ACCT 221 Financial Accounting Problems (Chapters 7-12)

1. The cash account for Santiago Co. on May 31, 2014 indicated a balance of $15,515. The Maybank statement indicated an ending balance of $20,245. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:a.b.c.d.e.f.Checks outstanding totaled $4,820.A deposit of $3,796 had been made too late to appear on the bank statement.A check for $1,233 returned with the statement had been incorrectly recorded as $233.The check was originally credited to accounts payable.The bank collected $5,541 on a note left for collection.Bank service charges for May amounted to $45.A check for $790 was returned by the bank because of insufficient funds.Prepare the bank reconciliation as of May 31, 2014. Journalize the necessary entries.Santiago Co.Bank ReconciliationMay 31, 2014JournalDateDescriptionPost RefDebitCredit2. At the end of the current year, Accounts Receivable has a balance of $685,000; Allowance forDoubtful Accounts has a credit balance of $9,000; and net sales for the year total $46,300,000. Using theaging of receivables method, the balance of the Allowance for Doubtful Accounts is estimated as $50,000.Determine the following:a. Using the Percent of Sales Method, what is the amount of the adjusting entry for uncollectible accounts?b. Using the Analysis of Receivables Method, what is the amount of the adjusting entry for uncollectible accounts?3. The following information is for employee Ella Dodd for the week ended March 15.Total hours worked: 48Rate: $15 per hour, with double time for all hours in excess of 40 Federal income tax withheld: $200United Fund deduction: $50Cumulative earnings prior to current week: $6,400Tax rates:Social security: 6% on maximum earnings of $100,000.Medicare tax: 1.5% on all earnings; on both employer and employeeState unemployment: 3.4% on maximum earnings of $7,000; on employerFederal unemployment: 0.8% on maximum earnings of $7,000; on employer(a)Determine (1) total earnings, (2) total deductions, and (3) cash paid.(1)(2)(3)(b)Determine each of the employer’s payroll taxes related to the earnings of Ella Dodd for the week ended March 15.DateMar 15DescriptionPayroll Tax ExpenseSoc. Sec. Tax PayableMedicare Tax PayableState Unemploy. Tax Pay.Federal Unemploy. Tax. Pay.Post RefDebitCredit4. When considering the Cost Basis of a Fixed Asset, identify each of the following expenditures as chargeable to (L) Land, (LI) Land Improvements, (B) Buildings, (E) Machinery and Equipment, or(O) other account.(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12)(13)(14)(15)(16)(17)(18)(19)(20)____ Cost of paving parking area for employees and customers.____ Insurance during construction of building.____ Interest incurred on loan during construction of building.____ Fee paid for installation of equipment.____ Special foundation for new equipment acquired.____ Insurance on new equipment while in transit.____ Freight charges on new equipment.____ Cost of repairing vandalism damage to equipment during installation.____ Sales tax on new equipment.____ Cost incurred in repairing damage resulting from installation of new equipment.____ Cost of land fill for building site.____ Cost of lubricating oil purchased for periodic oil changes for equipment.____ Parking lot lighting.____ Installing a fence around the parking lot.____ Repainting the trim on a building.____ Special assessment paid to city for extension of water main to property.____ Cost of razing and removing the old building on property acquired for a building site.____ Delinquent real estate taxes assumed by purchaser on property acquired.____Attorney’s fee for title search.____ Architect’s fee for building plans and supervision of construction.5. Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have auseful life of 5 years, or 14,000 operating hours, and a residual value of $10,000. Compute the depreciationfor the first and second years of use by each of the following methods:(a)(b)(c)straight-lineunits-of-production (1,200 hours first year; 2,250 hours second year)declining-balance at twice the straight-line rateRound answers to the nearest dollar and show all work (on a separate sheet of paper) for full credit.YearStraight-LineUnits of Prod.6. Present journal entries to record the following:(a) Issued 1,000 shares of $10 par common stock at $59 for cash.Double-Declining Balance(b)(c)Purchased 100 shares of treasury stock at $32.Sold 100 shares of treasury stock at $42.DateDescriptionPost RefDebitCredit7. Present journal entries to record the following:Star Corp. issued $500,000 of 10-year, 12% bonds on June 1 of the current year with interest payable onDecember 1st. Journalize the entries to record:(a) Issuing the bonds for cash(b) Paying the December 1st interest on the bondsDateDescriptionPost RefDebitCredit