There are 9 questions about accounting need to be answered. if you have any question let me know. please see attachment.Q-1
On April 1 of the current year, Morgan Jones established a business to manage rental
property. She completed the following transactions during April:
1. Opened a business bank account with a deposit of $60,000 in exchange for common
stock.
2. Purchased office supplies on account, $1,800.
3. Received cash from fees earned for managing a rental property, $22,300.
4. Paid rent on office and equipment for the month, $7,000.
5. Paid creditors on account, $1,100.
6. Billed customers for fees earned for managing a rental property, $3,600.
7. Paid automobile expenses for month, $750, and miscellaneous expenses, $1,000.
8. Paid office salaries, $4,000.
9. Determined that the cost of supplies on hand was $250; therefore, the cost of supplies
used was $1,550
10. Paid dividends, $5,000.
Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using the
following tabular headings:
2. Briefly explain why issuing common stock and revenues increased stockholders’ equity,
while dividends and expenses decreased stockholders’ equity.
3. Determine the net income for April.
4. How much did April’s transactions increase or decrease stockholders’ equity?
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing
Q-2
The beginning inventory at Midnight Supplies and data on purchases and sales for a threemonth period ending March 31 are as follows:
Instructions
1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory
record similar to the one illustrated in Exhibit 3 – textbook 6-3a “First-In, First-Out
Method” , using the first-in, first-out method.
2. Determine the total sales and the total cost of goods sold for the period. Journalize the
entries in the sales and cost of goods sold accounts. Assume that all sales were on account.
3. Determine the gross profit from sales for the period.
4. Determine the ending inventory cost as of March 31.
5. Based upon the preceding data, would you expect the ending inventory using the last-in,
first-out method to be higher or lower?
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing
Q-3
The following data were gathered to use in reconciling the bank account of Reddan
Company:
Instructions
1. What is the adjusted balance on the bank reconciliation?
2. Journalize any necessary entries for Reddan Company based on the bank reconciliation.
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing
Q-4
The following transactions were completed by Irvine Company during the current fiscal year
ended December 31:
Feb. 8. Received 40% of the $18,000 balance owed by DeCoy Co., a bankrupt business, and
wrote off the remainder as uncollectible.
May 27. Reinstated the account of Seth Nelsen, which had been written off in the preceding
year as uncollectible. Journalized the receipt of $7,350 cash in full payment of Seth’s
account.
Aug. 13. Wrote off the $6,400 balance owed by Kat Tracks Co., which has no assets.
Oct. 31. Reinstated the account of Crawford Co., which had been written off in the preceding
year as uncollectible. Journalized the receipt of $3,880 cash in full payment of the
account.
Dec. 31. Wrote off the following accounts as uncollectible (compound entry): Newbauer Co.,
$7,190; Bonneville Co., $5,500; Crow Distributors, $9,400; Fiber Optics, $1,110.
31. Based on an analysis of the $1,785,000 of accounts receivable, it was estimated that
$35,700 will be uncollectible. Journalized the adjusting entry.
Instructions
1. Record the January 1 credit balance of $26,000 in a T account for Allowance for Doubtful
Accounts.
2. Journalize the transactions. Post each entry that affects the following selected T accounts
and determine the new balances:
– Allowance for Doubtful Accounts
– Bad Debt Expense
3. Assuming that instead of basing the provision for uncollectible accounts on an analysis of
receivables, the adjusting entry on December 31 had been based on an estimated expense
of; of 1% of the sales of $18,200,000 for the year, determine the following:
4.
1. Bad debt expense for the year.
2. Balance in the allowance account after the adjustment of December 31.
3. Expected net realizable value of the accounts receivable as of December 31.
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing
Q-5
The following payments and receipts are related to land, land improvements, and buildings
acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
Instructions
1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited
life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by
letter and list the amounts in columnar form, as follows:
2. Determine the amount debited to Land, Land Improvements, and Building.
3. The costs assigned to the land, which is used as a plant site, will not be depreciated, while
the costs assigned to land improvements will be depreciated. Explain this seemingly
contradictory application of the concept of depreciation.
4. What would be the effect on the income statement and balance sheet if the cost of filling
and grading land of $12,000 [payment (i)] was incorrectly classified as Land
Improvements rather than Land? Assume Land Improvements are depreciated over a 20year life using the double-declining-balance method.
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing
Q-6
The following items were selected from among the transactions completed by Aston Martin
Inc. during the current year:
Apr. 15.
Borrowed $225,000 from Audi Company, issuing a 30-day, 6% note for that
amount.
May 1.
Purchased equipment by issuing a $320,000, 180-day note to Spyder
Manufacturing Co., which discounted the note at the rate of 6%.
Paid Audi Company the interest due on the note of April 15 and renewed the loan
15. by issuing a new 60-day, 8% note for $225,000. (Record both the debit and credit
to the notes payable account.)
July 14. Paid Audi Company the amount due on the note of May 15.
Aug. 16. Purchased merchandise on account from Exige Co., $90,000, terms, n/30.
Sept. 15. Issued a 45-day, 6% note for $90,000 to Exige Co., on account.
Oct. 28. Paid Spyder Manufacturing Co. the amount due on the note of May 1.
30. Paid Exige Co. the amount owed on the note of September 15.
Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and
Nov. 16. issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day
intervals.
Dec. 16.
28.
Paid the amount due Gallardo Co. on the first note in the series issued on
November 16.
Settled a personal injury lawsuit with a customer for $87,500, to be paid in
January. Aston Martin Inc. accrued the loss in a litigation claims payable account.
Instructions
1. Journalize the transactions.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of
the current year:
a. Product warranty cost, $26,800
b. Interest on the 19 remaining notes owned to Gallardo Co.
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing
Q-7
On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued
$46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash
of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30.
The fiscal year of the company is the calendar year.
Instructions
1. Journalize the entry to record the amount of cash proceeds from the issuance of the
bonds on July 1, 20Y1.
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of
the bond discount, using the straight-line method. Round to the nearest dollar.
b. The interest payment on June 30, 20Y2, and the amortization of the bond discount,
using the straight-line method. Round to the nearest dollar.
3. Determine the total interest expense for 20Y1.
4. Will the bond proceeds always be less than the face amount of the bonds when the
contract rate is less than the market rate of interest?
5. ( Appendix 1 – present value concepts and pricing bonds payable ) Compute the price of
$42,309,236 received for the bonds by using the present value tables in (Appendix A
– Interest tables at the end of the text). Round to the nearest dollar.
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing
Q-8
On December 1 of the current year, the following accounts and their balances appear in the
ledger of Latte Corp., a coffee processor:
Preferred 2% Stock, $50 par (250,000 shares authorized, 80,000 shares issued) $ 4,000,000
Paid-In Capital in Excess of Par—Preferred Stock
560,000
Common Stock, $35 par (1,000,000 shares authorized, 400,000 shares issued) 14,000,000
Paid-In Capital in Excess of Par—Common Stock
1,200,000
Retained Earnings
180,000,000
At the annual stockholders’ meeting on March 31, the board of directors presented a plan for
modernizing and expanding plant operations at a cost of approximately $11,000,000. The
plan provided (a) that a building, valued at $3,375,000, and the land on which it is located,
valued at $1,500,000, be acquired in accordance with preliminary negotiations by the
issuance of 125,000 shares of common stock, (b) that 40,000 shares of the unissued preferred
stock be issued through an underwriter, and (c) that the corporation borrow $4,000,000. The
plan was approved by the stockholders and accomplished by the following transactions:
May 11.
Issued 125,000 shares of common stock in exchange for land and a building,
according to the plan.
20. Issued 40,000 shares of preferred stock, receiving $52 per share in cash.
31. Borrowed $4,000,000 from Laurel National, giving a 5% mortgage note.
Instructions
1. Journalize the entries to record the May transactions.
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing
Q-9
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as
follows:
Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as
follows:
a. The investments were sold for $175,000 cash.
b. Equipment and land were acquired for cash.
c. There were no disposals of equipment during the year.
d. The common stock was issued for cash.
e. There was a $500,000 credit to Retained Earnings for net income.
f. There was a $90,000 debit to Retained Earnings for cash dividends declared.
Instructions
1. Prepare a statement of cash flows, using the indirect method of presenting cash flows
from operating activities.
The assignment has been taken from Financial and Managerial Accounting, the 15th Edition
– copyright Cengage Publishing

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