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THE 2010 Fall ACCOUNTING TRIBE

The First Scrimmage

______________________________________ Name (Please Print) _______________________________ PID ______________________________ Class Rules: No cheating
Pledge: 1) 2) 3) 4) By signing my name below, I am promising that: The work I complete is my own, I did not and will not give aid to others, I will not share any information about the examination with those who are taking It later, and 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) B) C) D) E) expense account. liability account. contra account. revenue account. owners equity account

2) Which of the following changes describes the sale for cash of $1,000 of 100 shares of stock? A) B) C) D) E) 3) Assets and owners' equity increase by $1,000 Assets and owners' equity decrease by $1,000 Assets and liabilities increase by $1,000 Assets and liabilities decrease by $1,000 No changes in total assets, liabilities, or owners' equity

Which account will NEVER be included in a closing journal entry? A) B) C) D) E) Sales Retained Earnings Advertising Expense Wages Payable Tax Expense

4)

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) B) C) D) E) $ 5,373.40 $ 155,902.36 $ 160,986.62 $ 372,046.96 Some other number

5)

Jason invests $1,000 today in an account paying 10% compounded semi-annually. How much will he have 20 years from today? A) B) C) D) E) $ 7,039.99 $ 38,337.60 $ 45,259.26 $ 49,561.44 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 31 st 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) B) C) D) E) $ 1,351.48 $ 587.31 $ 680.00 $ 487.20 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) B) C) D) E) $ 7,341.32 $ 6,089.95 $ 4,738.47 $ 4,822.64 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) B) C) D) E) $ 1,000.00 $ 1,274.82 $ 1,008.33 $ 6,019.77 Some other number

9)

Current Liabilities are: A) B) C) D) E) Equal to Current Assets - Expenses for the period Equal to long-term liabilities - Owners' Equity Liabilities that are due now or even overdue for payment Liabilities that will have to be paid within one year By definition, Bad Things

10) The accounting equation is A) B) C) D) E) 11) Debits = Credits Assets = Liabilities + Owners Equity Revenues - Cost of Goods Sold = Gross Margin Recording all expenses incurred in generating the revenues of the period Having the same number of asset accounts on the balance sheet as the prior year

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) B) C) D) E) $ 98,120.14 $ 79,854.20 $ 100,000.00 $ 83,698.31 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) B) C) D) E) 13) $ 150,000 $ 165,000 $ 140,000 $ 130,000 Some other number

Taxes Payable at 12/31/08 are A) B) C) D) E) $ 5,745 $ 8,000 $ 10,290 $ 12,990 Some other number

14)

The ending balance in Retained Earnings at 12/31/08 is A) B) C) D) E) $ 350,000 $ 380,310 $ 370,310 $ 369,010 Some other number

15)

The ending balance in Prepaid Insurance at 12/31/08 is A) B) C) D) E) $ 5,800 $ 4,800 $ 3,600 $ 1,000 Some other number

16)

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

A) B) C) D) E)

$ 94,000 $ 100,000 $ 84,000 $ 90,000 Some other number

17)

Depreciation Expense for 2008 is A) B) C) D) E) $ 30,000 $ 27,500 $ 110,000 $ 137,500 None of the above

18)

Prepaid Rent at 12/31/08 is A) B) C) D) E) $ 2,000 $ 4,000 $ 6,000 $ -0None of the above

19)

Wage Expense for 2008 is A) B) C) D) E) $ 45,000 $ 35,000 $ 47,000 $ 38,000 None of the above

20)

Accounts Receivable at 12/31/08 is A) B) C) D) E) $ 30,000 $ 243,750 $ 81,250 $ 325,000 None of the above

21)

Common Stock at 12/31/08 is A) $ 200,000

B) C) D) E) 22)

$ 50,000 $ 150,000 $ 250,000 None of the above

Interest Expense for 2008 is A) B) C) D) E) $ 16,000 $ 9,400 $ 6,000 $ 10,000 None of the above

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) B) C) D) E) 24) $ 530,000 $ 209,000 $ 280,000 $ 490,000 Some other number

The Total Current Liabilities at December 31, 2008 was A) B) C) D) E) $ 100,000 $ 110,000 $ 190,000 $ 530,000 Some other number

25)

The Total Liabilities at December 31, 2008 was A) B) C) D) E) $ 100,000 $ 110,000 $ 190,000 $ 530,000 Some other number

26)

The Total Owners Equity at December 31, 2008 was A) B) $ 530,000 $ 490,000

C) D) E)

$ 300,000 $ 190,000 Some other number

27)

The Gross Margin for the year ended December 31, 2008 was A) B) C) D) E) $ 825,000 $ 500,000 $ 300,000 $ 600,000 Some other number

28)

The Operating Income for the year ended at December 31, 2008 was A) B) C) D) E) $ 600,000 $ 300,000 $ 315,000 $ 305,000 Some other number

29)

The Taxable Income for the year ended at December 31, 2008 was A) B) C) D) E) $ 600,000 $ 300,000 $ 315,000 $ 305,000 Some other number

30)

The Earnings Per Share for the year ended at December 31, 2008 was A) B) C) D) E) $ 21.35 $ 10.68 $ 4.27 $ 5.02 Some other number

31)

The Common Stock Issued during 2008 was A) B) C) $ 40,000 $ 60,000 $ 100,000

D) E)

$ 21,500 Some other number

32)

The Dividends Declared during 2008 were A) B) C) D) E) $ 29,500 $ 8,000 $ -0$ 21,500 Some other number

33)

The Total Assets at December 31, 2008 was A) B) C) D) E) $ 530,000 $ 209,000 $ 280,000 $ 490,000 Some other number

34)

The matching concept is A) B) C) D) E) Debits = Credits Assets = Liabilities + Owners Equity Revenues - Cost of Goods Sold = Gross Margin Recording all expenses incurred in generating the revenues of the period 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. B. C. D. E. devote the most hours to deliberate practice need about 10 years of hard work to become world-class are naturals in their field and dont need to practice none of these are true A and B are true

36)

An expense account A) Is increased with a debit B) Ultimately decreases retained earnings C) Is closed at the end of the accounting period D) Is an income statement account

E) All of the above are correct 37) Which of the following financial statements reports as of a specific date? A) B) C) D) E) Income Statement Balance Sheet Statement of Journal Entries Statement of T-Accounts 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 Accounts Receivable Inventory (10 scooters @ $12,000 each) Equipment Accumulated Depreciation Security Deposit Accounts Payable Taxes Payable Rent Payable Wages Payable Note Payable Common Stock (4,000 shares) Retained Earnings $ 50,000 40,000 120,000 600,000 110,000 2,000 30,000 8,000 4,000 10,000 100,000 200,000 350,000

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 Accounts Receivable Accumulated Depreciation Advertising Expense Building Cash Common Stock Cost of Goods Sold Equipment Interest Expense Inventory Depreciation Expense Notes Payable Security Deposit Rent Expense Retained Earnings Sales Salaries Payable Salary Expense Tax Expense Taxes Payable Utilities Expense Land Prepaid Insurance $ 59,000 60,000 60,000 15,000 200,000 50,000 100,000 400,000 120,000 10,000 90,000 40,000 90,000 1,000 60,000 200,000 1,000,000 11,000 160,000 91,500 30,000 10,000 20,000 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.