ACC 421 Final

Question 1

Transactions for Mehta Company for the month of May are presented below.

May	1	B.D. Mehta invests $3,309 cash in exchange for common stock of Mehta Company, a small welding corporation.
	3	Buys equipment on account for $1,427.
	13	Pays $477 to landlord for May rent.
	21	Bills Noble Corp. $534 for welding work done.

Prepare journal entries for each of these transactions.

Question 2

On July 1, 2012, Crowe Co. pays $18,036 to Zubin Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Crowe Co. journalize the entry on July 1 and the adjusting entry on December 31. (Round answers to zero decimal places, e.g. 2,555.)

Question 3

Dresser Company's weekly payroll, paid on Fridays, totals $9,300. Employees work a 5-day week. Prepare Dresser's adjusting entry on Wednesday, December 31, and the journal entry to record the $9,300 cash payment on Friday, January 2. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Question 4

Side Kicks has year-end account balances of Sales $860,370; Interest Revenue $16,860; Cost of Goods Sold $563,130; Operating Expenses $191,430; Income Tax Expense $38,960; and Dividends $19,143. Prepare the year-end closing entries. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Question 7

Starr Co. had sales revenue of $617,400 in 2012. Other items recorded during the year were:

	Cost of goods sold	$321,700
	Wage expense	121,600
	Income tax expense	29,100
	Increase in value of company reputation	18,700
	Other operating expenses	12,300
	Unrealized gain on value of patents	22,600

Prepare a single-step income statement for Allen for 2012. Allen has 100,000 shares of stock outstanding. (List multiple entries from largest to smallest amount, e.g. 10, 5, 2. Round earnings per share to 2 decimal places, e.g. 0.20. Enter all amounts as positive amounts and subtract where necessary.)

Question 8

Portman Corporation has retained earnings of $774,780 at January 1, 2012. Net income during 2012 was $1,571,050, and cash dividends declared and paid during 2012 totaled $79,850. Prepare a retained earnings statement for the year ended December 31, 2012. Assume an error was discovered: land costing $81,890 (net of tax) was charged to repairs expense in 2009. (Enter all amounts as positive amounts and subtract wherenecessary.)

PORTMAN CORPORATION

Retained Earnings Statement

For the Year Ended December 31, 2012

Free cash flow

Question 25

Martinez Corporation engaged in the following cash transactions during 2012.

	Sale of land and building	$184,060
	Purchase of treasury stock	45,070
	Purchase of land	41,350
	Payment of cash dividend	89,570
	Purchase of equipment	58,360
	Issuance of common stock	149,470
	Retirement of bonds	108,270

Determine Martinez's free cash flow, assuming that it reported net cash provided by operating activities of $404,670. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. For negative numbers use either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)

Question 24

Martinez Corporation engaged in the following cash transactions during 2012.

	Sale of land and building	$196,420
	Purchase of treasury stock	42,540
	Purchase of land	42,130
	Payment of cash dividend	89,500
	Purchase of equipment	60,750
	Issuance of common stock	149,790
	Retirement of bonds	105,940

Compute the net cash provided (used) by investing activities. (List multiple entries from the largest positive to the smallest positive amount followed by the most negative to the least negative amount, e.g. 15, 14, 10, -17, -5, -1. For negative numbers use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)

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