| BUS 205 - Final Exam Part II |
| 75 Points, Due by Thursday, 12/5, 10 AM |
| You have decided to start a company that purchases and sells airplanes. You have named it Airplanes R Us. |
| The following transactions occurred during 2012, Airplanes R Us's first year of operations. |
| Jan | 1 | You, the owner, took $1,500,000 of cash out of your own bank account and put it in Airplanes R Us's bank account. You were issued 1,500,000 |
| | | shares of common stock in return. |
| | 3 | Airplanes R Us purchased 35 airplanes at $20,000 each. They will pay within 30 days. |
| | 15 | Airplanes R Us purchased 10 airplanes at $17,000 each. They paid cash. |
| Feb | 1 | Airplanes R Us paid $120,000 of cash for one year of rent on a warehouse. |
| | 2 | Airplanes R Us purchased $1,000 of supplies (these will be used up by year-end). They will pay within 30 days. |
| | 4 | Airplanes R Us purchased 5 airplanes at $18,000 each. They paid cash. |
| | 19 | Airplanes R Us paid off all outstanding accounts payable. |
| Apr | 1 | Airplanes R Us used cash to pay for a $48,000 insurance policy. The insurance coverage is from 4/1/12 to 3/31/13 |
| | 8 | Airplanes R Us sold 25 airplanes at $30,000 each. The customer will pay at a later date. Airplanes R Us uses the FIFO inventory method. |
| | 15 | Airplanes R Us received $500,000 cash from collections on accounts receivable. |
| | 30 | Airplanes R Us purchased welding equipment for $100,000 Airplanes R Us uses the straight-line method for depreciation. |
| | | This purchase was made by signing a $100,000, 90 day, 10% note payable. Estimated useful life is 10 years, and est. salvage value is $5,000. |
| | | The equipment was immediately put into production on the date of purchase. |
| May | 16 | Airplanes R Us purchased a $4,000 advertisement. They will pay for this within 30 days. |
| Jun | 15 | Airplanes R Us sold 22 airplanes at $30,000 each. The customer will pay at a later date. The FIFO method still applies. |
| | 16 | Airplanes R Us paid all of its outstanding accounts payable with cash. |
| Jul | 3 | Airplanes R Us collected all oustanding accounts receivable in cash. |
| | 31 | Airplanes R Us used cash to pay off the note payable with interest. |
| Sep | 10 | Airplanes R Us paid $500 cash to have the welding equipment cleaned. |
| Dec | 31 | Airplanes R Us paid you, the owner, a dividend of $175,000 cash. |
| Dec | 31 | Airplanes R Us made adjusting journal entries as needed. |
| Required: |
| 1) Prepare the necessary journal entries to record the 2012 transactions for Airplanes R Us. Round all calculations to the nearest dollar. |
| 2) Prepare T-accounts and balance them (as of 12/31/12). |
| 3) Prepare a Balance Sheet (as of 12/31/12). |
| 4) Prepare an Income Statement (for the year ended 12/31/12). |
| 5) Prepare a Statement of Changes in Stockholder's Equity (for the year ended 12/31/12). |
xoon
_practice_set_1.xlsx
