Mid-term Exam

ACTY 2100 - PRINCIPLES OF ACCOUNTING I

QUESTION BOOKLET
Time Allowed: 2 hours

Directions to Students:
There are 5 questions in this exam for a total of 110 marks.
Read the instructions carefully.
Upload your answer as PDF.

Students are to fill in the following

Family Name: ………….………………………… Given Name: ……………………………………

Candidate’s Signature:……………………………… Lecturer’s Name: Jan Livia Tiu

1
Question #1 (14 marks)

JP started his accounting firm on June 1, 2020. The trial balance at June 30 is shown below:
JP Company
Trial Balance
30-Jun-2020
Debit Credit
Cash 12,400 -
Account Receivable 12,000 -
Supplies 4,000 -
Prepaid Insurance 3,000 -
Equipment 28,800 -
Accounts Payable - 9,400
Unearned Service Revenue - 8,000
Share Capital - Ordinary - 40,000
Service Revenue - 15,800
Salaries Expense 8,000 -
Rent Expense 2,000 -
  73,200 73,200
Other data:
1. Supplies on hand at June 30 are $1,200
2. A utility bill for $300 has not been recorded and will not be paid until next month
3. The prepaid insurance is for three months.
4. $ 5,000 unearned service revenue is recognized for services performed at the end of the month
5. Salaries of $ 3,200 are accrued (owing) at June 30
6. The equipment has a 4-year life with no residual value. It is being depreciated at $600 per month for 48 months.
7. Invoices representing $4,200 of services performed during the month have not been recorded.

Instructions:
Journalize the adjusting entries on March 31.

Date Details Debit Credit

Question #2 (29 marks)

2
 The CX Company sells many products. GOX is one of its popular items.
Below is an analysis of the inventory purchases and sales for the month of March.
Purchases Sales
Unit
Units Unit Cost Selling Price/Unit
s
01-Mar Beginning inventory 120 $40
03-Mar Purchase 80 $50
04-Mar Sales 80 $80
10-Mar Purchase 220 $55
16-Mar Sales 90 $90
19-Mar Sales 100 $90
25-Mar Sales 80 $90
30-Mar Purchase 60 $60

Instructions:
Using the FIFO and weighted average assumption, calculate the amount charged to cost of
goods sold, gross profit, and ending inventory for March.

FIFO
Date Purchase COGS Balance

WEIGHTED AVERAGE
Date Purchase COGS Balance

COGS Gross Profit Ending Inventory

FIFO
Weighted-Average

3
Question #3 (34 marks)
The adjusted trial balance shown below is for Boss Company at the end of its fiscal year:
BOSS COMPANY
Adjusted Trial Balance
31-Oct-21
Debit Credit
Cash 25,800 -
Accounts Receivable 18,800 -
Office Supplies 1,400 -
Prepaid Insurance 5,000 -
Office Equipment 32,000 -
Accumulated Depreciation—Office Equipment - 4,800
Accounts Payable - 15,000
Loan Payable (to be paid in Oct 2025) - 4,800
Common Stock - 20,000
Retained Earnings - 11,200
Dividends 7,600 -
Service Revenue - 108,000
Salaries expense 40,200 -
Office Supplies Expense 30,600 -
Depreciation Expense 2,400 -
163,800 163,800
Instructions:
A. Prepare income statement, statement of Retained Earnings, and a classified balance sheet.
B. Prepare the closing entries from the temporary accounts at October 31.

4
Question #4 (24 marks)
During the month of June 2019, the following transactions occurred.
Jun
TOP Store had an inventory of10 ten speed bicycles at a cost of $200 each.
e 1
4 Purchased 40 bicycles at a cost of $200 each from Mario Bicycle Company,
terms 2/10, n/30 and FOB destination.
6 Sold 28 bicycles to "A" Team for $300 each, terms 2/10, n/30, and FOB shipping point.
7 Returned 3 defective bicycles purchased on June 4.
13 The "A" team returned 2 defective bicycle from June 6 sale.
14 Paid Mario Bicycle Company in full, less discount.
15 Received cash from the "A" team in full, less discount.

Instructions:
Prepare the journal entries to record the transactions assuming the company uses a perpetual
inventory system and prepare Income Statement until Gross Profit level.

Date Details Debit Credit

Income Statement

5
Question #5 (20 marks)
Viva Company bank statement for May 2021 shows the following data:
The bank balance on the 31st May amounted $285,600, and book balance on the 31st May amounted $266,380

Other Information:
1. The NSF check was from Cole Co., a customer valued $3,500
2. The note collected by the bank was $10,000, the bank charged a $200 collection fee.
interest earned $300.
3. Outstanding checks at May 31 total $48,200
4. Deposits in transit at May 31 total $35,040
5. The Viva check for $7,280, dated May 10, cleared the Bank on May 25.
The company recorded this check, which was a payment on account, for $7,280

Instructions:
Prepare bank reconciliation at May 31

Cash balance per bank statement

Cash balance per book