THE 2007 Winter ACCOUNTING TRIBE

SEQ CHAPTER \h \r 1THE 2010 Fall ACCOUNTING TRIBE

The First Scrimmage

______________________________________

Name (Please Print)

_______________________________

PID

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ClassRules:

No cheating

Pledge: By signing my name below, I am promising that: 1) The work I complete is my own,

2) I did not and will not give aid to others,

3) I will not share any information about the examination with those who are taking It later, and

4) I will report any others that I observe violating these rules.

Signature ___________________________________________________________

Prepare Journal Entries for Mollys Scooters (Problem 1)

Journal Entries, pg 2

Journal Entries, pg 3

Multiple Choice: Please mark your answer on the both Bubble sheet

and on this test. (6 points each)

1) Accumulated depreciation is a(an)

A) expense account.

B) liability account.

C) contra account.

D)revenue account.

E)owners equity account

2) Which of the following changes describes the sale for cash of $1,000 of 100 shares of stock?

A)Assets and owners' equity increase by $1,000

B)Assets and owners' equity decrease by $1,000

C)Assets and liabilities increase by $1,000

D)Assets and liabilities decrease by $1,000

E)No changes in total assets, liabilities, or owners' equity

3) Which account will NEVER be included in a closing journal entry?

A) Sales

B) Retained Earnings

C) Advertising Expense

D) Wages Payable

E) Tax Expense4) Ryan wants to have $500,000 in the bank in ten years. If the bank pays interest at

12% compounded semi-annually, how much does he need to deposit today to reach

his goal?

A) $ 5,373.40

B) $ 155,902.36

C) $ 160,986.62

D) $ 372,046.96

E) Some other number5) Jason invests $1,000 today in an account paying 10% compounded semi-annually.

How much will he have 20 years from today?

A) $ 7,039.99

B) $ 38,337.60

C) $ 45,259.26

D) $ 49,561.44

E) Some other number

6) Kylie, Inc. is buying a camel. The original cost on January 1, 2006 was $10,000. Kylie put $1,500 down and is making annual payments on December 31st of $1,838.68 which include interest at 8%. If Kylie is properly amortizing this purchase, the interest expense for 2006 (first year) is

A) $ 1,351.48

B) $ 587.31

C) $ 680.00

D) $ 487.20

E) Some other number

7) Still on Kylie- Assuming Kylie is amortizing the loan correctly, the Principal Balance at

the end of 2007 (end of the second year) would have been

A) $ 7,341.32

B) $ 6,089.95

C) $ 4,738.47

D) $ 4,822.64

E) Some other number

8) Eric wants to buy a new Mercedes. The cost is $80,000. Eric will put $20,000 down and pay the rest in equal monthly payments over five years which will begin in one month and which include interest at 10%. How much are the monthly payments?

A) $ 1,000.00

B) $ 1,274.82

C) $ 1,008.33

D) $ 6,019.77

E) Some other number

9) Current Liabilities are:

A)Equal to Current Assets - Expenses for the period

B)Equal to long-term liabilities - Owners' Equity

C)Liabilities that are due now or even overdue for payment

D)Liabilities that will have to be paid within one year

E)By definition, Bad Things

10) The accounting equation is

A) Debits = Credits

B) Assets = Liabilities + Owners Equity

C) Revenues - Cost of Goods Sold = Gross Margin

D) Recording all expenses incurred in generating the revenues of the period

E) Having the same number of asset accounts on the balance sheet as the prior year

11) How much does Bella need to put in the bank today if she wants to withdraw $20,000

per year for each of the next five years? She will put the money in a bank which pays

8% annually. She will make her first withdrawal exactly one year from today.

A) $ 98,120.14

B) $ 79,854.20

C) $ 100,000.00

D) $ 83,698.31

E) Some other number

Answer questions 12 - 22 using your entries and balances calculated for

Problem 1: Mollys Scooters, Inc. for 2008.

12) Cost of Goods Sold for 2008 is

A) $ 150,000

B) $ 165,000

C) $ 140,000

D) $ 130,000

E) Some other number

13) Taxes Payable at 12/31/08 are

A) $ 5,745

B) $ 8,000

C) $ 10,290

D) $ 12,990

E) Some other number

14) The ending balance in Retained Earnings at 12/31/08 is

A) $ 350,000

B) $ 380,310

C) $ 370,310

D) $ 369,010

E) Some other number

15) The ending balance in Prepaid Insurance at 12/31/08 is

A) $ 5,800

B) $ 4,800

C) $ 3,600

D) $ 1,000

E) Some other number

16) The ending balance in Note Payable at 12/31/08 is

A) $ 94,000

B) $ 100,000

C) $ 84,000

D) $ 90,000

E) Some other number

17) Depreciation Expense for 2008 is

A) $ 30,000

B) $ 27,500

C) $ 110,000

D) $ 137,500

E) None of the above18) Prepaid Rent at 12/31/08 is

A) $ 2,000

B) $ 4,000

C) $ 6,000

D) $ -0-

E) None of the above

19) Wage Expense for 2008 is

A) $ 45,000

B) $ 35,000

C) $ 47,000

D) $ 38,000

E) None of the above

20) Accounts Receivable at 12/31/08 is

A) $ 30,000

B) $ 243,750

C) $ 81,250

D) $ 325,000

E) None of the above 21) Common Stock at 12/31/08 is

A) $ 200,000

B) $ 50,000

C) $ 150,000

D) $ 250,000

E) None of the above

22) Interest Expense for 2008 is

A) $ 16,000

B) $ 9,400

C) $ 6,000

D) $ 10,000

E) None of the above SEQ CHAPTER \h \r 1Answer questions 23 - 33 using the financial information from Problem 2:

Bellas Boutique, Inc. at December 31, 2008.

23) The Total Current Assets at December 31, 2008 was

A) $ 530,000

B) $ 209,000

C) $ 280,000

D) $ 490,000

E) Some other number

24) The Total Current Liabilities at December 31, 2008 was

A) $ 100,000

B) $ 110,000

C) $ 190,000

D) $ 530,000

E) Some other number

25) The Total Liabilities at December 31, 2008 was A) $ 100,000

B) $ 110,000

C) $ 190,000

D) $ 530,000

E) Some other number26) The Total Owners Equity at December 31, 2008 was

A) $ 530,000

B) $ 490,000

C) $ 300,000

D) $ 190,000

E) Some other number

27) The Gross Margin for the year ended December 31, 2008 was

A) $ 825,000

B) $ 500,000

C) $ 300,000

D) $ 600,000

E) Some other number

28) The Operating Income for the year ended at December 31, 2008 was

A) $ 600,000

B) $ 300,000

C) $ 315,000

D) $ 305,000

E) Some other number

29) The Taxable Income for the year ended at December 31, 2008 was

A) $ 600,000

B) $ 300,000

C) $ 315,000

D) $ 305,000

E) Some other number30) The Earnings Per Share for the year ended at December 31, 2008 was

A) $ 21.35

B) $ 10.68

C) $ 4.27

D) $ 5.02

E) Some other number31) The Common Stock Issued during 2008 was

A) $ 40,000

B) $ 60,000

C) $ 100,000

D) $ 21,500

E) Some other number32) The Dividends Declared during 2008 wereA) $ 29,500

B) $ 8,000

C) $ -0-

D) $ 21,500

E) Some other number33) The Total Assets at December 31, 2008 was

A) $ 530,000

B) $ 209,000

C) $ 280,000

D) $ 490,000

E) Some other number34)The matching concept is

A) Debits = Credits

B) Assets = Liabilities + Owners Equity

C) Revenues - Cost of Goods Sold = Gross Margin

D) Recording all expenses incurred in generating the revenues of the period

E) Having the same number of asset accounts on the balance sheet as the prior year

35)According to the article What It Takes to be Great, the best people in any field

A.devote the most hours to deliberate practice

B.need about 10 years of hard work to become world-class

C.are naturals in their field and dont need to practice

D.none of these are true

E.A and B are true

36) An expense account A) Is increased with a debit

B) Ultimately decreases retained earningsC) Is closed at the end of the accounting period

D) Is an income statement accountE) All of the above are correct

37)Which of the following financial statements reports as of a specific date?

A) Income Statement

B)Balance Sheet

C) Statement of Journal Entries

D)Statement of T-Accounts

E)None of these

Name________________________________Problem 1 Mollys Scooters, Inc.Listed below are the accounts and their respective balances for Mollys Scooters, Inc. (MS, Inc.) at December 31, 2007:

Cash

$ 50,000

Accounts Receivable

40,000

Inventory (10 scooters @ $12,000 each) 120,000

Equipment

600,000

Accumulated Depreciation

110,000

Security Deposit

2,000

Accounts Payable

30,000

Taxes Payable

8,000

Rent Payable

4,000

Wages Payable

10,000

Note Payable

100,000

Common Stock (4,000 shares)

200,000

Retained Earnings

350,000

During 2008 the following transactions occurred: Collected amounts owed by customers at 12/31/07.

Paid amounts still owed to creditors for 2007 purchases.

Purchased 10 scooters at $15,000 each. Paid 30% down and will pay the rest later.

Sold 13 scooters for $25,000 each with 75% down (cash) and the other 25% will get later.

Paid 12/31/07 taxes payable.

Paid cash for wages of $45,000.

On April 1, 2008 sold 1,000 shares of common stock for $50,000.

Paid fifteen months rent, $30,000. (How much is the rent per month?) On June 30, 2008 purchased an insurance policy for $4,800. This is a two year policy that starts on July 1, 2008.

Paid $7,000 for office expenses.

Paid a $10,000 dividend to shareholders.

On December 31, 2008 made annual principal payment of $10,000 plus interest at 10% on the Note Payable. Also, the company will pay the 2008 taxes in 2009. The tax rate is 30%.

The company uses the FIFO inventory system.

At December 31, 2008 MS owed $12,000 in wages which had not yet been paid.

The equipment originally cost $600,000, had a twenty year life and was expected to be worth $50,000 at the end. The company calculates depreciation using the straight-line method.Other adjustments?

Prepare all Journal Entries and T-Accounts completely for 2008 on the pages provided in the exam. Then answer questions 12 - 22 in the exam based on your entries.

Name________________________________

Problem 2 Bellas Boutique, Inc.Listed below are the accounts for Bellas Boutique, Inc. at December 31, 2008 and their balances. The amounts listed for the Income Statement accounts are before the closing entry has been posted. The amounts for the Balance Sheet accounts are after the closing entry has been posted.

Accounts Payable $ 59,000

Accounts Receivable 60,000

Accumulated Depreciation 60,000

Advertising Expense 15,000

Building 200,000

Cash 50,000

Common Stock 100,000

Cost of Goods Sold 400,000

Equipment 120,000

Interest Expense 10,000

Inventory 90,000

Depreciation Expense 40,000

Notes Payable 90,000

Security Deposit 1,000

Rent Expense 60,000

Retained Earnings 200,000

Sales1,000,000

Salaries Payable 11,000

Salary Expense 160,000

Tax Expense 91,500

Taxes Payable 30,000

Utilities Expense 10,000

Land

20,000Prepaid Insurance

9,000

Bellas beginning balance (12/31/07) in Retained Earnings was $8,000 and the beginning Common Stock balance was $40,000. The company had 20,000 shares of common stock outstanding at the beginning of the year. The corporation issued 30,000 shares of common stock on March 31, 2008. The company paid $21,500 of dividends during the year. The payments on the note are $10,000 per year on the principal plus 10% interest.Use the information above to answer questions 23 33 on the exam.Hint: You might want to draft the financial statements on the back sides of your exam pages.