SET "A"
ACCT 213
Mid-term Exam
Second Semester, 1431/1432 H
Time: 90 Minutes
Question / Maximum / ScoreI / 5
II / 9
III / 5
IV / 7
V / 4
Total / 30
I. MULTIPLE CHOICE QUESTIONS ( 5 Points)
1. If common stock is issued for an amount greater than par value, the excess should be credited to
a) Paid-in Capital in Excess of Par Value.
b) Cash.
c) Retained Earnings.
d) Legal Capital.
2. Cash from sales of merchandise will be recorded in the
a) Purchases journal.
b) Sales journal.
c) Cash receipts journal.
d) General journal.
3. If a transaction cannot be recorded in a special journal
a) The company must refuse to enter into the transaction.
b) It is recorded directly in the accounts in the general ledger.
c) It is recorded as an adjustment on the work sheet.
d) It is recorded in the general journal.
4. Which of the following is not a principal characteristic of the partnership form of business organization?
a) Limited liability.
b) Association of individuals.
c) Limited life.
d) Mutual agency.
5. Which of the following would not be recorded in the formation entry of a partnership?
a) Allowance for doubtful accounts.
b) Accumulated depreciation.
c) Accounts receivable.
d) All of the above would be recorded.
II. (9Points)
Saleem Company uses a single-column purchases journal, and a cash payments journal to record transactions with its suppliers and others. Record the following transactions in the appropriate journals.
Transactions
Oct. 5 Purchased merchandise on account for SR.20,000 from Ahmed Company. Terms: 2/10, n/30.
Oct. 8 Purchased Land on account for SR.700000 from Amr Company.
Oct. 11 Purchased merchandise on account for SR.14,000 from Khalid Corporation. Terms: 2/5, n/15.
Oct. 13 Purchased car costing SR.30,000 for cash.
Oct. 15 Paid Ahmed Company for merchandise purchased on October 5, less discount.
Oct. 16 Purchased merchandise for SR.8,000 cash from Sami Company.
Oct. 30 Paid Khalid Corporation for merchandise purchased on October 11.
Oct. 31 Cash payment of SR.10,200 employees salaries.
Oct. 31 Purchased office equipment for SR.30,000 cash from Office Supply Company.
Saleem CompanyPurchase Journal
Date / Account Credited / Terms / Merchandise Inventory Dr.
Accounts Payable Cr.
Saleem Company
Cash Payments Journal
Date / Account Debited / Other Accounts Dr. / Accounts Payable Dr. / Merchandise Inventory Cr. / Cash Cr.
III. (5 Points)
Ahmed and Mohammad combine their proprietorships to start a partnership named AM Restaurant in January first, 2011. Ahmed and Mohammad have the following assets prior to the formation of the partnership:
Book Value / Market ValueAhmed / Mohammad / Ahmed / Mohammad
Cash / SR.10,000 / SR. 12,000 / SR. 10,000 / SR. 12,000
Accounts receivable / 9,000 / 10,000 / 9,000 / 10,000
Allowance for doubtful accounts / (1,000) / (500) / (2,000) / (1,000)
Equipment / 12,000 / 24,000 / 13,000 / 20,000
Accumulated depreciation —Equipment / (2,000)
28000 / (4,000)
41500 / - / -
Instructions
Prepare the journal entries necessary to record the formation of the partnership.
AM Restaurant
General Journal
Date / Account Titles and Explanation / Debit / CreditIV. (7 Points)
Abdulmajeed and Abdullah are co-partners in the AA Company. The partnership agreement provides for: (1) interest allowances of 10% on capital balances at the beginning of the year, and (2) the remainder will be distributed equally. Capital balances on January 1st. were Abdulmajeed SR.80,000, and Abdullah SR.120,000. In 2010, partnership net income is SR.90,000.
Instructions:
a) Prepare a schedule showing the division of net income.
b) Journalize the allocation of net income.
AA CompanyDivision of Net Income
Abdulmajeed / Abdullah / Total
AA Company
General Journal
Date / Account Titles and Explanation / Debit / CreditV. (4 Points)
The corporate charter of Saudi Fishing Corporation allows the issuance of a maximum of 2,500,000 shares of SR.1 par value common stock. During its first year, Saudi Fishing Corporation issued 1,200,000 shares at SR.15 per share.
Instructions
Based on the above information, answer the following questions:
a) How many shares were authorized?
b) How many shares were issued?
c) Journalize the issuance of the stock.
Saudi Fishing Corporation
General Journal
7