Accounting Midterm Review

2. Timing
3. Assets before performance = deferred revenue
4. Stockholder’s equity doesn’t report revenue
5.
6. Beg + NI – Div = End
NI = End – Big +Div
=15k – 12k +1k
= 4k
7. Oct. 15
Dr. Cash 50,000
Cr. Deferred/Unearned Revenue 50,000
Nov. 20
Dr. Deferred Revenue 50,000
Cr. Service Revenue 50,000
8. Company lends out money, interest = interest revenue for lender, for borrower it is interest
expense  B
LENDER
July 1
Dr. Notes Receivable 9,000
Cr. Cash 9,000
December 31
Dr. Interest Receivable 450
Cr. Interest Revenue 450
Interest  10%/12 x 6 x 9,000 = 450
April 1
9,000 + 10%/12 x 9 x 9,000
=9,000 + 675 = 9675
675 = 450 (6 months) + 225 (3 months)
Dr. Cash 9,675
Cr. Notes Receivable 9,000
Cr. Interest Receivable 450
CR. Interest Revenue 225
For Borrower, change receivable to payable, change revenue to expense
9. Draw T-account
Allowance Dr. 950
Cr. 1,000
1000+?-950 = 1,320
? = 1,270
10.
Dr. Cash 1,000
Cr. Sales Revenue 1,000
Dr. Cost of Goods Sold 800
 Cr. Inventory 800
 Matching Principle
12.
A/R  Dr. 311,000
Allowance  2% x 311,000 = 6,220
13.
LIFO  start w/ purchases
FIFO  start w/ beginning inventory
100 x $16 + 350 x $20
= 8,600
LIFO
400 x $20 + $50 x $16
= 8,800
14. Rotan Corp.
Adjusting Entries don’t have CASH  C
15.
Which increases assets, decreases liabilities
B  purchases inventory on account
16.
A.
17.
Shoeless Joe Inc.
Gross Profit = Sales/Revenue – COGS
Gross Profit = 25 x $7 – (15 x 3 +10 x 2)
Gross Profit = 175 - 65
Perpetual – calculate COGS immediately
Periodic – calculate COGS at the end of a period for everything
18.
A/R Beginning Balance = $471K (Debit)
Debit 315K
Credit 319k
Credit 1720
A/R Ending Balance = 465,280
Allowance Beginning Balance = $1,650 (Credit)
Debit 1720
19.
Ending Balance = .5% x 465,280 = 2,326
20,
2,326 = 1,650 – 1,720 +?
? = 2,396  C
21.
Adjusting Entry  NO CASH  A
23.
Net Realizable Value
Compare cost and NRV from market
A. Cost = 650, NRV = 685
B. Cost = 625, NRV = 550
625 – 550 = 75
we must reduce $75 from our inventory
Dr. COGS 75
Cr. Inventory 75  this is the only we need from C6
24.
D
25.
Average beginning, purchase 1, purchase 2
40 + 18 + 24 – 20 = 62 Units Sold
Gross Profit = Sales – COGS
= 62 x 20 –
C