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Sunday, April 24, 2011

F.A MID TERM PAPER :p

Department of Computer Science, University Of Karachi

BSCS (Final Year) (BSCS-607 – Financial Accounting)

Name: Seat No: 0

1) Security Service Company adjusts its accounts at the end of month. On November 30, adjusting entries are prepared to record:

a) Depreciation Expense for November.
b) Interest Expense that has accrued during November.
c) Revenue earned during earned November that has not yet been billed to customers.
d) Salaries, payable to company employees, which have accrued.
e) The portion of the company’s prepaid insurance that has expired during November.
f) Earning portion of the amount collected in advance from a customer.

Indicate the effect of each adjusting entries on the major elements of the company’s financial statements – that is upon revenues, expenses, net income, assets, liabilities and owner equity. The answer for adjusting entry a is provided as an example. Symbols I for increase, D for Decrease, and NE for no effect.


Adjusting Entries

Income Statement

Balance Sheet

Revenue - Expenses

= Net Income

Assets =

Liab + OE

a

NE

I

D

D

NE

D

b



c



d



e



f



2) The accounts of Martinez Political Consulting at December 31, 20X6, follow:

Accounts payable

$ 5,100

Angel Martinez, capital,

Accounts receivable

6,600

December 31, 20X5

$ 59,800

Accumulated depreciation—

Angel Martinez, withdrawals

50,400

building

37,800

Note payable, long-term

27,800

Accumulated depreciation—

Other assets

3,600

computers

11,600

Other current liabilities

4,700

Advertising expense

2,200

Prepaid insurance

1,100

Building

104,400

Prepaid rent

6,600

Cash

16,500

Salary expense

24,600

Service revenue

93,500

Salary payable

3,900

Computers

22,700

Supplies

2,500

Depreciation expense

1,300

Supplies expense

5,700

Insurance expense

800

Unearned service

Interest payable

600

revenue

5,400

Interest expense

1,200

Required: All adjustments have been journalized and posted, but the closing entries have not yet been made. Prepare the company's classified balance sheet in report format at December 31, 20X6. Show totals for total assets, total liabilities, and owner's equity.

Department of Computer Science, University Of Karachi

BSCS (Final Year) (BSCS-607 – Financial Accounting)

Name: Seat No: 0

1) From the following selected accounts of Hyundai Energy at June 30, 20X4, prepare the entity's closing entries:

Liu Hyundai, capital

$ 21,600

Interest expense

$ 2,200

Service revenue

101,100

Accounts receivable

14,000

Unearned revenues

1,350

Salary payable

850

Salary expense

12,500

Depreciation expense

10,200

Accumulated depreciation

35,000

Rent expense

5,900

Supplies expense

1,700

Liu Hyundai, withdrawals

40,000

Interest revenue

700

Supplies

1,400

What is Hyundai's ending capital balance at June 30, 20X4?

2) Data for the unadjusted trial balance of Links Resorts at December 31, 20X2, follow:

Cash

$ 3,000

Horst Schulz, capital

$49,100

Other current assets

9,400

Horst Schulz, withdrawals

51,800

Property, plant,

Service revenue

93,600

and equipment

66,200

Salary expense

42,700

Accumulated depreciation

21,800

Depreciation expense

Accounts payable

6,100

Supplies expense

Salary payable

Insurance expense

Unearned service revenue

5,300

Utilities expense

2,800

Adjusting data at the end of the year include the following:

  1. Unearned service revenue that has been earned, $3,600.
  2. Accrued service revenue, $8,100
  3. Supplies used in operations, $600.
  4. Accrued salary expense, $1,400.
  5. Insurance expense, $1,800.
  6. Depreciation expense, $2,900.

Horst Schulz, the owner, has received an offer to sell the company. He needs to know the following information within one hour: Net income for the year covered by these data. Without opening any accounts or making any journal entries, provide Schulz with the requested information. Prepare an income statement, and show all computations.

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