UIL Accounting Regional 2010-R -6-
UIL ACCOUNTING
Regional 2010-R
Group 1
For items 1 through 12, decide whether the item belongs on the Post-Closing Trial Balance. If the item belongs on this type of trial balance, indicate whether the normal balance will be listed in the debit column or the credit column. Use the following code:
A / Yes, debit sideB / Yes, credit side
C / No
1. Allowance for Uncollectible Accounts 7. the owner’s capital account
2. Prepaid Insurance 8. Office Supplies on Hand
3. Merchandise Inventory 9. Gross Profit
4. Payroll Tax Payable 10. Accumulated Depreciation—Equip.
5. Payroll Tax Expense 11. Bank Card Fees Expense
6. Income Summary (net loss) 12. Accounts Receivable
Group 2
Write the correct identifying letters (DR or CR or NC) on your answer sheet for items 13 through 20.
DR = this account is closed with a debitCR = this account is closed with a credit
NC = this is an account that is never closed; or this is not an account
13. Gain on Plant Assets 17. Cost of Merchandise Available for Sale
14. Depreciation Expense—Buildings 18. Amy Robach, Drawing
15. Purchases Discounts 19. Transportation In
16. Residual Value 20. Land
Group 3
Samoa Co. carries an average monthly inventory of $22,000. When the company prepares interim financial statements, the accountant estimates the ending inventory using the gross profit method. Samoa historically has averaged a gross profit percentage of 43%. Following are the normal balances in the general ledger as of January 31, 2010:
Net Sales / 122,500Beginning Inventory, January 1, 2010 / 22,400
Net Purchases / 69,025
For question #21 write the correct amount on your answer sheet.
* 21. What is the estimated ending inventory on January 31, 2010 using the gross profit
method?
Group 4
It is company policy to record any necessary journal entries and to update the checkbook balance after the bank reconciliation is completed. Reconcile the bank statement using the following T-account form. (The form will not be reviewed by graders.)
Mason’s Bar-b-QueBank Reconciliation
December 31, 2009
Bank Statement Balance, 12/29 / Checkbook Balance, 12/31
Add: / Add:
Deduct: / Deduct:
On December 31, Mason received the company bank statement dated Dec. 29 and reviewed it along with other accounting records and found the following facts:
1. The ending bank balance was $3,213.84
2. The following checks were written in November, were outstanding in November,
and still did not appear on this bank statement:
check #5103…$264.18 check #5104…$436.98
3. The following checks were written in December and did not appear on this bank
statement: check #5206…$4,298.16 check #5209…$18.14
check #5207…$264.29 check #5210…$639.74
4. The bank charged $22.25 for the month’s service charge
5. A check in the amount of $64.37 from Surewill Taaket that Mason deposited on Dec. 20
was returned by the bank for insufficient funds. The bank charged Mason’s account $25 for
handling the NSF check. No journal entry has been made yet by Mason for the NSF check
or its related fee.
6. A deposit of $4,628.10 made on Dec. 31 does not appear on the bank statement.
7. A check Mason wrote in early December for $285 made out to Restaurant Supply Co. was
lost in the mail and never found. Mason requested a stop payment order, which cost
$28.50 and was issued by Mason’s bank on Dec. 29. Mason needs to record this fee and
the voided check in the checkbook. He plans to write a replacement check on Jan. 2.
8. Mason’s review of the bank statement reminded him that he had used the debit card
on this account to make a $62.42 payment at Corner Grocery and forgot to record it in
the company checkbook.
9. Mason was shocked when the review of the bank statement revealed an electronic funds
transfer to a vendor for $895 that he forgot to record in the company checkbook.
For question #22 write the correct amount on your answer sheet.
* 22. What was the checkbook balance on December 31, 2009 before the reconciliation
was prepared?
Group 5
Use the following information for each of the two different cases presented below. Adjusting and closing entries are prepared only at the end of the fiscal year which is December 31. The following normal balances are provided on December 31 before any uncollectible accounts are written off this year and before adjusting entries are prepared.
Accounts Receivable / 36,428Allowance for Uncollectible Accounts / 4,320
Sales (includes cash & charge sales) / 81,904
Sales Discounts / 4,205
Sales Returns & Allowances / 3,499
charge sales / 42,600
Uncollectible Accounts Expense / 0
Accounts Receivable--Blake Emerson must be written off on 12-31-09. The company has stopped trying to collect it after ten months. / 2,675
Aging of Accounts Receivable after all accounts have been written off in 2009 / 3,980
For questions 23 through 30, write the correct amount on your answer sheet.
First case: Answer questions 23 through 28 using the data above from the perspective of Snowflake Company, which uses the aging of accounts receivable method.
23. What is the book value of Accounts Receivable before the Emerson account is
written off and before adjusting entries are prepared?
24. What is the book value of Accounts Receivable after the Emerson account is written
off and before adjusting entries are prepared?
25. What is the balance of Uncollectible Accounts Expense after the Emerson account
is written off and before adjusting entries are prepared?
26. What is the balance of Allowance for Uncollectible Accounts after the Emerson
account is written off and before adjusting entries are prepared?
27. What is the correct amount of the adjusting entry for uncollectible accounts
expense?
* 28. What is the book value of Accounts Receivable on the Balance Sheet dated
December 31, 2009?
Second case: Answer questions 29 and 30 using the data at the top of this page from the perspective of Brass Company. Brass Company uses the percentage of net sales method, and historically that percentage has been 4%.
29. What is the correct amount of the adjusting entry for uncollectible accounts
expense?
* 30. What is the book value of Accounts Receivable on the Balance Sheet dated
December 31, 2009?
Group 6
Three guys decided they were good enough to start a business providing singing lessons to the public and chose to form a partnership. The partners plan to invest the following assets in the business:
Bocelli / Pavarotti / DomingoCash / 25,000 / 16,000
Supplies / 5,000 / 6,000
Pianos / 125,000 / 130,000
Furniture / 4,000 / 8,000
Recording Equip. / 65,000
Building / 226,000
Land / 30,000
For questions 31 through 34, write the identifying letter of the best response on your answer sheet. Consider each question as an independent situation.
31. If the net income of the partnership is $187,290 and the partnership agreement does
not state how net income is to be divided, what amount of net income should be
allocated to Bocelli?
A. $37,458 B. $44,800 C. $62,430 D. $65,551.50 E. $78,400
* 32. The partners share net income in the same ratio as the beginning balances of their
capital accounts. If the net income is $189,000, what amount of net income should
be allocated to Domingo?
A. $40,000 B. $47,250 C. $63,000 D. $80,000 E. $94,500
33. The partners Bocelli, Pavarotti, and Domingo share net income based on the
amount of time they spend working in the business, which is expressed as 2:3:5
respectively. If the net income is $210,000, what amount of net income should be
allocated to Pavarotti?
A. $63,000 B. $70,000 C. $76,800 D. $84,000 E. $102,400
* 34. If Bocelli’s allocated share of the net income is $54,600 when total net income was
$156,000, then the method used to divide net income among the partners was
based on
A. which partner had the highest amount of music royalties for the year
B. which partner could hold a note the longest without fainting
C. a partnership agreement that does not specify how this should be done
D. the same ratio as the beginning balances of the partners’ capital accounts
E. the amount of time they spend working in the business
F. the number of standing ovations the partner received this year
Group 7
For questions 35 through 48, write the identifying letter of the best response on your answer sheet. Assume company policy is to record adjusting and closing entries only at the end of the fiscal year which is December 31.
35. Land, buildings, and equipment are all
A. current assets C. depreciable assets E. short-lived assets
B. contingent liabilities D. plant assets F. both C and D
36. The type of account and normal balance side of Accumulated Depreciation—
Equipment is:
A. asset; debit C. contra asset; debit
B. expense; debit D. contra asset; credit
Use the following information for questions 37 through 40.
A company purchased a piece of equipment on January 1, 2007 for $95,000. The equipment has an estimated useful life of 5 years and an estimated salvage value of $15,000. The equipment was sold on January 1, 2010 for $35,000.
37. Using the straight-line method of calculating depreciation, the amount of
depreciation to be recorded for the year ended December 31, 2009 is
A. $13,680 B. $16,000 C. $22,800 D. $38,000 E. $47,000 F. $48,000
38. Using the straight-line method of calculating depreciation, the book value on the
Balance Sheet dated December 31, 2009 is
A. $16,000 B. $20,520 C. $38,000 D. $47,000 E. $48,000 F. $74,480
*39. If the double-declining balance method is used instead of the straight-line method,
the book value on the Balance Sheet dated December 31, 2009 is
A. $16,000 B. $20,520 C. $38,000 D. $47,000 E. $48,000 F. $74,480
40. Assume straight-line was used as the depreciation method. The entry to record the
sale of the equipment includes all of the following except a
A. credit to Equipment for $95,000
B. debit to Loss on Plant Assets for $12,000
C. debit to Accumulated Depreciation—Equipment
D. credit to Gain on Plant Assets for $14,480
41. The adjusting entry for equipment depreciation includes a
A. debit to Income Summary and a credit to Accumulated Depreciation—Equip.
B. debit to Depreciation Expense and a credit to Equipment
C. debit to Depreciation Expense and a credit to Allowance for Recovered Cost
D. debit to Depreciation Expense and a credit to Accumulated Depreciation—Equip.
E. debit to Accumulated Depreciation—Equip. and a credit to Equipment
Group 7 continued
* 42. At the end of a fiscal year, the accounts on the Post-Closing Trial Balance included
plant assets as follows:
Asset
/ Original Cost / Accumulated Depreciation / Fair Market Value / Replacement ValueBuilding / 565,000 / 131,830 / 475,000 / 750,000
Equipment / 214,800 / 63,920 / 120,000 / 315,000
Vehicles / 180,000 / 135,000 / 36,000 / 175,000
What is the book value of all the plant assets at the end of the fiscal year?
A. $300,250 D. $629,050 G. $ 959,800
B. $330,119 E. $631,000 H. $1,240,000
C. $330,750 F. $909,250 I. $1,290,550
43. After closing entries are posted, the Depreciation Expense—Delivery Equipment
account will have
A. a debit balance C. either a debit or a credit balance
B. a credit balance D. a zero balance
* 44. A company uses the straight-line method and purchased a piece of equipment on
April 27, 2004 for $32,640. The equipment has an estimated useful life of 7years
and an estimated salvage value of $4,500. The amount of the adjusting entry for depreciation on December 31, 2011 is
A. zero B. $335 C. $1,340 D. $1,876 E. $2,680 F. $4,020 G. $4,662
45. A business began operations in 2008 and purchased several items of equipment
with estimated useful lives of 5 years and beyond. The Post-Closing Trial Balance
dated December 31, 2009 will include an accumulated depreciation account for
equipment with a
A. debit balance B. credit balance C. zero balance
46. How should a machine (plant asset) be reported on the Balance Sheet?
A. only its original cost
B. only the book value amount
C. the original cost, the accumulated depreciation, and the book value
D. item “C” above plus the machine’s current fair market value
** 47. An asset was purchased on January 1, 2006 with a cost of $80,000, a salvage value
of $8,000 and an estimated useful life of 5 years. Which of the choices below would
“fill in the blanks” incorrectly in this statement: The amount of $_?_ is the
depreciation expense for year(s) __?__ using the __?___ method.
A. $6,912; 2009; double-declining balance
B. $14,400; 2006 through 2010; straight-line
C. $28,800; 2006; double-declining balance
D. $19,200; 2007; double-declining balance
Group 7 continued
48. Which of the following is false:
A. Accelerated depreciation methods include the declining-balance method.
B. Accelerated depreciation methods are based on the theory that an asset loses
more value in the early years of its useful life than in the later years.
C. In order to calculate the depreciation rate used in the double declining-balance
method, the salvage value is not a factor in the math calculation of the rate;
however, salvage value is a required estimate in the application of this
accelerated depreciation method because a plant asset is never depreciated
below its estimated salvage value.
D. The term double declining-balance method indicates the adjusting entry will
require a double posting because the equipment use is double the normal
capacity in an effort to stabilize the economy.
Group 8
For question #49, write the correct amount on your answer sheet. Fayro Company has three employees who are paid weekly as follows:
Frankie Futrelle / $13 per hour with overtime for hours worked over 40 hours in a week at a rate of time and a halfJohn Curtis / $950 salary per week
Patsy Price / $600 salary per week plus 4.5% commission on sales
Last week each employee worked standard hours except Frankie who worked 58 hours. Patsy sold $14,200 of merchandise.