Buss Accounting help

1-Southeast Corporation made sales of 825 Million during 2014. Of this amount , Southeast collected cash for all but 27 million. The company cost of goods sold was 255 million, and all other expenses for the year totals 325 million. Also during 2014 Southeast paid 350 million for its inventory and 255 million for everything else. Beginning cash was 75 million. Southeast top management is interviewing you for a job and they ask two questions:

What was southeast net income for 2014?

How much was Southeast cash balance at the end of 2014?

4-A large auto manufacture sells large fleet of vehicles to the auto rental companies, such as Budget and Hertz. Suppose Budget is negotiating with the auto manufacture to purchase 827 vehicles. Write a short paragraph to explain to the auto manufacture when the company should, should not record this sales revenue and the related expense for the cost of goods sold.

5-Write in a short paragraph to explain in your own words the concept of depreciation as used in accounting.

6-Identify the accounting concept or principle that gives the most direction on how to account foe each of the following:

a-salary expense of 48,000 is accrued at the end of the period to measure income properly.

b-March has been a particularly slow month, and the business will have a net loss for the second quarter of the year. Management is considering not following its customary practice of reporting quarterly earnings to the public.

c-A physician performs a surgical operation and bills the patients insurance company . It may take three months to collect from the insurance company. Should the physician record revenue now or wait until cash is collected?

d-A construction company is building a highway system, and construction will take four years. When should the company record the revenues it ears?

e-A utility bill is received on December 27 and will be paid next year. When should the company record utility expense?

7-Answer the following question about prepaid expenses:

a-On October 1 Paradise Travel prepaid $6000 doe six months’ rent. Give the adjusting entry to record rent expense at October 31. Include the date of the entry and explanation. Then post all amounts to the two accounts involved, and show their balances at October 31. Paradise Travel adjusted the amounts only at October 31, the end of its fiscal year.

b-On October 1 Paradise Travel paid 950 for supplies. At October 31 Paradise Travel has $270 of supplies on hand. Make a required journal entry at October 31. Then post all amounts to the accounts and show their balances at October 31.

1) The adjusted trial balance of Debit Company is shown below:

Debit Company

Adjusted Trial Balance

December 31, 2012

Cash $6,500

Accounts receivable 8,000

Supplies 1,000

Prepaid Rent (3 months) 2,500

Equipment, net 42,000

Accounts payable $4,000

Salary payable 2,000

Unearned revenue (2 month advance) 2,000

Note payable — long term 14,000

Common stock 10,000

Retained earnings 14,700

Dividends 4,000

Service revenue 75,000

Salary expense 40,000

Rent expense 10,000

Supplies expense 1,500

Depreciation expense 5,000

Utilities expense 1,200

Total $121,700 $121,700

Prepare Debit Company's income statement, statement of retained earnings and balance sheet for the year ended December 31, 2012. (10 points each, total 30 points)

2) The following financial statements are to be used to answer the following questions: (5 points each, total 35 points)

What is the Accumulated Depreciation for Buildings on December 31, 2012?

A) $12,000

B) $51,000

C) $63,000

D) $114,000

What is the Cost of goods sold for the year ended December 31, 2012?

A) $8,000

B) $12,000

C) $65,000

D) $100,000

What are the total current assets as of December 31, 2011?

A) $17,000

B) $45,000

C) $99,000

D) $152,000

What is the ending retained earnings balance as of December 31, 2012?

A) $30,000

B) $45,000

C) $758,000

D) $452,000

If Jane Austin Bookstore sold 10,000 books during 2012, what is the average selling price per book?

A) $3.50

B) $6.50

C) $7.25

D) $10.00

If trucks are depreciated over ten years with no residual value, how many years has Jane Austin Bookstore had this truck?

A) 1 year

B) 6 years

C) 9 years

D) 10 years

What are total long-term assets?

A) $53,000

B) $54,000

C) $107,000

D) $137,000

3) Indicate whether the account is an asset (A), liability (L), stockholders' equity (SE), revenue (R) or expense (E) account. Also indicate if the account would appear on the Balance Sheet (BS) or Income Statement (IS) or the Statement of Retained Earnings (SRE) The first account has been completed for you. (25 points)

	ACCOUNT	TYPE OF ACCOUNT	FINANCIAL STATEMENT
1.	Land
2.	Common Stock
3.	Notes Payable
4.	Service Revenue
5.	Telephone Expense
6.	Dividends
7.	Accounts Receivable
8.	Computer Supplies
9.	Accounts Payable
10.	Prepaid Expenses

4) Great Gardens, Inc., had the following transactions during its first month of operations:

May 1 Great Gardens received $20,000 cash and issued common stock to the stockholders.

May 1 Paid the May rent, $1,000.

May 3 Purchased equipment on account for $6,000.

May 5 Purchased gardening supplies for $2,000 on account.

May 8 Performed services for a client and received cash of $1,800.

May 12 Performed services for a client and billed the customer $12,200. The customer promised to pay within 10 days.

May 15 Paid for the equipment purchased May 3 on account.

May 22 Received payment from a customer on account, $12,200.

May 28 Borrowed $20,000 from First National Bank for business use.

May 30 Paid the employee salaries of $3,000 for the month.

May 31 Paid the utility bill of $800.

Required: Record the transactions of the business in a journal. Include an explanation for each entry. (22 points)

5) The Book Company had the following adjustments at December 31, the end of the accounting period:

A. The Book Company uses straight-line depreciation for its equipment. The amount of depreciation to be recorded for the equipment is $10,500.

B. Accrued interest of $2,000 on a note receivable will be received in January.

C. On November 1, The Book Company paid for five months of rent in advance and debited Prepaid Rent. Rent is $1,000 per month.

D. On August 1, the company collected $24,000 in advance for a consulting contract, which is to be earned evenly over the next 12 months. The original entry debited cash and credited unearned revenue.

E. Employees are owed salaries for 3 days of a 5 day workweek; weekly payroll is $30,000.

F. The unadjusted balance of the supplies account is $2,750. Based on a physical count, the cost of supplies on hand is $1,250.

G. The company has incurred interest expense of $850 that will be paid in January.

1. Journalize the adjusting entries. (18 points)

2. Assuming the adjustments were not made, calculate the net overstatement or understatement this would have on net income. Would the company appear to be more or less profitable if the adjustments were not made? (5 points)

6) After all the adjustments have been made, the following selected balances were taken from the adjusted trial balance of Evan's Ski Shop:

Accounts Payable $10,000

Accounts Receivable 3,000

Accumulated Depreciation 1,400

Depreciation Expense 1,500

Dividends 2,400

Insurance Expense 1,750

Interest Revenue 1,240

Prepaid Supplies 2,320

Retained Earnings 10,500

Salary Expense 4,100

Service Revenue 37,800

Journalize the entries to close the appropriate accounts. (15 points)