1. Please record the following items in journal entry format. Clearly indicate the (a) account name (b) whether it is a (debit) or (credit) and (c) the amount. See my example below:
The firm bought supplies for $6,400 on account.
The firm purchased land for $450,000, $160,000 of which was paid in cash and a note payable signed for the balance.
The firm paid for the supplies ($6,400) purchased on account above.
The firm paid $1,000 for salaries for the month.
The firm accepted cash for repair services made in the amount of $5,000 and billed additional customers for repair services of the amount of $2,500
The firm received cash from customers on account in the amount of $2,000 .
The firm repaid $16,000 of its loan.
The firm paid the rent and utility bill for the month for $2,000
The firm paid a cash dividend of $1,000.
Example: The firm purchased Equipment for $1,000. Clearly indicate the (a) account name (b) whether it is a (debit) or (credit) and (c) the amount
Equipment (debit) $1,000
Cash (credit) $1,000
2. Use the accounts below for Stanley Black and Decker to prepare an income statement for the year ended December 31, 2015. ($ millions)
Sales revenue 250,000
Nonoperating Income 3,000
Cost of goods sold expense 120,000
Rent and Utilities expense 40,000
Salary expense 50,000
Income tax expense 15,000
Net earnings from discontinued operations 12,000
3. Use the accounts below for Stanley Black and Decker to prepare a Balance Sheet at December 31, 2015. ($ millions). In addition, Retained Earnings at December 31, 2014 was $10,000, Net Income for the year ended December 31, 2015 was 40,000 and 4,000 was paid out in dividends during 2015. Cash 10,000
Accounts receivable 6,000
Inventory 10,000
Land and Building 76,000
Accounts payable 1,000
Long-term debt 30,000
Contributed capital 25,000
4. In spring 2015, Parmac Engineering Company signed a $1,000,000 contract with the city of Parkersburg, to construct a new city hall.
Parmac expects to construct the building within two years and incur expenses of $600,000.
Using the percentage-of-completion method how much revenue should Parmac recognize in 2015?
Construction costs incurred during the year $174,000
Estimated costs to complete the contract $426,000
Total costs $600,000
Total contract price $1,000,000
5. The company had an accounts receivable balance of $105,000 and an allowance for uncollectible accounts balance of $3,000 (credit) at the end of the year (before any adjusting entry). Sales revenue for the year totaled $800,000. The accountant determined that 1% of this year's sales will be uncollectible.
a) How much will be reported as BAD DEBT/UNCOLLECTIBLE ACCOUNTS EXPENSE ON THE INCOME STATEMENT?
b) If management wanted to increase net income for the year, would the increase or decrease the % used to calculate the uncollectible account expense?
6. The company had an accounts receivable balance of $80,000 and an allowance for uncollectible accounts balance of $2,000 (credit) at the end of the year (before any adjusting entry). The accountant determined that 10% of the ending accounts receivable balance will ultimately be uncollectible.
a) How much will be reported as BAD DEBT/UNCOLLECTIBLE ACCOUNTS EXPENSE ON THE INCOME STATEMENT?
b) If management wanted to increase net income for the year, would the increase or decrease the % used to calculate the uncollectible account expense?
7. Given the following data, fill in the table below using the three cost flow assumptions given. That is, indicate the COST of ending inventory that will appear on the Balance Sheet and the COST of goods sold that will appear on the Income Statement, using the three cost flow assumptions given.
Date Units Cost per unit Total cost
1/1 - beginning inventory 40 $10 $400
1/10 - purchase of inventory 20 $20 $400
1/15 - purchase of inventory 20 $22 $440
Available for sale 80 __________ $1,240
Ending inventory 20 _________ _______
FIFO LIFO Average Cost
Cost of Ending Inventory ___ ______ _____
Cost of Goods Sold ____ ___________ ______
8. Boxcar, Inc., which uses a predetermined overhead rate based on direct labor hours. Use the information below to answer the following 3 questions:
Total manufacturing overhead Direct labor-hours
Estimated $160,000 8,000 hours
Actual $172,500 7,050 hours
a. Calculate Boxcar's predetermined overhead rate.
b. Calculate Boxcar's applied overhead.
c. How much was Boxcar's over- or under-applied overhead?