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RSM219H1 (32)
Final

# Winter 2012 - RSM219 - final exam-soluitons[1].doc

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School
University of Toronto St. George
Department
Rotman Commerce
Course
RSM219H1
Professor
Alexander Edwards
Semester
Fall

Description
RSM219 Exam – Solutions Winter 2012 Part A (15 marks) 1. A 2. B 3. D 4. D 5. D 6. D 7. D 8. C 9. D 10. A 11. C 12. B 13. C 14. D 15. B Part B ( 7 Marks) Case #1 1. ( 1 mark) Deposits per bank statement (July) = \$15,820 Less: deposits o/s June ( \$ 1,050) Deposits in July (Bank) \$ 14,770 Deposits per g/l (\$15,750) Deposits in Transit \$980 2. ( 1 mark) Cheques per bank statement (July) = \$16,660 Less: cheques o/s June ( \$ 970) Cheques in July (Bank) \$15,690 Cheques per g/l (\$17,200) o/s Cheques \$ 1,510 3. (2 marks) • Bank charges • Bank interest • NSF cheques • EFT deposits • EFT payments • Direct deposits Case #2 1. (1 mark) • Provide supporting documentation for all transactions • Able to track daily activity • All transactions are recorded in system in detail 2. (1 Mark) • Cheques can be traced back to the person issuing the cheque • Authorization is required for signature • Cheques have numerical sequence and therefore can be accounted for completeness 3. (1 Mark) • Wanda could order goods for personal use and the company could pay for them • Wanda could give goods to people without recording the inventory in the system • Wanda could pay for goods that were not ordered Part C (10 marks) 1. Sales = \$6,863,200 x .005 = \$34,316 Bad debt expense \$34,316 Allowance for doubtful accounts \$34,316 2. Allowance for Doubtful accounts (unadjusted) \$15,800 credit Estimate \$53,000 Adjustment required \$37,200 Bad debt expense \$37,200 Allowance for doubtful accounts \$37,200 3. Allowance for Doubtful accounts (unadjusted) \$10,000 debit Estimate \$53,000 Adjustment required \$63,000 Bad debt expense \$63,000 Allowance for doubtful accounts \$63,000 4. Allowance for doubtful accounts \$100 Accounts receivable \$100 Part D (10 marks) Net Income Total Assets Total Liabilities Shareholders’ Equity a. over 350 NE under 350 over 350 b. over 650 over 650 NE over 650 c. under 4,500 under 4,500 NE under 4,500 d. under 900 NE over 900 under 900 e. over 2,600 over 2,600 NE over 2,600 PART E ( 10 marks) 1. Current ratio 2.7:1. \$160,250 = 2.7 \$60,000 2. Return on common shareholders' equity 32.1%. \$80,250 = 32.1% (\$280,250 + \$220,000) ÷ 2 3. Price-earnings ratio 14.9 times. EPS = \$80,250 = \$1.34; 60,000
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