ACCT 212 Week 8 Final Exam

ACCT 212 Week 8 Final Exam | Assignment Help | Devry University 

Question 1

25 / 25 pts

(TCO 3) Explain why Adjusting Entries are required at the end of each accounting period (15 points) and provide an example of a required journal entry for either the consumption of supplies or insurance (10 points).

Question 2

25 / 25 pts

(TCO 2) Sandy Company is a retailer who applies the periodic method to account for its inventory. It had the following inventory transactions: Quantity Unit Cost Beginning inventory 100 $10.00 Purchase on March 4th 120 12.00 Purchase on March 10th 150 14.00 Purchase on March 20th 170 15.00 During March, 360 units were sold for $25 per unit. Calculate the cost of ending inventory, cost of goods sold, and gross profit using the LIFO method. Show all computations.

Question 3

(TCO 5) Internal Control Procedures are required to safeguard company assets and to ensure ethical operation of the business. (1) Explain how the separation of duties can satisfy the purpose of internal control (15 points) and (2) provide an example of how this control could be implemented. (10 points)

Question 4

(TCO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1) Explain how the Last in First out (LIFO) method is applied (15 points) and (2) provide an example of the impact that this method of inventory valuation will have on Gross Profit. (10 points)

Question 5

(TCO 1) The Balance Sheet is sometimes referred to as a snap-shot of the financial position of the business on a particular date. Name the three major components of the Balance Sheet (15 points) and provide an example of an account that would be found in each major component (10 points).

Question 6

(TCO 6) BagODonuts Company bought a used delivery truck on January 1, 2010, for $19,200. The van was expected to remain in service 4 years (30,000 miles).  BagODonuts’ accountant estimated that the truck’s residual value would be $2,400 at the end of its useful life.  The truck traveled 8,000 miles the first year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year. 

Question 7

(TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:
 Preferred Stock: 7%, par value $100 per share, 100,000 shares.
 Common Stock: $1 par value, 500,000 shares.

The following transactions occurred during the year:

1/19/12 – Issued 100,000 shares of common stock for $17 cash per share.
1/31/12 – Issued 3,000 shares of preferred stock for $115 cash per share.
11/1/12 – Repurchased 30,000 shares of common stock for $22 cash per share.
12/1/12 – Declared and paid a total dividend of $95,000.

Required:
1. Prepare the journal entry for each transaction listed above.
2. In your own words, explain the main differences between common and preferred stock.

Question 8

(TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions.  Of the seven internal control procedures, list five of these controls and describe how each procedure is implemented. (5 points each with 2 points for listing and 3 points for a description)

Question 9

(TCO 2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order.

Question 10

(TCO 4) Linda’s Lampshades started the business on Jan. 1, 2001. They had the following inventory transactions:

Journals - Jan. 2001

Purchases

Supplier         Date Received         Quantity        Unit Cost       Amount

Donna           01/10/01                110              12.00            1320.00

Thomas         01/15/01                160              14.00             2240.00

Cindy            01/18/01                150              15.00            2250.00

Sales

Customer      Date shipped    Quantity      Sel. Price                Amount         

Norilene        01/16/01         200                  25.00                   5000.00

1.    Calculate the ending inventory, using the perpetual inventory method:

A.     Using FIFO

B.     Using LIFO

C.     Using Average Cost

2.    Prepare the following statement            

Using

                                      FIFO    LIFO        Average Cost

Sales

Cost of Sales          

Gross Profit