exam 1 modified

8/3/2019 Exam 1 Modified

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Exam1 Page1 Summer2011

Exam 1

ACG 2021

CRN: 50005

Name:

READ and FOLLOW DIRECTIONS

Directions:

1. Please do not use your CELL PHONES during the exam; any use of cell phones will result in Fgrade for the exams.

2. Use only a non-programmable calculator (BAII Plus is acceptable).3. Print your name on the exam (above).4. Count the pages of your exam; you should have 11 numbered pages.5. Put your answers for questions 1 - 20 below, WRITE CLEARLY.6. Do NOT ask me any questions during the exam; understanding of the questions is part of the

exam

7.

DO NOT discuss this exam with any students until they have completed the exam.8. When completed, turn in the entire exam to the instructor.

1. 6. 11. 16.

2. 7. 12. 17.

3. 8. 13. 18.

4. 9. 14. 19.

5. 10. 15. 20.

To be completed by instructor:

5 points each for the Multiple Choice questions100 Points

Problem Questions150 points

Total points achieved (out of 250 points)250 Points


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6. Providing services on account will:

A. Increase assets and increase liabilities.

B. Increase assets and increase stockholders'

equity.

C. Decrease liabilities and increase

stockholders' equity.

D. Decrease assets and increase liabilities.

13. Which of the following is not possible when

recording a transaction?

A. Liabilities increase and assets decrease.

B. Stockholders' equity decreases and assets

decrease.

C. Stockholders' equity increases and assets

increase.D. One asset increases and another asset

decreases.

7. Retained Earnings at the end of the year is

calculated using:

A. Common stock and dividends.

B. Stockholders' equity, net income, and

dividends.

C. Net income and dividends.

D. Beginning retained earnings, net income,

dividends.

14. Which of the following best describes earning

revenue?

A. Providing goods and services to a

customer.

B. Paying dividends to stockholders.

C. Owning resources.

D. Receiving cash from a customer.


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Use the following to answer questions 15 - 16

A Corporation had the following account balances at the end of December. Use only the appropriate

accounts to answer the following questions.

Show your workPut your answers on the first page

15. What were total expenses for the year? $________________

16. Determine net income for the year: $________________

17. During the current year, JKL company

purchases equipment for $250,000, paying

$200,000 immediately and will pay the

remaining balance next year. Determine

the amount of investing cash outflow the

company would report in the current year.

A. $250,000

B. $200,000

C. $50,000

D. $450,000

18. A company's general ledger (company cash

account) shows a cash balance of $5,220.

Comparing the company's cash records with

the monthly bank statement reveals several

additional cash transactions such as checks

outstanding of $1,250, bank service charges

of $30, and interest earned of $85. Calculate

the correct balance of cash.

A. $4,025B. $5,275C. $3,995D. $6,525

Accounts Balances

Cash $9,700

Salaries expense 8,900

Retained earnings 4,200Advertising

expense 3,600

Office equipment 22,000

Service revenue 18,200

Common stock 11,000

Accounts payable 3,100

Unearned revenue 2,800


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19. Which of the following adjusts the banks

balance of cash in a bank reconciliation?

A. Service charges.B. Interest earned.C. NSF checksD. An error by the bank

20. With respect to the bank reconciliation which

is correct?

A. Add deposits outstanding to thecompany's balance.

B. Subtract interest earned from the bank'sbalance.

C. Subtract NSF checks from thecompany's balance.

D. Add service charge to the company'sbalance


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Section B- Problem questions, please Show your work (Indicate how you arrive at the answers) A

correct answer without the steps to arrive at the answer will have Zero points.

Q 21 (40 points)

The adjusted trial balance for Cannedy & Fife Company at December 31, 2010 is presented below:

a) Prepare the Income Statement for Cannedy & Fife Company for the year ended December 31,2010 (20 points)

b) Determine the companys ending retained earnings at December 31, 2010 (10 points)c) The company issued 5,000 shares of common stock during the year for $40,000. What was

common stock at the BEGINNING of the year? (10 points)

Adjusted Trial Balance

Debit Credit

Cash $25,000

Accounts receivable 155,000

Prepaid rent 10,000

Supplies 15,000

Equipment 285,000

Accumulated depreciation-equipment $135,000

Accounts payable 25,000

Salaries payable 7,000

Interest payable 3,000Notes payable-due in two years 35,000

Common stock 180,000

Retained earnings 44,000

Dividends 12,000

Service revenue 420,000

Salaries expense 192,000

Maintenance expense 55,000

Rent expense 25,000

Depreciation expense 40,000Interest expense 3,000

Utilities expense 32,000

Totals $849,000 $849,000


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Q 21 answer:


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Q 22 (20 points)

Carmella & Brett Corporation had the following account balances at the end of December.

5 points each

a) Determine the balance in the Building account.b) Determine Total Liabilities.c) Determine total Stockholders Equity.d) Determine Common stock.

Q 22 answer:

Accounts Balances

Accounts payable $10,200

Cash 8,300

Retained earnings 18,100Supplies 2,900

Machinery 9,000

Land 15,000

Building ?

Salaries payable 9,100

Common stock ?

TOTAL ASSETS 66,200

TOTAL LIABILITIES ?TOTAL STOCKHOLDERS

EQUITY ?


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Q 23 (25 points)

Use the following information to answer the following questions

A list of accounts used to record the economic effects of transactions in terms of the fundamental accounting

model is given below. You are to indicate the accounts to be increased (+) and/or decreased (-) for each

transaction by entering the appropriate letter in each blank, put + or in front of the letter to indicate increase or

decrease.

ACCOUNTS

A. Cash G. Depreciation ExpenseB. Accounts receivable H. Common stock

C. Office equipment I. Services revenue

D. Accumulated depreciation J Selling expenses

E. Accounts payable K. Interest expense

F. Notes payable L. Retained earnings

Transaction Account Account

1. Purchased office equipment for cash.

2. Issued shares of Scooters stock in exchange for cash.

3. Recorded depreciation expense on the office

equipment.

4. Borrowed cash from the bank on a note payable.

5. Provided services on credit.

6. Paid selling expenses with cash.

7. Provided services for cash.

8. Paid interest on notes payable.

Q 24 (65 points)

William & Danielle Company's cash ledger reports the following for the month ending December 31, 2010.

Deposits Checks

Date Amount No. Date Amount

5-Apr $3,000 440 3-Apr $2,100

10-Apr 2,560 441 9-Apr 3,200

18-Apr 6,400 442 12-Apr 1,950

22-Apr 1,280 443 19-Apr 1,100

Cash receipts 4/23 - 4/30 3,300 444 25-Apr 650

$16,540 445 27-Apr 2,100

446 30-Apr 1,100Balance on April 1 $5,400 $12,200

Receipts 16,540

Disbursements 12,200

Balance on April 30 $9,740


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Information from December's bank statement and company records reveals the following additional

information:

a) The ending cash balance recorded in the bank statement is $8,552.b) Cash receipts of $3,300 from 4/23 4/30 are outstanding.c) Checks 444 and 446 are outstanding.d) The deposit on 4/22 includes a customer's check for $280 that did not clear the bank (NSF check).e) Check 445 was written for $1,200 for rent in December. The bank properly recorded the check for this

amount.

f) An automatic withdrawal for the December bank loan was made on December 20 for $1,250.g) Miller's checking account earns interest based on the average daily balance. The amount of interest earned

for December is $12.

h) Earlier this month, one of Millers top executives borrowed $1,000 from Miller. On December 29, theexecutive electronically transferred $1,010 ($1,000 borrowed amount plus $10 interest) directly to the

companys bank account in payment for the borrowing.

i) The bank charged the following service fees: $25 for NSF check and $5 for the monthly service fee.1) Prepare a bank reconciliation for December 31, 2010.2) Record the necessary cash adjustments


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Q 24 answer:

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