accounting problems

The following infcrmationwasmadeavailable from the income statement and balance sheet of Meranda Company:

Completethecashflo

usingthe directmetho

fromoperating activitiessectionforMeranda Companyfortheyearended December31,2010.

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Part B: Answer each of the following 15 questions. Each answer is worth

4 points.

1. Given the following information, show the increase or decrease in the

accounting equation:

A. Deanne invests $45,000 and $10,000 of office equipment into the

business.

B. Furniture is purchased for $8,000 cash.

C. Supplies are purchased on credit for $2,300.

D. The month’s electric bill of $775 was paid.

E. The month’s cash sales were $5,000.

2. Journalize the following transactions and include the explanations.

A. Tammy invested $40,000 into her corporation on June 11.

B. Tammy purchased inventory for $95,000, of which $70,000 was on

account on June 14.

C. Tammy paid one month’s rent of $2,400 on June 16.

D. Tammy had sales of $15,000 on account on June 19.

E. Tammy had paid $2,500 on her payables account on June 21.

3. Prepare a trial balance from the following information for Computer

Systems, Inc. for December 31, 2012:

Accounts payable $4,298

Common stock $4,073

Sales $8,302

Cash $1,902

Notes payable $888

Wages expense $777

Supplies expense $1,028

Equipment $5,183

Accounts receivable $1,733

Inventory $6,938

4. Compute the missing information from this post-closing trial balance:

Cash $38,502

Accounts Receivable 14,372

Prepaid Rent 18,229

Prepaid Insurance 4,583

Supplies (A)

Accounts Payable (B)

Wages Payable 29,428

Common Stock 30,049

Retained Earnings 18,423

_______ _______

Total $80,436 $80,436

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5. Journalize the following transactions using the perpetual inventory

method:

Nov. 1 Purchased $3,600 of merchandise from Hilltop, terms 2/10, n/30.

Nov. 5 Purchased $1,750 of merchandise for cash from Owen’s Supply.

Nov. 7 Purchased $3,400 of merchandise from Seaside, terms 1/15, n/30.

Nov. 10 Returned $500 of merchandise to Seaside. Credit Memo #131.

Nov. 11 Paid the invoice from Hilltop.

6. Given the following information, prepare a balance sheet for Brandon’s

Campstore for the year ending December 31, 2012:

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7. Rick Company’s beginning inventory and purchases during the fiscal

year ended December 31, 2012, were as follows: (Note: The company uses a

perpetual system of inventory.)

What is the ending inventory of Rick Company for 2012 using FIFO?

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8. Assume that in Year 1, the ending merchandise inventory is overstated

by $30,000. If this is the only error in Years 1 and 2, fill in the items below,

indicating which items will be understated, overstated, or correctly stated for

Years 1 and 2.

Item Year 1 Year 2

Gross Profit _____________ ______________

Net Income _____________ ______________

Ending Retained Earnings _____________ ______________

9. Below is a list of treatments of accounting topics. Place GAAP on the line

if the treatment is GAAP-based and place IFRS on the line if the treatment is

IFRS-based.

A. The use of LIFO is allowed. ___________________

B. Both research and development costs are expensed as incurred.

___________________

C. Market is defined as current replacement cost. ___________________

10. Record the necessary journal entries from the following bank

reconciliation information for July 31, 2011:

11. Journalize the following transactions for Ryan Company:

July 1 Sold $5,300 of merchandise to Rick on account.

Nov. 1 Exchanged Rick’s account receivable for an eight-month, 6% note for

$5,300.

Dec. 31 Recorded accrued interest on Jim’s note (round to nearest dollar).

July 1 Rick paid off his note with interest (round to nearest dollar).

12. A computer system was purchased on July 1 at a cost of $125,000. It’s

expected to be used for four years and to have a residual value of $5,000 after

8,000 hours of service. The system was used for 1,750 hours the first year and

2,100 hours the second year. Calculate the depreciation expense to the nearest

dollar for the first and second years.

Method

Year 1 Year 2

Straight-line ________ ________

Double-declining-balance ________ ________

Units-of-production ________ ________

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13. Prepare journal entries for the following transactions for Ryan Company

in the general journal:

Feb. 28 Machinery that cost $57,000 and had accumulated depreciation of

$46,000 was sold for $2,500.

April 10 A van that cost $23,700 and had accumulated depreciation of

$21,000 was sold for $1,250.

July 16 Equipment that cost $120,000 and had accumulated depreciation

of $112,000 was traded in for new equipment with a fair-market value of

$140,000. The old equipment and $135,000 in cash were given for the new

equipment.

14. Journalize the following treasury stock transactions:

May 1 Reacquired 800 shares of $15 par common stock for $13 per share.

May 7 Sold 400 shares at $11 per share.

May 9 Sold 250 shares at $17 per share

15. The following information was taken from the financial statements of

Brandon Company for 12/31/10 and12/31/09:

Net income for 2010: $313,000

Depreciation expense for 2010: $28,400

Loss on sale of equipment: $7,300

Balance Sheet 12/31/10 12/31/09

Accounts Receivable $46,000 $50,000

Merchandise Inventory 35,000 28,000

Accounts Payable 27,000 24,000

Interest Payable 6,000 8,000

Prepare the operating activities section of the statement of cash flows under the

indirect method for the year ended December 31, 2010.