Accounting Principles I – Online EXAM IV – Chapters 8, 9 & 11 Part II

Accounting
Principles I – Online
EXAM IV – Chapters 8,
9 & 11
Part II
Complete
the following exam and save this file on your hard drive. Then submit your file to your instructor on
Canvas.
NAME___
PART A (14 Points)
1. Greenview Food Store
developed the following information in recording its bank statement for the
month of March.
a. Outstanding
checks total $1,380.
b. Deposits of
March 30 and 31 not yet recorded by the bank $1,185.
c. NSF check of
Joe Goofy, a customer, returned by the bank $420.

d. Check No. 210
for $161 was correctly issued and paid by the bank but incorrectly entered in
the cash payments journal as a payment of Supplies for $116.
e. Bank service
charge for March was $15.
f. The bank
collected a note receivable for the company for $3,000 plus $200 interest
revenue.
Required:Complete the bank reconciliation below to include proper
explanations.

Greenview
Food Store
Bank Reconciliation
March 31

Balance Per Bank Statement, March
31

$ 9,365

Add:

$

Subtotal:

$

Less:

Adjusted Balance Per Bank, March
31

$

Balance Per Books, March 31

$ 6,450

Add:

$

Subtotal:

$

Less:

$

Adjusted Balance Per Books, March
31

$

2. Record the general journal entry
or entries necessary to adjust Greenview Food Store records as of March 31 in
relation to the bank reconciliation above.

Date

Account Titles

Debit

Credit

PART B (12 Points)
Compute the maturity date and
the maturity value associated with each of the following notes
receivable. Use a 360-day year where applicable.
1. A $10,000, 9%, 5-month note
dated January 31.
Maturity date__________
, Maturity value $____________

2. A $30,000, 8%, 75-day note
dated August 13.
Maturity
date__________, Maturity value $____________
3. A $1,460, 10%, 90-day note
dated May 8.
Maturity
date__________, Maturity value $____________

PART C ( 16 Points)
On October 1, Foster Company
establishes a petty cash fund by issuing a check for $150 to Kim Mann, the
custodian of the petty cash fund. On October 31, Kim Mann submitted the
following paid petty cash receipts for replenishment of the petty cash fund
when there is $6 cash in the fund:

Freight Out

$15
Office Supplies
Expense 40

Entertainment
Expense 60
Postage
Expense
25

Instructions:
In the space
provided below prepare the journal entries required to establish the petty cash
fund on October 1 and the replenishment of the fund on October 31.

Date

Account Title

Debit

Credit

PART D (16 Points)
The accounting records of Fasbe
Company shows the following account balances:

DEBIT

CREDIT

Credit Sales

$400,000

Accounts Receivable

$70,000

Allowance for Doubtful Accounts

640

Required: Complete the following independent requirements:
1. Journalize the adjusting
entry at December 31 assuming bad debts are expected to be 1% of Sales.
2. Journalize the adjusting
entry at December 31 assuming bad debts are expected to be 6% of Accounts
Receivable.
3. Journalize the adjusting
entry at December 31 assuming that Allowance for Doubtful Accounts has a debit
balance of $180and bad debts are expected to be 1.5% of Sales.
4. Journalize the adjusting
entry at December 31 assuming that Allowance for Doubtful Accounts had a debit
balance of $180 and bad debts are expected to be 9% of Accounts Receivable.

Date

Account Title

Debit

Credit

PART E (18 Points)
Dental Products Company pays
an administrative salary of $1,500 to the company secretary for the
week ended 1/10. The following
information pertains to payroll taxes:

Employee Employer
FICA Taxes………………………………………………..
8%
8%
Federal Unemployment Taxes…………………………….
.8%
State Unemployment Taxes……………………………….
5.4%
Other withholdings are as
follows:
Federal Income Tax
Withheld………………………………….. $175
Health Insurance
Withheld………………………………………. $ 30
Required:
(1) Prepare the journal
entry to record the payroll on 1/10.

(2) Prepare the journal
entry to record Dental Product’s payroll tax expense.

Date

Account Titles

Debit

Credit

PART F (16 Points)
On November 1 the Alps
Company borrowed $30,000 from its bank by signing a 6-month, 12% interest
bearing Note Payable.
Required: Assuming interest
expense is NOT accrued on a monthly basis,prepare the journal entry
to record:
A. The
issuance of the note
B. The
year-end interest accrual at December 31.

C. The
payment of the note on its maturity date.

Date

Account Titles

Debit

Credit

PART G (9 Points)
In providing accounting
services to small businesses, you encounter the following situations pertaining
to
cash sales.
1. Price Company rings up sales
and sales taxes separately on its cash register. On November 15, the
register totals are sales $4,000 and
sales taxes $240.
2. Leonard Company does not
segregate sales and sales taxes. Its register total for November 15 is
$16,050, which includes a 7% sales
tax.
Required: Prepare the journal
entries to record the above sales transactions and related taxes for each
client.

Date

Account Titles

Debit

Credit

PART H ( 7 Points)
A company will incur product repair
costs in the future if products that it sells currently under warranty are
brought in for repair during the warranty period. The company will also
incur bad debts expense in the future if customers who buy on credit currently
are unable to pay their accounts. The accounting procedures for these two
costs (warranty expense and bad debts expense) are related to the same
accounting principle. (The answer I am looking for is NOT the
full-disclosure principle.) Identify the principle and explain
fully how these costs are related to or guided by that principle.