#ACCT 301 Week 7 – Homework Solution | Explore Tumblr posts and blogs

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BMGT220 Week 1 to 7 homework solutions

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Problem 1

Record the following journal entries below. The first two are done for you as examples.

Date

Event

1/2/2010

Amanda Smith invested $20,000 cash in capital stock of newly formed corporation

1/4/2010

Purchased equipment on account for $15,000. Note that when you see on account it means the customer will pay later.

1/12/2010

Received $30,000 from customers for services rendered.

1/15/2010

Received a bill for construction supplies used in the amount of $4,000.

1/18/2010

Provided $6,400 of services on account.

1/20/2010

Paid employees $4,600 for wages earned.

1/22/2010

Collected the amount due for work provided on January 18.

1/23/2010

Paid the amount due on equipment purchased on January 4.

1/25/2010

Purchased (and used immediately) construction supplies for cash in the amount of $1,200.

1/31/2010

The company paid Amanda Smith a $3,000 dividend

PROBLEM 2

Record the following journal entries below. Hint - some transactions do not require a journal entry

Date

Event

6/2/2011

Jose Alverado invested $50,000 cash in the capital stock of a new corporation

6/3/2011

Paid rent for June in amount of $2,000.

6/6/2011

Hired an assitant to be paid $6,000 per month.

6/7/2011

Signed contract with Alpha Company to provide services for $15,000.

6/8/2011

Purchased on account and immediately used $1,500 of office supplies.

6/9/2011

Received $5,000 from Alpha Company for services performed to date.

6/15/2011

Paid $2,400 travel expense associated with consultation work.

6/16/2011

Provided services on account to Bravo Company for $6,000.

6/17/2011

Paid $3,000 salary to assistant.

6/23/2011

Billed Charlie Company $8,000 for consulting work performed.

6/25/2011

Paid Jose Alverado $2,000 dividend.

6/26/2011

Collected the amount due from Charlie Company for June 23 work.

6/27/2011

Purchased office furniture for $8,000, paying $2,000 cash with balance on account.

6/27/2011

Paid $1500 on account for June 8 purchase.

6/28/2011

Completed contracted work for Alpha Company and billed remaining $10,000 on account.

6/30/2011

Paid assistant $3,000 salary

BMGT220 Week 2 homework solutions

Review the unadjusted trial balance below and prepare adjusting journal entries to record the various described items

below. Record in the space provided at the bottom of this spreadsheet. After completing journal entries, complete the

adjusted trial balance below. Lastly complete the income statement and balance sheet. The balance sheet must

balance. Save completed file with your name in the file name and submit to LEO.

Belair Corporation

Unadjusted Trial Balance

January 31, 2015

Debits

Credits

Cash

$ 37,500

$ -

Accounts receivable

12,410

Prepaid insurance

2,400

………………………………………

Belair Corporation's equipment had an original life of 140 months, and the straight-line depreciation method is used. As of January 1, the equipment was 40 months old. The equipment will be worthless at the end of its useful life.

As of the end of the month, Belair Corporation has provided services to customers for which the earnings process is complete. Formal billings are normally sent out on the first day of each month for the prior month's work. January's unbilled work is $25,000.

Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $1,500.

A review of supplies on hand at the end of the month revealed items costing $3,500.

The $2,400 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30.

The unearned revenue was collected in December of 2014. 60% of that amount was actually earned in January, with the remainder to be earned in February.

The loan accrues interest at 1% per month. No interest was paid in January.

Previously declared and recorded dividend of $2,500 was paid

BMGT220 Week 3 homework solutions

There are two homework problems this week. The first is below and the second one is on the second tab at the bottom left of the screen

Below you will see an unadjusted trial balance run at year end follwed by information needed to make adjusting entries.

Baltimore Glass Company

Trial Balance

December 31, 2014

Acct.

No.

Account Title

Debit

Credit

101

Cash

88,450

110

Accounts Receivable

195,613

120

Merchandise Inventory, 1/1/2014

256,250

125

Supplies on Hand

3,252

130

Prepaid Insurance

3,500

131

Prepaid Rent

7,500

150

Equipment

175,285

160

Accumulated Depreciation

24,260

202

Accounts Payable

72,555

210

Wages Payable

301

Capital Stock

220,000

302

Retained Earnings, 1/1/2014

211,144

401

Sales

998,250

405

Sales Returns and Allowances

5,145

410

Interest Revenue

1,500

500

Purchases

556,800

502

Purchases Returns and Allowances

1,200

505

Transporatation In

4,580

510

Inventory Change

520

Advertising Expense

1,000

530

Sales Salaries Expense

88,600

532

Supplies Expense

540

Office Salaries Expense

124,500

550

Utilities Expense

8,594

555

Insurance Expense

560

Professional Fees Expense

3,000

570

Depreciation Expense

580

Interest Expense

6,840

1,528,909

Adjusting items:

1. The remaining prepaid insurance at year end is $3,000

2. A physical inventory shows supplies on hand of $2,000 at year end

3. The prepaid rent of $7,500 covers January 2015 rent

4. Depreciation on equipment is $12,000 for the year

5. At year end sales salaries of $3,000 were earned but unpaid

6. At year end office salaries of $4,000 were earned but unpaid

7. A physical inventory of merchandise on hand totals $220,850.

Do the following requirements below. Create proper headings for each statement.

1. Record adjusting journal entries from information above. It is possible that an item may not require an entry

2. Prepare an adjusted trial balance including the adjusting entries made

3. Prepare a classified income statement. Supplies is a sales expense.

4. Prepare a statement of retained earnings

5. Prepare a classified balance sheet

6. Prepare closing journal entries

Problem 2

Compute the ending inventory using the perpetual inventory method for both LIFO and FIFO below:

units

price

1-Jan

Beginning inventory

3,500

$ 3.00

14-Jan

Bought

1,500

$ 3.15

5-Feb

Sold

1,000

22-Feb

Bought

2,000

$ 3.20

7-Mar

Sold

1,500

15-Mar

Sold

2,000

5-Apr

Bought

1,000

$ 3.25

10-Apr

Sold

800

12-Apr

Sold

800

22-Apr

Sold

500

4-May

Sold

600

10-May

Bought

2,000

$ 3.30

25-May

Sold

500

BMGT220 Week 4 homework solutions

Compute the ending inventory using the perpetual weighted average method below. These are the same transactions used in week 3 homework:

units

price

1-Jan

Beginning inventory

3,500

$ 3.00

14-Jan

Bought

1,500

$ 3.15

5-Feb

Sold

1,000

22-Feb

Bought

2,000

$ 3.20

7-Mar

Sold

1,500

15-Mar

Sold

2,000

5-Apr

Bought

1,000

$ 3.25

10-Apr

Sold

800

12-Apr

Sold

800

22-Apr

Sold

500

4-May

Sold

600

10-May

Bought

2,000

$ 3.30

25-May

Sold

500

Problem 2

Complete journal entries for the following transactions:

1. Sales for the month of June, 2014 were $75,000. Using a percentage allowance method of 1% record the allowance.

2. On June 30, it was determined that two customers with receivables totaling $980 were not likely to pay

3. On July 15, surprisingly one of the customers who owed $400 and was written off on June 30, paid their bill

4. On July 30, our fiscal year ends, the allowance for doubtful accounts has a balance of $1,780

The company uses an aging method to calculate the desired allowance balance.

An accounts receivable aging shows the following:

30 days or less = $68,500

31 -60 days = $10,400

61-90 days = $4,300

Over 90 days = $1,200

The company wants an ending reserve equal to:

30 days or less = 1%

31-60 days = 3%

61-90 days = 5%

over 90 days = 15%

BMGT220 Week 5 homework solutions

To the side of each senario, record the three required journal entries for a purchase at par, a premium

purchase, and a purchase of bonds at discount. The first entry has been made for you.

Dorchester Inc. invested $100,000 in 5-year bonds issued by Ace Brick Company. The bonds were purchased at par on January 1, 20X1, and bear interest at a rate of 8% per annum, payable semiannually.

(a)

Prepare the journal entry to record the initial investment on January, 20X1.

(b)

Prepare the journal entry that Dorchester would record on each interest date.

(c)

Prepare the journal entry that Dorchester would record at maturity of the bonds.

Problem 2

Evaluate the following features or comments and decide if the description would pertain to a capital lease or an operating lease.

Operating Lease

Capital Lease

The lessee reports the leased asset on its balance sheet

Payments are reported fully as rent expense

Ownership of the property passes to the lessee by the end of the lease term

The lease term is at least 75% of the remaining life of the property

Interest expense is measured and reported by the lessee

Depreciation of the leased asset is not reported by the lessee

At the inception of the lease, the lessee records both an asset and liability

The lessee reports a liability for the present value of all future payments anticipated under the lease agreement

The lessor continues to report the tangible asset covered by the lease on its balance sheet

Problem 3

Examine the following transactions and put the dollar amount in the correct box. Item four will have two boxes with amounts and it is possible that an item could have no entry required.

Item 1

Paid $2,500 for 20X7 insurance coverage on equipment

Item 1

Item 2

Paid $7,500 for trees and shrubs

Item 2

Item 3

Paid $500 attorney's fees for document preparation related to land purchase

Item 3

Item 4

Paid $150,000 for land and building. The land was separately valued at $40,000, and the building at $120,000

Item 4

Item 5

Paid $1,000 freight costs on purchase of new furniture

Item 5

Item 6

Paid $300 for staplers, trash cans, and desktop mats

Item 6

Item 7

Ordered new $50,000 truck, to be delivered and paid for in 20X8

Item 7

Item 8

Paid $10,000 of interest costs on loan on active building construction project

Item 8

Item 9

Paid $25,000 to expand parking lot paving

Item 9

BMGT220 Week 6 homework solutions

Problem 1

On October 1, 20X4, Farmer Engineering Services purchased a new laser surveying instrument. Farmer paid $5,000 down and executed the following promissory note: ……………………….

…………………..

Problem 2

Examine the following items and prepare the current liabilities section of the Balance sheet for Annapolis Corporation as of December 31, 2007

The beginning of year accounts payable was $100,000. Purchases on trade accounts during the year were $650,000, and payments on account were $610,000.

The company incurs substantial costs for electricity to run its servers and air conditioning systems. As of December 31, 2007, it is estimated that $55,000 of electricity has been used, although the monthly billing for December has not yet been received.

Annapolis Corporation sells web hosting plans for as low as $25 per month. However, it requires its customers to prepay in 6-month increments. As of the end of the year, $375,000 had been collected for 2008 web hosting plans.

Web hosting services are subject to sales taxes, and Annapolis Corporation collected $65,000 during the year. All of these amounts have been remitted to taxing authorities, with the exception of $5,000 that is due to be paid in January, 2008.

The company has total bank loans of $1,500,000. This debt bears interest at 6%, payable monthly. As of December 31, 2007, all interest had been paid, with the exception of accrued interest for the last half of December.

The company's bank loans ($1,500,000) are all due on June 30, 2008. However, Annapolis Corporation has a firm lending agreement with the bank to renew and extend $1,000,000 of this amount on a 5-year basis. The company intends to exercise this renewal option, but is not yet sure about the final disposition of the remainder.

Problem 3

Present and Future Value

What is the present value of $10,000 to be received in six years at an 8% discount rate?

$6,301.70

If you put $1,000 in a savings account at the beginning of every year for five years, what is the account balance at the end of five years if it earns 4% interest?

$5,632.98

How much would you have if you waited until the end of each year to deposit your $1,000?

BMGT220 Week 7 homework solutions

Mike works for Baltimore Corp. Fact's related to Mike's paycheck are listed below. He is paid $5,000 once per month on the last day of the month. He has already been paid for January. You are computing February payroll.

Mike's pay is subject to social security taxes at a 6.2% rate and Medicare at a 1.45% rate. He has not exceeded the annual base for social security taxes. Assume the company will remit this tax and any employer match on the 3rd business day after pay day.

Assume Mike's income tax withholding to be equal to $15% for Federal and 5% for Maryland. Assume that both of these withheld taxes will be remitted on the 3rd business day after pay day.

Baltimore Corp pays for workers' compensation insurance at a 3.5% rate. None of this cost is paid by the employee.

Baltimore Corp provides its employees with health care insurance, and pays 80% of the $600 per employee monthly premium. The other 20% is paid by employees via payroll withholdings.

Mike participates in a tax-sheltered deferred savings plan (401k plan) and has 6% of his gross pay withheld each month. Baltimore Corp provides a 100% matching contribution of the first 5% of worker pay. There is no match after 5%. This is sent to the investment company on the 10th of the following month.

Baltimore Corp's payroll is subject to federal (FUTA) tax of 6.2% of the first $7,000 of employee pay per year. The payroll is also subject to Maryland unemploment tax (SUTA) of 4.0% of the first $8,500 of employee pay per year. Both taxes are paid by the employer and the employee does not have these taxes withheld.

Mike participates in the Charitable giving program to donate monney to Baltimore Habitat for Humanity each month. $25 is withheld from his check and sent to the charity by Baltimore Corp on the 10th of the following month.

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