ACCOUNTING FINAL SPRING 2010
Identify the choice that best completes the statement or answers the question.
____ 1. Special journals ____.
a. simplify the posting process c. organize a business's transactions
b. simplify the recording process d. all of the above
____ 2. The value of the merchandise sold is recorded in the sales journal in the ____.
a. Sales Tax Payable Credit column c. Customer's Account Debited column
b. Sales Credit column d. Accounts Receivable Debit column
____ 3. Journal entries should be posted from the Accounts Receivable Debit column in the sales journal to the
customers' accounts ____.
a. quarterly c. yearly
b. daily d. monthly
____ 4. The number of postings from the sales journal to the general ledger depends upon ____.
a. the number of charge customers affected by each transaction
b. the balance of the charge customers' accounts
c. the number of special amount columns in the sales journal
d. the dates of the transactions
____ 5. If a charge customer owes $600 and is given a 3 percent cash discount of $18, the amount to be recorded in
the Accounts Receivable Credit column of the cash receipts journal is ____.
a. $18 c. $600
b. $582 d. $618
____ 6. Every transaction recorded in the cash receipts journal requires ____.
a. a credit to Accounts Receivable c. a credit to Cash in Bank
b. a debit to Cash in Bank d. a debit to Accounts Receivable
____ 7. The totals of the special amount columns in the sales journal and the cash receipts journal are posted ____.
a. at the end of the month c. once every two weeks
b. at the end of the week d. on a daily basis
On September 22, Illuminations Lighting Center sold $6,400 in merchandise on account to Sunshine Builders,
a charge customer. A 5 percent sales tax applied to the sale. The date of the sales slip was September 22, and
the credit terms were 2/10, n/30. Answer the following questions.
8. What is the last day Sunshine Builders can pay the invoice and still receive a discount?
9. What would be the amount of the cash discount?
10. What amount would Sunshine Builders pay if it sends a check to Illuminations Lighting Center on or before
the discount date?
11. What would be the amount credited to Sunshine Builders' account if it pays within the discount period?
12. What is the last day to pay the net amount of the invoice?
Information about various adjustments and work sheet amounts follows. Calculate the missing data.
13. The beginning Merchandise Inventory balance is $63,000, and the ending Merchandise Inventory balance is
$58,800. What is the amount of the adjustment? Is it a debit or a credit?
14. The Supplies balance in the Trial Balance section is $1,580, and the amount of the adjustment is a $970
credit. What is the ending Supplies balance?
15. The beginning Merchandise Inventory balance is $58,500, and the adjustment on the work sheet is a credit of
$3,570. What is the ending Merchandise Inventory balance?
16. The Federal Corporate Income Tax Expense reported in the Trial Balance section of the work sheet is $7,250,
and the account balance in the Adjusted Trial Balance section is $7,775. What was the amount of the
adjustment? Is it a debit or a credit?
17. The adjustment for Merchandise Inventory on the work sheet is a debit of $9,850. The Merchandise Inventory
amount in the Adjusted Trial Balance section is $71,396. What was the beginning Merchandise Inventory
18. By the end of the accounting period, $2,340 of the insurance premium had expired, leaving a balance of $780.
What was the Prepaid Insurance balance in the Trial Balance section?
19. The amount reported in the Trial Balance section of the work sheet for Federal Corporate Income Tax
Expense was $12,306. At the end of the accounting period, the accountant determined that income taxes for
the year would actually be $11,990. What is the amount of the adjustment? Is it a debit or a credit?
20. The total of the Income Statement Debit column is $138,592. The company has a net loss of $3,005 for the
period. What should the final totals of the Income Statement columns be?
21. The total of the Income Statement Debit column is $455,174, and the total of the Income Statement Credit
column is $494,250. Does the business have a net income or a net loss for the period? What is the amount?
Read the following paragraph and then answer the questions.
On January 2, Holiday Grill purchased a new cook system (range, oven, grill, microwave) for its restaurant.
The system cost $17,500, plus installation charges of $1,200. The cook system has a disposal value of $2,000
and an estimated useful life of eight years.
22. What amount should be debited to the plant asset account?
23. What are the four factors that will affect the depreciation estimate?
24. What is the estimated amount to be depreciated on the cook system? How is that amount calculated?
25. If Holiday Grill uses the straight-line method of depreciation, what is the estimated annual depreciation
26. If the cook system had been purchased on August 4 instead of in January, what would the estimated
depreciation expense for the partial year be?
27. After five years, Holiday Grill is considering replacing the cook system. What is the accumulated depreciation
after five years? What is the book value?
28. Robert LaClerq is paid a regular wage of $9.50 an hour, overtime at the rate of 1 times the regular rate for
all hours worked over 8 in any weekday, and overtime at the rate of 2 times the regular rate for hours worked
on Saturdays, Sundays, and holidays. During the week ended February 14, LaClerq worked the following
days and hours. Calculate the regular hours worked and the overtime hours worked. Then answer the
questions that follow.
Total Hours Regular Overtime
Day Worked Hours Hours
Monday 7 _______________ _______________
Tuesday 10 _______________ _______________
Wednesday 8 _______________ _______________
Thursday 10 _______________ _______________
Friday 11 _______________ _______________
Saturday 2 _______________ _______________
48 _______________ _______________
1. How many regular hours did Mr. LaClerq work?
2. How many overtime hours did Mr. LaClerq work?
3. What was Mr. LaClerq's regular pay?
4. What was Mr. LaClerq's overtime pay?
5. What would change if Mr. LaClerq had worked 6 hours on Monday and 9
hours on Wednesday?
29. The assembly line workers at Cambridge Motors are paid an hourly wage plus overtime for each hour worked
over 40 each week. Overtime is paid at a rate of 1 1/2 times hourly wage. Find the amount of gross earnings
for the following workers.
Hourly Regular Overtime Gross
Wage Earnings Earnings Earnings
Tom Arruda 39 $6.96 _________ __________ __________
Janet Dias 42 $7.10 _________ __________ __________
Paul Pijarowski 45 $7.15 _________ __________ __________
Rosemary Weiss 41 $7.75 _________ __________ __________
30. The sales clerks of Teresa's Treasures are paid a salary of $225 per week plus a commission of 8% on all sales
they make. Find the amount of commission and gross earnings for these employees.
Sales for Gross
Name the Week Commission Earnings
Tina Valendez $2,392.50 __________ __________
Jan Yarrow $3,480.75 __________ __________
31. A. Record the following transactions on page 26 of the general journal provided.
June 1 Sold on account to Ariana Marquez merchandise worth $1,750.00 plus
sales tax of $87.50, Sales Slip 422.
7 Received a check from Mariner High School to apply on account, $275.00,
11 Issued Credit Memo 113 to Ariana Marquez for the return of merchandise
originally sold on account, $150.00 plus sales tax of $7.50.
17 Sold merchandise on account to GTS, Inc., $2,400.00 plus $120.00 in sales
taxes, Sales Slip 423. Credit terms were 2/10, n/30.
25 Received a check for $1,000.00 from Ariana Marquez to apply on account,
27 Received a check from GTS, Inc., for $2,472.00 in payment of its account
balance of $2,520.00 less a 2 percent cash discount of $48.00, Receipt 525.
29 Sold merchandise on account to Mariner High School for $750.00, Sales
30 Cash sales for the period totaled $1,152.00 plus $57.60 in sales taxes, Tape
30 Bankcard sales for the period totaled $4,595.00, plus sales taxes of
$229.75, Tape 630.
B. Use the general journal to answer the following questions.
1 What were the total sales for the month?
2. What were the total sales on account for the month?
3. Do charge sales, cash sales, or bankcard sales represent the largest percentage of the
total sales for the month?
4. What were the total sales returns and allowances for June?
5. What percentage of the total sales do the total sales returns and allowances
6. What were net sales for the period (Sales minus the balance of its two related contra
32. Below are several purchases and cash payments transactions of Campbell Home Furnishings. Record the
transactions on page 44 of the general journal.
Oct. 1 Paid to Seitz Insurance $2,400.00 for the premium on a one-year insurance
policy, Check 445.
5 Purchased merchandise on account from Best, Inc., $2,300.00, Invoice 302,
terms 2/10, n/30.
6 Issued Check 446 for $350.00 to Halliday Transport for shipping charges on
merchandise purchased from Best, Inc.
12 Purchased office supplies for cash, $125.00, Check 447.
14 Issued Check 448 for $2,254.00 to Best, Inc., for merchandise purchased on
account, $2,300.00 less a cash discount of $46.00.
19 Purchased a new computer on account from CMS Systems, $2,250.00,
Invoice 0190, terms net 30.
23 Received Invoice 149 from LaChine Corporation for merchandise purchased
on account, $1,675.00, credit terms 1/10, n/45.
28 Issued Debit Memo 101 to LaChine Corporation for $395.00 in defective
30 Recorded bankcard fees of $177.50, October bank statement.
33. Barrett's Books is a retail merchandising store. The following transactions took place during February of the
(1) Record the transactions on page 15 of the sales journal and on page 11 of the cash
(2) Foot, prove, total, and rule the journals.
Feb. 1 Received $75.00 from Chris Cole to apply on account, Receipt 135.
2 Sold merchandise on account to Pelican Elementary School, $560.00, Sales Slip
5 Sold an old display stand (Store Equipment) for $50.00, Receipt 136.
8 Sold merchandise on account to Holly Winters, $200.00 plus $12.00 sales tax,
Sales Slip 1225.
10 Received a check from Carraba's, Inc., for $1,560.00 in payment of its account
balance of $1,590.00 less a 2 percent cash discount of $30.00, Receipt 137.
15 Cash sales amounted to $2,500.00 plus $150.00 in sales tax, Tape 0215.
15 Bank card sales amounted to $2,700.00 plus $162.00 in sales tax, Tape 0215.
20 Received from Pelican Elementary School a check for $280.00 to apply on its
account, Receipt 138.
25 Sold $120.00 of merchandise, plus $7.20 sales tax, on account to Dunbar
Enterprises, Sales Slip 1226.
27 Sold merchandise on account, $700.00 plus sales tax of $42.00, to Carraba's, Inc.,
Sales Slip 1227
28 Received a check for $170.00 from Holly Winters to apply on account, Receipt
34. Grandma's Cupboard is a merchandising business that specializes in fine collectibles. The following
purchases and cash payments transactions took place during June.
A. (1) Record these transactions on page 12 of the purchases journal and on page 15 of
the cash payments journal.
(2) Foot, prove, total, and rule the journals.
June 1 Issued Check 223 to Best Realty for the June rent, $700.00.
2 Bought $325.00 worth of office supplies on account from Home Office Co.,
Invoice 307, terms n/30.
7 Mailed Check 224 to Keystone Communications for the monthly telephone
8 Issued Check 225 for $2,400.00 to Davis Porcelains for merchandise purchased
on account in May; Invoice 178 for $2,500.00 less a $100.00 discount.
8 Purchased merchandise on account from Crater Curios Co., $2,000.00, Invoice
145, terms 2/15, n/30.
12 Bought on account new lighting fixtures for the store (Store Equipment) from
Star Manufacturing, Inc., $3,010.00, Invoice 124, terms n/45.
14 Issued Check 226 to Metro Transport for shipping charges on merchandise
purchased from Crater Curios, $250.00
19 Paid $499.00 cash to Bennett Corp. for merchandise, Check 227.
21 Mailed Check 228 for $1,960.00 to Crater Curios Co. in payment of Invoice 145
for $2,000.00 less a discount of $40.00.
23 Purchased a new desk for the office on account from Murphy Corp., $900.00,
Invoice 3334, terms n/30.
30 Received Invoice 876 for merchandise bought on account from Carrier
Wholesale, Inc., $1,250.00.
B. Use the journals from Part A to answer the following questions.
1. How many credit purchases of merchandise and other items did Grandma's Cupboard
make in June?
2. What was the total amount of merchandise purchased in June?
3. What amount should be posted to the Accounts Payable account from the purchases
journal on June 30?
4. Will the $3,010.00 amount in the General Debit column of the purchases journal be
posted individually or as part of a column total?
5. How many checks were written to pay creditors during June? What was the total of
6. How many column totals will be posted from the cash payments journal to the general
35. A. On the form below, record the adjustment data for Gulf Coast Cameras.
Data for Adjustments:
The value of the ending inventory is $19,680.
Supplies on hand at the end of the period are $1,324.
The portion of the insurance premium that expired during the period is $750.
Additional federal income taxes owed are $483.
Trial Balance Adjustments
No. Account Name Debit Credit Debit Credit
101 Cash in Bank 9,894
205 Accounts Receivable 2,732
110 Merchandise Inventory 28,402
115 Supplies 3,003
120 Prepaid Insurance 1,500
125 Equipment 45,679
201 Accounts Payable 4,108
205 Fed. Corp. Inc. Tax Pay. —
301 Capital Stock 30,000
302 Retained Earnings 11,090
303 Income Summary — —
401 Sales 171,095
402 Sales Ret. & Allow. 9,055
501 Purchases 62,796
502 Transportation In 7,065
503 Purch. Ret. & Allow. 2,750
601 Advertising Expense 14,694
605 Bankcard Fee Expense 3,465
610 Insurance Expense —
615 Rent Expense 14,400
620 Supplies Expense —
625 Utilities Expense 4,358
630 Fed. Corp. Inc. Tax Exp. _12,000 ______
B. Use the information from Part A, indicate the amount that would be extended to the Adjusted Trial Balance
section for each of the following accounts.
1. Merchandise Inventory 5. Income Summary
2. Supplies 6. Insurance Expense
3. Prepaid Insurance 7. Supplies Expense
4. Federal Corporate Income Tax Payable 8. Federal Corporate Income Tax Expense
36. The Merrick Company bought store equipment on July 3 of the current year at a cost of $4,800. The store
equipment has an estimated useful life of six years and an estimated disposal value of $600.
Prepare a depreciation schedule for the first three years of useful life of the store equipment. Use the straight-
line method to complete the following form.
Cost Annual Accumulated Book Value
July 3 $4,800.00 — — $4,800.00
First year (July - December) _______ _______ _______
Second year _______ _______ _______
Third year _______ _______ _______
37. Paula Masters, the owner of School Stuff, bought a new cash register for $2,800. On December 31 of the
current year, the accumulated depreciation on the cash register was $1,000 before the adjustment for this year.
The estimated annual depreciation expense is $400.
A. Using the T accounts below, enter the appropriate balances.
Accumulated Depreciation— Depreciation Expense—
Cash Register Cash Register Cash Register
Dr. Cr. Dr. Cr. Dr. Cr.
+ - - + + -
B. Using the information from Part A, journalize the adjusting entry for depreciation for the
cash register on page 12 of the general journal.