2023 ACCT 301 HW 2 SECTION 4510FALL 2015 University of MD University College ACCT 301 Section 4510 Professor Name Ayodele Gbenjo | Assignments Online

ACCT 301 HW 2 SECTION 4510FALL 2015

 

University of MD University College ACCT 301 Section 4510

Professor Name:  Ayodele Gbenjo, CPA, MBA

 

Student Name: ________________________

 

Administrative Notes:

• You may use a calculator, your textbook, and anything posted in our LEO classroom.
• Write directly on this HW 2 paper.
• Late submissions will be penalized.

 

 

·   You must show all your computationsto receive credit for your answer

·   Do not provide your  answer on a PDF document (Provide solution on this paper)

·   No scanned documents will be accepted nor graded

·   Late submission is not allowed

·   You must submit your paper  by Sunday 8/30/2015 11.59pm no exception

 

 

Chapter 4

 

Question 1 – (Knowledge test – Adjustments for Financial Reporting)

 

Question 1

Jupiter Publishing Company began operations on 2010 December 1. The company’s

bookkeeper intended to use the cash basis of accounting. Consequently, the bookkeeper recorded allcash receipts and disbursements for items relating to operations in revenue and expense accounts. Noadjusting entries were made prior to preparing the financial statements for December.

 

Dec. 1 Issued capital stock for USD 300,000 cash.

3 Received USD 144,000 for magazine subscriptions to run for two years from this date. The

magazine is published monthly on the 23rd.

4 Paid for advertising to be run in a national periodical for six months (starting this month).

The cost was USD 36,000.

7 Purchased for cash an insurance policy to cover a two-year period beginning December 15,

USD 24,000.

12 Paid the annual rent on the building, USD 36,000, effective through 2011 November 30.

15 Received USD 216,000 cash for two-year subscriptions starting with the December issue.

15 Salaries for the period December 1–15 amounted to USD 48,000. Beginning as of this date,

salaries will be paid on the 5th and 20th of each month for the preceding two-week period.

20 Salaries for the period December 1–15 were paid.

23 Supplies purchased for cash, USD 21,600. (Only USD 1,800 of these were subsequently used

in 2010.)

27 Printing costs applicable equally to the next six issues beginning with the December issue

were paid in cash, USD 144,000.

31 Cash sales of the December issue, USD 84,000.

31 Unpaid salaries for the period December 16–31 amounted to USD 22,000.

31 Sales on account of December issue, USD 14,000.

 

Requirements

 

a.       Prepare journal entries for the transactions as the bookkeeper prepared them.

 

b.      Prepare journal entries as they would have been prepared under the accrual basis. Where

 the entry is the same as under the cash basis, merely indicate “same”. Where possible, record the originaltransaction so that no adjusting entry would be necessary at the end of the month. Ignoreexplanations

 

Chapter5

 

Question 2 – (Knowledge Test – Completing the Accounting Cycle)

 

The Trial Balance of the Printer Repair Company at 2010 December 31, contains the

following account balances listed in alphabetical order to increase your skill in sorting amounts to theproper work sheet columns.

 

Printer Repair Company

Trial Balance Account Balances

2010 December 31

Accounts Payable $ 41,000

Accounts Receivable 92,000

Accumulated Depreciation—Buildings 25,000

Accumulated Depreciation—Equipment 9,000

Buildings 140,000

Capital Stock 65,000

Cash 60,000

Equipment 36,000

Prepaid Insurance 3,600

Retained Earnings, 2010 January 1 4,800

Salaries Expense 96,000

Service Revenue 290,000

Supplies on Hand 4,000

Utilities Expense 3,200

Using these account balances and the following additional information, prepare a work sheet for

Printer Repair Company. Arrange the accounts in their approximate usual order.

 

Supplies on hand at 2010 December 31, have a cost of USD 2,400.

 

The balance in the Prepaid Insurance account represents the cost of a two-year insurance

policy covering the period from 2010 January 1, through 2011 December 31.

 

The estimated lives of depreciable assets are buildings, 40 years, and equipment, 20 years.

No salvage values are anticipated

 

 

Chapter 6

 

Question 3 – (Knowledge Test – Accounting Theory)

 

 

For each of the following numbered items, state the letter or letters of the principle(s),

assumption(s), or concept(s) used to justify the accounting procedure followed. The accounting

procedures are all correct.

a. Business entity.

b. Conservatism.

c. Earning principle of revenue recognition.

d. Going concern (continuity).

e. Exchange-price (cost) principle.

f. Matching principle.

g. Period cost (or principle of immediate recognition of expense).

h. Realization principle.

i. Stable dollar assumption.

 

 1). Inventory is recorded at the lower of cost or market value.

 

2). A truck purchased in January was reported at 80 per cent of its cost even though its market

value atyear-end was only 70 per cent of its cost.

3). The collection of USD 40,000 of cash for services to be performed next year was reported as

A current liability.

4).The president’s salary was treated as an expense of the year even though he spent most of his

Time planning the next two years’ activities.

5). No entry was made to record the company’s receipt of an offer of USD 800,000 for land

carried in its accounts at USD 435,000.

 

6). A supply of printed stationery, checks, and invoices with a cost of USD 8,500 was treated as

acurrent asset at year-end even though it had no value to others.

7). A tract of land acquired for USD 180,000 was recorded at that price even though it was

appraised atUSD 230,000, and the company would have been willing to pay that amount.

8).The company paid and charged to expense the USD 4,200 paid to Craig Nelson for rent of a truckowned by him. Craig Nelson is the sole stockholder of the company