ACCT 2001 Chapter : Ch 11 Practice Key

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azuremammoth471

15 Mar 2019

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For questions 1 and 2: on october 1, 2009, frederick co issued a ,000, 10%, 9-month interest bearing note: the december 31, 2006 adjusting entry for accrued interest is. : assuming interest was accrued on june 30, 2010, the entry to record the payment of the note on july. ,100: travis co. has total proceeds (before segregation of sales taxes) from sales of ,100. 5%, the amount to be credited to sales account is: ,100 is 1. 05% of sales => sales is ,100/1. 05 = ,000. ,000: on august 1, 2009, a company borrowed cash and signed a one-year interest bearing note on which both face value and interest are payable on august 1, 2010. Interest pay"b -> current liab: when bonds are sold at face value on the issue date, bonds payable is credited for. Face value: on the maturity date, january 1, mora co. pays the accrued interest recorded on december 31 and the face value of the bonds.

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PAYROLL ENTRIES

J&W Buffet Co. employees earned $350,000 in the week endedDecember 17, 2010. Of this, $26,775 was deducted from employeesâpay for FICA and $62,000 was deducted for income taxes.

Prepare the journal entry to record the employeesâ portion ofpayroll for December 17, 2010.

Prepare the journal entry to record the employerâs share of FICApayroll taxes for December 17, 2010.

HW 9 â 2

NOTES PAYABLE

Mumford Co. borrowed a $100,000 note payable on June 1, 2010,with 6% interest. The note is due on May 31, 2011.

Prepare the journal entry to record the issuance of the note andreceipt of cash on June 1, 2010.

Prepare the adjusting journal entry to record the interest owedat the end of the accounting period on December 31, 2010.

Prepare the journal entries to record the interest and principalpayments to the lender on May 31, 2011.

HW 9 â 3

UNEARNED REVENUE

On January 1, 2009, Charlie Rangel paid $2,000 for a twoâyearmembership to the Beam Gym.

Prepare the journal entry to record the receipt of cash onJanuary 1, 2009.

By December 31, 2009, one half of Rangelâs membership expired.Prepare the required adjusting journal entry on that date.

By December 31, 2010, the remainder of Rangelâs membershipexpired. Prepare the required adjusting journal entry on thatdate.

Post the entries above to the Unearned Revenue account:

Unearned Revenue

HW 9 â 4

ISSUING BONDS

Issuance of $800,000, 5-year, 8% payable annually (market rate12%) for cash of $684,627 on 1/1/07

Were these bonds issued at a discount or at a premium? Why?

Prepare the journal entry to record the issuance (sale) of thebonds:

Complete the following interest schedule (assuming straight-lineamortization):

Date	Cash Payment of Interest	Interest Expense	Amortization of Discount	Carrying Value (Net Liability)
1/1/2007	None	None	None
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011

Prepare the journal entry to record the first payment ofinterest on 12/31/2007:

HW 9 â 5

ISSUING BONDS

Issuance of $1,200,000, 5-year, 10% payable annually (marketrate 8%) for cash of $1,295,844 on 1/1/07

Were these bonds issued at a discount or at a premium? Why?

Prepare the journal entry to record the issuance (sale) of thebonds:

Complete the following interest schedule (assuming straight-lineamortization):

Date	Cash Payment of Interest	Interest Expense	Amortization of Premium	Carrying Value (Net Liability)
1/1/2007	None	None	None
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011

Prepare the journal entry to record the first payment ofinterest on 12/31/2007:

whitewhale375

Presented below is the balance sheet of Harrietï¿½s Hats as ofDecember 31, 2009, along with some of the transactions thatoccurred during 2010. Harriet's Hats Ltd. Balance Sheet December31, 2009

Assets

Current Assets:

Cash $ 5,000

Accounts Receivable 3,000

Prepaid Rent 500

Inventories 4,000

Total Current Assets $12,500

Property, Plant and Equipment$20,000

Less: Accumulated Dep.(3,500)

Property, Plant and Equipment(net) 16,500

Total Assets $29,000

Liabilities and Owner'sEquity

Current Liabilities:

Accounts Payable $2,500

Accrued Wages 170

Accrued Interest 90

Notes Payable 2,700

Total Current Liabilities $5,460

Common Stock 15,000

Retained Earnings8,540

Total Shareholdersï¿½ Equity$23,540

Total Liabilities andShareholdersï¿½ Equity $29,000

Prepare the original and theadjusting journal entries at the end of 2010

1. On September 1, 2010, thecompany issued a short-term note for $3,000 and on the same dateretired the note that was outstanding at the beginning of theperiod. The old note had a 10 percent interest rate, had beenissued on September 1, 2009, and required semi-annual interestpayment on February 28 and August 31. The new note carried an 8percent interest rate with similar payment terms.

2. Rent payments of $1,800 eachwere made on March 1 and September 1. The payments were for rent onoffice building and were prepaid for six months.

3. Sales employees were paid$12,000 in salaries during the year. Records indicate that salariesfor the last week of December amounted to $250 and would be paid atthe end of the first week of January (a two week pay period). 1.Prepare all the journal entries on 12/31/2010 if the firm does notfollow the reversing entries convention for recording interest,rent and salaries. 2. Prepare all the journal entries. includingthe ones on 1/1/2010 and 12/31/2010, if the firm follows thereversing entries convention for recording interest, rent andsalaries.

1. Prepare all the journal entries, including the adjustingentries on 12/31/2010, for recording all the transactions relatedto note, interest on note, rent and salaries during 2010. assumethat the firm does not follow the reversing entries convention

2. Prepare all the journal entries. including the reversingentries on 1/1/2010 and adjusting entries on 12/31/2010, forrecording all the transactions related ot note, interest on note,rent and salaries during 2010. assume that the firm does follow thereversing entries convention and records all cash receipts and cashpayments to a nominal account

burgundyhyena519

Spreadsheet and Statement of Cash Flows

The following information was taken from Lamberson Company's accounting records:

	Account Balances
Account Titles	January 1, 2016	December 31, 2016
Debits
Cash	$ 1,400	$ 2,400
Accounts Receivable (net)	2,800	2,690
Marketable Securities (at cost)	1,700	3,000
Allowance for Change in Value	500	800
Inventories	8,100	7,910
Prepaid Items	1,300	1,710
Investments (long-term)	7,000	5,400
Land	15,000	15,000
Buildings and Equipment	32,000	46,200
Discount on Bonds Payable	â	290
	$69,800	$85,400
Credits
Accumulated Depreciation	$16,000	$16,400
Accounts Payable	3,800	4,150
Income Taxes Payable	2,400	2,504
Wages Payable	1,100	650
Interest Payable	â	400
Note Payable (long-term)	3,500	â
12% Bonds Payable	â	10,000
Deferred Taxes Payable	800	1,196
Convertible Preferred Stock, $100 par	9,000	â
Common Stock, $10 par	14,000	21,500
Additional Paid-in Capital	8,700	13,700
Unrealized Increase in Value of Marketable Securities	500	800
Retained Earnings	10,000	14,100
	$69,800	$85,400

Additional information for the year:

Sales		$ 39,930
Cost of goods sold		(19,890)
Depreciation expense		(2,100)
Wages expense		(11,000)
Other operating expenses		(1,000)
Bond interest expense		(410)
Dividend revenue		820
Gain on sale of investments		700
Loss on sale of equipment		(200)
Income tax expense		(2,050)
Net income		$ 4,800

Dividends declared and paid totaled $700.

On January 1, 2016, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.

Long-term nonmarketable investments that cost $1,600 were sold for $2,300.

The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.

Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.

Equipment was purchased at a cost of $16,200.

The 12% bonds payable were issued on August 31, 2016, at 97. They mature on August 31, 2026. The company uses the straight-line method to amortize the discount.

Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.

Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.

Prepare the statement of cash flows.

LAMBERSON COMPANY Statement of Cash Flows For Year Ended December 31, 2016

Operating Activities:

Prepare the statement of cash flows.

___________________ ____________

Adjustment for noncash income items:

___________________ ____________

Adjustments for cash flow effects from working capital items:

___________________ ____________

Net cash provided by operating activities ______________

Investing Activities:

___________________ ____________

Net cash used for investing activities ____________

Financing Activities:

___________________ ____________

Net cash provided by financing activites ____________

Cash, january 1, 2016 _____________

Cash, december 31, 2016 ____________

Compute the cash flow from operations to sales ratio and the profit margin ratio for 2016. Round your answers to one decimal place.

Cash flows from operations ratio ________:%

Profit margin:___________ %

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ACCT 2001 Chapter : Ch 11 Practice Key

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