Question 1

Tevis Company reports the following for the month of June.

Units Unit Cost Total Cost
June 1 Inventory 250 $7 $1,750
12 Purchase 325 8 2,600
23 Purchase 475 9 4,275
30 Inventory 110
Instructions
(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO
and (2) LIFO.
(b) Which costing method gives the higher ending inventory? Why?
(c) Which method results in the higher cost of goods sold? Why?
Answer: https://www.mathlearningcentre.com/accounting/pa/inv/535-inv-problem-17
Question 2
Vox Corporation’s comparative balance sheets are presented below.
VOX CORPORATION
Comparative Balance Sheets
December 31
2017 2016
Cash $ 19,300 $ 10,000
Accounts receivable 21,200 23,000
Land 20,000 26,000
Building 70,000 70,000
Accumulated depreciation (15,000) (10,000)
Total $115,500 $119,000

Accounts payable $ 17,370 $ 30,000

Common stock 75,000 69,000
Retained earnings 23,130 20,000
Total $115,500 $119,000
Additional information:
1. Net income was $27,630. Dividends declared and paid were $24,500.
2. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in
accumulated depreciation. The land was sold for $3,900.
Instructions
(a) Prepare a statement of cash flows for 2017 using the indirect method.
(b) Compute free cash flow.
Answer:
Question 3
Jeffries Company purchased a delivery truck for $50,000 on January 1, 2017. The truck has an expected
salvage value of $4,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years.
Actual miles driven were 15,000 in 2017 and 12,000 in 2018.
Instructions
(a) Compute depreciation expense for 2017 and 2018 using (1) the straight-line method, (2) the units-of-
activity method, and (3) the double-declining balance method.
(b) Assume that Jeffries uses the straight-line method.
(1) Prepare the journal entry to record 2017 depreciation.
(2) Show how the truck would be reported in the December 31, 2017, balance sheet.
Answer: https://www.mathlearningcentre.com/accounting/pa/pni/355-pni-problem-16
Question 4
A.
Rich Company has accounts receivable of $110,000 at March 31. An analysis of the accounts shows the
following.
Month of Sale Balance, March 31
March $ 62,000
February 18,000
January 17,000
Prior to January 13,000
$110,000
Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $2,100 prior
to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts.
The company’s estimate of bad debts is as follows.
Estimated Percentage
Age of Accounts Uncollectible .
1–30 days 2.0%
31–60 days 5.0%
61–90 days 30.0%
Over 90 days 50.0%
Instructions
(a) Determine the total estimated uncollectibles.
(b) Prepare the adjusting entry at March 31 to record bad debt expense.
Answer: https://www.mathlearningcentre.com/accounting/pa/ar/329-ar-problem-12

B.
On May 10, Ogle Company sold merchandise for $2,700 and accepted the customer’s National Bank
MasterCard. National Bank charges a 4% service charge for credit card sales.
Prepare the entry on Ogle Company’s books to record the sale of merchandise.
Answer: https://answers.yahoo.com/question/index?qid=20161020132120AASXSyO
Question 5
The adjusted trial balance columns of the worksheet for Greenwood Company are as follows.
GREENWOOD COMPANY
Worksheet
For the Year Ended December 31, 2017

Adjusted
Account Trial Balance
No. Account Titles Dr. Cr.
101 Cash 18,800
112 Accounts Receivable 16,200
126 Supplies 2,300
130 Prepaid Insurance 4,400
157 Equipment 46,000
158 Accumulated Depreciation—Equipment 20,000
200 Notes Payable 20,000
201 Accounts Payable 8,000
212 Salaries and Wages Payable 2,600
230 Interest Payable 1,000
301 Owner’s Capital 26,000
306 Owner’s Drawings 12,000
400 Service Revenue 87,800
610 Advertising Expense 10,000
631 Supplies Expense 3,700
711 Depreciation Expense 8,000
722 Insurance Expense 4,000
726 Salaries and Wages Expense 39,000
905 Interest Expense 1,000
Totals 165,400 165,400
Instructions
(a) Complete the worksheet by extending the balances to the financial statement columns. (Fill in the
worksheet given on the next page).
(b) Prepare an income statement, owner’s equity statement, and a classified balance sheet. (Note:$5,000 of
the notes payable become due in 2018.) T. Greenwood did not make any additional investments in the
business during 2017.
Answer: https://www.mathlearningcentre.com/accounting/pa/cac/272-cac-problem-2
 GREENWOOD COMPANY
Partial Worksheet
For the Year Ended December 31, 2017

Adjusted Income Balance

Account Trial Balance Statement Sheet
No. Titles Dr. Cr. Dr. Cr. Dr. Cr.
101 Cash 18,800
112 Accounts Receivable 16,200
126 Supplies 2,300
130 Prepaid Insurance 4,400
157 Equipment 46,000
158 Acc. Depr.—Equip. 20,000
200 Notes Payable 20,000
201 Accounts Payable 8,000
212 Salaries and Wages Payable
2,600
230 Interest Payable 1,000
301 Owner’s Capital 26,000
306 Owner’s Drawings 12,000
400 Service Revenue 87,800
610 Advertising Expense 10,000
631 Supplies Expense 3,700
711 Depreciation Expense 8,000
722 Insurance Expense 4,000
726 Salaries and Wages
Expense 39,000
905 Interest Expense 1,000              
Totals 165,400 165,400
Net Income
Totals