ACCT-1001EL Study Guide - Final Guide: Bank Statement, Current Liability

60 views1 pages

pearmosquito296

20 Jun 2018

School

Department

Course

Professor

For unlimited access to Study Guides, a Grade+ subscription is required.

Accounting Final Exam Review

Chapter Six — Cash

-Bank Reconciliations

Internal Control Procedure

Ensures that difference between the accounting records for cash and the bank statement

received from the bank are identiﬁed, explained and recorded where necessary.

PREPARING:

2 sides

Things we know and the bank does not. Things the bank knows, but we don't until statement.

JOURNAL ENTRIES & RECORDING

G/L add = Cash Debit

G/L less - Cash Credit

Chapter Seven — Inventory

-Periodic vs Perpetual

-Concluding year and inventory balances using Dif method

-Inventory Evaluation

Chapter Eight — Long-Term Assets

-Basket Purchases

-Capitalizing Costs

-Selecting depreciation method

-Calculating and recording depreciation as well as un-depreciated amount (using different

methods)

Chapter Nine — Current Liabilities

-Types and examples of current liabilities (including current portion of long-term debt) KNOW

THE FULL LIST

-Contingent Liabilities

Chapter Ten — Long-term liabilities

-Accounting for bonds

Chapter Eleven — Shareholders Equity

-More informational than computational

-Different types of shares KNOW THE FULL LIST

-Rights of shareholders

-Dividends

-Key Dates

-Stock Dividends

Chapter Twelve — Financial Statement Analysis

-Common six ﬁnancial statements

-Ratio analysis (2 key ratios across 5 categories)

find more resources at oneclass.com

Unlock document

This preview shows half of the first page of the document.
Unlock all 1 pages and 3 million more documents.

Already have an account? Log in

Document Summary

Ensures that difference between the accounting records for cash and the bank statement received from the bank are identi ed, explained and recorded where necessary. Things we know and the bank does not. Things the bank knows, but we don"t until statement. Concluding year and inventory balances using dif method. Calculating and recording depreciation as well as un-depreciated amount (using different methods) Types and examples of current liabilities (including current portion of long-term debt) know. Different types of shares know the full list.

Related Questions

Produce a balance sheet for a company that distinguishes betweencurrent and non- current assets and liabilities.

Create a balance sheet from a trial balance.

Create a comparison of net income based on different methods ofinventory accounting.

Analyze a statement of cash flows and show where each line itemcan be found or

calculated from the other financial statements.

Prepare a full analysis of key financial ratios for a companyand state conclusions about

the financial strength of the company compared to industryratios.

PROJECT SUBMISSION PLAN

Project Part

Description/Requirements of Project Part

Evaluation Criteria

Title: Creating a Balance Sheet and Evaluating Inventory
You will be provided with financial information about a fictionalcompany. You will have to determine what information is relevantfor Project Parts 1 and 2.

Task 1: Create a balance sheet from a trial balance for a givenscenario. Make sure you classify the accounts appropriately ascurrent or non-current. Click here to download the trialbalance.

Page 1

AC1420: Project

Project Part

Description/Requirements of Project Part

Evaluation Criteria

Task 2: Perform inventory valuations using LIFO, FIFO, andweighted average methods based on the following information.Explain the impact of each method on the cost of goods sold andending inventory.

The company imports microwaves from a supplier in China for theUS market. At the end of the first quarter, 100 microwaves are instock. The company purchased a total of 400 microwaves during thequarter at various prices: January: 100 units @ $75

February: 250 units @ $83
March: 50 units @ $87
The company had no inventory at the beginning of the quarter.
Task 3: If the companyâs goal is to maximize net income, whichevaluation method will you use and why?

Project Part 1 -Task 2:

Value of Ending Inventory of100 Units

Weighted AVG

LIFO

FIFO

Cost of Goods Sold (300 UnitsSold)

Weighted AVG

LIFO

FIFO

Create a BalanceSheet from the trial balance:
		Debits	Credits	Classification

	Cash	300,000.00		Current asset

	Sales		(10,000,000.00)	Income statement

	Cost of Goods Sold	7,000,000.00		Income statement

	Selling Expenses	500,000.00		Income statement

	Other income		(50,000.00)	Income statement

	Administrative expenses	350,000.00		Income statement

	Interest Expenses	12,500.00		Income statement

	Land	300,000.00		non-current asset

	Building	2,000,000.00		non-current asset

	Long Term bond payable		(550,000.00)	non-current liability

	Accrued Liabilities		(50,000.00)	current- liability

	Accumulated Depreciation Buildings		(250,000.00)	non-current asset

	Equipment	750,000.00		non-current asset

	Receivables	100,000.00		current asset

	Allowance for doubtful accounts		(7,500.00)	current asset

	Accumulated depreciation equipment		(125,000.00)	non-current asset

	Common Stock		(200,000.00)	equity

	Payables		(115,000.00)	current Liability

	Inventories	200,000.00		current asset

	Prepaid Expenses	50,000.00		current asset

	Retained Earnings		(215,000.00)	equity



		11,562,500.00	(11,562,500.00)

Assets		Equity and Liabilities

Current Assets		Current Liabilities





Total Current Assets	-	Total Current Liabilities	-




		Total long term Liabilities	-

Total property plant andequipment	-






		Total Equity	-


Total Assets	-	Total Equity and liabilities	-

pearlouse123

Part A - Inventory and Depreciation

Consider this Balance Sheet situation:

Three years ago Mr. Jones bought a new machine that insertspimentos into

green olives. He paid $10,000 for the machine, and it wenthappily to work

and has been filling 5,000 green olives per day with bright redpimentos.

At the time of purchase, Mr. Jonesï¿½ accountant told him that thestandard

useful life for this type of equipment was 10 years. Mr. Jonesdecided to use

the straight-line method to calculate depreciation.

Please answer the following questions:

1. What amount would go on the Balance Sheet at the time of

purchase?

2. Where would this amount have been posted on the Balance

Sheet?

3. What is the current book value of the equipment?

4. How much accumulated depreciation is posted?

Consider this Income Statement situation:

Mr. Jones started the year with no olives in inventory. Hebought 5,000

green olives at 25 cents each in March, 10,000 at 50 cents eachin July, and

10,000 at 75 cents each in November. At year end he had 2,000olives left

in inventory.

Calculate his ending inventory value using:

5. Average cost method

6. FIFO

7. LIFO

8. Which method should he use when he prepares his Income

Statement to show the bank?

Part B - Financial Statement Analysis

Please solve the following Financial Statement Ratios using

the Balance Sheet and Income Statement found below.

Also tell me, in a sentence or two, what we have learned

from each one.

1. CURRENT RATIO

2. QUICK, OR ACID TEST RATIO

3. WORKING CAPITAL

4. DEBT TO WORTH (or Owners Equity) RATIO

5. ROI (Return on Investment).

6. EARNINGS PER SHARE

7. INVENTORY TURNOVER

FIGURE A

Jim Jones, dba Jimï¿½s Cool Stuff

BALANCE SHEET

As of December 31, 2009

ASSETS LIABILITIES

Current Assets Current Liabilities

Cash 250 Accounts Payable 500

Accts. Receivable 550 Notes Payable 600

Inventory 750 Contracts Payable 300

Prepaid Expenses 1,000 Total Curr. Liabilities 1,100

Total Curr. Assets 2,550

Long-Term Liabilities

Fixed Assets Mortgage 15,000

Land 40,000 Long Term Contract 1,500

Truck 2,000 Total LT Liabilities 16,500

Accum. Dep. (250) 1,750 TOTAL LIABILITIES 17,600

Total Fixed Assets 41,750

TOTAL ASSETS: 44,300 EQUITY

Common Stock

(1,000 shares)

26,700

TOTAL EQUITY 26,700

LIABILITIES & EQUITY 44,300

FIGURE B

Jim Jones, dba Jimï¿½s Cool Stuff

INCOME STATEMENT

For the 12 months ending December 31, 2009

REVENUE $1,000,000

EXPENSES

Cost of Goods Sold:

Beginning Inventory 125,000

Plus Purchases 550,000

Less Ending Inventory (100,000)

= Cost of Goods Sold $575,000

Gross Profit $425,000

Operating Expenses

Rent 175,000

Payroll 217,700

Utilities 11,000

Office Expenses 500

Depreciation 50

Local Taxes 250

Legal Fees 500

Total Operating Expenses 405,000

NET INCOME BEFORE TAX 20,000

Federal Income Taxes (25%) 5,000

NET INCOME 15,000

pearwhale985

Consider this Balance Sheet situation:

Three years ago Mr. Jones bought a new machine that insertspimentos into

green olives. He paid $10,000 for the machine, and it wenthappily to work

and has been filling 5,000 green olives per day with bright redpimentos.

At the time of purchase, Mr. Jonesï¿½ accountant told him that thestandard

useful life for this type of equipment was 10 years. Mr. Jonesdecided to use

the straight-line method to calculate depreciation.

Please answer the following questions:

1. What amount would go on the Balance Sheet at the time of

purchase?

2. Where would this amount have been posted on the Balance

Sheet?

3. What is the current book value of the equipment?

4. How much accumulated depreciation is posted?

Consider this Income Statement situation:

Mr. Jones started the year with no olives in inventory. Hebought 5,000

green olives at 25 cents each in March, 10,000 at 50 cents eachin July, and

10,000 at 75 cents each in November. At year end he had 2,000olives left

in inventory.

Calculate his ending inventory value using:

5. Average cost method

6. FIFO

7. LIFO

8. Which method should he use when he prepares his Income

Statement to show the bank?

Part B - Financial Statement Analysis

Please solve the following Financial Statement Ratios using

the Balance Sheet and Income Statement found below.

Also tell me, in a sentence or two, what we have learned

from each one.

1. CURRENT RATIO

2. QUICK, OR ACID TEST RATIO

3. WORKING CAPITAL

4. DEBT TO WORTH (or Owners Equity) RATIO

5. ROI (Return on Investment).

6. EARNINGS PER SHARE

7. INVENTORY TURNOVER

FIGURE A

Jim Jones, dba Jimï¿½s Cool Stuff

BALANCE SHEET

As of December 31, 2009

ASSETS LIABILITIES

Current Assets Current Liabilities

Cash 250 Accounts Payable 500

Accts. Receivable 550 Notes Payable 600

Inventory 750 Contracts Payable 300

Prepaid Expenses 1,000 Total Curr. Liabilities 1,100

Total Curr. Assets 2,550

Long-Term Liabilities

Fixed Assets Mortgage 15,000

Land 40,000 Long Term Contract 1,500

Truck 2,000 Total LT Liabilities 16,500

Accum. Dep. (250) 1,750 TOTAL LIABILITIES 17,600

Total Fixed Assets 41,750

TOTAL ASSETS: 44,300 EQUITY

Common Stock

(1,000 shares)

26,700

TOTAL EQUITY 26,700

LIABILITIES & EQUITY 44,300

FIGURE B

Jim Jones, dba Jimï¿½s Cool Stuff

INCOME STATEMENT

For the 12 months ending December 31, 2009

REVENUE $1,000,000

EXPENSES

Cost of Goods Sold:

Beginning Inventory 125,000

Plus Purchases 550,000

Less Ending Inventory (100,000)

= Cost of Goods Sold $575,000

Gross Profit $425,000

Operating Expenses

Rent 175,000

Payroll 217,700

Utilities 11,000

Office Expenses 500

Depreciation 50

Local Taxes 250

Legal Fees 500

Total Operating Expenses 405,000

NET INCOME BEFORE TAX 20,000

Federal Income Taxes (25%) 5,000

NET INCOME 15,000

pinkgoose788

ACCT-1001EL Study Guide - Final Guide: Bank Statement, Current Liability

Document Summary

Get access

Related Documents

ACCT-1001EL Lecture Notes - Lecture 7: Current Liability, Bank Statement

ART 1001 Lecture : 1001 Lecture 15rev FrRevol

COMMERCE 1AA3 Chapter Notes - Chapter 3-4: Petty Cash, Passive Electronically Scanned Array, List Of The Shield Episodes

Related Questions