umuc acct220 all weeks homework latest 2015 [ week 1 2 3 5 6 7 ]

| February 14, 2018

wek 1Week 1Tom Pryor formed a management consulting firm specializing in cost management systems. Below are the transactions that occurred during the initial month of operation.June 2 Tom Pryor invested $25,000 cash in the capital .homeworkminutes.com/question/view/89264/umuc-acct220-week-1-homework-latest-2015#”>stock of the newly formed corporation.June 3 Hired an administrative assistant, to be paid $3,000 per month. Leased office space at the rate of $1,000 per month. Signed a contract with Pomero to deliver consulting services valued at $7,500.June 8 Purchased (and immediately used) office supplies on account for $750.June 9 Received $2,500 from Pomero for work performed to date.June 15 Paid $1,200 for travel costs associated with consultation work.June 16 Provided services on account to Arpy for $3,000.June 17 Paid $1,500 to administrative assistant for salary.June 23 Billed Farris for $4,000 consulting engagement performed.June 25 The company paid Tom Pryor a $1,000 dividend.June 26 Collected 50% of the amount due for the billing on June 23.June 27 Purchased computer furniture for $4,000, paying $1,000 down.June 27 Paid $750 on the open account relating to the June 8 .homeworkminutes.com/question/view/89264/umuc-acct220-week-1-homework-latest-2015#”>purchase.June 28 Completed the Pomero job and billed the remaining amount.June 30 Paid $1,500 to administrative assistant for salary.June 30 Paid rent for June, $1,000.Pryor consulting uses the following .homeworkminutes.com/question/view/89264/umuc-acct220-week-1-homework-latest-2015#”>accounts:CashAccounts ReceivableEquipmentAccounts PayableCapital StockRevenuesSalary ExpenseRent ExpenseTravel ExpenseSupplies ExpenseDividends(a) Journalize the listed transactions.(b) Post the transactions to the appropriate general ledger accounts.(c) Prepare a trial balance as of June 30.Paul Morris is a doctor of veterinary medicine specializing in horses. At the beginning of March, he incorporated his practice, and has completed his first month in business. He has come to you seeking help setting up his “books.” The following is a transcript of your conversation with Dr. Morris.Dr. Morris “I specialize in embryo transplants for horses that will be used in cutting horse competitions. I started the month by investing $30,000 of my own money in the stock of the business.”You “By stock, do you mean livestock animals or capital stock?”Dr. Morris “I mean the capital stock of the business — I don’t actually own any animals. I work with my clients’ animals only.”You “Ok, is that all the .homeworkminutes.com/question/view/89264/umuc-acct220-week-1-homework-latest-2015#”>money you had to start out the business? Were there any other investors?”Dr. Morris “I am the only owner, but the business did borrow $50,000 to buy some land on which I plan to build a barn next year. Is that what you mean by other investors?”You “Not exactly. The .homeworkminutes.com/question/view/89264/umuc-acct220-week-1-homework-latest-2015#”>loan will need to be listed as a liability of the business. Have you paid off any of the loan yet?”Dr. Morris “Not yet. The loan is not due for several years. But, I did pay $400 interest on the loan for the month.”You “I see. So, you plan to build a barn next year on the land. I guess that is where you will be working with animals in the future. But, where are you caring for animals currently?”Dr. Morris “I rent stalls from Tri-County arena. That costs me $1,500 per month. Which reminds me, I need to pay them for the first month. I forgot to send them their check!”You “Besides the interest, what other bills have you paid so far?”Dr. Morris “I knew you would ask that, so I kept a list. I paid for salaries of $2,000, for supplies used of $3,300, and utilities of $700. That’s it so far.”You “Do you have any other bills that have not been paid yet?”Dr. Morris “Nope, just the rent, but we already talked about.”You “Good. Let’s talk about your revenues. Do you have list of what customers paid you this month?”Dr. Morris “No, just a total of all my bank deposits. They come to a total of $26,315 — excluding the cash deposits for my original investment and the $50,000 loan.”You “I see, and this $26,315 all relates to services provided to customers? Have you done any work for which you have not been paid?”Dr. Morris “Yes, my wife keeps up with the outstanding balances due from customers. She told me that we are still owed $9,500.”You “Well, Dr. Morris, I think that gives me enough information to get started. I will prepare you a set of financial statements for your first month of business, and we will see where you stand. Then, I think the first order of business for next month will be to get you set up with a computerized accounting system. You really will need an organized accounting system going forward, and that is best handled with a basic computer program. There are many from which to choose.”Dr. Morris “Great, that is what I was hoping you would say. I cannot tell you how much I appreciate your help on this.”(a) Prepare summary journal entries that reflect the first month of business.(b) Use T-accounts to capture the impact of the transactions on the accounts.(c) Prepare a trial balance as of the end of March.(d) Prepare an income statement and statement of retained .homeworkminutes.com/question/view/89264/umuc-acct220-week-1-homework-latest-2015#”>earnings for the month of March. Prepare the resulting balance sheet as of the end of the month.Prepare Bisceglia’s income statement, statement of retained earnings, and balance sheet for the year ending December 31, 20X5. The following information is all that is available. Be sure to prepare proper headings and dates on each financial statement.19-03-2015 IS RE BSCapital stock $41,000 41,000Wage expense 37,000 -37,000Revenue 90,000 90,000Cash 9,000 9000Utilities expense 6,000 6,000Beginning retained earnings 11,000 11,000Rent expense 10,000 1,000Accounts payable 4,000 4,000Equipment 80,000 80,000Dividends 5,000 5,000Accounts receivable 19,000 19,000Notes payable 20,000 20,000Bingo Corporation is a newly formed company. Below are the first 10 transactions that Bingo encountered. Prepare an income statement, statement of retained earnings, and balance sheet immediately following each of these consecutive transactions. BS Equiptment(1) Issued capital stock for $50,000 cash. 50,000(2) Purchased building for $120,000, making a $20,000 down payment and signing a promissory note payable for the balance. 1,20,000 20,000/1000(3) Paid wages expense of $5,000. 5000 5000(4) Provided services to customers for $15,000 cash. 15,000 15,000(5) Paid utilities expense of $2,000. 2,000 2,000(6) Reduced note payable with an $8,000 cash payment (ignore interest costs). 8,000(7) Provided services to customers on account, $10,000. 10,000(8) Incurred wages expense of $3,000, to be paid in the future. 3,000(9) Collected $4,000 on an outstanding account receivable. 4,000(10) Declared and paid dividend of $6,000. 6,000week 2Week 2Berry Corporation prepared the following preliminary trial balance. The trial balance and other information was evaluated by Delton Wiser, CPA. Delton has returned a list of proposed adjustments that are necessary to facilitate preparation of correct financial statements for the year ending December 31, 20X3.BERRY CORPORATIONTrial BalanceDecember 31, 20X3Debits Credits.homeworkminutes.com/question/view/89265/umuc-acct220-week-2-homework-latest-2015#”>Cash $30,540 $-.homeworkminutes.com/question/view/89265/umuc-acct220-week-2-homework-latest-2015#”>Accounts receivable 45,000 -Supplies 7,000 -Equipment 2,44,500 -Accumulated depreciation – 46,500Accounts payable – 12,700Unearned revenue – 31,250Notes payable – 80,000Capital .homeworkminutes.com/question/view/89265/umuc-acct220-week-2-homework-latest-2015#”>stock – 1,00,000Retained .homeworkminutes.com/question/view/89265/umuc-acct220-week-2-homework-latest-2015#”>earnings, Jan. 1 – 63,200Dividends 12,000 -Revenues – 2,89,800Wages expense 2,14,600 -Utilities expense 8,700 -Selling expense 41,610 -Depreciation expense 12,000 -Interest expense 7,500 -$6,23,450 $6,23,450Delton discovered that 40% of the unearned revenue appearing in the trial balance had actually been earned as of the end of the year.A physical count of supplies on hand revealed a year-end balance of only $3,000.Unpaid and unrecorded invoices for utilities for December amounted to $1,500.The last payday was December 26. Employees are owed an additional $3,900 that has not been recorded.Additional depreciation of $3,100 needs to be recorded.(a) Prepare journal entries relating to the adjustments.(b) Prepare an adjusted trial balance (you might utilize a partial worksheet for this task, as shown in the downloadable form).(c) Prepare an income statement and statement of retained earnings for 20X3, and a classified balance sheet as of the end of the year.(d) Berry’s bookkeeper argued with Delton that there was no need to record the adjustments since they have no “net” effect on income. Evaluate whether this observation is true of false, and comment on the appropriateness of this logic.Examine the following trial balances, before and after adjustment:CHESTERFIELD CORPORATIONTrial Balance and Adjusted Trial BalanceDecember 31, 20X9Trial Balance Adjusted Trial BalanceDebits Credits Debits CreditsCash $1,66,890 $- $1,66,890 $-Accounts receivable 87,654 – 1,07,654 -Supplies 8,992 – 4,500 -Prepaid rent 6,000 2,000 -Equipment 1,45,700 – 1,45,700 -Accumulated depreciation – 37,660 – 44,660Accounts payable – 13,590 – 13,590Wages payable – – – 4,500Interest payable – 1,500Unearned revenue – 18,000 – 12,000Notes payable – 50,000 – 50,000Capital stock – 2,25,000 – 2,25,000Retained earnings, Jan. 1 – 89,119 – 89,119Dividends 40,000 – 40,000 -Revenues – 3,34,490 – 3,60,490Wages expense 2,76,123 – 2,80,623 -Rent expense 33,000 – 37,000 -Depreciation expense – – 7,000 -Supplies expense – – 4,492 -Interest expense 3,500 – 5,000 -$7,67,859 $7,67,859 $8,00,859 $8,00,859(a) Determine and record the apparent adjusting entries in journal entry format.(b) Prepare an income statement for the year ending December 31, 20X9.(c) Prepare a statement of retained earnings for the year ending December 31, 20X9.(d) Prepare a classified balance sheet as of December 31, 20X9.Examine each of the following fact scenarios, then prepare initial and end-of-year adjusting entries (when needed) assuming (a) use of a “balance sheet” approach versus (b) use of an “income statement” approach. You may assume a calendar year end for each scenario. Use T-accounts to show how the same financial statement results occur under either approach. The preprinted worksheet includes an illustrative solution for the first scenario.Scenario 1 A $1,500, one-year insurance policy was purchased on June 1, 20X1.Scenario 2 $20,000 of unearned revenue was collected on August 1, 20X1. 40% of this amount was earned by the end of the year.Scenario 3 On December 1, 20X1, $3,000 was prepaid for space in a trade-show booth. The trade show is in February of 20X2.Scenario 4 A $1,000 customer deposit for future services was received on April 1, 20X1. On June 20, 20X1, the customer canceled the agreement and received a full refund.Plicta Motors is an automobile service center offering a full range of repair services for high performance cars. The following information is pertinent to adjusting entries that are needed for Plicta, as of March 31, 20X5. Plicta has a fiscal year ending on March 31, and only records adjusting entries at year end.Plicta has a large .homeworkminutes.com/question/view/89265/umuc-acct220-week-2-homework-latest-2015#”>investment in repair equipment, and maintains detailed asset records. These records show that depreciation for fiscal “X5” is $123,400.As of March 31, 20X5, accrued interest on loans owed by Plicta is $21,678.Auto dealerships outsource work to Plicta. This work is done on account, and billed monthly. As of March 31, 20X5, $54,800 of unbilled services have been provided.Plicta maintains a general business .homeworkminutes.com/question/view/89265/umuc-acct220-week-2-homework-latest-2015#”>liability insurance policy. The prepaid annual premium is $6,000. The policy was purchased on October 1, 20X4. Another policy is a 6-month property and casualty policy, and it was obtained on December 1, 20X4, at a cost of $3,000. Both policies were initially recorded as prepaid insurance.The company prepared a detailed count of shop supplies at March 31, 20X4. $37,904 was on hand at that date. Management believed this level was greater than necessary and undertook a strategy to reduce these levels over the next year. During the fiscal year 20X5, Plicta purchased an additional $125,000 of supplies, and debited the Supplies account. By March 31, 20X5, the effort to reduce inventory was successful, as the count revealed an ending balance of only $13,600.During the fiscal year, Plicta began offering a service contract to retail customers entitling them regular tire rotations, car washing, and other routine maintenance items. Customers prepay for this service agreement, and Plicta records the proceeds in the Unearned Revenue account. The service plan is a flat fee of $219, and Plicta sold the plan to 456 customers. At March 31, 20X5, it is estimated that 25% of the necessary work has been provided under these agreements.Plicta’s primary advertising is on billboards. Lamzar Outdoor Advertising sold Plicta a plan for multiple sign locations around the city. Because Plicta agreed to prepay the full price of $26,000, Lamzar agreed to leave the signs up for 13 months. Plicta paid on June 1, 20X4, and recorded the full amount as a prepaid. However, the advertising campaign was not begun until July 1, 20X4. It will conclude on July 31, 20X5.Plicta leases shop space. Monthly rent is due and payable on the first day of each month. Plicta paid March’s rent on March 1, and expects to pay April’s rent on April 1.Prepare adjusting entries (hint: when necessary) for Plicta, as of March 31, 20X5.week 3.homeworkminutes.com/question/view/89267/umuc-acct220-week-3-homework-latest-2015#”>purchase and resale of amphibious tour vehicles. Purchases for the first year of operation were as follows:Date Purchases07-Jan 50 units @ $15,000 each15-Mar 70 units @ $16,000 each16-Jun 30 units @ $16,500 each03-Aug 90 units @ $17,000 each11-Oct 25 units @ $17,200 eachSales for this first year of operation amounted to 210 units and totaled $4,250,000.(a) If Adriaan Taylor uses the first-in, first-out (FIFO) inventory method (periodic approach), what values would be assigned to ending inventory and cost of goods sold? How much is gross .homeworkminutes.com/question/view/89267/umuc-acct220-week-3-homework-latest-2015#”>profit?(b) If Adriaan Taylor uses the last-in, first-out (LIFO) inventory method (periodic approach), what values would be assigned to ending inventory and cost of goods sold? How much is gross profit?(c) If Adriaan Taylor uses the weighted-average inventory method (periodic approach), what values would be assigned to ending inventory and cost of goods sold? How much is gross profit?(d) Which of the above techniques produces the highest profit? Which of the above techniques reports the most “current” cost on a balance sheet? Which of the above techniques report the most “current” cost in measuring income? Which of the above techniques results in the lowest income tax obligation?”Ali Naeem was recently placed in charge of inventory accounting for Sialkot Surgical Supply. This company is located in Pakistan and deals in surgical supplies for global export. The company has been using the last-in, first-out inventory method applied on a perpetual basis. The company’s export trade is denominated and settled in dollars, and that currency is used within the company’s ledger.”Ali’s responsibility is to bring Sialkot Surgical’s inventory accounting into conformity with international accounting standards that have been embraced by the Institute of Chartered Accountants of Pakistan. As a result of his research, Ali was surprised to learn that LIFO does not have global acceptance and it is not a GAAP method in his country.Below is January’s preliminary inventory schedule for surgical clamps. This schedule was prepared on a LIFO basis.Date Purchases Sales Cost of Goods Sold Balance01-Jan 5,000 X $20 = $100,00005-Jan 5,000 X $20 = $100,0007,000 X $21 = $147,000 7,000 X $21 = $147,000$2,47,00012-Jan 9,000 @ $35 = $315,000 7,000 X $21 = $147,0002,000 X $20 = $ 40,000 3,000 X $20 = $ 60,000$1,87,00017-Jan 3,000 X $20 = $ 60,0004,000 X $22 = $ 88,000 4,000 X $22 = $ 88,000$1,48,00026-Jan 3,000 @ $37 = $111,000 3,000 X $22 = $66,000 3,000 X $20 = $ 60,0001,000 X $22 = $ 22,000$ 82,00031-Jan 3,000 X $20 = $ 60,0001,000 X $22 = $ 22,000$ 82,000(a) Examine Sialkot’s LIFO inventory schedule, and redo the presentation assuming perpetual FIFO. For this problem, you may assume that the beginning inventory would be the same as under LIFO.(b) Examine Sialkot’s LIFO inventory schedule, and redo the presentation assuming a moving average method. For this problem, you may assume that the beginning inventory would be the same as under LIFO.(c) Prepare journal entries necessary to reflect the FIFO perpetual application.(d) Show that the Inventory account balance resulting from part (c) agrees with the schedule from part (a). If Ali applied FIFO on a periodic basis, rather than a perpetual basis, would the same results occur?(e) By applying FIFO, rather than LIFO, will Sialkot Surgical’s income be increased or decreased?(f) Do you suspect that global divergence in accounting practices can contribute to difficulties in cross-border financing and global trade?Ahson Tariq is director of operations for CTC. CTC specializes in global merchandising of the world’s finest cotton fibers. It is common practice for CTC to purchase cotton in bulk from regional growers, and then apply grading and measurement techniques to the fiber. Substandard fibers are subject to return or .homeworkminutes.com/question/view/89267/umuc-acct220-week-3-homework-latest-2015#”>purchase price adjustment. CTC has negotiated credit terms with all suppliers of 1/10, n/30. Following are summary statements about June’s purchases.Purchased cotton for 80,000,000 Pakistan Rupees (.homeworkminutes.com/question/view/89267/umuc-acct220-week-3-homework-latest-2015#”>PKR), on accountReturned cotton for credit on account, PKR 3,000,000Agreed with suppliers to purchase price allowances, PKR 5,000,000Made payment on PKR 60,000,000 of open .homeworkminutes.com/question/view/89267/umuc-acct220-week-3-homework-latest-2015#”>accounts within discount period, and received PKR 600,000 purchase discountsMade payment on PKR 12,000,000 of open accounts outside of discount period, and lost PKR 120,000 purchase discountsAdditional information for June follows:”Net sales, PKR 97,000,000Beginning inventory, PKR 6,000,000Ending inventory, PKR 5,000,000Freight-in, PKR 2,200,000Freight-out, PKR 1,700,000Rent expense, PKR 3,500,000Salaries expense, PKR 2,400,000″(a) Prepare summary journal entries for the purchase related transactions, using the “gross” method.(b) Prepare summary journal entries for the purchase related transactions, using the “net” method.(c) Prepare an income statement for June, assuming use of the entries recorded in part (a).(d) Prepare an income statement for June, assuming use of the entries recorded in part (b).”Tic Toc Clock Shop reported the following merchandising-related transactions during June. Tic Tock Clock Shop records all purchases “”gross”” and credit terms are precisely followed on both purchases and sales.Prepare journal entries to record each transaction.”03-Jun Purchased $4,000 of clocks on account from Swiss Time, F.O.B. destination, terms 1/10, n/30.05-Jun Sold a $1,500 clock to Janci Holgren on account, terms 2/10, n/eom. The customer picked up the clock from the shop.09-Jun Paid the amount due for the purchase of June 3.11-Jun Purchased $8,000 of clocks on account from Melbourne Clockworks, F.O.B. shipping point, terms 2/10, n/30. Freight charges of $460 were prepaid by Melbourne and added to the invoice. No discount is permitted on the freight charges.19-Jun Sold a $3,500 clock on account, terms 2/10, n/eom. Tic Toc sold the clock F.O.B. destination, and paid the freight charges of $330.23-Jun The customer of June 19 called to report that the clock was received damaged. An agreement was reached to reduce the invoice by 20%.27-Jun Paid Melbourne Clockworks for the purchase of June 11.27-Jun Janci Holgren paid for the purchase of June 5.28-Jun The customer of June 19 paid the balance due.week 5Week 5Following is the September 30, 20X4 bank reconciliation for the Quiet Moose Lodge. You are also provided with the October check .homeworkminutes.com/question/view/89272/umuc-acct220-week-5-homework-latest-2015#”>register and bank statement. Utilize this information to prepare October’s bank reconciliation and related adjusting entry. You may assume that any discrepancies between the check register and bank statement relate to recording errors in the accounts of the Quiet Moose, and not the bank.Ending balance per bank statement $18,344.07Add:Deposits in transit 2,505.55Deduct:Outstanding checks#3444 $175.00#3446 1,908.09 (2,083.09)Correct cash balance $18,766.53Ending balance per company records $18,696.53Add:Interest .homeworkminutes.com/question/view/89272/umuc-acct220-week-5-homework-latest-2015#”>earnings 80.00Deduct:Service charges (10.00)Correct cash balance $18,766.53DATE PARTY REF # CHECK DEPOSIT Balance01-Oct Balance $18,766.5302-Oct Gomez 3448 $145.99 – 18,620.5405-Oct Deposit – $3,400.00 22,020.5407-Oct Bryers 3449 387.97 – 21,632.5707-Oct Morton 3450 1,204.67 – 20,427.9007-Oct Lee 3451 4,664.50 – 15,763.4010-Oct Morici 3452 43.23 – 15,720.1710-Oct LaCorx 3453 2,990.44 – 12,729.7311-Oct Benson 3454 1,100.31 – 11,629.4212-Oct Void 3455 – – 11,629.4213-Oct Morgan 3456 695.77 – 10,933.6513-Oct Russell 3457 788.87 – 10,144.7814-Oct Deposit – 3,476.88 13,621.6617-Oct Lowen 3458 3,664.34 – 9,957.3219-Oct Post Office 3459 45.45 – 9,911.8720-Oct Nguen 3460 677.21 – 9,234.6630-Oct Behn 3461 499.00 – 8,735.6631-Oct Deposit – 8,131.21 16,866.87$16,907.75 $15,008.09Mountain Home Bank Statement date: October 1, 20X4 through October 31, 20X4Statement for: Quiet Moose Lodge121 Main Street 13 River StreetP.O. Box 5566 Patawa TownshipAccount # 474784CHECKING SUMMARYPrevious statement balance on 9-30-X4 18,344.07Total of 5 deposits for + 19,339.09Total of 14 withdrawals for – 14,887.45Interest earnings for + 65.66Service charges for – 35.00New balance 22,826.37CHECKS AND OTHER DEBITSCheck Date Paid Amount Check Date Paid Amount3446 3-Oct 1908.09 3454 12-Oct 1100.31*3448* 5-Oct 145.99 *3456* 13-Oct 695.773449 7-Oct 387.97 3457 14-Oct 788.873450 7-Oct 1204.67 3458 18-Oct 3664.34*3452* 10-Oct 43.23 3459 20-Oct 54.453453 11-Oct 2990.44 3460 21-Oct 677.21Electronic funds tranfer – Patawa Water Co-op 25-Oct 237.34NSF returned check – maker Stacey 28-Oct 988.77NSF fee 28-Oct 25.00Monthly service fee 31-Oct 10.00DEPOSITS AND OTHER CREDITSDate Posted AmountCustomer deposit 1-Oct 2505.55Customer deposit 5-Oct 3400.00Collection item — note receivable ($6500 + interest) 11-Oct 6774.33Customer deposit 14-Oct 3476.88Credit card sales posting 28-Oct 3182.33Interest earnings 31-Oct 65.66Manahan Corporation received its August 31 bank statement showing total funds on deposit of $288,090.09. This amount was $149,158.22 in excess of the balance in the general ledger Cash account. Additional information consists of the following:The company has a 1-year, $100,000, certificate of deposit. This amount is included in the total funds listed on the bank statement. Manahan classifies this security in a separate investment account in its general ledger.Interest earned on the CD was $475 during the month. This interest is .homeworkminutes.com/question/view/89272/umuc-acct220-week-5-homework-latest-2015#”>free for withdrawal and is automatically posted to the regular checking account. Manahan’s first notification of the amount of interest for the month is via the bank statement, and the interest income has not yet been recorded in the general ledger Cash account.Manahan Corporation received a $50,000 draft for an oil and gas lease from XTX Exploration. This draft was presented to the bank in early July. Drafts are not cash until the maker (XTX) honors them (at their option), and this process can take as long as several weeks. The bank statement included notification that XTX had honored and funded the draft in mid August. This is the first notification to Manahan of actual funding, and Manahan has not previously recorded this transaction.Manahan made a deposit late in the afternoon of August 31. The amount of the deposit was $3,666.04, but this amount did not appear on the August 31 bank statement. The bank has .homeworkminutes.com/question/view/89272/umuc-acct220-week-5-homework-latest-2015#”>a sign in its lobby that says “Deposits after 3 pm will be processed on the next following business day.”Manahan has authorized automatic payments to its utility company for monthly charges. Withdrawals of $1,445.99 appear in the bank statement for such utilities. This is the first notification to Manahan, and Manahan has not previously recorded this transaction.Late in August, Manahan did an online authorization for a credit card company payment. Due to a timing issue, the bank statement does not yet reflect the payment for $4,446.09. Manahan has appropriately recorded the reduction in cash in the general ledger.Manahan prepared a $3,000 payment to Sims via check #12234. Due to a bookkeeping error, Sims reported that it had not received payment. Manahan issued a $3,000 replacement check #12257. Both checks cleared the bank in August, and Sims has admitted its error. Sims will be returning $3,000 to Manahan.The bank statement included monthly service charges of $125. Manahan has not previously recorded these charges.At the end of July, three checks were outstanding (#12170, $245.55; #12200, $1,889.66; and #12202, $75). At the end of August, three checks were outstanding (#12170, $245.55; #12290, $1,333.07, and #12291, $1,117.54).A review of deposits clearing the bank revealed that Manahan had recorded a $2,000.22 deposit as $2,222.22 in the general ledger Cash and Revenue .homeworkminutes.com/question/view/89272/umuc-acct220-week-5-homework-latest-2015#”>accounts.(a) Prepare Manahan’s bank reconciliation as of August 31, 20X5.(b) What is the correct balance for Cash in the August 31 balance sheet?(c) Prepare the journal entry suggested by the reconciliation.Myssie Cardenas was recently hired as the chief financial officer for Barajas Corporation. At the time Myssie was hired, the company had just completed the accounting cycle for the year ending December 31, 20X7. Myssie began her new job by reviewing the following information about sales and receivables activity during the year:Beginning accounts receivable $15,00,000Beginning allowance for uncollectibles 40,000Sales on account 60,00,000Collections on account 48,00,000Sales discounts 68,000Accounts written-off 33,000Additions to allowance for uncollectible accounts 1% of net sales(a) Based on her review, Myssie prepared some handwritten notes in journal entry form summarizing the above sales, collections, discounts, write-offs, and additions to the allowance. She wanted to compare her entries to what had actually been recorded by the company. How should her summary entries appear?(b) After completing her review, Myssie concluded that beginning in 20X8, the company would switch to a balance sheet approach for providing for uncollectible accounts. She estimates that the Allowance for Uncollectible Accounts should include an end-of-year balance equal to 3% of total gross receivables. Prepare summary journal entries for 20X8 to capture the following information, and to update the allowance account from its beginning of year balance (see part (a) to determine the beginning balance).Sales on account 66,00,000Collections on account 59,00,000Sales discounts 88,000Accounts written-off 53,000(c) What is the objective in deciding which technique is appropriate for estimating uncollectibles? What factors perhaps influenced Myssie’s decision to adopt a new technique?Rocks Shoes is a three-year old company that started out producing specialty shoes for rock climbing and mountaineering. However, the shoe’s unique styling has made them a hit with the general public and the company is now growing rapidly. Rocks needs additional capital to expand its manufacturing capacity, and it plans to sell additional shares of .homeworkminutes.com/question/view/89272/umuc-acct220-week-5-homework-latest-2015#”>stock to raise money.During its first three years in operation, Rocks used the direct-write off method to account for uncollectible accounts. Information about sales, write-offs, and the company’s income follows:Sales Write-offs Net IncomeYear 1 $24,00,000 $- $1,00,000Year 2 6,300,000 24,000 3,00,000Year 3 12,900,000 1,11,000 5,50,000″Rocks is required to have audited financial statements prior to offering its shares of stock for sale. This will require the company to recompute its income under generally accepted accounting principles for each of the three prior years. The only item that requires adjustment is the treatment of uncollectible accounts.Rocks estimates that 3% of sales ultimately prove to be uncollectible — 1% in the year following a sale, and 2% in the year thereafter.”(a) Prepare the journal entries that were used by Rocks for each year under the direct write-off method.(b) Determine if the actual write-offs are aligning with the estimates provided by Rocks. Why does GAAP require an allowance method for uncollectibles?(c) Prepare the journal entries that would have been made each year, had the percentage of sales technique been used to establish an allowance account. Be sure to include entries to both establish the allowance, and to record the write offs.(d) How much is the corrected net income for each year? Will the reduction in income potentially impact the amount of capital that can be raised?week 6Week 6On January 1, 20X2, The GenKota Winery purchased a new bottling system. The system has an expected life of 5 years. The system cost $325,000. Shipping, installation, and set up was an additional $35,000. At the end of the useful life, Julie Hayes, chief accountant for GenKota, expects to dispose of the bottling system for $96,000. She further anticipates total output of 660,000 bottles over the useful life.(a) Assuming use of the straight-line depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year.(b) Assuming use of the units-of-output depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year. Actual output, in bottles, was 100,000 (20X2), 130,000 (20X3), 150,000 (20X4), 160,000 (20X5), and 120,000 (20X6).(c) Assuming use of the double-declining balance depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year.(d) Assuming use of the straight-line method, prepare revised depreciation calculations if the useful life estimate was revised at the beginning of 20X4, to anticipate a remaining useful life of 4 additional years (in other words, a total life of 6 years). The revised useful life was accompanied by a change in estimated salvage value to $54,400.Grant Price is conducting an audit of the property, plant, and equipment records of Wellron Corporation. Grant selected two specific assets for closer inspection. Grant has examined documentation related to each asset’s original .homeworkminutes.com/question/view/89277/umuc-acct220-week-6-homework-latest-2015#”>purchase and compared it to the recorded cost, physically inspected the item to determine that it is still in the possession of the company, and conducted other similar assurance procedures.The final step in the audit of these .homeworkminutes.com/question/view/89277/umuc-acct220-week-6-homework-latest-2015#”>accounts is to test the calculations of depreciation expense and accumulated depreciation. Grant has asked you to perform this final procedure for 20X8. Below is a schedule of the two assets, with the depreciation values determined by Wellron. The building was depreciated by the straight-line method, and the truck by the double-declining balance method. Determine if the indicated depreciation values are correct.Item Cost Purchase Date Service Life Salvage Value Depreciation Expense for 20X8 Accumulated Depreciation at 12/31/X8Building $12,00,000 July 1, 20X1 25 years $4,00,000 $32,000 $2,56,000Truck $80,000 Oct. 1, 20X6 8 years $5,000 $13,184 $35,449″Pierce Corporation recently hired a new manager for its struggling construction division. The manager was given responsibility for streamlining operations and restoring profitability. Selling selected assets is one option under consideration.Begin by reviewing the following asset listing, and prepare hypothetical entries “”as if”” each asset were sold for .homeworkminutes.com/question/view/89277/umuc-acct220-week-6-homework-latest-2015#”>cash at its estimated fair value. Then, determine which asset should be sold if the objective becomes to (a) have the largest immediate accounting gain, (b) have the largest immediate accounting loss, (c) result in the highest avoidance of future depreciation expense in periods subsequent to the period of asset sale, (d) produce the most immediate cash inflow, (e) have the largest total asset position, or (f) have no change in total assets.”Cost Accumulated Depreciation Fair ValueAsset A $25,00,000 $10,00,000 $30,00,000Asset B 8,00,000 1,00,000 7,00,000Asset C 46,00,000 5,00,000 40,00,000Asset D 32,50,000 12,50,000 12,50,000Tidwell Corporation’s accounting staff was unsure of how to account for certain expenditures relating to its property, plant, and equipment. As a result, the company has delayed recording entries related to the following transactions. In addition, until these items are resolved, the determination of depreciation expense for the year has been delayed.Item A The company’s delivery truck, originally costing $90,000 and having a 6-year life with no salvage value, was substantially overhauled at a cost of $10,000. This expenditure occurred at the beginning of the year, when the truck was two years old. This action restored the truck to “like-new” condition, and extended the useful life by an additional three years.Item B At mid-year, the company added a new $65,000 dust handling unit to the heating and ventilation system in its inventory warehouse. This new feature is supposed to reduce dust from the air and provide for a cleaner environment in which to store inventory. The new dust unit has a 10-year physical life, but it is anticipated that it will be scraped six and one-half years after its installation, when the primary heating system is replaced. As of the beginning of the year, the heating and ventilation system had a cost of $240,000 and accumulated depreciation of $100,000.Item C The company entered into a 5-year contract with Reliable Maintenance Services Company. The agreement provides for Tidwell to make monthly payments of $1,500 for all routine cleaning and maintenance activities on shop equipment. Two months of services had been provided and paid as of the end of the year. As of the beginning of the year, shop equipment had a remaining net book value of $300,000, and a remaining life of three years.Item D Tidwell entered into a joint agreement with several other companies to mutually acquire an easement on an adjoining tract of land. The easement was needed to provide right-of-way for a future rail transport line extension that will benefit all of the participating companies. Tidwell paid $10,000 for its share of the access easement. The easement is perpetual in nature.Prepare journal entries for each of the four described expenditures. Then, calculate depreciation, as appropriate, for the expenditure and/or related assets. Assume straight-line depreciation in each case. STidwell Corporation’s accounting staff was unsure of how to account for certain expenditures relating to its property, plant, and equipment. As a result, the company has delayed recording entries related to the following transactions. In addition, until these items are resolved, the determination of depreciation expense for the year has been delayed.Item A The company’s delivery truck, originally costing $90,000 and having a 6-year life with no salvage value, was substantially overhauled at a cost of $10,000. This expenditure occurred at the beginning of the year, when the truck was two years old. This action restored the truck to “like-new” condition, and extended the useful life by an additional three years.Item B At mid-year, the company added a new $65,000 dust handling unit to the heating and ventilation system in its inventory warehouse. This new feature is supposed to reduce dust from the air and provide for a cleaner environment in which to store inventory. The new dust unit has a 10-year physical life, but it is anticipated that it will be scraped six and one-half years after its installation, when the primary heating system is replaced. As of the beginning of the year, the heating and ventilation system had a cost of $240,000 and accumulated depreciation of $100,000.Item C The company entered into a 5-year contract with Reliable Maintenance Services Company. The agreement provides for Tidwell to make monthly payments of $1,500 for all routine cleaning and maintenance activities on shop equipment. Two months of services had been provided and paid as of the end of the year. As of the beginning of the year, shop equipment had a remaining net book value of $300,000, and a remaining life of three years.Item D Tidwell entered into a joint agreement with several other companies to mutually acquire an easement on an adjoining tract of land. The easement was needed to provide right-of-way for a future rail transport line extension that will benefit all of the participating companies. Tidwell paid $10,000 for its share of the access easement. The easement is perpetual in nature.Prepare journal entries for each of the four described expenditures. Then, calculate depreciation, as appropriate, for the expenditure and/or related assets. Assume straight-line depreciation in each case.week 7Week 7Following are selected borrowing transactions by Campus Housing Corporation.01-Jun Campus purchased new furniture in exchange for a $500,000 promissory note. The note was due in 6 months and bears interest at 8% per annum.01-Jul Borrowed .homeworkminutes.com/question/view/89283/umuc-acct220-week-7-homework-latest-2015#”>cash of $90,000, giving a $100,000 one-year note. The interest is implicit in the difference between the cash borrowed and the note’s $100,000 maturity value.01-Oct Campus was experiencing a temporary cash .homeworkminutes.com/question/view/89283/umuc-acct220-week-7-homework-latest-2015#”>flow crunch. The company issued a $40,000 one-year note in settlement of an outstanding account payable. The note bears interest at 8% per annum. The agreement with the creditor was that Campus would repay the note as soon as possible, and the total interest would be allocated to each month based on the “rule of 78.”31-Oct Campus paid the note and accrued interest resulting from the October 1 transaction.01-Nov Borrowed $75,000 cash from a local bank by issuing a 2-year, 6% promissory note. The interest is to be calculated based on actual days, using a 365-day year assumption.01-Dec Campus paid the note and accrued interest resulting from the June 1 transaction.(a) Prepare journal entries necessary to record the above transactions.(b) Prepare year-end adjusting journal entries pertinent to the above borrowing transactions.Evaluate the following types of transactions, and identify the impact (increase (?), decrease (?), or no change (N/C)) on total equity, common or preferred stock, additional paid-in capital, treasury stock, and retained .homeworkminutes.com/question/view/89283/umuc-acct220-week-7-homework-latest-2015#”>earnings. The first transaction type is done as an example.Total Equity “Common Stock/Preferred .homeworkminutes.com/question/view/89283/umuc-acct220-week-7-homework-latest-2015#”>Stock ” Additional Paid-in Capital Treasury Stock Retained EarningsIssue common stock at par ? ? N/C N/C N/CIssue common stock at > parIssue preferred stock at parIssue preferred stock at > parBuy treasury stock (cost method)Resell treasury stock > cost (cost method)Resell treasury stock < cost (cost method)Declare cash dividendPay previously declared cash dividendDeclare and issue large stock dividend"Declare and issue small stock dividend(fair value > par)”Declare and issue stock splitFollowing are selected transactions or events of Amazon Company relating to its first month of operation.01-May Amazon borrowed $100,000 via a note payable bearing interest at 1% per month. This note and all accrued interest is due at the end of July.10-May Purchased $25,000 of inventory, terms 2/10, n/30. The .homeworkminutes.com/question/view/89283/umuc-acct220-week-7-homework-latest-2015#”>purchase was initially recorded at the net amount. The obligation was not paid during May.16-May The company adopted an employee health insurance plan. The total estimated cost is $100 per day. None of this cost was funded during May.20-May Sold goods for $80,000 cash. Amazon offers a warranty on the goods, and anticipates that total warranty cost will be 2% of sales.25-May One of Amazon’s vehicles was involved in an accident. Amazon expects to be held responsible for an estimated $10,000 in damages.31-May At month end, it was estimated that employees are owed for $13,000 in accrued wages. In addition, $400 was spent on warranty service work.(a) Prepare any initial journal entries necessary to record the preceding transactions or events.(b) Prepare month-end adjusting journal entries that are deemed appropriate related to the preceding transactions or events.(c) Prepare the current liability section of the company’s balance sheet as of the end of the month. The only obligations are those related to the preceding transactions or events.Dry Dock Container Corporation began operations in early 20X5, when it issued 200,000 shares of $3 par value common stock for $10 per share. The following additional equity-related transactions occurred during 20X5.”Transaction A:Issued 50,000 shares of $100 par value, 6%, cumulative preferred at $102 per share.””Transaction B:Reacquired 10,000 common shares for treasury at $12 per share.””Transaction C:Declared the full cash dividend on the preferred and $0.10 per share on the outstanding common shares.””Transaction D:Paid the previously declared dividends.””Transaction E:Sold 10,000 treasury shares at $15 per share.””Transaction F:Declared and issued a 2% common stock dividend. The dividend occurred subsequent to the above described treasury stock transactions. The .homeworkminutes.com/question/view/89283/umuc-acct220-week-7-homework-latest-2015#”>market value of the stock was $13 per share.””Transaction G:Reacquired 20,000 common shares for treasury at $11 per share.””Transaction H:Closed the annual net income of $800,000 from Income Summary to Retained Earnings.”(a) Prepare journal entries for the above described transactions.(b) Prepare the 20X5 statement of stockholders’ equity reflecting the above described transactions.(c) Prepare the stockholders’ equity section of Dry Dock’s balance sheet at December 31, 20X5.

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