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Final Exam Review – Acct 1 Ch 7-10, 12

Note: This review is not comprehensive – Students are responsible for understanding all topics taught in the course for the final exam. Ch 7 Merchandising Corporation Module 7: Setting up a Merchandising Business - Merchandising activities (sales and cost of sales) - Gross margin ratio - Classified Balance Sheet - Multi-step Income Statement Statements Question The following information is available for Rodgers Inc. for the year ended Dec. 31, 2013:

Rodgers Inc. Trial Balance

31-Dec-13Accounts Payable $3,000Accounts Recievable 7500Accumulated depreication 8000Depreciation Expense 3500Sales discounts 300Cash 1300Cost of goods sold 75000Property Plant and Equipment 76110Insurance expense 250Interest expense 40Common Shares 20000Retained Earnings 12300Dividends 1100Inventory 2200Bank Loan 6000Rent expense 160Rent payable 120Salaries expense 120Sales 120000Sales returns and allowances 1500Supplies 300Supplies expense 40Notes:All accounts are normal balances$1200 of the bank loan is due in the next 12 months

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Prepare:

a) a multiple-step income statement; b) statement of changes in Owner Equity c) A classified balance sheet in good form for Oz Systems.

Ch 8 Inventory

Module 8: Inventory Transactions - Recording inventory transactions - Assigning costs to inventory items using various valuation methods - Perpetual versus periodic inventory systems

Inventory Transactions Question

Fiona's Store had the following transactions during December, the last month of the accounting period: Dec 2. Sold merchandise on credit for $6000, cost $4000 terms 1/10, n/30.

Dec 3. Purchased merchandise for cash, $900.

Dec 4. Purchased merchandise on credit for $4600, terms 2/20, n/30.

Dec 5. Issued a credit memorandum for $500 to a customer who returned merchandise

purchased Nov. 29, cost $300.

Dec 11. Received payment for merchandise sold Dec 2nd.

Dec 15. Received a credit memorandum for $500 for the return of faulty merchandise

purchased on Dec. 4.

Dec 18. Paid freight charges of $100 for merchandise ordered last month.

Dec 23. Paid for the merchandise purchased Dec 4 less merchandise returned.

Dec 24. Sold merchandise on credit for $8000, terms 1/10, n/30, cost $6,500.

Dec. 31 Received payment for merchandise sold on Dec. 24.

Prepare general journal entries to record these transactions, using a perpetual inventory system.

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Inventory Valuation Question During January, a company that uses a perpetual inventory system had beginning inventory, purchases, and sales as follows:

a.) Prepare a schedule to show the cost of goods sold and ending inventory using the FIFO cost flow assumption. Date Purchases

Sales (at cost) Inventory Balance

Quantity Unit

Cost Value Units Unit

Cost Value Quantity Unit

Cost Value

Jan 1

Jan 5

Jan 10

Jan 15

Jan 25

Total

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b.) Prepare a schedule to show the cost of goods sold and ending inventory using the moving weighted average method of costing rounding calculations to two decimals.

Date Purchases

Sales (at cost) Inventory Balance

Quantity Unit Cost

Value Units Unit Cost

Value Quantity Avg Cost/ Unit

Value

Jan 1

Jan 5

Jan 10

Jan 15

Jan 25

Total

Ch 9: Cash Controls

Module 9: Cash controls - Internal control over cash - Bank reconciliations - Accounting for Petty Cash - Ethics and cash transactions

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Petty Cash Question

On September 1, Bart Company established a petty cash fund for $100. On September 10, the petty cash fund was replenished when there was $16.50 on hand and there were petty cash receipts for office supplies, $27; transportation-in, $32; and postage, $21.50. On September 15, the petty cash fund was increased to $125. a) Record these transactions in general journal format.

b )Name four controls related to petty cash.

Bank Reconciliation Question

The following information was available for Romney Supply Company for the month ended May 31, 2015.

i) Prepare the Reconciliation Worksheet

ii) Prepare the appropriate journal entries.

Ch 10: Payroll

Module 10: Payroll - Record payroll liabilities - Record employer's contributions - Record payroll payments Question: Workbook Chapter 10 AP-10

Ch 12: Financial Statement Analysis

Module 11: Cash Flow Identification and Financial Statement Analysis - Identify the content of the Statement of Cash Flow. - Determine the inflow or outflow of cash classified by activity. - Identify the activity classification for a variety of transactions. - Analyze profitability, cash flow and management performance using ratio analysis Questions: Workbook

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Solutions

Ch 7

Statements

Rodgers Inc.Income Statement

For the year ended December 31, 2013

RevenuesSales 120,000$ Less: Sales Discounts 300$

Sales returns and allowances 1,500 1,800 Net sales 118,200 Cost of goods sold 75,000 Gross Profit 43,200 Operating Expenses:Depreciation Expense 3,500 Insurance expense 250 Rent expense 160 Salaries expense 120 Supplies expense 40 Total Operating Expenses 4,070 Income from Operations 39,130 Other expensesInterest expense 40 Net Income 39,090$

Rodgers IncStatement of Shareholders'Equity

For the Year Ending December 31, 2013

Common Shares 20,000$ Retained Earnings 12,300$ Add: Net Income 39,090 Less: Dividends 1,100

Ending Retained Earnings 50,290 Total Shareholders' Equity 70,290$

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Ch 8 Inventory

Inventory Transaction Solution

Rodgers Inc.Balance Sheet

as at December 31, 2013

AssetsCurrent Assets

Cash 1,300$ Accounts Receivable 7,500 Supplies 300 Inventory 2,200

Total Current Assets 11,300$ Non-current Assets

Equipment 76,110$ Accumulated Depreciation, equipmen 8,000 68,110

Total Non-current Assets 68,110 Total Assets 79,410$

LiabilitiesCurrent Liabilities

Accounts Payable 3,000$ Rent Payable 120 Short-term Portion of Bank Loan 1,200

Total Current Liabilities 4,320 Non-current Liabilities

Long-term Portion of Bank Loan 4,800 Total Non-current Liabilities 4,800 Total Liabilities 9,120

Shareholders' Equity 70,290

Total Liabilities + Owner Equity 79,410$

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Inventory Valuation Solution:

a) FIFO

b) Moving Weighted Average:

Chapter 9 Petty Cash Solution

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Bank Reconciliation Solution

Petty Cash AP-10 See workbook solutions for answer.

b)31-May-13 $1,500

$1,500

31-May-13 150150

31-May-13 73006800

500

31-May-13 150150Cash

Service charge

Repost Insurance ExpenseCash

Note ReceivableInterest Revenue

Note received Bank Charge

CashInsurance Expense

Reverse ErrorInsurance Expense

Cash