following accounts. Use the symbols D if a debit is required , C if a credit is required, N if the account is not closed at the end of the period.
a. Salary Expense l. Income Summary (of an unprofitable company)
b. Unexpired Insurance
c. Consulting Fees Earned
d. Depreciation Expense
e. Dividends
f. Retained Earning
g. Interest revenue
h. Accumulated Depreciation
i. Income Taxes Expense
j. Unearned Revenue
k. Income Summary (of a profitable company)
6.1) Office Today is an office supply store. Office today's revenue in the current year is $800 million and its cost of goods sold is $640 million. Compute Office Today's gross profit and it's gross profit percentage.
6.3) Alberto & Sons. Inc. a retailer of antique figurines, engages in the following transactions during October of the current year:
OCT.1 Purchases 100 Hummels at $50 each
Oct.5 Sells 50 of the Hummels at $80 each.
Compute Alberto & Son's gross profit for October.
6.5) Murphy Co. is a high end retailer of fine fashions for men. Murphy's inventory balance at the beginning of the year is $300,000, and Murphy's purchases $600,000 of goods during year. Its inventory balance at the end of then year is $250,000. What is the cost of goods sold for the year?
7.3. The Former bookkeeper of White Electric Supply is serving time in prison for embezzling nearly $416,000 in less than five years. She describes herself as "an ordinary mother of three kids and a proud grandmother of four. Like so many other ordinary employees she started out by taking only small amounts. By the time she was caught, she was stealing lump sums of $5,000 and $10,000.
Her method was crude and simple. She would then write a check payable to herself for the $5,000 difference. In the check register next to the number of each check she had deposited in her personal bank account, she would write the word "void", making it appear as though the check had been destroyed. This process went undetected for nearly five years.
a. What controls must have been lacking at White Electric Supply to enable the bookkeeper to steal nearly $416,000 before being caught?
b. What the bookkeeper did was definitely unethical. But what if one of her grandchildren had been ill and needed an expensive operation? If this had been the case , would it have been ethical for her to take company funds to pay for the operation if she intended to pay the company back in full? Defend your answer.