| #1, The following balance sheet was prepared by the bookkeeper for joseph Adeophonse company as of december 31th,2012' |
| | | | | | Joseph Adephones cccompany |
| | | | | | Balance Sheet |
| | | | | | As of December `31,2012. |
| | | Cash | | | 85,000 | | Account payable | | | 90,000 |
| | | Account Receivable (net) | | | 52,000 | | Long term Liabilities | | | 100,000 |
| | | Inventory | | | 57,000 | | Stockholders equity | | | 218,500 |
| | | Investment | | | 76,000 |
| | | Equipment | (net) | | 106,000 |
| | | Patent | | | 32,000 |
| | | | | | 408,500 | | | | | 408,500 |
| | The following additional information is provided: |
| | 1,,Cash include the cash surrender value of a life insurance policy $9,400 and a bank overdraft of $2,500has been deducted . |
| | 2, The net accounts receivable balance includes |
| | a, Account receivable -debit balances $60,000 |
| | b, Account receivable -credit balance $4,000 |
| | c, Allowance for doubtful accounts $3,800 |
| | 3, Inventory does not include goods costing $3,000 shipped out on consignment received of $3,000, were recorded on these goods |
| | 4,Investment include include investment in common stock , trading $19,000 and available for sales $48,300 , and franchises $9,000 |
| | 5, Equipment costing $5,000 with accumulated deperciation $4,000 is no longer uesd and is held foe sales . Accumulated depreciation on the equipment is $40,000. |
| | Instruction |
| | Prepare a balance sheet in good form i.e it must balance. |
| | #2 |
| | Selected Financial statement information. | | | | and addition data for Talib Company is presented below. Prepare a statement of cash flows for the foll | | | | | | | | sh flows for the year ending December | or the year | r ending December |
| | 31, 2012. |
| | | | | | | | | | December 31 |
| | | | | | | | | 2011 | | 2012 |
| | Cash | | | | | | | $42,000 | | |
| | Accounts receivable[net] | | | | | | | 84,000 | | 144,200 |
| | Inventory | | | | | | | 168,000 | | 201,600 |
| | Land | | | | | | | 58,800 | | 16,000 |
| | Equipment | | | | | | | 504,000 | | 789,600 |
| | | TOTAL | | | | | | $856,800 | | $1,226,400 |
| | Accumulated depreciation] | | | | | | | $84,000 | | $115,600 |
| | Account payable | | | | | | | 50,400 | | 86,000 |
| | Notes payable - Short-term | | | | | | | 67,200 | | 29,400 |
| | Notes payable - Long-term | | | | | | | 168,000 | | 302,400 |
| | Common stock | | | | | | | 420,000 | | 487,200 |
| | Retained earning | | | | | | | 67,200 | | 205,800 |
| | | TOTAL | | | | | | $856,800 | | $1,226,400 | | | | | $1,226,400 |
| | Additional data for 2012: |
| | 1. Net income was $240,200. |
| | 2. Depreciation was $31,600. |
| | 3. Land was sold at its original cost. |
| | 4. Dividends of $101,600 were | | | paid. |
| | 5. Equipment was purchased for $84,000 cash. |
| | 6. Along-term note for $201,600 was used to pay for an equipment purchase. |
| | 7. Common stock was issued to pay a$67,200 long-term note payable. |
| | #3 The trial balance before adjustment of Lucas Company reports the following balances: |
| | | | | | | | Debit | | Credit |
| | Accounts receivable | | | | | | $120,000 |
| | Allowance for doubtful accounts | | | | | | | | 730 |
| | Sales | | | | | | | | $510,000 |
| | Sales returns and allowances | | | | | | 8,000 |
| Give journal entries assuming that the estimate of uncollectibless is determined by taking (1) | | | | | | | | | (1) 5% of gross accounts |
| receivable and | able and (2) 1% of net sales. |
| #4 On December 31,2012,Durgapersad Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000, a due date of December 31, 2015, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note | | | | | | | | | | | ory note |
| with a face value of $600,000, a due date of December 31, 2015, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable |
| each year.The fair value of services is not readily determinable and the note is not is readily marketable, Under t | | | | | | | | | | . Under the circumstaces, the note is considered |
| to have anappropriate imputed rate of intrest of 10% | | | rate of intrest of 10%. | erst of 10% . |
| The following factor are provided . |
| | | | | | | Intrest rate |
| Table factor for three periods. | | | | | | 5% | | 10% |
| Future Value of 1 | | | | | | 1.15763 | | 1.331 |
| present Value of 1 | | | | | | 0.86384 | | 0.75132 |
| futre value of ordinary Annuity of 1 | | | | | | 3.1525 | | 3.31 | | | | | | | |
| present Value of 1 | value of ordinary annuity of 1 | | | | | 2.72325 | | 2.48685 |
| determine the present value of the note. |
| #5 French Leasing Company purchased specialized equipment from Bryant Company on December 31, 2013 for $400,000. On the same date,it leased this equipment to Holmes Company for 5 years, the useful life of the equipment. The lease payments begin january 1,2014 and are made every 6 months until july 1, 2018. French Leasing wants to earn 10% annually on its investment. |
| | | | | | | Various Factors at 10% |
| | Periods | | Future | | Present | | Future Value of an | | | Present Value of an |
| | or Rents | | Value of $ 1 | | Value of $ 1 | | Ordinary Annuity | | | Ordinary Annuity |
| | 9 | | 2.35795 | | 0.4241 | | 13.57948 | | | 5.75902 | | | | |
| | 10 | | 2.59374 | | 0.38554 | | 15.93743 | | | 6.14457 |
| | 11 | | 2.85312 | | 0.35049 | | 18.53117 | | | 6.49506 |
| | | | | | Various Factors at 5% |
| | Periods | | Future | | Present | | Future Value of an | | | Present Value of an |
| | or Rents | | Value of $ 1 | | Value of $ 1 | | Ordinary Annuity | | | Ordinary Annuity |
| | 9 | | 1.55133 | | 0.64461 | | 11.02656 | | | 7.10782 |
| | 10 | | 1.62889 | | 0.61391 | | 12.57789 | | | 7.72173 |
| | 11 | | 1.71034 | | 0.58468 | | 14.20679 | | | 8.30641 |
| |
| (a) Calculate the amount of each rent. |
| (b) How much interest revenue will Frence earn in 2014? |
| #6 Abdulla Company owns a plot of land on which buried toxic wastes have been discovered.Since it will require several years and a |
| considerable sum of money before the property is fully detoxified and capable of generating revenues, Abdulla wishes to sell the land |
| now.He has located two potential buyers:Holmes, who is willing to pay $320,000 for the land now,and Watson,who is willing to make |
| 20 annual payments of $50,000 each,With the first payment to be made 5 years from today. Assuming that the appropriate rate of |
| interest is 9%, to whom should Abdulla sell the land? Show ALL calculations. |
| #7 Raji Company sells TVs. The perpetual inventory was stated as $28,500 on the books at December 31,2012. At the close of the year, |
| a new approach for compiling inventory was used and apparently a satisfactory cut-off for preparation of financial statements was not |
| made.Some events that occurred are as follows. |
| 1. TVs shipped to a customer january 2, 2013, coting $5,000 were included in inventory at December 31, 2012. The sale was recorded in 2013. |
| 2. TVs costing $12,000 received December 30, 2012, were recorded as received on january 2, 2013. |
| 3. TVs received during 2012 costing $4,600 were recorded twice in the inventory account. |
| 4. TVs shipped to a customer December 28, 2012, f.o.b. shipping point, which cost $10,000, were not received by the customer until january, |
| 2013. The TVs were included in the ending inventory. |
| 5. TVs on hand that cost $6,100 were never recorded on the books. |
| Compute the correct inventory at December 31, 2012. | |
| #8 Jakes Company shows the following data related to an item of inventory. |
| | Inventory, January 1 | | | | 100 units @ $5.00 |
| | Purchashe, January 9 | | | | 300 units @ $5.40 |
| | Purchashe, January 19 | | | | 70 units @ $6.00 |
| | Inventory, January 31 | | | | 100 units |
| (a) What value should be assigned to the ending inventory using FIFO? |
| (b) What value should be assigned to cost of goods sold using LIFO? |
| #9 Marino Company was formed on December 1, 2012. The following information is available from |
| | Marino's inventory record for product X. | | | | | | | | |
| | | | | | | | Units | | Unit cost |
| January 1, 2013 (beginning inventory) | | | | | | | 1,600 | | $18.00 |
| Purchases: | | | | | | | |
| January 5,2013 | | | | | | | 2,600 | | $20.00 |
| January 25,2013 | | | | | | | 2,400 | | $21.00 |
| February 16,2013 | | | | | | | 1,000 | | $22.00 |
| March 15,2013 | | | | | | | 1,800 | | $23.00 |
| A physical inventory on March 31, 2013, shows 2,500 units on hand. |
| Prepare schedules to compute the ending inventory at March 31, 2013, under each of the following |
| inventory methods | methods : |
| (a) FIFO. |
| (b) LIFO. |
| (c) Weighted-average. |
| Show supporting computations in good form. |
| #10 Halle Berry is presently leasing a small business computer from Jackson Office Equipment |
| Company. The lease requires 10 annual payments of $4,000 at the end of each year and provides |
| the lessor (Jaskson) with an 8% return on its investment. You may use the following 8% interest |
| factors: |
| | | | | | 9 Periods | 10 Periods | 11 Periods |
| Future value of 1 | | | | | 1.999 | 2.15892 | 2.33164 | |
| Present value of 1 | | | | | 0.50025 | 0.46319 | 0.42888 |
| Future value of Ordinary Annuity of 1 | | | | | 12.48756 14.48656 16.64549 |
| Present value of Ordinary Annuity of 1 | | | | | 6.24689 | 6.71008 | 7.13896 |
| Present value of Annuity Due of 1 | | | | | 6.74664 | 7.24689 7.71008 |
| (a) Assuming the computer has a ten-year life and will have no salvage value at the expiration |
| of the lease, what was the original cost of the computer to Jackson? |
| (b)What amount would each payment be if the ten annual payments are to be made at the | | | | | | | | |
| the beginning of each period? |
Martin
intermediate_accounting_questions.xlsx
