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University of Guelph
ACCT 2220
Linda Hunter

ACCT 2220 Winter 2013 Term Exam 1A Answer all questions in the exam booklet, except the multiple choice questions which must be answered on the exam itself. Question 1 (21 Marks) ABC Incorporated had the following accounts and balances at December 31, 2012: Cash 15,000 Unearned Revenue 1,500 Accounts Payable 30,000 Building 200,000 Salaries Expense 3,000 Depreciation expense 1,800 Accumulated Depreciation - Equipment 8,000 Bank Loan Payable, Due 2016 13,150 Land 100,000 Common Shares 170,000 Income Tax expense 750 Accounts Receivable 30,000 Retained Earnings, Jan 1 2012 82,000 Prepaid Insurance 1000 Revenue 10,000 Accumulated Depreciation - Building 80,000 Salaries Payable 900 Equipment 40,000 Rent expense 2,500 Supplies 500 Dividends 1,000 Additional information: During the year the company issued common shares for $120,000. Required: PART 1: Prepare a Statement of Changes in Equity PART 2: Answer in the following questions: 1. What is the carrying amount of the equipment? 2. What is the value of the total current assets? 3. What type of business activity is the issuance of common shares? 4. The company paid dividends of $1,000 during the year. Who are they paid to? Part 3: Prepare the closing entries for company. 1 Question 2 (14 marks) Prepare adjusting entries for the following transactions. Omit explanations. 1. Accrued interest on notes receivable is $95. 2. Unearned revenues earned totals $2,000. 3. Four months’ rent paid in advance totalled $60,000. Two months of rent have been used. 4. Services totalling $2,100 had been performed but not yet billed at the end of the year. 5. Equipment purchased two years ago for $18,000 had an estimated useful life of 4 years. The company records depreciation annually. 6. The balance in the Supplies account was $690 at the beginning of the year. By year end, only $100 in supplies remained. 7. Salaries owed to employees at the end of the year total $1,000. Question 3 (4 Marks) The following information is available from the 2012 financial statements of Hubble Corp. Sales $26,510 Profit 565 Current assets 11,712 Beginning total assets 17,102 Ending total assets 22,088 Current liabilities 7,966 Total liabilities
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