THREE ACCOUNTING QUESTIONS
Question
Question 1: PREPARE FINANCIAL STATEMENTS
Trial Balance
For the year ended, October 31, 2010
<pclass=”msonormal” style=”color: rgb(0, 0, 0); font-size: 12px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px 0px 0.0001pt; padding: 0px; font-family: Arial, Helvetica, Verdana, ‘Bitstream Vera Sans’, sans-serif;”>Cash 218,000
Accounts receivable 280,000
Inventories 74,000
Prepaid insurance 6,000
Supplies 4,000
Furnitures and fixtures 100,000
Accumulated depreciation, furnitures & fixtures 60,000
Building 250,000
Accumulated depreciation, building 140,000
Accounts payable 310,000
Accounts payable 310,000
Salaries payable 5,000
Unearned service revenue 13,000
Notes payable ($12,000 due in the current year) 40,000
Mortgage payable (1/3 due in the current year) 30,000
Retained earnings (beginning) 293,000
Dividends 65,000
Service revenue 300,000
Professional fees revenue 30,000
Salary expense 170,000
Supplies expense 4,000
Depreciation expense, furniture & fixtures 20,000
Depreciation expense, building 11,000
Rent expense 8,000
Interest expense 7,000
Utilities expense 4,000
1) Prepare an income statement
2) Prepare a statement of retained earnings
3) Prepare a CLASSIFIED balance sheet
Question 3: DEPRECIATION METHODS (Use 3 decimal places for the depreciation rate only. The rest of the numbers rounded to a whole number.)
Data on delivery truck purchased on January 1, 2007:
Cost of delivery truck $50,000
Estimated residual value $2,000
Estimated useful life:
Years 5 years
Units of production 100,000 miles
REQUIRED:
Calculate depreciation at each year end that applies:
- Straight-line method (use the table below)
Depreciation Depreciable Depreciation Accumulated Book
Date Rate Cost Expense Depreciation Value
- Units of production method (use the table below)
Assumption: Truck is driven 30,000 miles on the 1st year, 20,000 on the 2nd year, 23,000 on the 3rd year, 17,000 on the 4th year, and 10,000 during the 5th year.
Depreciation Number of Depreciation Accumulated Book
Date Per Unit Units Expense Depreciation Value
- Double-declining balance method
Depreciation Accumulated Book
Date DDB Rate Expense Depreciation Value
Quiz 4: INVENTORY METHODS (USE 2 DECIMAL PLACES)
Robert opened a music store that sells compact disks of pop music. The store is called All Pops. At the end of the year, a physical inventory count revealed that 3,400 of those disks are on hand.
Assume the following for All Pops: Strictly Classical purchased 1,000 CDs as follows:
Date No. of disks purchased Cost/Unit Total Cost
Jan 1 700 $6.20 $ _______
Mar 8 2,500 $6.45 $ _______
Jun 23 3,800 $6.35 $ _______
Aug 6 3,000 $6.30 $ _______
Sep 15 4,200 $6.25 $ _______
Dec 8 3,000 $6.40 $
Total ______ $ _________
REQUIRED: Calculate the Cost of Merchandise Sold and ending inventory value using: (Use the table below as your guide)
1) FIFO method
2) LIFO method
3) AVERAGE-COST method
Method Ending Inventory Cost of Merchandise Sold
FIFO
Method Ending Inventory Cost of Merchandise Sold
LIFO
Method Ending Inventory Cost of
