1
1.
value:
2.35 points
Account Title / Debit / Credit
Cash / $ / 7,300
Accounts receivable / 16,500
Office supplies / 2,000
Trucks / 197,000
Accumulated depreciation—Trucks / $ / 40,582
Land / 75,000
Accounts payable / 11,300
Interest payable / 3,000
Long-term notes payable / 52,000
K. Webb, Capital / 183,638
K. Webb, Withdrawals / 19,000
Trucking fees earned / 134,500
Depreciation expense—Trucks / 26,175
Salaries expense / 63,080
Office supplies expense / 7,398
Repairs expense—Trucks / 11,567
Totals / $ / 425,020 / $ / 425,020
(1) / Calculate the current ratio. (Assume that the industry average for the current ratio is 1.5.)(Round your answer to 2 decimal places.)
Current ratio /
(2) / Compare Webb's current ratio with the industry average.
/ Webb's current ratio is above the industry average.
/ Webb's current ratio is below the industry average.
2.
value:
2.35 points
Account Title / Debit / Credit
Cash / $ / 8,100
Accounts receivable / 16,500
Office supplies / 2,000
Trucks / 158,000
Accumulated depreciation—Trucks / $ / 32,548
Land / 75,000
Accounts payable / 12,100
Interest payable / 3,000
Long-term notes payable / 52,000
K. Webb, Capital / 160,160
K. Webb, Withdrawals / 19,000
Trucking fees earned / 113,000
Depreciation expense—Trucks / 20,993
Salaries expense / 52,997
Office supplies expense / 10,500
Repairs expense—Trucks / 9,718
Totals / $ / 372,808 / $ / 372,808
The K. Webb, Capital, account balance is $160,160 at December 31, 2010.
(1) / Prepare the income statementfor the year ended December 31, 2011.(Input all amounts as positive values. Omit the "$" sign in your response.)
WEBB TRUCKING COMPANY
Income Statement
For Year Ended December 31, 2011
3.
value:
2.35 points
Cash / $ / 5,000
Accounts receivable / 29,000
Office supplies / 6,958
Trucks / 190,000
Accumulated depreciation—Trucks / $ / 39,140
Land / 46,000
Accounts payable / 9,000
Interest payable / 20,000
Long-term notes payable / 61,000
K. Webb, Capital / 146,271
K. Webb, Withdrawals / 17,000
Trucking fees earned / 125,000
Depreciation expense—Trucks / 25,245
Salaries expense / 59,329
Office supplies expense / 11,000
Repairs expense—Trucks / 10,879
Totals / $ / 400,411 / $ / 400,411
Using the above adjusted trial balance to prepare Webb Trucking Company’s classified balance sheet as of December 31, 2011.(Be sure to list the assets and liabilities in order of their liquidity. Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.)
WEBB TRUCKING COMPANY
Balance Sheet
December 31, 2011
4
4.
value:
2.35 points
a. / Unrecorded depreciation on the trucks at the end of the year is $8,505.
b. / The total amount of accrued interest expense at year-end is $8,000.
c. / The cost of unused office supplies still available at the year-end is $600.
(1) / Use the above information about the company’s adjustments to complete a 10-column work sheet.(Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
DALTON DELIVERY COMPANY
Work Sheet
For Year Ended December 31, 2011
Unadjusted
Trial Balance / Adjustments / Adjusted
Trial Balance / Income
Statement / Balance Sheet
& Statement of
Owner's Equity
Account Title / Dr. / Cr. / Dr. / Cr. / Dr. / Cr. / Dr. / Cr. / Dr. / Cr.
Cash / $ / 15,500 / $ / $ / $ / $ / $ / $ / $ / $
Accounts receivable / 18,500 / / / / / / / /
Office supplies / 1,600 / / / / / / / /
Trucks / 290,000 / / / / / / / /
Accum. Depreciation–Trucks / $ / 80,000 / / / / / / / /
Land / 170,000 / / / / / / / /
Accounts payable / 24,335 / / / / / / / /
Interest payable / 4,000 / / / / / / / /
Long-term notes payable / 150,000 / / / / / / / /
V. Dalton, Capital / 151,838 / / / / / / / /
V. Dalton,Withdrawals / 35,000 / / / / / / / /
Delivery fees earned / 283,495 / / / / / / / /
Depreciation expense—Trucks / 20,000 / / / / / / / /
Salaries expense / 119,068 / / / / / / / /
Office supplies expense / 11,000 / / / / / / / /
Interest expense / 4,000 / / / / / / / /
Repairs expense—Trucks / 9,000 / / / / / / / /
Totals / $ / 693,668 / $ / 693,668 / / / / / / / /
Net Income / / / /
Totals / $ / $ / $ / $
(2.1) / Prepare the year-end closing entries for Dalton Delivery Company as of December 31, 2011.(Omit the "$" sign in your response.)
General Journal / Debit / Credit
(2.2) / Determine the capital amount to be reported on its year-end balance sheet.(Omit the "$" sign in your response.)
Ending balance / $
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5.
value:
2.35 points
No. / Account Title / Debit / Credit
101 / Cash / $ / 18,000
126 / Supplies / 9,600
128 / Prepaid insurance / 2,000
167 / Equipment / 23,000
168 / Accumulated depreciation—Equipment / $ / 6,500
301 / R. Showers, Capital / 42,165
302 / R. Showers, Withdrawals / 6,000
404 / Services revenue / 43,400
612 / Depreciation expense—Equipment / 2,000
622 / Salaries expense / 25,302
637 / Insurance expense / 1,823
640 / Rent expense / 2,908
652 / Supplies expense / 1,432
Totals / $ / 92,065 / $ / 92,065
(1) / Prepare the December 31, 2011, closing entries for Showers Company.(Omit the "$" sign in your response.)
Date / General Journal / Debit / Credit
Dec. 31 / /
(2) / Prepare the December 31, 2011, post-closing trial balance for Showers Company.(The items in the Trial Balance should be grouped as follows: Assets, Liabilities and Equity. Be sure to list the asset in order of liquidity.Omit the "$" sign in your response.)
SHOWERS COMPANY
Post-Closing Trial Balance
December 31, 2011
Debit / Credit
/ $
/ $
Totals / $ / $
5
6.
value:
2.35 points
a. / Tanger rents a building from its owner for $3,300 per month. By a prearrangement, the company delayed paying October's rent until November 5. On this date, the company paid the rent for both October and November.
b. / Tanger rents space in a building it owns to a tenant for $700 per month. By prearrangement, the tenant delayed paying the October rent until November 8. On this date, the tenant paid the rent for both October and November.
Required:
1. / Prepare adjusting entries that the company must record for these events as of October 31.(Omit the "$" sign in your response.)
Date / General Journal / Debit / Credit
Oct. 31 / /
2. / Assuming Tanger doesnotuse reversing entries, prepare journal entries to record Tanger's payment of rent on November 5 and the collection of rent on November 8 from Tanger's tenant.(Omit the "$" sign in your response.)
Date / General Journal / Debit / Credit
Nov. 5 / /
8 / /
3. / Assuming that the company uses reversing entries, prepare reversing entries on November 1 and the journal entries to record Tanger's payment of rent on November 5 and the collection of rent on November 8 from Tanger's tenant.(Omit the "$" sign in your response.)
Date / General Journal / Debit / Credit
Nov. 1 / /
5 / /
8 / /
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7.
value:
2.35 points
Cash / $ / 760 / $ / 865 / $ / 1,060
Short-term investments / 0 / 0 / 500
Current receivables / 0 / 945 / 660
Inventory / 1,900 / 955 / 3,800
Prepaid expenses / 1,200 / 562 / 900
Total current assets / $ / 3,860 / $ / 3,327 / $ / 6,920
Current liabilities / $ / 2,239 / $ / 1,120 / $ / 1,730
Compute the current ratio and acid-test ratio for each of the above separate cases.(Round your answers to 2 decimal places.)
Case A / Case B / Case C
Current ratio / / /
Acid-test ratio / / /
Which company case is in the best position to meet short-term obligations?
/ Case A
/ Case B
/ Case C
8.
value:
2.35 points
a / b / c / d / e
Sales / $ / 51,200 / $ / 36,250 / $ / 33,280 / $ / / $ / 20,122
Cost of goods sold
Merchandise inventory (beginning) / 4,864 / 2,936 / 6,989 / 6,124 / 2,073
Total cost of merchandise purchases / 29,184 / / / 27,987 / 7,256
Merchandise inventory (ending) / () / (3,736 / ) / (8,489 / ) / (5,749 / ) / ()
Cost of goods sold / 28,684 / 11,241 / / / 7,056
Gross profit / / / 5,826 / 38,198 /
Expenses / 9,000 / 10,650 / 13,050 / 2,600 / 6,100
Net income (loss) / $ / / $ / 14,359 / $ / (7,224 / ) / $ / 35,598 / $ /
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9.
value:
2.35 points
1(a) / Prepare entries that the buyer should record for the purchase.(Omit the "$" sign in your response.)
General Journal / Debit / Credit
1(b) / Prepare entries that the buyer should record for the cash payment.(Omit the "$" sign in your response.)
General Journal / Debit / Credit
2(a) / Prepare entries that the seller should record for the sale.(Omit the "$" sign in your response.)
General Journal / Debit / Credit
2(b) / Prepare entries that the seller should record for the cash collection.(Omit the "$" sign in your response.)
General Journal / Debit / Credit
3. / Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 11% and paid it back on the last day of the credit period. Compute how much the buyer saved by following this strategy.(Use 365 days a year. Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)
Buyer's net savings / $
10.
value:
2.35 points
Debit / Credit
Merchandise inventory / $ / 32,800
Prepaid selling expenses / 6,000
J.Deacon, Withdrawals / 2,400
Sales / $ / 590,400
Sales returns and allowances / 22,435
Sales discounts / 6,282
Cost of goods sold / 290,477
Sales salaries expense / 64,944
Utilities expense / 18,893
Selling expenses / 50,774
Administrative expenses / 130,478
Additional Information
Accrued sales salaries amount to $1,700. Prepaid selling expenses of $2,400 have expired. A physical count of year-end merchandise inventory shows $32,177 of goods still available.
Deacon Co. uses a perpetual inventory system.
Using the aboveaccount balances and the additional information prepare adjusting entries.(Omit the "$" sign in your response.)
Date / General Journal / Debit / Credit
Dec. 31 / /
Using the aboveaccount balances and the additional information prepare closing entries.(Omit the "$" sign in your response.)
Date / General Journal / Debit / Credit
Dec. 31 / /
11.
value:
2.35 points
Prepare the net sales portion of the company’s multiple-step income statement.(Input all amounts as positive values. Omit the "$" sign in your response.)
Multiple-Step Income Statement
/ $
/ $
Net sales /
12.