Online quiz

Below is a Chart of Accounts with a corresponding letter. For each transaction below:

Chart of Accounts:

A. Accounts Payable                  

B. Accounts Receivable

C. Owner's Capital

D. Cash

E. Computer Equipment

F. Cost of Goods Sold

G. Owner's Drawing

H. Merchandise Inventory (Perpetual)

I. Prepaid Insurance

J. Sales

K. Service Revenue

L. Telecommunication Expense

M. Sales Discount

1.  Following the General Journal entry format, place the letter of the account to be debited in the first line for each transaction and the letter of the account to be credited next.

2. Using the following abbreviations, indicate for each entry which special journal the entry would go in if the company used special journals:

CR – Cash Receipts Journal CP – Cash Payments Journal S – Sales Journal P – Purchases Journal GJ – General Journal

 

Jan.1   Owner invested $10,000 of computer equipment to start the business.          

Jan. 3   Purchased $5,000 of software for resale to clients on account. Jan. 5   Sold $1,500 of software to a client on account, terms 2/10, n/30, costing $650.

Jan. 7   Performed $2,000 of consulting services for a client and billed the client.

Jan. 9   Purchased a 12-month insurance policy by paying $9,000 cash.

Jan. 11 Collected payment in full from the customer related to the transaction on Jan. 5th.

Jan. 13 Purchased a new computer costing $1,500 by paying $500 down and the balance due in 30 days.

Jan. 15 Owner withdrew $750.

Jan. 17 Paid the month’s telecommunication bill, which was $550.

Jan. 19 Performed $3,000 of consulting services.  Half was paid on this day, and half is to be paid in 15 days.

2- Using the Adjusted Trial Balance below, properly and in good form, complete a Multiple Step Income Statement, Statement of Owner's Equity, and Classified Balance Sheet.  

ABC Company
Adjusted Trial Balance
12/31/2010
	Debit	Credit
Cash	94000
Accounts Receivable	21010
Merchandise Inventory	181900
Office Supplies	540
Land	25000
Equipment	200000
Accumulated Depreciation, Equipment		13000
Accounts Payable		18100
Salaries Payable		2400
Loan Payable		85000
D. Panther, Capital		228750
D. Panther, Withdrawals	43000
Sales		1311000
Sales Returns & Allowances	2200
Cost of Goods Sold	800000
Sales Salaries Expense	180000
Advertising Expense	10000
Office Salaries Expense	70000
Office Supplies Expense	1400
Rent Expense – Store	14000
Utilities Expense - Store	5000
Telecommunication Expense - Admin.	4500
Interest Expense	5700
Totals	1658250	1658250

 

3- Partners Audrey, Betty, and Charles have capital account balances of $120,000 each.  The income and loss ratio is 5:3:2, respectively.  In the process of liquidating the partnership, noncash assets with a book value of $100,000 are sold for $40,000.  The balance of Charles's Capital account after the sale is:

image2.wmf	$90,000
image3.wmf	$102,000
image4.wmf	$108,000
image5.wmf	None of these is correct

The partnership agreement of Amos, Baker, and Collins provides for the following income ratio: (a) Amos, the managing partner, receives a salary allowance of $36,000, (b) each partner receives 10% interest on average capital investment, and (c) remaining net income or loss is divided equally.  The average capital investments for the year were: Amos $200,000, Baker $400,000, and Collins $600,000.  If partnership net income is $240,000, the amount distributed to Baker should be:

image6.wmf	$68,000
image7.wmf	$84,000
image8.wmf	$88,000
image9.wmf	None of these is correct