Devry acct 550 final exam

1. DEVRY ACCT 550 Final Exam
Check this A+ tutorial guideline at
http://www.homeworkrank.com/acct-
550/acct-550-final-exam
For more classes visit
http://www.homeworkrank.com
ACCT 550 Final Exam
1. (TCO A) Listed below are several information, characteristics, and
accounting principles and assumptions. Match the letter of each
with the appropriate phrase that states its application.
(Points : 30)
Potential Matches:
1 : Earnings process completed and realized or realizable
2 : Cost of providing financial information versus the benefits
derived from its use
3 : Accruals and deferrals in adjusting and closing process
4 : Business enterprise assumed to have a long life
5 : Stable dollar assumption
6 : Notes as part of necessary information to a fair presentation
7 : Valuing assets at amount originally paid for them
8 : The impact of an item on the overall financial operations of a
company
9 : Presentation of error-free information with representational
faithfulness
2. (TCO B) Adjusting Entries: Unearned rent at 1/1/10 was $10,300
and at 12/31/10 was $6,000. The records indicate cash receipts from

2. rental sources during 2010 amounted to $50,000, all of which was
credited to the Unearned Rent Account. You are to prepare the
missing adjusting entry. For each journal entry write Dr. for debit
and Cr. for credit. (Points : 10)
3. (TCO B) Adjusting Entries: Data relating to the balances of
various accounts affected by adjusting or closing entries appear
below. (The entries which caused the changes in the balances are
not given.) You are asked to supply the missing journal entries
which would logically account for the changes in the account
balances. Interest receivable at 1/1/10 was $1,000. During 2010
cash received from debtors for interest on outstanding notes
receivable amounted to $1,000. The 2010 income statement showed
interest revenue in the amount of $2,900. You are to provide the
missing adjusting entry that must have been made, assuming
reversing entries are not made. For each journal entry write Dr. for
debit and Cr. for credit. (Points : 10)
4. (TCO B) Adjusting entries: Accumulated depreciation-equipment
at 1/1/10 was $200,000. At 12/31/10, the balance of the account was
$320,000. During 2010, one piece of equipment was sold. The
equipment had an original cost of $50,000 and was 1/2 depreciated
when sold. You are to prepare the missing adjusting entry. For each
journal entry, write Dr. for debit and Cr. for credit. (Points : 10)
5. (TCO B) Adjusting Entries: Allowance for doubtful accounts on
1/1/10 was $70,000. The balance in the allowance account on
12/31/10 after making the annual adjusting entry was $70,000 and
during 2010 bad debts written off amounted to $40,000. You are to
provide the missing adjusting entry. For each journal entry write Dr.
for debit and Cr. for credit. (Points : 10)
6. (TCO B) Adjusting Entries: Prepaid rent at 1/1/10 was $50,000.
During 2010 rent payments of $110,000 were made and charged to
"rent expense." The 2010 income statement shows as a general
expense the item "rent expense" in the amount of $135,000. You are
to prepare the missing adjusting entry that must have been made,
assuming reversing entries are not made. For each journal entry
write Dr. for debit and Cr. for credit. (Points : 10)
7. (TCO B) Adjusting Entries: Retained earnings at 1/1/10 were
$100,000 and at 12/31/10 it was $300,000. During 2010, cash
dividends of $40,000 were paid and a stock dividend of $40,000 was
issued. Both dividends were properly charged to retained earnings.
You are to provide the missing closing entry. For each journal entry
write Dr. for debit and Cr. for credit. (Points : 10)

3. 8. (TCO C) Presented below is information related to Big Blast
Company.
Retained earnings, December 31, 2010 $ 2,350,000
Sales 2,600,000
Selling and administrative expenses 240,000
Earthquake loss (pre-tax) on plant (extraordinary item) 250,000
Cash dividends declared on common stock 53,600
Cost of good sold 1,000,000
Gain resulting from computation error on depreciation charge in
2009 (pre-tax) 520,000
Other revenue 80,000
Other expenses 50,000
Instructions: Prepare in good form a multiple-step income
statement for the year 2011. Assume a 30% tax rate and that
100,000 shares of common stock were outstanding during the year.
(Points : 40)
9. (TCO D) The following balance sheet was prepared by the
bookkeeper for Purple Company as of December 31, 2011 Purple
Company Balance Sheet as of December 31, 2011:
Cash $ 80,000 Accounts payable $ 75,000
Accounts receivable (net) 52,200 Long-term liabilities 100,000
Inventories 57,000 Stockholders' equity 218,500
Investments 76,300
Equipment (net) 96,000
Patents
$393,500 $393,500
The following additional information is provided:
(1) Cash includes the cash surrender value of a life insurance policy
$12,000, and a bank overdraft of $2,500 has been deducted.
(2) The net accounts receivable balance includes:
(a) accounts receivable debit balances $60,000;
(b) accounts receivable 0;
(c) allowance for doubtful accounts $3,800.
(3) Inventories do not include goods costing $3,000 shipped out on
consignment. Receivables of $3,000 were recorded on these goods.
(4) Investments include investments in common stock, trading
$13,000, available-for-sale $48,300, and franchises $15,000.
(5) Equipment costing $5,000 with accumulated depreciation $4,000
is no longer used and is held for sale. Accumulated depreciation on
the other equipment is $40,000.

4. (6) An unrecorded liability was not recorded on the balance sheet of
$2000.
Instructions:
Prepare a balance sheet in good form (stockholders' equity details
can be omitted.) (Points : 40)
10. (TCO E) Jack Sawyer is presently leasing a copier from John
Office Equipment Company. The lease requires 11 annual payments
of $4,500 at the end of each year and provides the leaser (John)
with an 8% return on its investment. You may use the following 8%
interest factors:
9 Periods 10 Periods 11 Periods
Future Value of 1 1.99900 2.15892 2.33164
Present Value of .50025 .46319 .42888
Future Value of 12.48756 14.48656 16.64549
Ordinary Annuity of 1
Present Value of 6.24689 6.71008 7.13896
Ordinary Annuity of 1
Present Value of 6.74664 7.24689 7.71008
Annuity Due of 1
Instructions
(a) Assuming the computer has an eleven-year life and will have no
salvage value at the expiration of the lease, what was the original
cost of the copier to John?
(b) What amount would each payment be if the 11 annual payments
are to be made at the beginning of each period? (Points : 25)
11. (TCO F) David deposits all receipts and makes all payments by
check. The following information is available from the cash records:
MARCH 31 BANK RECONCILIATION
Balance per bank $26,746
Add: Deposits in transit 2,100
Deduct: Outstanding checks (3,800)
Balance per books $25,046
Month of April Results Per Bank Per Book
Balance April 30 $27,995 $24,355
April deposits 8,864 14,889
April checks 12,200 16,080
April note collected 3,000 -0-
(not included in April deposits)

5. April bank service charge 35 -0-
April NSF check of a customer 900 -0-
returned by the bank
(recorded by bank as a charge)
Instructions:
Calculate the amount of the April 30:
(1) Deposits in transit
(2). Outstanding checks
Show all your work for potential partial credit. (Points : 25)
12. (TCO G) Steve Company was formed on December 1, 2010. The
following information is available from Steve's inventory record for
Product X.
Units Unit Cost
January 1, 2011 (beginning inventory) 1,500 $19.00
Purchases:
January 5, 2011 2,600 $20.00
January 25, 2011 2,400 $21.00
February 16, 2011 1,000 $22.00
March 15, 2011 2,300 $24.00
A physical inventory on March 31, 2011, shows 2,800 units on hand.
Instructions
Prepare schedules to compute the ending inventory at March 31,
2011, under each of the following inventory methods:
(a) FIFO
(b) LIFO
(c) Weighted-average.
Show supporting computations in good form. (Points : 40)
13. (TCO H) A machine cost $500,000 on April 1, 2010. Its estimated
salvage value is $50,000 and its expected life is eight years.
Instructions
Calculate the depreciation expense (to the nearest dollar) by each
of the following methods, showing the figures used.
(a) Straight-line for 2010
(b) Double-declining balance for 2011
(c) Sum-of-the-years'-digits for 2011 (Points : 40)