UMUC – ACCT 220

Directions: Please complete the following 5 parts. You can use the answer sheets at the end of this document to complete this Exam.

Part 1. Prepare Closing Entries – Ch. 4 (6 points). The Adjusted Trial Balance for Marilyn’s Auto Repair is shown below, for January. Prepare the four closing entries for Marilyn’s Auto Repair. Use the JE page for Part 1 at the end of this exam. HINT: The Income Summary has $49,825CR just before it is closed.

Part 2. Classified Balance Sheet – Ch. 4 (7 points). The following accounts for Fischer Tax Accounting Services are shown below. The accounts are listed in Alphabetical Order. After closing the temporary accounts, the Capital account, W. Fischer, Capital, has a balance of $62,720.  Use the Balance Sheet page of this document’s answer sheets to prepare a Classified Balance Sheet. Use the format shown on page 171 of your textbook. There are no intangible assets.

Part 3. Journal entries from Chapter 5 from the purchasing side (perpetual inventory) – 6 points

Directions: Prepare the journal entries for each of the four transactions, in good form for Belinda’s Bath Bounty. You can use the Journal entry page at the end of this exam document to enter your answers. This company uses a perpetual inventory system. Each JE is worth 1.5 points.

1.                  On April 5, purchased merchandise from Waxen Goodness Company for $15,000 terms 2/10, net/30, FOB shipping point.

2.                  On April 8, returned damaged merchandise to Waxen Goodness Company and was granted a $2,000 credit for returned merchandise.

3.                  On April 13 paid the amount due to Waxen Goodness Company in full (took advantage of the discount).

4.                  On April 16, Belinda’s Bath Bounty Co. received a shipping bill for $400 for delivery of the merchandise delivered by Waxen Goodness. Payment is due by May 16^th.

Part 4. Journal entries from Chapter 5 from the selling side (perpetual inventory) – 6 points

Directions. Prepare the journal entries for each of the three transactions, in good form for Wei Asian Imports. You can use the Journal entry page at the end of this exam document to enter your answers. This company uses a perpetual inventory system.

On September 1, Wei Asian Imports Company had an inventory of 300 jade figurines at a cost of $180 each. The company uses a perpetual inventory system. During September, the following transactions occurred.

1.      September 6. The Trade Shop, a customer of Wei Asian Imports purchased 25 of the figurines, paying $500 each. The amount was added to the customer’s account. The customer is given credit terms of 1/10, n/30.

(2 points)

2.      On September 9^th, The Trade Shop returned 4 of the figurines. They had minor discoloration in them. Wei Asian imports gave the customer full credit. These items were returned to inventory. (2 points)

3.      On September 11^th a check for the balance due, net of discounts and returns was received by Wei Asian Imports from The Trade Company for their purchases. (2 points)

Part 5. An inventory problem from Chapter 6 for FIFO and Weighted Average/Average Cost

(Periodic system) – 10 points

Nelson Company had 1,000 units in beginning inventory at a total cost of $15,250. The company purchased 2,000 units at a total cost of $26,000. At the end of the year, Nelson Company had 800 units in ending inventory.

5.1       Compute Cost of Goods Sold and Ending Inventory assuming FIFO is used (5 points)

5.2       Compute Cost of Goods Sold and Ending Inventory assuming Weighted Average/Average Cost is used (5 points)

Be sure to show your calculations for partial credit. Use the last page of the answer sheets for Part 5.