Maryland Acct 220 Final Exam Problems - Principles of Accounting I

Question 1: Suggested time 20 minutes: 15% points:
The account balances appearing on the trial balance (below) were taken from the general ledger of Flip's Copy Shop at June 30, 2012.
Additional information for the month of June which has not yet been recorded in the accounts is as follows:
(a) A physical count of supplies indicates $300 on hand at June 30.
(b) The amount of insurance that expired in the month of June was $200.
(c) Depreciation on equipment for June was $400.
(d) Rent owed on the copy shop for the month of June was $600 but will not be paid until July.
Flip’s Copy Shop
Trial Balance
For the Month Ended June 30, 2012
Account Titles Debit Credit
Cash $1,000
Supplies 1,100
Prepaid Insurance 2,200
Equipment 24,000
Accum. Depreciation— Equipment $4,500
Accounts Payable 2,400
Notes Payable 4,000
Flip’s Capital 15,300
Flip’s Drawings 2,400
Service Revenue 4,900
Utilities Expense 400
Totals $31,100 $31,100
Instructions: Prepare in journal form, without explanations, the end of month adjusting entries & closing entries for Flip's Copy Shop for the month of June.

Question 2: Suggested time 15 minutes: 15% points:
The following items were taken from the post adjusted trial balance of Flip Company. (All balances are normal.)

Mortgage payable $ 1,443 Accumulated depreciation 3,655
Prepaid expenses 880 Accounts payable 1,444
Equipment 11,000 Notes payable after 2015 1,200
Long-term investments 1,100 Flip’s capital 13,480
Short-term investments 3,690 Accounts receivable 1,696
Notes payable in 2014 1,000 Inventories 1,756
Cash 2,100
Instructions: Prepare a classified balance sheet in good form as of December 31, 2013.

Question 3: Suggested time 15 minutes: 15% points:
The following information is available for Flip Company:
Beginning inventory 600 units at $4 First purchase 900 units at $6 Second purchase 500 units at $7.20

Assume that Flip uses a periodic inventory system and that there are 700 units left at the end of the month.

Instructions: Compute the cost of ending inventory and Cost of Good Sold under the
(a) LIFO method.
(b) FIFO method.
(c) Average-cost method

Question 4: Suggested time 15 minutes: 10% points:

Prepare journal entries to record the following transactions entered into by Flip Company:

2012
June 1 Accepted a $10,000, 12%, 1-year note from Flop as full payment on her account.

Nov. 1 Sold merchandise on account to Flap, Inc. for $12,000, terms 2/10, n/30.

Nov. 5 Flap, Inc. returned merchandise worth $500.

Nov. 9 Received payment in full from Flap, Inc.

Dec. 31 Accrued interest on Flop's note.

2013
June 1 Flop honored her promissory note by sending the face amount plus interest. No interest has been accrued in 2013