EXAM #1 WEEK 3 (Chapters 1–3)
Should be completed by Sunday at 11:59 p.m. ET.
Question 1: The records of Skymaster Airplane Rentals show the following information as of December 31, 2011
|
Accounts payable |
$ 36,000 |
2011 Wages expense |
$75,000 |
|
Insurance expense |
2,000 |
2011 Advertising expense |
22,000 |
|
Accounts receivable |
24,000 |
Cash |
11,000 |
|
Retained earnings, December 31, 2010 |
130,000 |
Common stock Office furniture |
20,000 15,000 |
|
Airplanes |
150,000 |
2011 Maintenance expense |
39,000 |
|
Notes payable |
47,000 |
2011 Revenues |
217,000 |
|
Hangar |
60,000 |
Dividends of $52,000 were paid during 2011.
Using the above information, prepare an income statement for 2011. (15 points)
Question 2: The records of Skymaster Airplane Rentals show the following information as of December 31, 2011
|
Accounts payable |
$36,000 |
2011 Wages expense |
$75,000 |
|
Insurance expense |
2,000 |
2011 Advertising expense |
22,000 |
|
Accounts receivable |
24,00 |
Cash |
11,000 |
|
Retained earnings, December 31, 2010 |
130,000 |
Common stock Office furniture |
20,000 15,000 |
|
Airplanes |
150,000 |
2011 Maintenance expense |
39,000 |
|
Notes payable |
47,000 |
2011 Revenues |
217,000 |
|
Hangar |
60,000 |
Dividends of $52,000 were paid during 2011.
Using the above information, prepare a statement of retained earnings for 2011 (15 points)
Question 3: The records of Skymaster Airplane Rentals show the following information as of December 31, 2011
|
Accounts payable |
$36,000 |
2011 Wages expense |
$75,000 |
|
Insurance expense |
2,000 |
2011 Advertising expense |
22,000 |
|
Accounts receivable |
24,000 |
Cash |
11,000 |
|
Retained earnings, December 31, 2010 |
130,000 |
Common stock Office furniture |
20,000 15,000 |
|
Airplanes |
150,000 |
2011 Maintenance expense |
39,000 |
|
Notes payable |
47,000 |
2011 Revenues |
217,000 |
|
Hangar |
60,000 |
Dividends of $52,000 were paid during 2011.
Using the above information, prepare a balance sheet at December 31, 2011. (15 points)
Question 4: The following is a list of accounts and identification letters A through J for Shannon Management Co.:
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A. |
Common Stock |
F. |
Prepaid Rent |
|
B. |
Interest Payable |
G. |
Advertising Expense |
|
C. |
Land |
H. |
Unearned Rent Revenue |
|
D. |
Dividends |
I. |
Commissions Earned |
|
E. |
Fees Earned |
J. |
Notes Receivable |
Use the form below to identify the type of account and its normal balance. The first item is filled in as an example. (10 points)
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Type of Account |
Normal Balance |
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Asset |
Liability |
Equity |
Debit |
Credit |
|
|
A. |
X |
X |
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B. |
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C. |
|||||
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D. |
|||||
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E. |
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F. |
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G. |
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H. |
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I. |
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J. |
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Question 5: Dolly Barton began Barton Office Services in October and during the month completed the following transactions:
a. Invested $10,000 cash and $15,000 of computer equipment in exchange for common stock
b. Paid $500 cash for an insurance premium covering the next 12 months
c. Completed a word processing assignment for a customer and collected $1,000 cash
d. Paid $200 cash for office supplies
e. Paid $2,000 for October’s rent.
Prepare journal entries to record the above transactions. Explanations are unnecessary. (15 points)
Question 6: In general journal form, record the December 31 adjusting entries for the following transactions and events. Assume that December 31 is the end of the annual accounting period. (15 points)
a. The Prepaid Insurance account shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year
b. The Office Supplies account has a debit balance of $400; a year-end inventory count reveals $80 of supplies still on hand
c. On November 1 of the current year, Rent Earned was credited for $1,500. This amount represented the rent earned for a three-month period beginning November 1
d. Estimated depreciation on office equipment is $600
e. Accrued salaries amount to $400
Question 7: The adjusted trial balance of Sara’s Web Services follows:
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SARA’S WEB SERVICES Adjusted Trial Balance December 31 |
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|
Cash |
$ 1,170 |
|
|
Supplies |
1,930 |
|
|
Prepaid insurance |
600 |
|
|
Computer equipment |
20,600 |
|
|
Accumulated depreciation – Computer equipment |
$ 5,400 |
|
|
Accounts payable |
325 |
|
|
Common stock |
3,000 |
|
|
Retained earnings |
10,925 |
|
|
Dividends |
4,800 |
|
|
Services revenue |
21,720 |
|
|
Salaries expense |
6,920 |
|
|
Depreciation expense |
2,000 |
|
|
Rent expense |
1,200 |
|
|
Supplies expense |
800 |
|
|
Utilities expense |
950 |
|
|
Insurance expense |
400 |
|
|
Totals |
$41,370 |
$41,370 |
- 1.
(a) Prepare the closing entries for Sara’s Web Services. (15 points)
