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Acct220: Principles of Accounting I University of Maryland University College

A course module on fundamental principles of financial accounting.

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    University of Maryland University College Final Examination Acct220: Principles of Accounting I For this exam, omit all general journal entry explanations. Ensure to include correct dollar signs , commas , u nderlines & double underlines where required . Question 1 : 4 0% points : Flip Company's December 31, 2014 tr ia l balance is as follows: Flip Co rporation Trial Balance December 31, 2014 Account Debit Credit Cash $ 43 , 50 0 Accounts Receivable 5 4 , 5 00 Allowance for Doubtful Accounts 500 Notes Receivable 30,000 Merchandise Inventory 55,000 Land 20,000 Building 150,000 Accumulated Depreciation, Building $ 15,000 Equipment 50,000 Accumulated Depreciation, Equipment 21,000 Goodwill 26,000 Accounts Payable 25,000 Long Term Notes Payable 75,000 Common Stock, $10 par, 2,000 shares authorized & outstanding 20,000 Retained Earnings 147,000 Sales Revenue 700,000 Salaries Expense 150,000 Utilities Expense 3,500 Cost of Goods Sold 350,000 Administrative Expenses 55,000 Sales Expenses 15,000 _______ Totals $ 1,0 0 3, 0 00 $ 1,0 0 3, 0 00 Flip is a small company and records adjusting entries & closing entries only at fiscal (calendar) year end. C orrecting and adjusting entries have not been recorded. Acct220 Page 1 of 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 at 3% per year. There is no salvage value. d. Equipment is depreciated at 15% year. There is no salvage value. e. Flip discovered , on December 30 th , that the inexperienced bookkeeper recorded in the general journal and general ledger th at day's $1,500 cash sales as a debit to Accounts 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 value will not be considered theft or loss. g. Salaries for the last half of December , payable in January , amount to $6,500. h. Flip estimates that of the Accounts Receivable 5 % will not be collectable. Required: a. Prepare in journal form, any required correcting entries b. Prepare in journal form, all end - of - the period adjusting entries c. Prepare a December adjusted trial balance d. Prepare a classified balance sheet for the year ended December 31, 2014 e. Prepare in journal form, the closing entries for the year ended December 31, 2014 NOTE: Students are encouraged to prepare their own T - accounts , on a separate scratch sheet of paper , and track from the beginning balance thru all journal transactions to ending balances for all accounts used in this problem. Do not turn in your separate scratch sheet of paper - those are student personal working papers and not part of any solution required for this exam. Question 2 : 8 % points: Inventory Flip uses the period method and had the following inventory events during January: Date Units Purchased Unit Cost Date Units Sold Unit Sales Price Jan. 1 150 $7.00 Jan. 2 100 $10.00 Jan. 5 2 25 7.25 Jan. 7 125 10.00 Jan. 10 100 7.50 Jan. 12 75 12.00 Jan. 15 150 7. 50 Jan. 17 200 12.00 Jan. 20 200 7.75 Jan. 24 150 15.00 Jan. 25 150 8. 00 Jan. 30 75 8 . 25 Note: January 1 amount was the beginning inventory and unit value. (Round all total dollar values to the nearest dollar. Round all unit values to the nearest penny. ) Acct220 Page 2 of 9

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