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ACCOUNTING REVIEW

ACCOUNTING JEOPARDY. ACCOUNTING REVIEW. DOCSEDA. Debit/Credit. Adjustments. Income Statement. Balance Sheet. Statement of Equity. 100. 100. 100. 100. 100. 200. 200. 200. 200. 200. 300. 300. 300. 300. 300. 400. 400. 400. 400. 400. 500. 500. 500. 500. 500.

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ACCOUNTING REVIEW

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  1. ACCOUNTING JEOPARDY ACCOUNTING REVIEW DOCSEDA

  2. Debit/Credit Adjustments Income Statement Balance Sheet Statement of Equity 100 100 100 100 100 200 200 200 200 200 300 300 300 300 300 400 400 400 400 400 500 500 500 500 500

  3. Debit/Credit100 SOLD EQUIPMENT THAT COST $60,000 AND HAS ACCUMULATED DEPRECIATION OF $48,000 FOR $25,000. A: What is adebit to Cash for 25,000, Accumulated Depreciation-Equip for 48,000 and credits to Equip. for 60,000 and Gain on Sale of Equip. for $13,000? Docseda

  4. Debit/Credit200 ISSUED 60,000 $1 PAR VALUE COMMON STOCK FOR $2.50 PER SHARE. A: What is adebit to Cash for 150,000 and credits to Common Stock for 60,000 and Paid-in-Capital-Excess over Par Value, Common for 90,000 ? Docseda

  5. Debit/Credit300 SOLD 3,000 OF 8,000 TREASURY SHARES THAT INITIALLY COST $10 FOR $12 PER SHARE. A: What is a debit to Cash for 36,000 and credits to Treasury Stock-Common for 30,000 and Paid-in-Capital from Treasury Stock Transactions, Common for 6,000? Docseda

  6. Debit/Credit400 Declared a 100% stock dividend on $2 par value common stock. Market price per share of 70,000 shares outstanding is $18. A: What is a debit to Stock Dividends-Common for 140,000 and credit to Stock Dividends to be Issued for 140,000? Docseda

  7. Debit/Credit 500 Equipment that cost 60,000 and has accumulated depreciation of 48,000 is exchanged for similar equipment with FMV of 20000 and 5000 cash is received. A: What is adebit to Equipment-New for 9,600, Accumulated Depreciation-Equip. for 48,000, Cash for 5,000 and Credits to Old Equipment for 60,000 and Gain on Disposal of Equip. 2600 ? [Cost – Acc.Dep = BV; BV – FMV = Gain; ] [60000 – 48000 = 12000; 12000-25000 =13000;] [Gain recognized (2/10 × $13,000)= $ 2,600;] Check: Fair value - Deferred gain = Basis of new equipment; 20000 - 10400 = 9,600 Docseda

  8. Adjustments 100 This entry represents Gaston’s accrued interest payable as of 12/31/05. On 9/01/05, Gaston issued note payable to Nat’l Bank in amount of $1,500,000, bearing interest at 12%, and payable in 3 equal annual principal payments of $500,000. First payment for interest and principal was made on September 1, 2005. A: What is debit to Interest Expense and credit to Interest Payable for 40,000 (1,000,000×.12×1/3)? Docseda

  9. Adjustments200 This entry represents Patton’s accrued payroll tax expense as of 10/31/04.Patton Co.'s payroll for pay period ended 10/31/04 is summarized as follows: Federal Amount of Wages Subject Dept. Total Income Tax to Payroll Taxes Payroll Wages WithheldF.I.C.A.(8%)Unemployment (4%) Factory $ 75,000 $10,000 $66,000 $22,000 Sales 22,000 3,000 16,000 2,000 Office 18,000 2,000 8,000 — $115,000 $15,000$90,000$24.000 A: What is debit to Payroll Tax Expense for 8,160 and credits to FICA payable for 7,200 and FUTA/SUTA Payable for 960? [($90,000×.08)+($24,000×.04)] Docseda

  10. Adjustments 300 This entry represents adjustment to Short-term Investments in Stock account at 12/31/03. Trading Security Portfolio consists of 300 shares of Schoff Corporation $3 par value stock that initially cost $10.50 and is currently valued at $12 per share. A: What is debit to Short-term Investments in Stock and credit to Unrealized Gain on Investments for 300 [(12*300) - (10.50*300)]? Docseda

  11. Adjustments 400 This entry represents adjustment to Long-term Investments in Stock account at 12/31/03. Portfolio consists of 10,000 shares or 25% of Collins Corp that initially cost $8 and is currently valued at $10. Collins reported a net loss for 2003 of $20,000. A: What is debit to Equity in Investee Loss and credit to Long-term Investment in Stock for 5,000 [20,000*.25]? Docseda

  12. Adjustments500 This entry represents a prior-period adjustment initiated by Controller who discovered that income tax expense was overstated by $50,000 in 2002. A: What is debit to Income Tax Payable and credit to Retained Earnings-Prior Period Adjustment for 50,000? Docseda

  13. Income Statement100 This amount represents Nixon’s depletion expense for 2003. In January of 2003, Nixon Corporation purchased a mineral mine for $6,800,000 with removable ore estimated by geological surveys at 2,000,000 tons. The property has an estimated value of $400,000 after the ore has been extracted. The company incurred $2,000,000 of development costs preparing the mine for production. During 2003, 500,000 tons were removed and 400,000 tons were sold. A: What is $1,680,000 [($6,800,000–$400,000 + $2,000,000) ÷ 2,000,000] × 400,000? Docseda

  14. Income Statement200 These amounts represent net income and related EPS based on following data: A: What is $14,000 Net Income and EPS of $2.80 ? [160-80-66-8+20-14-6+8] and [14,000 / 5000] Docseda

  15. Income Statement300 Using effective interest method, this amount represents Dodge’s interest expense for 2003. On 1/2/03, Dodge Corporation sold 8% bonds with face value of $1,500,000. These bonds mature in 5 years, and interest is paid semiannually on 6/30 and 12/31. Bonds were sold for $1,384,000 to yield 10%. A: What is $138,860? {[1,384,000×.05=69,200] [1,384,000+($69,200 – $60,000)]×.05 =69,660] 138,860} Docseda

  16. Income Statement 400 Using treasury stock method for computing Edson’s Diluted EPS , this amount represents increase of weighted average number of outstanding shares due to assumed exercise of warrants in following scenario. Edson Corporation has warrants exercisable at $20 each to obtain 70,000 shares of common stock during period when average market price of common stock was $25. A: What is $14,000 [70000–((70000×20)÷25)] ? Docseda

  17. Income Statement 500 This amount represents Fairly’s Diluted EPS for 2003. Fairly Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 10% convertible bonds outstanding during 2003. The preferred stock is convertible into 40,000 shares of common stock. During 2003, Fairly paid dividends of $1.20 per share on common stock and $4.00 per share on preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. Net income for2003 was $800,000 and income tax rate was 30%. A: What is $3.05? {800,000+($1,000,000×.10×.7)} {200,000 + 45,000 + 40,000} Docseda

  18. Balance Sheet100 This account is created when purchase price of net assets exceeds fair market value of net assets acquired. A: What is Goodwill? Docseda

  19. Balance Sheet200 Accounts Receivable Turnover and Current Ratios are used to measure this criteria of a company’s success. A: What is Short-term Liquidity? Docseda

  20. Balance Sheet 300 Based on LIFO, this amount represents value of James’ ending inventory for March. James Co. has following data related to inventory items: Inventory, March 1 200 units @ $4.20 Purchase, March 7 700 units @ $4.40 Purchase, March 16 140 units @ $4.50 Inventory, March 31 300 units A: What is $1,280 [(200*4.20)+ (100*4.40)]? Docseda

  21. Balance Sheet 400 Unrealized Gains and Losses on Available -For-Sale Securities are disclosed in this section of Balance Sheet. A: What is separate component of Stockholder’s Equity after Total Contributed Capital and Retained Earnings? Docseda

  22. Balance Sheet 500 Using Sum-of Years Digit depreciation method, this amount represents balance of accumulated depreciation on Riley’s machinery at 3/31/04. Riley Co. purchased machinery on 4/01/02 for $480,000. Machinery has estimated useful life of 5 years and a salvage value of $30,000. A: What is $270,000[(480-30)×(5/15 + 4/15)]? Docseda

  23. Statement of Equity 100 Preferred stockholders with this feature are entitled to dividends in arrears. A: What is Cumulative? Docseda

  24. Statement of Equity 200 This amount represents Total Contributed Capital at 12/31/03 based on data below regarding El Paso’s Stockholder’s Equity information. A: What is $375,700 [250,000+125,000+700] ? [700=1200*(8-7(cost)) + 500*(6-7(cost))] Docseda

  25. Statement of Equity 300 This amount represents Treasury Stock balance as of 12/31/03 based on data below: A: What is $5,600 [2500-(1200+500)*$7)? Docseda

  26. Statement of Equity400 This amount represents Total Stockholder’s Equity for company as of 12/31/03 based on data below: A: What is $850,100 [250,000+125,000+700+480,000 –5,600]? Docseda

  27. Statement of Equity500 Assuming that $100,000 will be distributed as a dividend in current year, this amount represents portion of dividend received by common stockholders.Tomlin Inc. has outstanding 200,000 shares of $2 par common stock and 40,000 shares of no-par 8% preferred stock with stated value of $5. Preferred stock is cumulative and nonparticipating. Dividends have been paid in every year except past two years and current year. A: What is $52,000 [100,000–(40,000×$5×.08×3)]? Docseda

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