act

ACT 200 Spring 2020

TAP R – 15 % - CH. 3,4,5

Name ____________________________________ ID______________________

State which TAP you like to replace by answering this TAP I would like to submit TAP R in replacement of my submission of Tap: write TAP number here

Exercise 1 (30 points) Prepare adjusting entries for the following transactions.

1. Depreciation on equipment is €800 for the accounting period. 2. There was no beginning balance of supplies and purchased €700 of office supplies during

the period. At the end of the period €100 of supplies were on hand. 3. Prepaid rent had a €1,000 normal balance prior to adjustment. By year end €800 was

unexpired. Exercise 2 (20 points) The following accounts were included on Haircut 101’s adjusted trial balance at December 31, 2020:

Accounts payable 2,000 Accounts receivable 7,500 Cash 11,000 Share capital-ordinary 15,000 Retained earnings 25,000 Dividends 10,000 Interest expense 3,000 Note payable, due 8/31/23 60,000 Supplies 1,000 Service revenue 39,000 Equipment 5,000

(a) What are total current assets? (b) What are total current liabilities?

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Exercise 3 – Multiple choice questions – Choose one right answer (15 points)

1) Equipment is classified in the statement of financial position as

a. a current asset. b. property, plant, and equipment. c. an intangible asset. d. a long-term investment.

2) Intangible assets include each of the following except

a. copyrights. b. goodwill. c. land improvements. d. patents.

3) Which account balance will change between the adjusted trial balance and the post- closing trial balance?

a. Retained Earnings b. Share Capital-Ordinary c. Interest Payable d. Accumulated Depreciation

Exercise 4 – True and False Questions – mention if the statements below are TRUE or FALSE (15 points)

1) Adjusting entries are not necessary if the trial balance debit and credit columns

balances are equal.

2) A company must make adjusting entries every time it prepares an income statement

and a statement of financial position.

3) The preparation of a Statement of Financial Position is a required step in the accounting

cycle.

Exercise 5 (20 points) Please describe the difference between Operating expenses and Non-operating expenses.

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Bonus question (10 points) Rowland Company reported the following balances at June 30, 2020:

Sales Revenue $32,000 Sales Returns and Allowances 1,000 Sales Discounts 500 Cost of Goods Sold 15,500

Calculate the Net sales for the month.