4. Compute the missing information from this post-closing trial balance.
Accounts Receivable 9,467
Prepaid Rent 5,000
Prepaid Insurance (A)
Accounts Payable $5,389
Wages Payable (B)
Common Stock 37,049
Retained Earnings 8,234
Total $52,356 $52,356
5. Journalize the following transactions using the perpetual inventory method.
Aug. 6 Purchased $830 of inventory on account from Johnston with terms of 2/10, n/30.
Aug. 8 Purchased $2,611 of inventory for cash from Pillner Company.
Aug.15 Paid for August 6 purchase from Johnston.
Aug. 17 Purchased $1,743 of merchandise on account from Luis Company with Terms of 3/15, n/45.
6. Given the following information, prepare a balance sheet for Isaiah’s Tool Shed for the year ending December 31, 2012.
Cash $65,750 Retained Earnings $179,319
Common Stock $35,000 Equipment $27,500
Accounts Receivable $11,478 Accounts Payable $29,450
Land $30,000 Inventory $78,311
Prepaid Supplies $7,357 Income Taxes Payable $4,209
Office Computers $11,345 Other PPE $31,446
Accum. Depr. (all) $23,459 Prepaid Insurance $8,250
7. Rick Company’s beginning inventory and purchases during the fiscal year ended December 31, 2012, were as follows:
(Note: The company uses a perpetual system of inventory.)
Units Unit Price Total Cost
January 1—Beginning inventory 18 $24 $432
March 12—Sold 13
April 11—Purchase 45 $29 $1,305
June 20—Sold 33
Aug 16—Purchase 35 $27 $945
Total Cost of Inventory 29
Ending inventory is 23 units. $2,682
What is the cost of goods sold for Rick Company for 2012 using LIFO?
8. Assume that in Year 1, the ending merchandise inventory is overstated by $30,000. If this is the only error in Years 1 and 2, fill in the items below, indicating which items will be understated, overstated, or correctly stated for Years 1 and 2.
Item Year 1 Year 2
Ending inventory ___________ _____________
Beginning inventory ___________ _____________
Cost of goods sold ___________ _____________
11. Journalize the following transactions for Tammy Company:
Sept. 1 Sold $3,500 of merchandise to Jim on account
Oct. 1 Exchanged Jim’s account receivable for a four month, 8% note for $3,500
Dec. 31 Recorded accrued interest on Jim’s note
Feb. 1 Jim paid off his note with interest (round to nearest dollar)
12. A truck was purchased on January 2 at a cost of $60,000. It’s expected to be used for five years and to have a residual value of $5,000 after 120,000 miles of service. The truck was driven for 23,000 miles the first year and 25,000 miles the second year. Calculate the depreciation expense to the nearest dollar for the first and second years.
Method Year 1 Year 2
Straight-line ________ ________
Double-declining-balance ________ ________
Units-of-production ________ ________
13. Prepare the general journal entries for the following transactions:
Jan. 2, 2011 Purchased land with a building on it for $750,000. The land is worth $300,000.
Paid $150,000 cash down and signed a mortgage payable for the balance.
Dec. 31, 2011 Depreciation is computed using the straight-line method. The estimated salvage value of the building is $75,000 and has an estimated life of 20 years.
July 1, 2012 The building and land are sold for $825,000 cash.
14. Journalize the following treasury stock transactions:
June 3 Reacquired 350 shares of $12 par common stock at $10 per share.
June 7 Sold 180 shares of treasury stock for $16 per share.
June 8 Sold 150 shares of treasury stock for $9 per share.
15. Lowry Landscapes had net income of $50,000 for 2010. Land was sold for $40,000, of which $3,000 was a gain. The beginning cash balance was $53,000, and the ending cash balance was $151,000. Depreciation expenses were $11,000. Prepare a statement of cash flows for the year ended December 31, 2010, for Lowry Landscapes using the indirect method.
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