Wolkite university

Department of Accounting and Finance

Individual Assignment for FOA_I Summited with Final Exam
(1) Matt Stiner started a delivery service, Stiner Deliveries Ltd., on June 1, 2017. The following transactions
occurred during the month of June.
(A) June 1 Shareholders invested £10,000 cash in the business in exchange for ordinary shares.
(B) June 2 purchased a used van for deliveries for £14,000. Matt paid £2,000 cash and signed a note
payable for the remaining balance.
(C) June 3 paid £500 for office rent for the month.
(D) 5 Performed services worth £4,800 on account.
(E) June 9 Declared and paid £300 in cash dividends.
(F) June 12 purchased supplies for £150 on account.
(G) June 15 received a cash payment of £1,250 for services performed on June 5.
(H) June 17 purchased gasoline for £100 on account.
(I) June 20 received a cash payment of £1,500 for services performed.
(J) June 23 made cash payment of £500 on the note payable.
(K) June 26 paid £250 for utilities.
(L) June 29 Paid for the gasoline purchased on account on June 17.
(M) June 30 paid £1,000 for employee salaries.
Instructions
(a) Show the effects of the previous transactions on the accounting equation
(2) Rivera Roofing Company, owned by Reyna Rivera, began operations in July and completed these
transactions during that first month of operations.
 July 1 Reyna Rivera invested $80,000 cash in the company
 July 2 The company rented office space and paid $700 cash for the July rent.
 July 3 The company purchased roofing equipment for $5,000 by paying $1,000 cash and agreeing to pay
the $4,000 balance in 30 days.
 July 6 The company purchased office supplies for $600 cash.
 July 8 The company completed work for a customer and immediately collected $7,600 cash for the work.
 July 10 The company purchased $2,300 of office equipment on credit.
 July 15 The company completed work for a customer on credit in the amount of $8,200.
 July 17 The company purchased $3,100 of office supplies on credit.
 July 23 The company paid $2,300 cash for the office equipment purchased on July 10.
 July 25 The company billed a customer $5,000 for work completed; the balance is due in 30 days.
 July 28 The company received $8,200 cash for the work completed on July 15.
 July 30 The company paid an assistant’s salary of $1,560 cash for this month.
 July 31 The company paid $295 cash for this month’s utility bill.
 July 31 Reyna Rivera withdrew $1,800 cash from the company for personal use
Required
i. Use additions and subtractions within the table to show the dollar effects of each transaction on individual
items of the accounting equation. Show new balances after each transaction.
ii. Prepare the income statement and the statement of owner’s equity for the month of July, and the balance
sheet as of July 31.
iii. Prepare the statement of cash flows for the month of July.
(3) Selected transactions for Isabella Rossini Company SpA during its first month in business are presented
below.
(A) Sept. 1, Invested €10,000 cash in the business in exchange for ordinary shares.
(B) Sept. 5 purchased equipment for €12,000 paying €4,000 in cash and the balance on account.
(C) Sept. 25 Paid €2,400 cash on balance owed for equipment.
(D) Sept. 30 Declared and paid a €500 cash dividend.
(E) Rossini’s chart of accounts shows
(F) No. 101 Cash, No. 157, equipment, No. 201 , Accounts Payable, No. 311 Share Capital—Ordinary,
and No. 332 Dividends.
Instructions
(a) Journalize the transactions on page J1 of the journal.
(b) Post the transactions using the standard account form.
(4) Lena Fohn is a licensed accountant. During the first month of operations of her business, Lena Fohn, AG,
the following events and transactions occurred.
(A) May 1 Shareholders invested €20,000 cash in exchange for ordinary shares.
(B) May 2 hired a secretary-receptionist at a salary of €2,000 per month.
(C) May 3 Purchased €1,500 of supplies on account from Hartig Supply Company.
(D) May 7 Paid office rent of €900 cash for the month.
(E) May 11 completed a tax assignment and billed client €2,800 for services performed.
(F) May 12 Received €3,500 advance on a management consulting engagement.
(G) May 17 Received cash of €1,200 for services performed for Lucille Co.
(H) May 31 Paid secretary-receptionist €2,000 salary for the month.
(I) May 31 Paid 40% of balance due Hartig Supply Company.
Lena uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable,
No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 311 Share
Capital—Ordinary, No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent
Expense.
Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts.
(c) Prepare a trial balance on May 31, 2017.
(5) Joey Cuono started his own consulting firm, Cuono Company SpA on June 1, 2017.
The trial balance at June 30 is shown below.

CUONO COMPANY SpA

Trial Balance
June 30, 2017
Account Number Debit Credit
101 Cash € 6,200
112 Accounts Receivable 6,000
126 Supplies 1,600
130 Prepaid Insurance 3,000
157 Equipment 14,400
201 Accounts Payable € 4,700
209 Unearned Service Revenue 4,000
311 Share Capital—Ordinary 20,000
400 Service Revenue 7,900
726 Salaries and Wages Expense 4,400
 729 Rent Expense 1,000
€36,600 €36,600
In addition to those accounts listed on the trial balance, the chart of accounts for Cuono Company SpA also
contains the following accounts and account numbers: No. 158 Accumulated Depreciation—Equipment,
No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 722
Insurance Expense, and No. 732 Utilities Expense.
Other data:
1. Supplies on hand at June 30 are €340.
2. A utility bill for €185 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. €2,500 of unearned service revenue is recorded for services performed at the end of the month.
5. Salaries of €1,600 are accrued at June 30.
6. The equipment has a 4-year life with no residual value. It is being depreciated at €300 per month for 48
months.
7. Invoices representing €2,400 of services performed during the month have not been recorded as of June
30.
Instructions
(a) Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal.
(b) Enter the totals from the trial balance as beginning account balances and place a check mark in the
posting reference column. Post the adjusting entries to the ledger accounts.
(c) Prepare an adjusted trial balance at June 30, 2017
(6) Vree Distributing Company plc. completed the following merchandising transactions in the month of April.
At the beginning of April, the ledger of Vree showed Cash of €8,000 and Share Capital—ordinary of
€8,000.
(A) Apr. 2 Purchased merchandise on account from Walker Supply Co. €6,200, terms 1/10, n/30.
(B) Apr. 4Sold merchandise on account €5,500, FOB destination, terms 1/10, n/30. The cost of the
merchandise sold was €3,400.
(C) Apr. 5 Paid €240 freight on April 4 sale.
(D) Apr. 6 Received credit from Walker Supply Co. for merchandise returned €500.
(E) Apr. 11 Paid Walker Supply Co. in full, less discount.
(F) Apr. 13 received collections in full, less discounts, from customers billed on April 4.
(G) Apr. 14 Purchased merchandise for cash €3,800.
(H) Apr. 16 received refund from supplier for returned goods on cash purchase of April 14, €500.
(I) Apr. 18 Purchased merchandise from Benjamin Distributors €4,500, FOB shipping point, terms 2/10,
n/30.
(J) Apr. 20 Paid freight on April 18 purchase €160.
(K) Apr. 23 Sold merchandise for cash €7,400. The merchandise sold had a cost of €4,120.
(L) Apr. 26 Purchased merchandise for cash €2,300.
(M) Apr. 27 Paid Benjamin Distributors in full, less discount.
(N) Apr. 29 made refunds to cash customers for defective merchandise €90. The returned merchandise
had a fair value of €30.
(O) Apr. 30 Sold merchandise on account €3,400, terms n/30. The cost of the merchandise sold was
€1,900.
Vree Distributing Company’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts
Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 311 Share Capital—Ordinary, No. 401
 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, No. 505 Cost of Goods
Sold, and No. 644 Freight-Out.

Instructions
(a) Journalize the transactions using a perpetual inventory system.
(b) Enter the beginning cash and share capital—ordinary balances, and post the transactions. (Use J1 for
the journal reference.)
(c) Prepare the income statement through gross profit for the month of April 2017.
(7) Arial Ltd. maintains a petty cash fund for small expenditures. The following transactions occurred over a
2-month period.
(A) July 1 Established petty cash fund by writing a check on Coulter Bank for €200.
(B) July 15 replenished the petty cash fund by writing a check for €198.00. On this date, the fund
consisted of €2.00 in cash and the following petty cash receipts: freight-out €87.00, postage expense
€51.40, entertainment expense €46.60 and miscellaneous expense €11.20.
(C) July 31 replenished the petty cash fund by writing a check for €192.00. At this date, the fund
consisted of €8.00 in cash and the following petty cash receipts: freight-out €82.10, charitable
contributions expense €45.00, postage expense €25.50 and miscellaneous expense €39.40.
(D) Aug. 15 replenished the petty cash fund by writing a check for €187.00. On this date, the fund
consisted of €13.00 in cash and the following petty cash receipts: freight-out €75.60, entertainment
expense €43.00, postage expense €33.00 and miscellaneous expense €37.00.
(E) Aug. 16 increased the amount of the petty cash fund to €300 by writing a check for €100.
(F) 31 Replenished the petty cash fund by writing a check for €277.00. On this date, the fund consisted
of €23 in cash and the following petty cash receipts: postage expense €133.00, travel expense
€95.60, and freight-out €47.10.

Instructions:
(a) Journalize the petty cash transactions.
(b) Post to the Petty Cash account.
(8) On May 31, 2017, Terrell Ltd. had a cash balance per books of £6,781.50. The bank statement from Home
Town Bank on that date showed a balance of £6,824.60. A comparison of the statement with the Cash
account revealed the following facts.
1. The statement included a debit memo of £60 for the printing of additional company checks.
2. Cash sales of £836.15 on May 12 were deposited in the bank. The cash receipts journal entry and
the deposit slip were incorrectly made for £886.15. The bank credited Terrell Company for the
correct amount.
3. Outstanding checks at May 31 totaled £276.25. Deposits in transit were £1,916.15
4. On May 18, the company issued check No. 1181 for £685 to Barry Dietz on account. The check,
which cleared the bank in May, was incorrectly journalized and posted by Terrell for £658.
5. A £3,000 note receivable was collected by the bank for Terrell on May 31 plus £80 interest. The
bank charged a collection fee of £20. No interest has been accrued on the note.
6. Included with the cancelled checks was a check issued by Bridges plc. to Jon Newton for £600 that
was incorrectly charged to Terrell by the bank.
7. On May 31, the bank statement showed an NSF charge of £640 for a check issued by Sandy
Grifton, a customer, to Terrell on account.
Instructions
 (a) Prepare the bank reconciliation at May 31, 2017.
(b) Prepare the necessary adjusting entries for Terrell at May 31, 2017.
(9) Clayco Company completes the following transactions during the year.
A. July 14 Writes off a $750 account receivable arising from a sale to Briggs Company that dates to 10
months ago. (Clayco Company uses the allowance method.)
30 Clayco Company receives a $1,000, 90-day, 10% note in exchange for merchandise sold to Sumrell
Company (the merchandise cost $600).
B. Aug.15 Receives $2,000 cash plus a $10,000 note from JT Co. in exchange for merchandise that sells for
$12,000 (its cost is $8,000). The note is dated August 15, bears 12% interest, and matures in 120 days.
C. Nov. 1 Completes a $200 credit card sale with a 4% fee (the cost of sales is $150). The cash is transferred
immediately from the credit card company.
3 Sumrell Company refuses to pay the note that was due to Clayco Company on October 28. Prepare the
journal entry to charge the dishonored note plus accrued interest to Sumrell Company’s accounts
receivable.
5.Completes a $500 credit card sale with a 5% fee (the cost of sales is $300). The cash is transferred
immediately from the credit card company.
15 Receives the full amount of $750 from Briggs Company that was previously written off on July 14.
Record the bad debts recovery.
D. Dec. 13 Receives payment of principal plus interest from JT for the August 15 note.
Required
1. Prepare Clayco Company’s journal entries to record these transactions.
2. Prepare a year-end adjusting journal entry as of December 31 for each separate situation.
 Bad debts are estimated to be $20,400 by aging accounts receivable. The unadjusted balance
of the Allowance for Doubtful Accounts is a $1,000 debit.
 Alternatively, assume that bad debts are estimated using the percent of sales method. The
Allowance for Doubtful Accounts had a $1,000 debit balance before adjustment, and the
company estimates bad debts to be 1% of its credit sales of $2,000,000.