Principles of Accounting I

Principles of Accounting II

Running head: Week Two Assignment Revenues and Expenses 1 Yesenia Hernandez Week Two Assignment Revenues and Expenses ACC 205 Professor- Rodisch Week Two Assignment Revenues and Expenses 2 1. Recognition of concepts . Jim Armstrong operates a small company that books entertainers for theaters, parties, conventions, and so forth. The company’s fiscal year ends on June 30. Consider the following items and classify each as either: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, (4) accrued revenue, or (5) none of the foregoing. a Interest owed on the company's bank loan, to be paid in early July – Prepaid Expense b Professional fees earned but not billed as of June 30 - Accrued Revenue c Office supplies on hand at year-end – Prepaid Expense d An advance payment from a client for a performance next month at a convention – Unearned Revenue e The payment in part (d) from the client's point of view – Prepaid Expense f Amounts paid on June 30 for a 1-year insurance policy – Prepaid Expense g The bank loan payable in part (a) – None of the Foregoing h Repairs to the firm's copy machine, incurred and paid in June – None of the Foregoing 2. Understanding the closing process . Examine the following list of accounts: Note Payable Accumulated Depreciation: Building Alex Kenzy, Drawing Accounts Payable Product Revenue Cash Accounts Receivable Supplies Expense Utility Expense Which of the preceding accounts a. appear on a post-closing trial balance? Note Payable, Accounts Payable, Cash, Accounts Receivable and Accumulated Depreciation: Building b. are commonly known as temporary, or nominal, accounts? Supplies Expense, Utility Expense c. generate a debit to Income Summary in the closing process? Product Revenue Week Two Assignment Revenues and Expenses 3 d. are closed to the capital account in the closing process? Alex Kenzy, Drawing 3. Adjusting entries and financial statements . The following information pertains to Sally Corporation:  The company previously collected $1,500 as an advance payment for services to be rendered in the future. By the end of December, one half of this amount had been earned. a. B, Adjustment of an Unearned Revenue b. Unearned Service Revenue Debit: $1500, Services Revenue: $750 c. Increased Revenue by $750  Sally Corporation provided $1,500 of services to Artech Corporation; no billing had been made by December 31. a. D, Adjustment to Record an Accrued Revenue b. Account Receivable Debit: $1500, Services Revenue Credit: $1500 c. Increased Revenue by $1500  Salaries owed to employees at year-end amounted to $1,000. a. C, Adjustment to Record an Accrued Expense b. Salaries Expense Debit: $1000, Salaries Payable Credit: $1000 c. Increase Total Expenses by $1000  The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period. a. A, Adjustment of a Prepaid Expense b. Supplies Expense Debit: $5500, Supplies Credit: $5500 c. Increase Total Expenses by $5500  The company paid $18,000 on October 1 of the current year to Vantage Property Management. The payment was for 6 months’ rent of Sally Corporation’s headquarters, beginning on November 1. a. A, Adjustment of a Prepaid Expense b. Rent Expense Debit: $18000, Prepaid Expense $18000 c. Increase Total Expenses by $ 18000

ACC | 205 | Principles of Accounting I | homework | Running head: Week Two Assignm

Chapter 1 Exercise 6: 6. Equipment transaction and cash flow reporting Property, plant, & equipment Dec. 31, 19X4 Dec. 31, 19X3 Land $94,000 $94,000 Equipment 652,000 527,000 Less: Accumulated depreciation -316,000 -341,000 New equipment purchased during 20x4 totaled $280,000. The 20x4 income statement disclosed equipment depreciation expense of $41,000 and a $9,000 loss on the sale of equipment. a. Determine the cost and accumulated depreciation of the equipment sold during 19X4. $ 171,000 b. Determine the selling price of the equipment sold. $146,000 c. Show how the sale of equipment would appear on a statement of cash flows prepared by using the indirect method. Operating activities Loss on sale of Equipment $ 9000 Investing activities Sale of Equipment $146,000 Chapter 1 Problem 3: 3. Cash flow information: Direct and indirect methods The comparative year-end balance sheets of Sign Graphics, Inc., revealed the following activity in the company's current accounts: 19X5 19X4 Increase / Decrease) Current assets Cash $55,400 $35,200 $20,200 Accounts receivable (net) 83,800 88,000 -4,200 Inventory 243,400 233,800 9,600 Prepaid expenses 25,400 24,200 1,200 Current liabilities Accounts payable $123,600 $140,600 ($17,000) Taxes payable 43,600 49,200 -5,600 Interest payable 9,000 6,400 2,600 Accrued liabilities 38,800 60,400 -21,600 Note payable 44,000 — 44,000 The accounts payable were for the purchase of merchandise. Prepaid expenses and accrued liabilities relate to the firm's selling and administrative expenses. The company's condensed income statement follows. SIGN GRAPHICS INC. Income Statement for the Year Ended December 31, 20x5 Sales $713,800 Less: Cost of goods sold 323,000 Gross proﬁt $390,800 Less: Selling & administrave expenses $186,000 Depreciaon expense 17,000 Interest expense 27,000 230,000 Add: gain on sale of land $160,800 21,800 Income before taxes $182,600 Income taxes 36,800 Net income $145,800 Other data: 1. Long-term investments were purchased for cash at a cost of $74,600. X 2. Cash proceeds from the sale of land totaled $76,200. X 3. Store equipment of $44,000 was purchased by signing a short-term note payable. Also, a $150,000 telecommunications system was acquired by issuing 3,000 shares of preferred stock. X 4. A long-term note of $49,400 was repaid. X 5. Twenty thousand shares of common stock were issued at $5.19 per share. X 6. The company paid cash dividends amounting to $128,600. X Instructions: a. Prepare the operating activities section of the company's statement of cash flows, assuming use of: 1. The direct method.

Courses in ACC

Popular Documents from Ashford University

Ashford University

Ashford University