Project #55817 - Accounting

UMUC – ACCT 220

QUIZ 1

You should open this quiz, save the document with your filename, work through the problems, add your answers to your saved document and then submit it via the LEO Assignments location for Quiz 1.

The Quiz has 100 points, and counts for 15% of your Final Grade.

 

PLEASE NOTE: YOU MUST SUBMIT A WORD-PROCESSED QUIZ. I WILL NOT ACCEPT A HAND-WRITTEN, SCANNED IN QUIZ!

The quiz is based on Chapters 2 through 6 of Hermanson et al.

 

Directions: Please complete the following 7 parts. You can use the answer sheets at the end of this document to complete this Quiz.

 

Part 1. Writing journal entries (Chapters 2 and 3). 2.5 points per JE – 25 points.

Please write a journal entry for the following 10 transactions, for Lillian’s Cooking School. All of the events listed below occurred in October. On the answer sheet, be sure to number your journal entries. Write the debit entry first and the credit entry second.

 

1.      Lillian purchased $700 in cooking supplies for Cash

2.      Lillian’s accountant paid $550 of the balance due in Accounts Payable

3.      Lillian sent out bills to three new clients who signed up and took a cooking class. The customers owe a total of $1,200 for classes they took last week.

4.      After getting an unexpected check from her favorite aunt, Lillian invested $25,000 in her business, buying Capital Stock in her corporation.

5.      A new industrial-quality stove (Cooking Equipment) was purchased for the business, for $3,200. Lillian signed a promissory note for the stove.

6.      Employees were paid $2,800 for work done during October. Payday was October 14th.

7.      Maxwell paid for his wife to attend cooking classes in November. On October 16th, he paid the Cooking School $1,000, for classes that were scheduled to begin on November 7th.

8.      Lillian pays for her liability insurance 6 months in advance. On October 20th, she paid $3,000 for October through March of the following year.

9.      On October 24th, the company received a check for $600 from a customer, who paid the balance due on her account.

10.  Lillian held a cooking class on October 26th. Ten customers attended and paid $200 apiece for the class ($2,000 total).

Part 2. Prepare 8 adjusting journal entries (Chapter 4) 2.5 points per JE - 20 points. Use the below answer sheets to prepare 8 adjusting journal entries for Milly’s Spa, for the month of August.

 

1.      Prepaid rent includes monthly rent of $1,500 for each month for Milly’s Spa

  1. Milly’s Spa used up $600 worth of spa supplies in August
  2. Danisha paid $4,000 in June, to reserve spa treatments for all of the bridesmaids in her wedding. In August, the Spa provided the spa services to the bridesmaids.
  3. Milly’s Spa owed $11,500 in Wages to employees at the end of August.
  4. The business accrued $925 in interest in August, owed on a Note Payable. The interest will be paid when the note is repaid, next year.
  5. Milly has many regular customers who come in for spa treatments each month. Milly’s accountant sent out bills totaling $39,200 for services rendered during the month of August.
  6. Spa equipment is depreciated at a rate of $950 per month
  7. A local hotel contracts with Milly’s Spa to send hotel guests to receive complimentary spa treatments as part of its weekend packages. At month-end, Milly’s sent out a bill for $16,000 to the hotel for services rendered to hotel guests.

 

 

Part 3. Prepare Closing Entries – Ch. 5 (10 points). The Adjusted Trial Balance for Marilyn’s Auto Repair is shown below, for January. Prepare the four closing entries for Marilyn’s Auto Repair. Use the JE pages at the end of this quiz. HINT: The Income Summary has $49,825CR just before it is closed.

Marilyn’s Auto Repair

January 31 Adjusted Trial Balance

 

Adjusted Trial Balances

 

1/31/2013

Account Name

DR

CR

Cash

$24,300

 

A/R

$10,500

 

Repair Supplies

$800

 

Prepaid Insurance

$5,000

 

Prepaid Rent

$7,500

 

Furniture

$11,925

 

Accumulated Depreciation-Furniture

 

$2,700

Repair Equipment

$113,400

 

Accumulated Depreciation-Repair Equipment

 

$22,800

Land Held for Future Use (Investments)

$8,500

 

Accounts Payable

 

$16,500

Interest Payable

 

$300

Unearned Service Revenues

 

$2,200

Salaries Payable

 

 

Notes Payable (Due in three years)

 

$21,000

Capital Stock

 

$62,000

Retained Earnings

 

$12,600

Dividends

$8,000

 

Service Revenues

 

$64,000

Rent Expense

$1,500

 

Insurance Expense

 $1,000

 

Interest Expense

 $1,100

 

Salary Expense

$8,100

 

Repair Supplies Expense

 $475

 

Depreciation Expense-Furniture

 $800

 

Depreciation Expense-Repair Equipment

$1,200

 

TOTALS

$204,100

$204,100

 

 


 

Please use the information below to complete parts 4, 5 and 6. Income Statement, Statement of Retained Earnings and a Classified Balance Sheet – Ch. 5 (35 points). The following accounts for Fischer Tax Accounting Services are shown below. The accounts are listed in Alphabetical Order. Use the sheets at the end of the quiz to complete the Income Statement (10 points), Statement of Retained Earnings (10 points) and the Classified Balance Sheet (15 points). There are some check figures located on the answer sheets. There are no intangible assets.

 

Fischer Tax Accounting Services –12/31/14 Adjusted Trial Balance

 

DR

CR

Accumulated Depreciation - Computers

 

$2,160

Accumulated Depreciation - Furniture

 

$15,300

A/P

 

$14,200

A/R

$28,840

 

Capital Stock

 

$20,000

Cash

$19,440

 

Computers

$13,200

 

Depreciation Expense - Computers

$740

 

Depreciation Expense - Furniture

$860

 

Dividends

$6,400

 

Furniture

$30,700

 

Insurance Expense

$800

 

Interest Expense

$880

 

Interest Payable

 

$240

Investment in Real Estate

$19,000

 

Land

$6,800

 

Notes Payable (due in 2 years)

 

$32,240

Office Supplies

$640

 

Office Supplies Expense

$400

 

Prepaid Insurance

$4,000

 

Prepaid Rent

$10,000

 

Rent Expense

$2,000

 

Retained Earnings

 

$19,700

Salary Expense

$16,500

 

Salaries Payable

 

$4,000

Service Revenue

 

$51,600

Unearned Service Revenue

 

$1,760

TOTALS

$161,200

$161,200

 


 

Part 7. Matching Terms. Match each of the following 10 terms to the correct definition or description (10 points)

1.      Matching principle

2.      Going concern assumption

3.      Materiality

4.      Conservatism principle

5.      Cost principle

6.      Revenue recognition principle

7.      Periodicity (time period) principle

8.      Business entity concept

9.      Stable Dollar Assumption

10.  Money measurement

 

a)      Accounting and business activities are recorded in months, quarters and fiscal years

b)      It is assumed that a business will operate indefinitely

c)      Amounts earned from selling goods and services should be recorded when the goods/services are rendered, whether the customer has paid for them or not

d)      Sometimes the amounts of events or transactions are too small to be recorded individually. They are not significant

e)      Accounting transactions should be recorded at the amount that was exchanged

f)       Accounting transactions can be recorded using dollar values

g)      Effort should be made to record accounting information to avoid overstating of revenues or asset values. At the same time, understatement of liabilities or expenses should be avoided

h)      Expenses should be recorded during the same time period when the corresponding revenues were earned

i)        A business is considered to be separate from its owners (stockholders)

j)       The dollar is not likely to fluctuate in value much over time

 

 

 

Use these pages for your answers

 

Part 1 (Journal Entries for Lillian’s Cooking School) – No dates are needed for these October entries

JE #

 

Debit

Credit

1.

 

Cooking Supplies

700

 

 

 

     Cash

 

700

 

 

 

 

2.

 

Accounts Payable

550

 

 

 

     Cash

 

550

 

 

 

 

3.

 

Accounts Receivable

1,200

 

 

 

     Service Revenue

 

1,200

 

 

 

 

4.

 

 

 

 

 

 

 

 

 

 

 

 

 

5.

 

 

 

 

 

 

 

 

 

 

 

 

 

6.

 

 

 

 

 

 

 

 

 

 

 

 

 

7.

 

 

 

 

 

 

 

 

 

 

 

 

 

8.

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Part 1 (Journal Entries)

JE #

 

Debit

Credit

9.

 

 

 

 

 

 

 

 

 

 

 

 

 

10.

 

 

 

 

 

 

 

 

 

 

PART 2 – August ADJUSTING ENTRIES FOR MILLY’S SPA

 

 

1.

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

 

 

 

 

 

 

 

 

 

 

 

 

 

3.

 

 

 

 

 

 

 

 

 

 

 

 

 

4.

 

 

 

 

 

 

 

 

 

 

 

 

 

5.

 

 

 

 

 

 

 

 

 

 

 

 

 

6.

 

 

 

 

 

 

 

 

 

 

 

 

 

7.

 

 

 

 

 

 

 

 

 

 

 

 

 

8.

 

 

 

 

 

 

 

 

 

 

 

 

 

Part 3. Marilyn’s Auto Repair. Use this journal entry page to complete Part 3- (Closing entries).

HINT: The Income Summary has $49,825CR just before it is closed

 

 

 

Debit

Credit

1.

Close Revenue Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

Close Expense Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.

Close the Income Summary Account

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.

 

Close the Dividends Account

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Use this page to complete the Income Statement (Part 4)

Fischer’s Tax Services

Income Statement for the Year Ended December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

Part 5. Statement of Retained Earnings. Please complete a Statement of Retained Earnings for Fischer Tax Accounting Services.

Fischer Tax Accounting Services

Statement of Retained Earnings

For the Year Ended December 31, 2014

 

 

 

 

 

 

 

 

Retained Earnings, 12/31/2014

$42,720


 

Part 6. Use this page to prepare a Classified Balance Sheet. There are only 3 classes of assets (No Intangible Assets) - Check figures are in blue

Fischer Tax Accounting Services - Balance Sheet

December 31, 2014

ASSETS

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term Investments

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total PP&E

 

 

$33,240

 

 

 

 

Total Assets

 

 

 

$115,160

LIABILITIES AND OWNERS EQUITY

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term Liabilities

 

 

 

 

Total Liabilities

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

Capital Stock

 

 

 

Retained Earnings

 

 

 

Total Owners’ Equity

 

 

 

Total Liabilities and Owners Equity

 

 

 

 


 

Part 7. Matching Terms. Match each of the following 10 terms to the correct definition or description (10 points)

a)      Accounting and business activities are recorded in months, quarters and fiscal years

b)      It is assumed that a business will operate indefinitely

c)      Amounts earned from selling goods and services should be recorded when the goods/services are rendered, whether the customer has paid for them or not

d)      Sometimes the amounts of events or transactions are too small to be recorded individually. They are not significant

e)      Accounting transactions should be recorded at the amount that was exchanged

f)       Accounting transactions can be recorded using dollar values

g)      Effort should be made to record accounting information to avoid overstating of revenues or asset values. At the same time, understatement of liabilities or expenses should be avoided

h)      Expenses should be recorded during the same time period when the corresponding revenues were earned

i)        A business is considered to be separate from its owners (stockholders)

j)       The dollar is not likely to fluctuate in value much over time

 

Letter for definition

Term

 

1.      Matching principle

 

2.      Going concern assumption

 

3.      Materiality

 

4.      Conservatism principle

 

5.      Cost principle

 

6.      Revenue recognition principle

 

7.      Periodicity (time period) principle

 

8.      Business entity concept

 

9.      Stable Dollar Assumption

 

10.  Money measurement

 

 

 

 

Subject Business
Due By (Pacific Time) 02/02/2015 11:45 am
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy