Print Assignment: Assignment 5.

Comprehensive Review ::true

Page 1 of 12

Description / Instructions: this assignment is optional

Question 1
On December 31, before any year-end adjusting entries are made, Falcon Companys Insurance Expense account
had a balance of 925 and its Prepaid Insurance account had a balance of 1,900. It was determined that 1,500
of insurance had expired by year end. How much is the adjusted balance for Insurance Expense for the year?

925
1,500
975
2,425

Question 2
The balance of the Allowance for Doubtful Accounts account at January 1 of the current year was HK$6,800.
During the year, accounts receivable in the amount of HK$9,000 were written off. Estimated uncollectible accounts
expense for the year amounts to HK$7,200, based on the percentage-of-sales approach. How much is the balance
of the Allowance for Doubtful Accounts account to be reported on the statement of financial position at year-end?

HK$14,000
HK$7,200
HK$8,600
HK$5,000

Question 3
If unearned revenues are initially recorded in revenue accounts and have not all been earned at the end of the
accounting period, then failure to make an adjusting entry will cause

accounts receivable to be overstated.

revenues to be understated.
liabilities to be overstated.
revenues to be overstated.

Question 4
KidsRUs paid HK$630 cash on account to a creditor. The transaction was incorrectly recorded as a debit to Cash of
HK$360 and a credit to Accounts Receivable of HK$360. The correcting entry is

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 2 of 12

debit to Accounts Payable, HK$630, and credit to Cash, HK$630.

debit to Accounts Receivable, HK$360, and credit to Cash, HK$360.
debit to Accounts Receivable, HK$630, and credit to Accounts Payable, HK$630.
debit to Accounts Payable, HK$630, debit to Accounts Receivable, HK$360, and credit to Cash, HK$990.

Question 5
Dynacare recorded estimated bad debts totaling 35,000, and wrote-off accounts receivable of 20,000 during the
current year. What net effect do these two transactions have on net income?

A decrease of 55,000
A decrease of 35,000
A decrease of 20,000
No effect

Question 6
A company purchased land for HK$70,000 cash. Real estate brokers commission was HK$5,000. The company
paid a salvage company HK$7,000 to demolish an old building on the land before construction of a new building
could start. Under the historical cost principle, the cost of land would be recorded at

HK$77,000
HK$70,000
HK$75,000
HK$82,000

Question 7
Jefferson Company purchased a piece of equipment on January 1, 2013. The equipment cost 60,000 and had an
estimated life of 8 years and a residual value of 8,000. What was the depreciation expense for the asset for 2014
under the double-declining-balance method?

6,500.
11,250.
15,000.
6,562.

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 3 of 12

Question 8
ABC Corporation issues 1,000 shares of 10 par value ordinary shares at 12 per share. In recording the
transaction, credits are made to

Share Capital-Ordinary 10,000 and Share Premium-Ordinary 2,000.

Share Capital-Ordinary 12,000.
Share Capital-Ordinary 10,000 and Gain from CityplaceSale of Shares 2,000.
Share Capital-Ordinary 10,000 and Retained Earnings 2,000

Question 9
XYZ, Inc. sells 100 shares of its 5 par value treasury shares at 13 per share. If the cost of acquiring the shares
was 10 per share, the entry for the sale should include credits to

Treasury Shares 1,000 and Share Premium - Treasury 300.

Treasury Shares 500 and Share Premium - Treasury 800.
Treasury Shares 1,000 and Retained Earnings 300.
Treasury Shares 500 and Gain from CityplaceSale of Treasury Shares 800.

Question 10
Adana Inc. reported net income of $186,000 during 2014 and paid dividends of $ 26,000 on ordinary shares. It
also has 10,000 shares of 6%, $100 par value, non-cumulative preference shares outstanding. Ordinary
shareholders equity was $1,200,000 on January 1, 2014, and $1,600,000 on December 31, 2014. The companys
return on ordinary equity for 2014 is

10.0%.
9.0%.
7.1%.
13.3%.

Question 11
Net income is 132,000, accounts payable increased 10,000 during the year, inventory decreased 6,000 during
the year, and accounts receivable increased 12,000 during the year. Under the indirect method, what is net cash
provided by operations?

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 4 of 12

102,000
112,000
124,000
136,000

Question 12
If sales are CHF130,000, beginning accounts receivable CHF12,000, and ending accounts receivable CHF15,000,
what is the amount of cash receipts from customers?

CHF127,000
CHF133,000
CHF130,000
CHF142,000

Question 13
Bainbridge Company uses the direct method in determining net cash provided (used) by operating activities. The
income statement shows income tax expense of 60,000. Income taxes payable were 25,000 at the beginning of
the year and 18,000 at the end of the year. Cash payments for income taxes are

53,000.
60,000.
67,000.
78,000.

Question 14
Metz Incorporated issued 8%, 10-year 2,000,000 bonds that pay interest semiannually on October 1 and April 1.
The bonds are dated April 1, 2014 and are sold on that date. The discount rate of interest for such bonds on the
April 1, 2014 was 10%. How much are the cash proceeds CityplaceMetz received from the issuance of the bonds?

2,000,000
1,750,757
1,754,209
3,600,000

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 5 of 12

Question 15
Kaya Abbas, D.D.S., opened a dental practice on January 1, 2014. During the first month of operations, the
following transactions occurred.
1.

Performed services for patients who had dental plan insurance. At January 31,
performed but not yet recorded.

835 of such services were

2.

Utility expenses incurred but not paid prior to January 31 totaled

3.

Purchased dental equipment on January 1 for 87,000, paying 29,600 in cash and signing a 57,400,
3-year note payable. (a) The equipment depreciates 435 per month. (b) Interest is 574 per month.

4.

Purchased a six-month malpractice insurance policy on January 1 for

5.

Purchased

593.

1,551 of dental supplies. On January 31, determined that

26,076.
672 of supplies were on hand.

Prepare the adjusting entries on January 31. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually.)
No.

Account Titles and Explanation

Debit

Credit

1.

2.

3(a).

3(b).

4.

5.

Question 16
Natal Co. was organized on April 1, 2014. The company prepares quarterly financial statements. The adjusted trial
balance amounts at June 30 are shown below.
Debits
Cash

Credits
R$ 6,231

Accumulated
DepreciationEquipment

R$ 632

Accounts Receivable

465

Notes Payable

Prepaid Rent

651

Accounts Payable

763

Supplies

983

Salaries and Wages Payable

375

Equipment
Dividends

12,516

Interest Payable

3,564

66

438

Unearned Rent Revenue

335

Salaries and Wages

Expense

7,715

Share CapitalOrdinary

12,923

Rent Expense

1,316

Service Revenue

11,632

Depreciation Expense
Supplies Expense

632
137

Rent Revenue
Total credits

1,248
R$31,538

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Utilities Expense

Page 6 of 12

388
66

Interest Expense

R$31,538

Total debits

Determine the net income for the quarter April 1 to June 30.
Net income

R$

Determine the total assets and total liabilities at June 30, 2014, for Natal Company.
Natal Company
Total assets

R$

Total liabilities

R$

Determine the amount that appears for Retained Earnings at June 30, 2014.
Retained Earnings, June 30

R$

Question 17
Eastland Company reports the following for the month of June.
Date

Explanation

Units

Unit Cost

Total Cost

June 1

Inventory

310

$6

$1,860

June 12

Purchase

465

3,255

June 23

Purchase

775

6,200

June 30

Inventory

248

Calculate the cost of the ending inventory and the cost of goods sold for FIFO, using a perpetual inventory system.
Assume a sale of 620 units occurred on June 15 for a selling price of $9 and a sale of 682 units on June 27 for $10.
(Round answers to 0 decimal places, e.g. $2,120.)
FIFO
The cost ending inventory
The cost of goods sold

$
$

Calculate the cost of the ending inventory and the cost of goods sold for moving-average cost, using a perpetual
inventory system. Assume a sale of 620 units occurred on June 15 for a selling price of $9 and a sale of 682 units
on June 27 for $10. (Round answers to 0 decimal places, e.g. $2,120.)
Moving-Average Cost
The cost ending inventory
The cost of goods sold

$
$

Question 18

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 7 of 12

Prepare journal entries to record the following. (Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
(a)
(b)

Matterhorn Company retires its delivery equipment, which cost CHF 40,220. Accumulated depreciation is
also CHF 40,220 on this delivery equipment. No residual value is received.
Assume the same information as (a), except that accumulated depreciation is CHF 34,280, instead of
CHF 40,220, on the delivery equipment.

No. Account Titles and Explanation

Debit

Credit

(a)

(b)

Question 19
Otto Electronics issues a R$ 835,100 , 10 %, 10-year mortgage note on December 31, 2013. The proceeds from
the note are to be used in financing a new research laboratory. The terms of the note provide for semiannual
installment payments, exclusive of real estate taxes and insurance, of R$ 67,011 . Payments are due June 30 and
December 31.

Prepare an installment payments schedule for the first 2 years. (Round answers to 0 decimal places, e.g.
$15,250.)
Semiannual
Interest
Period

Cash Payment

Interest Expense

Reduction of
Principal

Principal Balance
R$

Issue Date
1

R$

R$

R$

2
3
4

Prepare the entries for (1) the loan and (2) the first two installment payments. (Credit account titles are
automatically indented when amount is entered. Do not indent manually.)
Date

Account Titles and Explanation

Debit

Credit

Dec. 31, 2013

June 30, 2014

Dec. 31, 2014

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 8 of 12

Show how the total mortgage liability should be reported on the statement of financial position at December 31,
2014.
Otto Electronics
Statement of Financial Position
December 31, 2014

R$

R$

Question 20
Elston Corporation had the following equity accounts on January 1, 2014: Share CapitalOrdinary ($5 par)
$426,085, Share PremiumOrdinary $190,300, and Retained Earnings $112,300. In 2014, the company had the
following treasury share transactions.
Mar. 1
June 1
Sept. 1
Dec. 1

Purchased 5,760 shares at $9 per share.

Sold 846 shares at $13 per share.
Sold 1,750 shares at $11 per share.
Sold 1,460 shares at $6 per share.

Elston Corporation uses the cost method of accounting for treasury shares. In 2014, the company reported net
income of $27,700.

Journalize the treasury share transactions, and prepare the closing entry at December 31, 2014, for net income.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date

Account Titles and Explanation

Debit

Credit

Mar. 1

June 1

Sept. 1

Dec. 1

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 9 of 12

Dec. 31

Question 21
On December 1, Discount Electronics Ltd. has three DVD players left in stock. All are identical, all are priced to sell
at $172. One of the three DVD players left in stock, with serial #1012, was purchased on June 1 at a cost of $110.
Another, with serial #1045, was purchased on November 1 for $99. The last player, serial #1056, was purchased
on November 30 for $85.

Calculate the cost of goods sold using the FIFO periodic inventory method assuming that two of the three players
were sold by the end of December, Discount Electronics year-end.
The cost of goods sold

If Discount Electronics used the specific identification method instead of the FIFO method, how might it alter its
earnings by selectively choosing which particular players to sell to the two customers? What would Discounts
cost of goods sold be if the company wished to minimize earnings? Maximize earnings?
Cost of goods sold would be

if it wished to minimize the earnings.

Cost of goods sold would be

if it wished to maximize the earnings.

Question 22
On December 31, 2013, Russell Co. estimated that 2% of its net sales of $404,000 will become uncollectible. The
company recorded this amount as an addition to Allowance for Doubtful Accounts. On May 11, 2014, Russell Co.
determined that the B. Vetter account was uncollectible and wrote off $2,020. On June 12, 2014, Vetter paid the
amount previously written off.
Prepare the journal entries on December 31, 2013, May 11, 2014, and June 12, 2014. (Credit account titles are
automatically indented when amount is entered. Do not indent manually.)
Date

Account Titles and Explanation

Debit

Credit

Dec. 31, 2013

May 11, 2014

June 12, 2014

(To write off bad debts).

(To record bad debts recovered).

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 10 of 12

Question 23
At the beginning of 2012, Mansen Company acquired equipment costing $172,400. It was estimated that this
equipment would have a useful life of 6 years and a residual value of $17,240 at that time. The straight-line
method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to
be recorded at the end of each year.
During 2014 (the third year of the equipments life), the companys engineers reconsidered their expectations, and
estimated that the equipments useful life would probably be 7 years (in total) instead of 6 years. The estimated
residual value was not changed at that time. However, during 2017 the estimated residual value was reduced to
$9,482.
Indicate how much depreciation expense should be recorded each year for this equipment, by completing the
following table. (Round answers to 0 decimal places, e.g. $2,150.)
Depreciation
Expense

Year
2012

Accumulated
Depreciation
$

2013
2014
2015
2016
2017
2018

Question 24
Condensed financial data of Jhutti Company appear below.
Jhutti Company
Comparative Statements of Financial Position
December 31
Assets

2014

Equipment

$249,240

Accumulated depreciationequipment
Investments

(49,010 )

2013
$205,360
(39,520 )

84,700

86,450

120,100

101,400

Accounts receivable

79,000

57,450

Cash

91,680

47,880

$575,710

$459,020

Inventory

Equity and Liabilities

Share capitalordinary

$240,600

$198,010

Retained earnings

168,550

125,170

Bonds payable

101,090

69,070

Accounts payable

53,440

47,810

Accrued expenses payable

12,030

18,960

$575,710

$459,020

Jhutti Company
Income Statement
For the Year Ended December 31, 2014
Sales revenue
Gain on Disposal of Equipment

$298,280
8,440

306,720

Less:

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Cost of goods sold

Page 11 of 12

98,880

Operating expenses (excluding

depreciation expense)

14,320

Depreciation expense

46,770

Income tax expense

7,240

Interest expense

2,300

169,510
$137,210

Net income
Additional information:
1.
2.
3.
4.

Equipment costing $91,490 was purchased for cash during the year.
Investments were sold at cost.
Equipment costing $47,610 was sold for $18,770, resulting in gain of $8,440.
A cash dividend of $93,830 was declared and paid during the year.

Prepare a worksheet for the statement of cash flows using the indirect method. Enter the reconciling items directly
in the worksheet columns. (List components of retained earnings separately in the debit and credit
columns. Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g.
(15,000).)

Statement of
Financial Position
Debits

JHUTTI COMPANY
WorksheetStatement of Cash Flows
For the Year Ended December 31 , 2014
Reconciling Items
Balance 12/31/13

Debit

Credit

Balance 12/31/14

Equipment
Investments
Inventory
Accounts receivable
Cash
Totals
Credits
Share capitalordinary
Retained earnings
Bonds payable
Accumulated
depreciationequipment
Accounts payable
Accrued expenses
payable
Totals
Statement of Cash
Flow Effects
Operating activities

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014

Print Assignment: Assignment 5. Comprehensive Review ::true

Page 12 of 12

Investing activities

Financing activities

Totals

Totals

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/16/2014