Acct220: Principles of Accounting I University of Maryland University College

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University of Maryland University CollegeFinal ExaminationAcct220:Principles of Accounting IFor this exam, omit all general journal entry explanations.Ensure to include correct dollar signs, commas, underlines & doubleunderlineswhere required.Question1:40%points:Flip Company's December 31, 2014 trial balance is as follows:Flip CorporationTrial BalanceDecember 31, 2014AccountDebitCreditCash$43,500Accounts Receivable54,500Allowance for Doubtful Accounts500Notes Receivable30,000Merchandise Inventory55,000Land20,000Building150,000Accumulated Depreciation, Building$15,000Equipment50,000Accumulated Depreciation, Equipment21,000Goodwill26,000Accounts Payable25,000Long Term Notes Payable75,000Common Stock, $10 par, 2,000 shares authorized &outstanding20,000Retained Earnings147,000Sales Revenue700,000Salaries Expense150,000Utilities Expense3,500Cost of Goods Sold350,000Administrative Expenses55,000Sales Expenses15,000_______Totals$1,003,000$1,003,000Flip is a small company and records adjusting entries & closing entries only atfiscal (calendar) year end.Correctingandadjusting entries havenotbeen recorded.Acct220Page1of 9

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Additional Information:a. Notes Receivable is a 3-months, 6% note accepted on December 1, 2014.b. Long Term Notes Payable is a 5-year, 5% note, that was signed on July 1,2014.Interest is payable annually.c. Building is depreciated at3% per year. There is no salvage value.d. Equipment is depreciated at 15% year. There is no salvage value.e. Flip discovered,on December 30th,that the inexperienced bookkeeper recordedin the general journal and general ledger thatday's $1,500 cash sales as a debit toAccounts Receivable and a credit to Sales Revenue.f. The year-end physical count for Merchandise Inventory reflected a value of$52,500.Any difference in valuewillnotbeconsidered theft or loss.g. Salaries for the last half of December,payablein January,amount to $6,500.h. Flip estimates that of the Accounts Receivable5% will not be collectable.Required:a. Prepare in journal form, any required correcting entriesb. Prepare in journal form, all end-of-the period adjusting entriesc. Prepare a December adjusted trial balanced. Prepare a classified balance sheet for the year ended December 31, 2014e. Prepare in journal form, the closing entries for the year ended December 31,2014NOTE: Students are encouraged to prepare their own T-accounts,on a separatescratch sheet of paper,and track from the beginning balance thru all journaltransactions to ending balances for all accounts used in this problem. Do not turn inyour separate scratch sheet of paper-those are student personal working papersand not part of any solution required for this exam.Question2:8% points:InventoryFlip uses the period method and had the following inventory events during January:DateUnitsPurchasedUnit CostDateUnits SoldUnit SalesPriceJan. 1150$7.00Jan. 2100$10.00Jan. 52257.25Jan. 712510.00Jan. 101007.50Jan. 127512.00Jan. 151507.50Jan. 1720012.00Jan. 202007.75Jan. 2415015.00Jan. 251508.00Jan. 30758.25Note:January 1 amount was the beginning inventory and unit value.(Round alltotal dollar values tothe nearest dollar.Round all unit values to the nearestpenny.)Acct220Page2of 9

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