Platzziffer: Punkte:

____________ Note:
Fakultät Angewandte Wirtschaftswissenschaften
School of Management
Kurs: Principles of Accounting Semester: 1
Studiengang: IM Prüfungsdauer: 90 min.
Prüfer: Prof. Dr. M. Heigl-Murauer Prüfungsdatum: 04.02.2022
Hilfsmittel: Open-Book-Exam Uhrzeit: 11:00
Prüfungsart: schriftl. Prüfung Anzahl d. Blätter: 6

Hints:

The exam comprises 15 assignments.

Please do the rounding of the amounts always nearest to the

dollars.

1
Assignment 1 (7 points)

Cloveridge, Inc. had the following transactions during a recent period:

a. Received $80,000 cash from the issuance of capital stock.
b. Purchased inventory for $37,000 cash.
c. Purchased $7,500 of equipment on account.
d. Sold merchandise on account for $44,000; cost of goods sold was
$28,500.
e. Purchased land and a building for $30,000 and $100,000,
respectively, for $25,000 cash, signing a note for the balance.
f. Collected $23,750 from customers who had previously purchased
inventory on account.

Prepare the appropriate journal entries to record these transactions.

Assignment 2 (7 points)

The following financial statement was prepared by Schenck Corporation's

accountant.

Schenck Corporation
Balance Sheet
December 31, 2019

Assets Liabilities and Stockholders'

Equity
Cash $ 6,000 Accounts Payable $ 4,000
Accounts Receivable 6,500 Notes Payable ?
Inventory 15,000 Total Liabilities $ 9,500
Building ? Capital Stock (10,000
Total Assets $165,000 shares @ $10 per $120,000
share)
Retained Earnings ?
Total Stockholders' ?
Equity
Total Liabilities and
Stockholders' Equity ?

Based on the above Balance Sheet for Schenck Corporation, what are the correct
balances for the accounts listed below:

1. Building
2. Notes Payable
3. Total Liabilities and Stockholders' Equity
4. Total Stockholders' Equity
5. Retained Earnings

Please show your calculation!

2
Assignment 3 (6 points)

The transactions carried out by Blue Waters Corporation during the year caused a
decrease in total assets of $26,650 and an increase in total liabilities of $12,250.
If no additional stock was issued during the year and dividends of $6,550 were
paid, what was the net income for the year? Please show your calculation.

Assignment 4 (6 points)

The following information was taken from the Hall Corporation's books:

Accounts receivable $ 78,400 Salaries expense $132,000

Income tax expense 49,600 Accounts payable 40,000
Retained earnings 201,600 Supplies expense 36,800
Service revenue 360,000 Dividends 3,400
Advertising expense 14,400 Rent expense 9,600

Prepare an income statement in good form for the year ended December 31,
2021.

Assignment 5 (9 points)

Based on the following account balances at December 31, 2019, prepare a trial
balance for Uniflex Company.

Accounts Payable 575 Notes Payable 7,000

Accounts Receivable 1,800 Rent Expense 1,500
Building 19,000 Retained Earnings 2,275
Capital Stock 10,000 Sales Revenue 15,684
Cash 1,160 Supplies on Hand 556
Cost of Goods Sold 17,969 Utilities Expense 849
Equipment 6,700 Wages Expense 2,000
Inventory 4,000

3
Assignment 6 (6 points)

In the course of your examination of the books and records of Griffin Company for
the year ending December 31, 2021, you find the following data:

Salaries earned by employees $ 40,000

Salaries paid to employees 50,000
Total sales revenue 700,000
Cash collected from sales 750,000
Utility expense incurred 4,500
Utility bills paid 4,200
Cost of goods sold 400,000
Cash paid on inventory in purchases in 2021 370,000
Inventory at December 31,2021 286,400
Tax assessment for 2021 5,000
Taxes paid in 2021 3,500
Rent expense for 2021 30,000
Rent paid in 2021 25,000

Which of the above positions are to choose to compute Griffin Company’s net
income for 2021 if one uses the accrual-basis accounting. Please show the
calculation.

Assignment 7 (12 points)

Mancheski and Sons Inc. reported net income of $45,600 in 2019. Carl, the
company bookkeeper, neglected to make the necessary adjusting entries. The
original journal entries are given below:

a. Supplies at the beginning of the year were $2,000. Supply purchases

during the year totaled $1,500 and Supplies on hand was debited for
this amount. Ending supplies on hand was $800.
b. Insurance purchased during the year was $3,500, of which $1,000
remained unexpired at year end. Prepaid Insurance was debited to
record the purchase of this policy.
c. Rent revenue collected for the year was $15,000. Only $5,000 of this
was earned in 2019. The company credited Unearned Rent to record
the $15,000 rent collection.
d. The company rents storage space from a local firm. Mancheski paid the
rent for September 1, 2019, to August 31, 2020, a total of $1,500, in
advance on September 1. This was recorded as a prepaid expense.

1. Prepare the necessary adjusting entries for December 31, 2019.

2. Determine Mancheski's corrected net income for 2019.

4
Assignment 8 (6 points)

Monant Inc.’s fiscal year ended on December 31,2024. The balance in the prepaid
insurance account as of December 31, 2024 was $34,800 (before adjustment) and
consisted of the following policies:
Policy Date of Date of Balance in
Number Purchase Expiration Account
278122 10/1/23 9/30/24 $14,400
457991 2/1/24 2/28/26 $9,600
699944 7/1/23 6/30/25 $10,800
$34,800

The adjusting entry required on December 31, 2024 would be? Show calculation.

Assignment 9 (7 points)

Hughes Medical Supply, a retail business, had net sales of $92,400 during
January. Purchases of merchandise during the month amounted to $42,700, of
which $29,600 had been paid for by the end of January. The merchandise
purchased had a retail sales value of $59,000. On January 1, inventory on hand
cost $26,180 and had a retail sales value of $39,400. Traditionally, Hughes' gross
margin percentage has been 25 percent.

Use the gross margin estimation method to determine the cost of Hughes'
inventory at the end of January.

Assignment 10 (9 points)

Peter, Inc. sells diving equipment. The sales and inventory records of the
computer for January through March 2021 were as follows:

Equipment Unit Cost $ Total Cost $

Beginning 460 30 13,800
Inventory, Jan.1
Purchase, Jan. 16 110 32 3,520
Sale, Jan. 25 246
Purchase, Feb. 16 105 36 3,780
Sale, Feb. 27 297
Purchase, March 10 150 28 4,200
Sale, March 30 180

Determine the amounts for ending inventory and cost of goods sold under the
following costing alternatives:
a) FIFO
b) LIFO
c) Average cost.
Use the periodic inventory method, which means that all sales are assumed to
occur at the end of the period. Round amounts to the nearest dollar.

5
Assignment 11 (7 points)

On January 1, 2018, Johnson purchased a caterpillar for $55,000. The caterpillar

had an estimated useful life of 6 years and an estimated residual value of $3,000
at the time of purchase. Johnson spent $18,000 on January 1, 2020, to replace
the caterpillar motor. This replacement increased the caterpillar's life by 5 years
and the residual value by $5,000. On February 2, 2021 Johnso sold the caterpillar
at a price of $ 20,000.

Assuming that straight-line depreciation is used over the accounting periods.

Please show the depreciation in the year 2018and 2020. Calculate the result of the
sale of the caterpillar in 2021 and prepare the journal entry.

For assignments 12-15: Which answer is correct? Please specify one

letter.

Assignment 12 (2 points)
The perpetual method of accounting for inventory
a. Requires that a physical count of inventory be taken before the cost of goods
sold can be determined with any reasonable degree of accuracy
b. Is likely to be less expensive to maintain than a periodic inventory method
c. Is not as helpful as a periodic method in providing management with timely
reports about inventory quantities and costs
d. Allows management to better estimate inventory losses from pilferage than
does a periodic inventory method

Assignment 13 (2 points)
The entry to record a gain on the increase in value of land would include which of the
following?
a. Credit to Gain on Land Increase
b. Debit to Land
c. Credit to Non-Impairment of Land
d. No entry is required

Assignment 14 (2 points)
The declaration and payment of cash dividends
a. Reduces the amount of resources a company has to invest in productive assets
b. Sometimes does not reduce a company's retained earnings balance
c. Reduces a company's net income
d. Sometimes does not reduce a company's cash balance

Assignment 15 (2 points)
Amy Company sold $8,000 of merchandise to Tory Turnbull with terms 2/10, n/30. If Tory
paid for three-fourths of the merchandise within the discount period and one-fourth after
the discount period, he paid a total of
a. $7,840
b. $7,880
c. $7,920
d. $7,960