Download Q2) sea company had the following transactions :

Model (B)
:‫نموذج رقم‬
Accounting studies in English
ACCT 4333
: ‫رقم المساق‬
‫ ساعتـــــان فقط‬: ‫مدة االمتحان‬
11:00 - 13:00
: ‫االمتحان النهائي للفصل األول وقت االمتحان‬
22 Jan 2011
: ‫تاريخ االمتحان‬
2011/2010
Do not write anything in the first table:
Question Question Question
Number
One
Two
Result
15
10
.......:‫رقم الطالب في كشف الحضور‬
6
:‫عدد صفحات االمتحان‬
...................:‫االسم باللغة العربية‬
1200…./ ..........:‫الرقم الجامعي‬
101
:‫رقم الشعبة‬
‫ ناهـض نمر محمـد الخـالـدي‬.‫د‬
‫ال تكتب شيئا ً في هذا الجدول‬
Question Question Total
Four
Five
13
60
Question
Three
22
Answer the following Questions:
Question One:
(15 Mark)
Ahmad ,CPA, was retained by your friend to prepare financial statements for April 2010. Ahmad reviewed
the records and found the following errors:
1
2
Cash received from a customer on account was recorded as $780 instead of $870
A payment of $650 for advertising expense was entered as a debit to various expense$650 and
accredit to cash$650
3 The first salary payment this month was for $1,900 which included $500 of salaries payable on
March 31. the payment was record as debit to salaries expense $1,900 and accredit to cash $1,900
4 The purchase on account of a printer costing $290 was recorded as a debit to supplies and accredit to
account payable for $290.
5 A cash payment of repair expense on equipment for $95 was recorded as a debit to equipment $59
and accredit to cash$59
You are required to :Prepare an analysis of each error showing(1) the incorrect entry, (2) the correct entry, and (3) the
correcting entry.
NO.
THE INCORRECT ENTRY
THE CORRECT ENTRY
THE CORRECTING ENTRY
1
Cash
780
Cash
870
Cash
90
A/Raccount
receivable
870
A/Raccount
receivable
90
A/R- account receivable 780
2
various Expenses 650
Cash
650
Advertising Expenses 650
various Expenses 650
1,900
……..Salaries Expense1,400
……..Salaries Payable 500
1,900 …………Salaries Payable 500
………. Salaries Expense 500
………. Cash
1,900
3
Salaries Expense
Cash
4
Supplies
Account payable
290
Equipment
Cash
59
5
Advertising Expenses 650
Cash
650
290
59
Equipment
Account payable
Repair expense
Cash
290
290
95
95
Equipment
Supplies
290
290
……….Repair expense
……..Equipment
……..Cash
95
59
36
7‫ من‬1 ‫صفحة‬
Question Two : Mark True ( T ) or False ( F ) for the following sentences as appropriate ?
1. ( ) Reliability of information means that the information is free of error and bias.
2. ( ) The economic entity assumption states that the economic life of a business can be divided into
artificial time periods
3. ( ) The full disclosure principle requires that circumstances and events that make a difference to
financial statement users be disclosed.
4. ( ) Conservatism in accounting means that when in doubt, choose the method that understates
assets and income.
5. ( ) Firms that conduct their operations in more than one country are referred to as multinational
corporations.
6. ( ) Notes and accounts receivable that result from sales transactions are often called trade
receivables.
7. ( ) The percentage of receivables basis results in a better matching of expenses with revenues than
the percentage of sales basis.
8. ( ) Sales resulting from the use of VISA are considered credit sales by the retailer.
9. ( ) In a promissory note, the party making the promise to pay is called the maker.
10. ( ) Short-term notes receivable are reported at their cash (net) realizable value.
11. ( ) Sales revenue less cost of goods sold is called net profit.
12. ( ) In a perpetual inventory system the cost of goods sold is determined and recorded each time a sale
occurs.
13. ( ) A multiple-step income statement distinguishes between operating and non-operating activities.
14. ( ) The income statement for retailers contains one expense category just like the income statement of a
service enterprise.
15. ( ) Sales Returns and Allowances is a contra revenue account to Sales and has a normal debit balance
16. ( ) There are more steps involved in preparing a work sheet for a merchandiser than for a service
enterprise.
17. ( ) A work sheet is a device that eliminates the need to prepare financial statements.
18. ( ) In closing the books, all temporary accounts are closed
19. ( ) The post-closing trial balance will contain only permanent accounts.
20. ( ) Correcting entries are only made at the end of an accounting period.
Question Two
Question 1
Number
/
The
answer
‫إجابة الســـؤال الثاني‬
(10 Marks )
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16 17 18 19 20
X
/
X
/
X
X
X
/
/
X
/
/
X
/
X
X
/
/
X
Question Three : Each Multiple – Choice question has four suggested answers, letter (A), (B), (C),
or (D). You should read each question and then decide which choice is best.
1. 7 UP company has total profits from sales of $ 4,515. If the profits include sales taxes of 5%, the
amount to be credited to sales is :
A.$4,000
B. $4,300
C.4,289.25
D. No correct answer given
2. STAR Company purchased equipment on January 1, 2008 at total invoice cost of $400,000. The
equipment has an estimated salvage value of $10,000 and an estimated useful life of 5 years. The
amount of accumulated depreciation at December 31, 2009, if the straight – line method of
depreciation is used , is :
A.$80,0000
B.$160,000
C.$78,000
D.$156,000
3. If beginning inventory is $60,000, cost of goods purchased is $380,000, and ending inventory is
$50,000, cost of goods sold is:
A.$390,000
B.$370,000
C.$330,000
D.$420,000
7‫ من‬2 ‫صفحة‬
4. Ahmad Construction Company began a long-term construction contract on January 1, 2005. The
contract is expected to be completed in 2006 at a total cost of $20,000,000. Ahmad's revenue for
the project is $24,000,000. Ahmad incurred contract costs of $4,000,000 in 2005. What gross
profit should be recognized in 2005?
A. $800,000
B. $1,000,000
C. $2,000,000
D. $4,000,000
5. Jerusalem Company had installment sales of $1,000,000 in its first year of operations. The cost of
goods sold on installment was $650,000. Jerusalem collected a total of $500,000 on the
installment sales. Using the installment method, how much gross profit should be recognized in
the first year?
A. $140,000
B. $175,000
C. $350,000
D. $500,000
6. Jafa Company on June 15 sells merchandise on account to Gaza Co. for $1,000, terms 2/10, n/30.
On June 20, Gaza Co. returns merchandise worth $300 to Jafa Company. On June 24, payment is
received from Jafa Co. for the balance due. What is the amount of cash received?
A. $700
B. $686.
C. $680
D. None of the above.
7. Which of the following approaches for bad debts is best described as a balance sheet method?
A. Direct write-off method.
B. Percentage of receivables basis.
C. Percentage of sales basis.
D. Both a and b.
8. If the net sales for the month are $800,000, and bad debts are expected to be 1.5% of net sales.
The company uses the percentage of sales basis. If the Allowance for Doubtful Accounts has a
credit balance of $15,000 before adjustment, what is the balance after adjustment?
A. $27,000.
B. $15,000.
C. $23,000.
D. $31,000.
9. In 2010, Gaza Company had net credit sales of $750,000. On January 1, 2010, Allowance for
Doubtful Accounts had a credit balance of $18,000. During 2010, $30,000 of uncollectible
accounts receivable were written off. Past experience indicates that 3% of net credit sales become
uncollectible. What should be the adjusted balance of Allowance for Doubtful Accounts at
December 31, 2010?
A. $10,500.
B. $10,050.
C. $22,500.
D. $40,500.
10. An analysis and aging of the accounts receivable of 7 UP Company at December 31 reveals the
following data: Accounts receivable $800,000, Allowance for doubtful accounts per books before
adjustment 50,000, Amounts expected to become uncollectible 65,000. The cash realizable value
of the accounts receivable at December 31, after adjustment, is:
A. $685,000
B. $735,000.
C. $800,000.
D. $750,000.
11. Jerusalem Retailers accepted $50,000 of Citibank VISA credit card charges for merchandise sold
on July 1. Citibank charges 4% for its credit card use. The entry to record this transaction by
Jerusalem Retailers will include a credit to Sales of $50,000 and a debit(s) to:
A. Cash 48,000$ and Service Charge Expense $2,000
B. B. Cash $50,000
C. Accounts Receivable $48,000 and Service Charge Expense $2,000
D. D. Accounts Receivable $50,000
Question Three
Question Number
Answer
(22 Marks )
1
C
2
D
3
A
4
A
5
B
6
B
7
B
8
A
9
A
‫إجابة الســـؤال الثالـــــث‬
10 11
B A
7‫ من‬3 ‫صفحة‬
Question Four: The trail balance for Mr. Hamdy Company is as follows:
Mr. Hamy Company
Trial Balance
For the year Ended December 31, 2009
Account
No.
101
112
151
152
155
200
201
301
306
400
610
631
711
722
726
905
827
700
513
150
611
Account Titles
Dr.
(13 Mark)
Cr.
Cash
20,800
Account Receivable
16,200
Office Equipment (OE)
4000
Accumulated Depreciation (OE)
2000
Machinery
30,000
Notes Payable
20,000
Accounts Payable
8000
Hamdy , Capital
52,000
Hamdy , Drawing
12000
Sales Revenue
79,800
Advertising Expense
12,000
Supplies Expense
3700
Depreciation Expense
1000
Insurance Expense
4000
Salaries Expense
9,000
Interest Expense
1000
Sales Returns
5000
Purchases
38,000
Purchases Returns
3600
Inventory
7000
Freight - in
1700
165,400
165,400
Totals
Instructions :Prepare an income statement and a classified balance sheet. $10,000 of the notes
payable become due in 2010 . Inventory at the end of the period $5000
Only For the students who did not take the mid-term exam:
Question Five: River company had the following transactions at December 2009. ( 25 Marks)












Dec. 1 Starting business with $50,000 cash capital.
Dec. 3 Cash register sales total $43,200 , which includes an , 8% sales tax.
Dec. 5 Sold $20,000 of goods to LG Company, terms 2/10 , n /30 .
Dec. 15 Received payment in full from LG Company for balance due .
Dec. 15 One of the accounts receivable written off in November was from J. Hamdy , who pays the
amount due, $14,000 , in cash .
Dec. 15 Purchased equipment on account from WHM Co. for $26,000.
Dec. 16 Purchased goods from New look Company for $18000 terms (2/10 n /30) FOB shipping point .
Dec. 17 Paid freight costs of $800 on goods purchased from New look Co.
Dec. 18 Returned damaged goods to New look Company and was granted a $4,000 allowance .
Dec. 26 Paid the amount due to New Look Co. in full .
Dec. 27 Issued $50,000 , 11% , 10 – year convertible bonds. The bonds sold at face value and pay
semiannual interest on January 1 and July 1.
Dec. 31 Paid December salaries $15300.
Instructions :
1- Journalize the December transactions (20 Mark) .
2- Post the entries to cash account only and balance off this account (5 Marks) .
GOOD LUCK
7‫ من‬4 ‫صفحة‬
:‫نموذج رقم‬
Accounting studies in English
ACCT 4333
: ‫رقم المساق‬
‫ ساعتـــــان فقط‬: ‫مدة االمتحان‬
11:00 - 13:00
: ‫االمتحان النهائي للفصل األول وقت االمتحان‬
22 Jan 2011
: ‫تاريخ االمتحان‬
2011/2010
Answer Sheet for Q 4 : Income statement
.......:‫رقم الطالب في كشف الحضور‬
4
:‫عدد صفحات االمتحان‬
...................:‫االسم باللغة العربية‬
1200…./ ..........:‫الرقم الجامعي‬
101
:‫رقم الشعبة‬
‫ ناهـض نمر محمـد الخـالـدي‬.‫د‬
Classified balance sheet
.
Revenues
Sales revenue
Assets: Current Assets
79,800
Less :
Sales returns
(500)
Net Sales
74,800
Inventory , January 1st
7000
Cash
20,800
A/R
16,200
Inventory
5,000
Total Current Assets
42,000
Property , Plant, Equipment
Purchases
38,000
Office Equipment
4,000
Less :Purchases return & Allowances
(3,600)
Less: Accumulated Dep.(OE)
(2000)
Net Purchases
34,200
Machinery
30,000
Assets
32,000
74,000
Add : Freight – in
1700
Cost Of Goods Purchases
36,100
Cost Of Goods Available for sale
43,100
Total Assets
Inventory, December 31
5,000
Liabilities & Owners Equity
Cost Of Goods Sold
38,100
Current Liabilities
Goss Profit
36,700
Notes Payable
10,000
Accounts Payable
8,000
Operation Expenses :
Advertising Expenses
12,000
Total Current liabilities
Supplies Expenses
3,700
Long Term liabilities
Depreciation Expenses
1,000
Notes Payable
Insurance Expenses
4,000
Total liabilities
Salaries Expenses
9,000
Owners Equity
18,000
10,000
28,000
Total Operation Expenses
(29,700)
Capital
52,000
Other losses and expenses
(1,000)
Retained Profit
6,000
Less : Drawing
Net Income
2,000
(12,000)
6,000
Total Liabilities and
74,000
Owners Equity
7‫ من‬5 ‫صفحة‬
The journal
Answer Sheet for Q. 5
No.
Date
1
Dec.1
Explanation
Cash
Dr.
Cr.
50,000
Capital
2
Dec.3
3
50,000
Cash
Dec.5
43,000
Sales
3,456
Sales Tax
39,744
A\ R ( L G Company )
20,000
Sales
4
Dec.15
20,000
Cash
19,600
Sales Discount
400
Sales
5
Dec.15
20,000
A\ R
14,000
Bad Debts
5
Dec.15
14,000
Cash
14,000
A\ R
6
Dec.15
14,000
Equipment
26,000
A\P ( WHC.Co)
7
Dec.16
26,000
Purchases
18,000
A\ P (New Look Company)
8
Dec.17
Freight in Expenses
18,000
800
Cash
9
Dec.18
800
A\ P (New Look Company)
4,000
Purchases Allowances
10
Dec.26
11
Dec.27
A \ P (New Look Company)
4,000
14,000
Cash
13,720
Purchases Discount
280
Cash
50,000
Issued Notes
12
Dec.31
50,000
Salaries Expenses
15,300
Cash
15,300
Cash Ledger
Date
Explications
Dr.
Cr.
Balance
Capital
50,000
50,000
Sales
43,000
93,000
Sales
19,600
112,600
A\R
14,000
126,600
Freight in Expenses
800
125,800
A \ P (New Look Company)
13,720
112,080
Issued Notes
Salaries Expenses
50,000
162,080
15,300
146,780
7‫ من‬6 ‫صفحة‬
‫صفحة ‪ 7‬من‪7‬‬