Uses of Accounting Information I (ACC 230) Final Exam Review

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1 Uses of Accounting Information I (ACC 230) Final Exam Review Balances at the end of the first year of operations: Cash 10,000 Sales 70,000 Accounts Receivable 12,000 Accounts Payable 8,000 Cost of Goods Sold 30,000 Inventory 16,000 Land 70,000 Building 280,000 Bonds Payable 200,000 Salary Expense 12,000 Salaries Payable 3,000 Prepaid Insurance 6,000 Insurance Expense 7,000 Income Tax Expense 3,000 Capital Stock 182,000 Dividends Paid 11,000 Net income? Retained Earnings at end of year? Current ratio? Gross profit ratio? How would the following transactions affect the Accounting (Balance Sheet) equation? Provided services on account Assets = Liabilities + Owners Equity Collected payment on account Purchased supplies on account Paid for supplies on account

2 Cash balance per bank 12,000 Deposits in transit 3,000 Interest earned 50 Service charges 150 Customer s NSF check 100 Outstanding checks 1,100 Adjusted balance per bank? Cash balance per books 8,000 Service charges 70 Deposits in transit 2,500 Outstanding checks 900 Interest earned 20 Customer s NSF check 130 Adjusted balance per books? Buyer Company purchases 1,000 geegaws at $100 each. Supplier Company offers a 5% quantity discount for purchases of 500 or more and terms 2/10, n/30. If Buyer Company remits payment on the ninth day after the invoice date, how much should they pay?

3 Sales 100 Calculate the following: Inventory: Beg 6 End 3 Cost of goods purchased Operating Expenses 21 Purchases 50 Purchases returns 4 Purchases discounts 2 Transportation-in 5 Dividends 8 Cost of goods sold Gross margin Date Units Unit Cost Total Cost Aug 1 30 $2 $ Aug 31 Ending Inventory 32 units Ending Inventory Cost of Goods Sold First-in First-out (FIFO) Last-in First-out (LIFO) Weighted Average

4 An automobile was purchased on January 1, Year 1 at a cost of $18,000. Estimated useful life was 5 years with a residual value of $3,000. 1) Straight-line method 2) Double declining balance method a) Annual depreciation? Depreciation for Year 1? b) Book value on December 31, Year 1? Which payroll taxes are imposed on the following? Employee Employer Which taxes are subject to a maximum amount? An investment of $10,000 is made at an annual rate of 8% for 6 years. How would the time value of money tables be used if the compounding of interest was: Semi-annually Quarterly periods % periods %

5 Bonds were issued on a date when the face rate of interest was 6% and the market rate was 5%. These bonds will be issued at a (premium OR discount) to face value. Amounts received: Children: Salary 26, year old Tips 15, year old twins Interest bank 1, year-old GCC sophomore Maricopa county bonds 1,200 Inheritance 30,000 Game show winnings 3,000 Amounts paid: Illegal income 18,000 Gift from aunt 12,000 Tuition paid to GCC 3,600 Amount to be included in taxable income? Total of tax credits? Common stock, $10 par $200,000 Additional paid in capital 90,000 Retained Earnings 150,000 Less: Treasury stock, 2,000 shares (36,000) Number of shares issued? Number of shares outstanding? What would change if the company split its stock 2 for 1?

6 Sales $400,000 Accounts receivable, January 1 40,000 Accounts receivable, December 31 70,000 Cash collected from customers? Salaries expense $100,000 Salaries payable, January 1 30,000 Salaries payable, December 31 50,000 Cash paid for salaries? Cost of goods sold $200,000 Inventory, January 1 20,000 Inventory, December 31 40,000 Accounts payable, January 1 10,000 Accounts payable, December 31 50,000 Cash paid for merchandise? Year 1 Year 2 Accounts receivable $14 $10 Inventories Accounts payable Net income 80 Depreciation expense 5 Using the indirect method, this company s cash flow from operating activities for Year 2 would be?

Managerial Accounting (ACC 212) Uses of Accounting Information II (ACC 240)

Managerial Accounting (ACC 212) Uses of Accounting Information II (ACC 240) Final Exam Review (Blue) 1) Beginning Raw Materials Inventory $ 3 Ending Raw Materials Inventory 5 Purchases of Raw Materials