Assignment Instructions

FINAL EXAM: NAME: ___________________ The following select transactions have not yet been recorded by the company’s accountants. Please review the following transactions and record all relevant transactions and adjusting transactions. Each transaction must be recorded on a journal entry sheet with a reference number, date, and explanation (in good form). Use 12/31/2016 as the end of the year to post any required adjusting entries on 12/31/2016 Assume that this company is on a 12 month calendar year. In most of the scenarios the transaction is described and you must determine all of the appropriate journal entries to record the transactions and any subsequent adjusting entries (for example, depreciation expense on 12/31/2016). a. Purchased new equipment for $50,000 by paying cash on Oct 1. This equipment will have an 8 year useful life, an estimated residual value of 8,000. Reference Account Title Debit Credit b. Purchased $4,000 of equipment on July1, paying $500 in cash and owing the rest on accounts payable to the supplier. The equipment will be depreciated using the double declining balance method have a useful life of 4 years. It is estimated to have a 500 residual value. Reference Account Title Debit Credit c. On Sept 1 paid the supplier of equipment purchased on July 1 the remaining balance. Reference Account Title Debit Credit d. Due to expansion the Company bought a new building and land on Oct 1 for $300,000 with cash. The land is valued at 100,000 and the building at 200,000. The building will be depreciated using the straight line depreciation method. The estimated residual value of the building is $50,000 and it has an expected useful life of 25 years. Reference Account Title Debit Credit   e. The Company sold equipment for $18,000 which was classified as an asset on June 30. For simplification, this equipment was put into service on the same day (June 30) eight years ago. The assets life was originally estimated to be 10 years. The original cost was $50,000 with an estimated residual value of $5,000. The asset was being depreciated using the straight-line method. Reference Account Title Debit Credit f. On December 31 the Company determined that a fixed asset with a Net Book Value of $20,000 was impaired and needed to be adjusted. The fair value of the asset was determined to be $8,000 based on a future cash flow analysis that determined it could general $9,000 in cash for it’s remaining life. Reference Account Title Debit Credit   g. During the year the company sold 5000 units of inventory at $1,200 each. (Sold 1000 units on Feb 1, Sold 2000 units on May 1, sold 500 units on Aug 1, and 1500 units Dec 1) The company uses FIFO. Date Purchased Units Unit Costs 10/1/2015 1000 800 11/15/2015 1500 810 1/15/2016 1000 815 2/20/2016 2500 820 5/10/2016 3000 830 8/22/2016 1000 850 10/15/2016 2000 850 12/10/2016 3000 860 Reference Account Title Debit Credit h. The company determined that some slow moving inventory existed that is recoded at a cost of $10,000 but has a current market value of $6,000. Management has decided that a LCM adjustment is required. Reference Account Title Debit Credit i. At the end of the year company estimates its bad debt expense using an aging of the accounts receivable. Record the transaction to record the bad debt expense. Aging Category Estimated Percent not collectable Amount outstanding Not yet due 2% 10,000,000 Up to 90 Days past due 12% 3,000,000 Over 90 Days past due 35% 1,000,000 Reference Account Title Debit Credit. FINAL EXAM:
NAME: ___________________
The following select transactions have not yet been recorded by the company’s accountants.  Please review the following transactions and record all relevant transactions and adjusting transactions. Each transaction must be recorded on a journal entry sheet with a reference number, date, and explanation (in good form).  Use 12/31/2016 as the end of the year to post any required adjusting entries on 12/31/2016  Assume that this company is on a 12 month calendar year.  In most of the scenarios the transaction is described and you must determine all of the appropriate journal entries to record the transactions and any subsequent adjusting entries (for example, depreciation expense on 12/31/2016).
 

  1. Purchased new equipment for $50,000 by paying cash on Oct 1. This equipment will have an 8 year useful life, an estimated residual value of 8,000.
ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 
 
 
 
 

  1. Purchased $4,000 of equipment on July1, paying $500 in cash and owing the rest on accounts payable to the supplier. The equipment will be depreciated using the double declining balance method have a useful life of 4 years.  It is estimated to have a 500 residual value.

 

ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 
 
 

  1. On Sept 1 paid the supplier of equipment purchased on July 1 the remaining balance.

 

ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 
 
 

  1. Due to expansion the Company bought a new building and land on Oct 1 for $300,000 with cash. The land is valued at 100,000 and the building at 200,000. The building will be depreciated using the straight line depreciation method. The estimated residual value of the building is $50,000 and it has an expected useful life of 25 years.

 

ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 
 
 
 

  1. The Company sold equipment for $18,000 which was classified as an asset on June 30. For simplification, this equipment was put into service on the same day (June 30) eight years ago.  The asset’s life was originally estimated to be 10 years. The original cost was $50,000 with an estimated residual value of $5,000. The asset was being depreciated using the straight-line method.

 

ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 
 
 
 
 

  1. On December 31 the Company determined that a fixed asset with a Net Book Value of $20,000 was impaired and needed to be adjusted. The fair value of the asset was determined to be $8,000 based on a future cash flow analysis that determined it could general $9,000 in cash for it’s remaining life.

 

ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 
 
 
 

  1. During the year the company sold 5000 units of inventory at $1,200 each. (Sold 1000 units on Feb 1, Sold 2000 units on May 1, sold 500 units on Aug 1, and 1500 units  Dec 1)   The company uses FIFO.

 

Date PurchasedUnitsUnit Costs
10/1/20151000800
11/15/20151500810
1/15/20161000815
2/20/20162500820
5/10/20163000830
8/22/20161000850
10/15/20162000850
12/10/20163000860

 

ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 

  1. The company determined that some slow moving inventory existed that is recoded at a cost of $10,000 but has a current market value of $6,000. Management has decided that a LCM adjustment is required.

 
 

ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 
 

  1. At the end of the year company estimates its bad debt expense using an aging of the accounts receivable.  Record the transaction to record the bad debt expense.

 

Aging CategoryEstimated Percent not collectableAmount outstanding
Not yet due2%10,000,000
Up to 90 Days past due12%3,000,000
Over 90 Days past due35%1,000,000

 
 
 
 

ReferenceAccount TitleDebitCredit
    
    
    
    
    
    
    
    
    

 
 

FINAL EXAM: NAME: ___________________ The following select transactions have not yet been recorded by the company’s accountants. Please review the following transactions and record all relevant transactions and adjusting transactions. Each transaction must be recorded on a journal entry sheet with a reference number, date, and explanation (in good form). Use 12/31/2016 as the end of the year to post any required adjusting entries on 12/31/2016 Assume that this company is on a 12 month calendar year. In most of the scenarios the transaction is described and you must determine all of the appropriate journal entries to record the transactions and any subsequent adjusting entries (for example, depreciation expense on 12/31/2016). a. Purchased new equipment for $50,000 by paying cash on Oct 1. This equipment will have an 8 year useful life, an estimated residual value of 8,000. Reference Account Title Debit Credit b. Purchased $4,000 of equipment on July1, paying $500 in cash and owing the rest on accounts payable to the supplier. The equipment will be depreciated using the double declining balance method have a useful life of 4 years. It is estimated to have a 500 residual value. Reference Account Title Debit Credit c. On Sept 1 paid the supplier of equipment purchased on July 1 the remaining balance. Reference Account Title Debit Credit d. Due to expansion the Company bought a new building and land on Oct 1 for $300,000 with cash. The land is valued at 100,000 and the building at 200,000. The building will be depreciated using the straight line depreciation method. The estimated residual value of the building is $50,000 and it has an expected useful life of 25 years. Reference Account Title Debit Credit   e. The Company sold equipment for $18,000 which was classified as an asset on June 30. For simplification, this equipment was put into service on the same day (June 30) eight years ago. The assets life was originally estimated to be 10 years. The original cost was $50,000 with an estimated residual value of $5,000. The asset was being depreciated using the straight-line method. Reference Account Title Debit Credit f. On December 31 the Company determined that a fixed asset with a Net Book Value of $20,000 was impaired and needed to be adjusted. The fair value of the asset was determined to be $8,000 based on a future cash flow analysis that determined it could general $9,000 in cash for it’s remaining life. Reference Account Title Debit Credit   g. During the year the company sold 5000 units of inventory at $1,200 each. (Sold 1000 units on Feb 1, Sold 2000 units on May 1, sold 500 units on Aug 1, and 1500 units Dec 1) The company uses FIFO. Date Purchased Units Unit Costs 10/1/2015 1000 800 11/15/2015 1500 810 1/15/2016 1000 815 2/20/2016 2500 820 5/10/2016 3000 830 8/22/2016 1000 850 10/15/2016 2000 850 12/10/2016 3000 860 Reference Account Title Debit Credit h. The company determined that some slow moving inventory existed that is recoded at a cost of $10,000 but has a current market value of $6,000. Management has decided that a LCM adjustment is required. Reference Account Title Debit Credit i. At the end of the year company estimates its bad debt expense using an aging of the accounts receivable. Record the transaction to record the bad debt expense. Aging Category Estimated Percent not collectable Amount outstanding Not yet due 2% 10,000,000 Up to 90 Days past due 12% 3,000,000 Over 90 Days past due 35% 1,000,000 Reference Account Title Debit Credit

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