Acct 220: Final Exam Student | Complete Solution

Omit all general journal entry explanations. Be sure to include correct dollar signs, commas, underlines, and double-underlines where required.
Question 1 (40 points)
  
XYZ Company's December 31, 2015, trial balance is as follows:
XYZ Company
Trial Balance
December 31, 2015
Account    Debit    Credit
Cash    $   43,500     
Accounts Receivable    53,500     
Allowance for Doubtful Accounts    1,500     
Notes Receivable    30,000     
Merchandise Inventory    55,000     
Land    20,000     
Building    150,000     
Accumulated Depreciation, Building         $   15,000
Equipment    50,000     
Accumulated Depreciation, Equipment         21,000
Goodwill    26,000     
Accounts Payable         25,000
Long-Term Notes Payable         75,000
Common Stock, $10 par, 2,000 shares authorized and outstanding         20,000
Retained Earnings         147,000
Sales Revenue         700,000
Salaries Expense    150,000     
Utilities Expense    3,500     
Cost of Goods Sold    350,000     
Administrative Expenses    55,000     
Sales Expenses        15,000    _______
   Totals    $1,003,000    $1,003,000
XYZ is a small company and records adjusting entries and closing entries only at fiscal (calendar) year end. Correcting and adjusting entries have not been recorded.
Additional Information:
a.    Notes Receivable is a 3-month, 6% note accepted on November 1, 2015.
b.    Long-Term Notes Payable is a 5-year, 5% note that was signed on July 1, 2015. Interest is payable annually.
c.    Building is depreciated at 3% per year. There is no salvage value.
d.    Equipment is depreciated at 15% per year. There is no salvage value.
e.    XYZ discovered, on December 30, that the inexperienced bookkeeper recorded in the general journal and general ledger that day's $1,500 cash sales as a debit to Accounts Receivable and a credit to Sales Revenue.
f.    The year-end physical count for Merchandise Inventory reflected a value of $51,500. Any difference in value will not be considered theft or loss.
g.    Salaries for the last half of December, payable in January, amount to $5,500.
h.    XYZ estimates that of the Accounts Receivable, 5% will not be collectable.
Required:
a.    Prepare in journal form, any required correcting entries.
b.    Prepare in journal form, all end-of-the-period adjusting entries.
c.    Prepare a December adjusted trial balance.
d.    Prepare a classified balance sheet for the year ended December 31, 2015.
e.    Prepare in journal form, the closing entries for the year ended December 31, 2015.
Question 1 options:
Skip Toolbars for .
   
More Insert actions.
 
                     
Show All Components
    
 
Save
Question 2 (8 points)
  
XYZ Company uses the period method and had the following inventory events during January:
Date    Units Purchased    Unit Cost    Date    Units Sold    Unit Sales Price
Jan. 1    150    $7.00    Jan. 2    100    $10.00
Jan. 5    225    7.20    Jan. 7    125    10.00
Jan. 10    100    7.50    Jan. 12    75    12.00
Jan. 15    150    7.80    Jan. 17    200    12.50
Jan. 20    200    7.95    Jan. 24    150    15.00
Jan. 25    150    8.00               
Jan. 30    75    8.20               
Note: The January 1 amounts were the beginning inventory and unit value.
(Round all total dollar values to the nearest dollar. Round all unit values to the nearest penny.)
Required:
a.    Calculate the cost of goods available for sale.
b.    Calculate the dollar value of sales.
c.    Calculate the value of Ending Inventory and Cost of Goods Sold under the following independent assumptions:
(1) LIFO method
(2) FIFO method
(3) Average-cost method
Question 2 options:
  

Save
Question 3 (7 points)
  
Required: Prepare Acme Supply Company's general journal entries for the following transactions:
Jan. 1    Accepted RunTimeCo's 120-day, 10% note as settlement of an outstanding $15,000 account receivable for goods sold last year.
Jan. 15    Purchased $10,000 Equipment from XYZ, signing a 9-month, 12% note.
Jan. 15    Loaned Warner Co. $30,000 cash, accepting a 90-day, 10% note.
Jan. 31    Prepared accrual adjusting entry for any interest revenue.
Apr. 15    Received payment in full from Warner Co. for outstanding note and interest.
May 1    Received payment in full from RunTimeCo for outstanding note and interest.
Oct. 15    Paid XYZ in full.
Question 3 options:
  

Save
Question 4 (9 points)
  
XYZ Company purchased a refrigerated delivery truck for $65,000 on January 1, 2015. The plan is to use the truck for 5 years and then replace it. At the end of its useful life, the truck is expected to have a salvage value of $10,000. The fiscal year ends December 31.
a.    Prepare the depreciation table for XYZ's truck, assuming that the company uses the straight-line method for depreciation.
b.    Prepare the depreciation table for XYZ's truck, assuming that the company uses the double-declining-balance depreciation method.
c.    Compute the depreciation expense for 2015 for XYZ's truck, assuming the truck has an expected life of 200,000 miles and during 2015 the truck was driven 24,540 miles. Round your depreciation expense per mile to three decimal places.
Question 4 options:
  

Save
Question 5 (7 points)
  
Acme Company has a January 15 mid-month gross salaries expense of $25,000. All is subject to FICA Social Security (6.2%), FICA Medicare (1.45%), state income tax (5%) and federal income tax (15%) withholdings. Additionally, all is subject to employer taxes to include FUTA (0.8%) and SUTA (5.4%) taxes. (Round all calculations to the nearest penny.)
Required:
a.    Prepare the general journal entry to record the employer's payroll liability.
b.    Prepare the general journal entry to record the employer's payroll-tax liability.
c.    Prepare the general journal entry to liquidate the liabilities accrued in parts (a) and (b) on January 22.
Question 5 options:
  

Save
Question 6 (4 points)
  
At the end of the fiscal 2015 year, Acme Company has the following information: Credit Sales, $2,500,000; Sales Returns and Allowances, $25,000; Accounts Receivable, $200,000; and Allowance for Doubtful Accounts with a Debit, $1,500.
Required:
a.    Prepare the general journal entry to record the end-of-the-year adjusting entry if Acme uses 0.5% of Net Credit Sales as the basis for determining Bad-Debt Expense.
b.    Prepare the general journal entry to record the end-of-the-year adjusting entry if Acme uses 5% of Accounts Receivable as the basis for determining Bad-Debt Expense.

ACCT 220 Final Exam Answer Sheet

Question 1 (40points)

a.    General Journal Entries:

Date    Account    Debit    Credit

b. Adjusting Entries:

Date    Account    Debit    Credit

c. Adjusted Trial Balance:

Adjusted Trial Balance

Account Titles    Debit    Credit
 
d. Classified Balance
e. Closing Entries:

Date    Account    Debit    Credit
        
Question 2 (8points)

a.    Cost of Goods Available for Sale    
b.    Sales    
c.    Value of:    Ending Inventory    COGS
(1)    LIFO method        
(2)    FIFO method        
(3)    Average-cost method        

 
Question 3 (7points)

Date    Account    Debit    Credit
            
Question 4: (9points)

a. Answer:
Year    Depreciation Expense    Total Accumulated Depreciation    End-of-Year
Book Value
            
b. Answer:
Year    Depreciation Expense    Total Accumulated Depreciation    End-of-Year
Book Value
            
c.
Answer    

Question 5 (7points)

Date    Account    Debit    Credit
    

Question 6 (4points)

Date    Account    Debit    Credit