ACCT 2001 Study Guide - Midterm Guide: Accounts Payable, Accounts Receivable

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ACCT 2001 Full Course Notes

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Exam 1 acct 2001 practice quiz chapter 2: marg bakery has total assets of ,000. Baking equipment is purchased for ,000 on account. After the purchase, total assets are: mary company, with total assets of ,000, earns ,000 of service revenue on account. Phil company with total assets of ,000 borrows ,000 from a finance company: ken enterprises collects ,000 of its accounts receivable. Total assets are now ,000: owners" equity is ,000 less, none of the above are correct, owners" equity is ,000 more, owners" equity is ,000 less, owners" equity is the same. Total assets are now ,000: none of the above are correct. If cape company pays ,000 of the accounts payable: unchanged. Land with a cost of ,000 was sold for ,000 cash and the balance of ,000 to be received over the next three years. Fisher enterprises assets increased from ,800 to ,600, and liabilities decreased from ,800 to ,500.

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Calculate the external financing needed given the following financial statements. Assume that all costs, all assets, and accounts payable change proportionally with sales. Sales are projected to grow by 25%. Also assume that the company is operating at full capacity.

Current Statement of Comprehensive Income Sales $50,000 CoGS 30,000 EBDIT 20,000 Depreciation 10,000 EBIT 10,000 Interest expense 5,000 Taxable income 5,000 Taxes (35%) 1,750 Net Income 3,250 Dividends 975 Addition to RE 2,275

Current Statement of Financial Position Cash $8,000 Accounts receivable 22,000 Inventory 30,000 Total current assets 60,000 Fixed assets 90,000 Total assets $150,000 Accounts payable $15,000 Notes payable 5,000 Total current liabilities 20,000 Long-term debt 40,000 Common stock 40,000 Retained earnings 50,000 Total ownersâ equity 90,000 Total Liabilities and OE $150,000

Select one answer

A- $33,750

B- $34,656.25

C- $30,906.25

D- $37,500

E- $22,500

aquamarinecattle50

A company with 100,000 authorized shares of $4 par common stockissued 50,000 shares at $9 per share. Subsequently, thecompany declared and issued a 10% stock dividend. The market priceof the shares is $20 per share.

53. What is the effect of the dividend on Paid in Capital?

a. Paid-in Capital decreased

b. Paid-in Capital increased

c. Paid-in Capital remained the same

d. None of the above

54. Refer to the previous question. By what amount did Paid inCapital change, if at all? ( If the account balance or amount didnot change, state your answer as "$0")

55. What is the effect of the dividend on the number of sharesoutstanding?

a. The number decreased

b. The number increased

c. The number remained the same

d. None of the above

56. Refer to the previous question. By what amount did thenumber of shares change, if at all? (If the account or amount didnot change, state your answer as "$0")

57. What is the effect of the dividend on total equity and totalassets?

a. Total equity decreased, and total assets decreased

b. Total equity decreased, and total assets increased

c. Total equity increased, and total assets decreased

d. Total equity increased, and total assets increased

e. None of the above

CASH FLOWS
	Instructions:
1.	Prepare journal entries for the selectedtransactions listed below.
2.	Based on the account information in the ledger, theselected transactions below,
	and the other financial statements, preparetheStatement of Cash Flows
	for ABC Company for the year ended June 30,2014
3.	Answer questions A-D.

1. PREPARE THE JOURNAL ENTRIES.

	Some of ABC Company's January transactions arelisted below. They have been
	already been posted to the ledger.

	Partial list of fiscal year ended June 30, 2014transactions for ABC Company:
	a.	Issued 5,000 shares of $1 par common stock forcash, $50,000
	b.	Sold investment for $35,000 of cash.
	c.	Redeemed $55,000 bonds at face value.
	d.	Declared $4,000 in dividends.
	e.	Recorded depreciation on equipment, $18,500
	f.	Paid $3,500 in cash for dividends
	g.	Purchased equipment for cash, $13,450


	PARTIAL JOURNAL		Debit	Credit
a.



b.



c.


d.


e.


f.


g.

DO NOT POSTJOURNAL ENTRIES PREPARED IN INSTRUCTION #1 (THEY ARE ALREADYINCLUDED BELOW).

		LEDGER

		Cash #100				Accounts Pay. #200				Service Revenue #500
	7/1/13	42,480					4,900	7/1/13			0	7/1/13
	activity	101,850	62,350			22,800	21,500				106,500
	a.	50,000					3,600	6/30/14			106,500
	b.	35,000
			55,000	c.
			3,500	f.		Dividends Pay. #210				Depreciation Exp. #600
			13,450	g.			700	7/1/13		0		7/1/13
	6/30/14	95,030			f.	3,500	4,000	d.	e.	18,500
							1,200	6/30/14		18,500
		Accounts Rec. #115
	7/1/13	5,000
		50,400	45,750			Bonds Payable #220				RentExpense #603
	6/30/14	9,650					100,000	7/1/13		0		7/1/13
					c.	55,000				24,000
							45,000	6/30/14		24,000
		Supplies #116
	7/1/13	3,660
		3,050	4,160
	6/30/14	2,550				Common Stock #320				Supplies Expense 610
							10,000	7/1/13		0		7/1/13
							5,000	a.		4,160
							15,000	6/30/14		4,160
		Invest. in XYZ Co #120
	7/1/13	20,000
			20,000	b.		PIC in Ex of Par-CS #322				Salaries Expense #620		7/1/13
	6/30/14	0					20,000	7/1/13		0		7/1/13
							45,000	a.		34,000
							65,000	6/30/14		34,000
		Equipment #130
	7/1/13	86,920
	g.	13,450				Retained Earnings #400				Gain on Sale #700
	6/30/134	100,370					13,160	7/1/13			0	7/1/13
											15,000	b.
											15,000
		Accum. Deprec. #131				Cash Dividends #410
			9,300	7/1/13		0		7/1/13
			18,500	e.	d.	4,000
			27,800	6/30/14		4,000


		Before
		158,060	158,060	-
		After
		292,260	292,260	-

FINANCIALSTATEMENTS

ABC Company						ABC Company
Income Statement						Comparative Balance Sheet
For the Year Ended June 30,2014						June 30,
										2014		2013		Amount of		Type of
Revenue:						Assets								Inc/(Dec)		Activity(ies)
	Service revenue			$	106,500	Current assets:
Operating expenses:							Cash		$	95,030	$	42,480	_____		___
	Depreciation Expense	$	18,500				Accounts Receivable			9,650		5,000	_____		___
	Rent Expense		24,000				Supplies			2,550		3,660	_____		___
	Supplies Expense		4,160					Total current assets		107,230		51,140
	Salaries Expense		34,000			Plant Assets:
	Total operating expenses				80,660		Equipment			100,370		86,920	_____		____
Income from operations					25,840		Less:	Accumulated Depreciation		27,800		9,300	_____		____
								Total plant assets		72,570		77,620
Other revenue:						Investments				0		20,000	_____		____
Gain on sale		$	15,000			Total Assets			$	179,800	$	148,760
Total other revenue					15,000
Net income				$	40,840	Liabilities
						Current liabilities:
							Accounts Payable		$	3,600	$	4,900	_____		_____
							Dividends Payable			1,200		700	_____		_____
								Total current liabilities		4,800		5,600
ABC Company						Long-term liabilities:
Statement of RetainedEarnings							Bonds Payable			45,000		100,000	_____		_____
For the Year Ended June 30,2014								Total liabilities		49,800		105,600

Retained earnings, July 1,2013				$	13,160	Stockholders' Equity
Net income		$	40,840			Paid in capital :
Less:	Dividends		4,000				Common Stock, $1 par, 50,000 authorized			15,000		10,000	______		_____
Increase in retainedearnings					36,840		Paid in Capital in Excess of Par			65,000		20,000	______		_____
Retained earnings, June 30,2014				$	50,000			Total paid in capital		80,000		30,000
						Retained Earnings				50,000		13,160	______		_____
								Total stockholders' equity		130,000		43,160
						Total liabilities and stockholders' equity			$	179,800	$	148,760


	2. COMPLETE THE STATEMENT OF CASH FLOWS.

	ABC Company
	Statement of Cash Flows
	For the Year Ended June 30, 2014
	Cash flows from operating activities:
		Net income			$
		Adjustments to reconcile net income to netcash
		flow from operating activities:
					$

			Changes in current operating assets andliabilities:





						$

	Cash flows from investing activities:
					$
		Less:




	Cash flows from financing activities:
					$
		Less:		$






	Cash at beginning of period

	Cash at end of period					$



3. QUESTIONS

A.	If the corporation reported income and expensesusing the cash basis (instead of accrual),
	what impact did operational transactions have oncash?			Increase/Decrease Amount		$

B.	What was the of largest specific source of cashinflow during the year?


C.	What was the largest specific source of cashoutflow during the year?


D.	The ending cash balance on the Statement of CashFlows should match the cash balance
	on which other financial statement?

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ACCT 2001 Study Guide - Midterm Guide: Accounts Payable, Accounts Receivable

ACCT 2001 Full Course Notes

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