Adamas University

Department of Accounting
Fundamental of Accounting II
Individual Assignment

Submission Date: 16 August 2022 GC (6:00 Local Time)

1. Lambert Supply Company received a 30-day, 5% notes for $210,000, dated August
7 from a customer on account.
A. Determine the due date of the note.

B. Determine the maturity value of the note.

C. Journalize the entry to record the receipt of the payment of the note at maturity

2. At the end of the current year, Accounts Receivable has a balance of $685,000;
Allowance for Doubtful Accounts has a credit balance of $9,000; and net sales
for the year total
$7,400,000. Using the aging method, the balance of Allowance for Doubtful
Accounts is estimated as $20,000. Determine:

(a) The amount of the adjusting entry for uncollectible accounts;

(b) The adjusted balances of Accounts Receivable, Allowance for Doubtful
Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts
receivable.

3. Journalize the following transactions in the accounts of Pro Medical Co., a

medical equipment company that uses the direct write-off method of accounting for
uncollectible receivables:

A. Jan. 30. Sold merchandise on account to Dr. Cindy Mott, $85,000. The
cost of the merchandise sold was $50,000.

B. June 3. Received $48,000 from Dr. Cindy Mott and wrote off the remainder
owed on the sale of January 30 as uncollectible.

C. Nov. 27. Reinstated the account of Dr. Cindy Mott that had been written off
on June 3and received $37,000 cash in full payment.
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4. Journalize the following transactions in the accounts of Lamp Light Company, a
restaurant supply company that uses the allowance method of accounting for
uncollectible receivables:
A. Mar. 19. Sold merchandise on account to Midnight Delights Co., $37,500. The
cost of the merchandise sold was $23,000.
B. Aug. 31. Received $22,000 from Midnight Delights Co. and wrote off the
remainder owed on the sale of March 19 as uncollectible.

C. Dec. 22. Reinstated the account of Midnight Delights Co. that had been written
off onAugust 31 and received $15,500 cash in full payment.
5. HM plc has received 500,000, 90 days and 12% on November 10/ 2017 from XYZ
Company. Required
A. Compute and journalized the accrued interest as of December 31/2017

B. Journalize the receipt of cash on the due date

6. Glorious Trading PLC beginning inventory and purchases during the year ended
December 31,2014, were as follows:
Date Transaction type Units Unit cost Total cost

January Beginning inventory 1,000 $50.00 $50,000

March 10 Purchase 3,000 52.00 156,000

June 25 Sold 1,600 units

August 30 Purchase 2,600 55.00 143,000

October 5 Sold 4,000 units

November Purchase 1,000 57.00 57,000

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December Sold 800 units
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Instructions

A. Determine the cost of inventory and cost of goods sold on December 31, 2014, under
the perpetual inventory system using first-in, first-out and weighted average cost

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methods
B. Determine the cost of inventory and cost of goods sold on December 31, 2014,
under the periodic inventory system suing first-in, first-out and moving average cost
methods.
7. Based on the following data, estimate the cost of the ending merchandise inventory
using gross profit method:
Sales (net) .............$1,450,000

Estimated gross profit rate....42%

Beginning merchandise inventory .........$100,000

Purchases (net)................................860,000

8. On the basis of the following data, estimate the cost of the merchandise inventory at
June 30 by the retail method:
Cost Retail

June 1 Merchandise inventory ………$ 165,000 $ 275,000

June 1–30 Purchases (net) ……………..2,361,500 3,800,000
June 1–30 sales (net)..........................………………….3, 550,000
9. During the taking of its physical inventory on December 31, 2014, Sport Interiors
Company incorrectly counted its inventory as $113,900 instead of the correct
amount of $118,350. Indicate the effect of the misstatement on the balance sheet
and income statement for the year ended December 31, 2014 and for year ended
December 31, 2015.
10. Abay Trading uses a perpetual inventory system. At January 1, 2016, inventory was

$214,000,000 at both cost and net realizable value. At December 31, 2016, the inventory was

$286, 000,000 at cost and $265,000,000 at net realizable value. Prepare the
necessary December 31 entry under (a) the cost-of-goods sold method and (b) the
loss method.
11. Florida Corporation has the following four items in its ending inventory.

Item Cost NRV

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 Jokers €2,000 €2,100

Penguins 5,000 4,950

Riddlers 4,400 4,625

Scarecrows 3,200 3,830

Determine (a) the LCNRV for each item, and (b) the amount of write-down, if any,
using (1) an item-by-item LCNRV evaluation and (2) a total-group LCNRV
evaluation.
12. Sandblasting equipment acquired at a cost of $36,000 has an estimated residual value of

$6,000 and an estimated useful life of 10 years. It was placed into service on April 1
of the current fiscal year, which ends on December 31. Determine the depreciation
for the current fiscal year and for the following fiscal year by
A) The straight-line method and

B) The double-declining-balance method and

C) Sum of the years digit method

13. A truck acquired at a cost of $69,000 has an estimated residual value of $12,000,
has an estimated useful life of 300,000 miles, and was driven 77,000 miles
during the year. Determine (a) the depreciable cost, (b) the depreciation rate, and (c)
depreciation expense and net book value at the end of the first year.
14. A truck with a cost of $82,000 has an estimated residual value of $16,000, has an estimated

useful life of 12 years, and is depreciated by the straight-line method. (a)

Determine the amount of the annual depreciation. (b) Determine the book value at
the end of the seventh year of use. (c) Assuming that at the start of the eighth year
the remaining life is estimated to be six years and the residual value is estimated to
be $12,000, determine the depreciation expense for each of the remaining six years.
15. Presented below is information related to equipment owned by kaki Company at
December 31, 2010.
Cost..................................€9,000,000,

Accumulated depreciation to date......1,000,000

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Value-in-use............................7,000,000

Fair value less cost of disposal...........4,400,000

Assume that kaki Company will continue to use this asset in the future. As of December
31, 2010, the equipmenthas a remaining useful life of 4 years.
Instructions

(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2010.

(b) Prepare the journal entry to record depreciation expense for 2011.

(c) The recoverable amount of the equipment at December 31, 2011, is €7,050,000.
Prepare the journal entry (if any) necessary to record this increase.
16. Gono Trading acquired equipment on January 1, 2009, for €12,000. Gono elects to
value this class of equipment using revaluation accounting. This equipment is being
depreciated on a straight-line basis over its 6-year useful life. There is no residual
value at the end of the 6- year period. On December 31, 2011, the fair value of the
equipment is determined tobe
€7,000.

Instructions: record the journal entry for the equipment in December 31, 2011

17. Equipment acquired on January 6, 2011, at a cost of $714,000, has an estimated

useful life of 12 years and an estimated residual value of $44,400.
A. What was the annual amount of depreciation for the years 2011, 2012,
and 2013, using the straight-line method of depreciation?
B. What was the book value of the equipment on January 1, 2014?

C. Assuming that the equipment was sold on January 3, 2014, for

$525,000, journalize the entry to record the sale.
D. Assuming that the equipment had been sold on January 3, 2014, for
$560,000 instead of $525,000, journalize the entry to record the sale.
18. Caldwell Mining Co. acquired mineral rights for $127,500,000. The mineral deposit is

estimated at 425,000,000 tons. During the current year, 42,000,000 tons were mined
and sold.
A. Determine the depletion rate.

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 B. Determine the amount of depletion expense for the current year.

C. Journalize the adjusting entry on December 31 to recognize the depletion expense

19. A patent with an estimated useful economic life of 15 years was acquired for
$900,000 on January 1. Journalize the adjusting entry on December 31 for the
amortization of the patent rights.

Submission Date: 16 August 2022 GC (6:00 Local Time)

Venue: Megenagna 1, Accounting Department office