2023 UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE INTERMEDIATE ACCOUNTING ACCT310 QUIZ TWO Required Signature I have | Assignments Online
2023 UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE INTERMEDIATE ACCOUNTING ACCT310 QUIZ TWO Required Signature I have | Assignments Online
Assignments Online 2023 Business Finance
UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE
INTERMEDIATE ACCOUNTING
ACCT310
QUIZ TWO
Required Signature. I have not received or given any aid to any students in completing this quiz. I also have not received aid from anyone outside our classroom; such as other accounting teachers, CPAs, etc. I have limited my resources for this exam to the weekly resources from week 3 and 4, and also the chapter outlines. I understand that I can also use a calculator and my notes.
Your typed name will suffice for your signature.
NAME:
DATE:
Quiz two covers the required readings and homework assignments from weeks three and four. There are six exercises worth 16.7 points each. Although, questions and exercises come from the homework assignments and the required readings for weeks three and four, the wording or formats or formulas will not always be exactly the same as that in the resources from weeks three and four; you may need to analyze the question or exercise.
NOTE: Be sure to show all your calculations. This has the possibility of partial credit. Incorrect answers without calculations will automatically result in zero points.
The Exercises Start On The Next Page
ACCT310 Quiz Two Continued: Page 2 of 4
Exercises
1. Pax Corp. uses the direct method to prepare its statement of cash flows. Pax’s trial balances at December 31, 2015 and 2014 are as follows:
2015 2014
Debits
Cash $ 40,200 $ 36,000
Accounts receivable 32,000 27,000
Inventory 29,680 45,000
Property, plant, & equipment 72,000 75,000
Unamortized bond discount 3,600 4,000
Cost of goods sold 220,000 345,000
Selling expenses 118,000 140,000
General and administrative expenses 100,100 130,000
Interest expense 4,135 2,500
Income tax expense 14,400 41,200
$634,115 $845,700
Credits
Allowance for uncollectible accounts 1,100 $ 1,000
Accumulated depreciation 10,500 12,000
Trade accounts payable 22,000 15,500
Income taxes payable 18,000 24,100
Deferred income taxes 6,000 4,000
8% callable bonds payable 35,000 18,000
Common stock 38,000 22,000
Additional paid-in capital 8,100 6,500
Retained earnings 57,915 52,000
Sales 437,500 690,600
$634,115 $845,700
- Pax purchased $4,000 in equipment during 2015.
- Pax allocated one third of its depreciation expense to selling expenses and the remainder to general and administrative expenses. There were no write-offs of accounts receivable during 2015.
Required: For Pax’s December 31, 2015 Statement of Cash Flows, answer the following questions:
a. What is cash collected from customers for December 31, 2015?
b. What is cash paid for purchases of merchandise inventory goods to be sold?
c. What is cash paid for interest?
d. What is cash paid for income taxes?
- What is cash paid for selling expenses?
ACCT310 Quiz Two Continued: Page 3 of 4
2. The following information relates to Rem Corp’s accounts receivable for 2015:
Accounts receivable, 1/1/15 $ 430,000
Credit sales for 2015 1,800,100
Sales returns for 2015 52,000
Accounts written off during 2015 26,800
Collections from customers during 2015 1,450,000
Estimated future sales returns at 12/31/15 33,500
Estimated uncollectible accounts at 12/31/15 73,250
Required:
What amount should Rem report for accounts receivable, before allowances for sales returns and uncollectible accounts, at December 31, 2015?
3. Poe, Inc. had the following bank reconciliation at March 31, year 2:
Balance per bank statement, 3/31/Y2$46,500
Add deposit in transit 10,300
56,800
Less outstanding checks 12,600
Balance per books, 3/31/Y2 $44,200
Data per bank for the month of April year 2 follow:
Deposits $58,400
Disbursements 49,700
All reconciling items at March 31, year 2, cleared the bank in April. Outstanding checks at April 30, year 2, totaled $7,000. There were no deposits in transit at April 30, year 2. What is the cash balance per books at April 30, year 2?
4. Bob Smith borrowed $200,000 on January 1, 2015. The interest rate of 8% is compounded semiannually to be repaid January 1, 2025. To repay this Bob wants to start making five equal annual deposits into fund that earns 6% annum on January 1, 2020.
Required:
What is the amount of the five annual deposits that Bob needs to make?
5. Timken Company issues a $1,500,000 bond at 10% for 10 years. The market interest rate is 9%.
Required:
1. What is the issue price of these bonds and the bond discount or premium?
2. Assume that Timken uses the effective interest method to amortize the bond discount or premium for the semiannual interest payments, what is the interest expense and the amount of cash paid on the first interest payment?
ACCT310 Quiz Two Concluded: Page 4 of 4
6. On December 31, year 1, Day Co. leased a new machine from Parr with the following pertinent information:
Annual rental payable at beginning of each year $60,000
Useful life of machine 10 years
Day’s incremental borrowing rate 15%
Implicit interest rate in lease (known by Day) 12%
The lease is not renewable, and the machine reverts to Parr at the termination of the lease. The cost of the machine on Parr’s accounting records is $425,000.
Required:
At the beginning of the lease term, what should Day record as a lease liability?
END OF ACCT310 QUIZ TWO
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