Acc 210 Exam 1 Review

Financial Statements

100

What is the order of the Financial Statments

1. Income Statement

2. Statement of Changes in SH Equity

3. Balance Sheet

4. Statement of Cash Flows

200

In which section of the Statement of Cash Flows do you classify: Paid off a loan.

FA

300

What Accounts go on Statement of Changes in Stock Holders Equity

Common Stock & Retained Earnings

400

What are the three parts of the Statement of Cash Flows in order?

OA, IA, FA

500

Prepare an Income Statement:

The following transactions apply to the Garber Corporation for Year 1, its first year in business.

1. 1) Issued stock to investors, $50,500.
2. 2) The company borrowed $44,500 cash from the bank.
3. 3) Services were provided to customers and $52,500 cash was received.
4. 4) The company acquired land for $46,500.
5. 5) The company paid $36,500 rent for the building where it does its business.
6. 6) The company paid $4,200 for supplies that were used during the period.
7. 7) The land purchased in Event 4 had an appraised market value of $52,500 on December 31, Year 1.
8. 8) A dividend of $2,000 was paid to the owners.
9. 9) Repaid $22,500 of the loan described in item 2.

Service Rev.          52,500

Opera. Exp.          (40,700)

Net Income           11,800

Formulas

100

What is the formula for calculating the amount of interest owed during a period?

P x R x T

200

What is the formula for Accounts Receivable?

 

Beginning Balance

+ Revenue on Account

- Collections

= Ending Balance

300

What is the formula for Accounts Payable

 Beginning Balance

+ Expenses on Account

- Cash Payments

= Ending Balance

400

What is the formula for Retained Earnings?

 Beginning Balance

+ Net Income

- Dividends

= Ending Balance

500

What is the Formula for Supplies Expense?

 Beginning Balance

+ Supplies Purchased

- Supplies Used

= Ending Balance

Practice Problems

100

A = L + SHE

A = L + CS + RE

A = 50,000 + 4,000 + 200

A = ?

54,200

200

A = L + SHE

A = L + CS + RE

50,000 = L + 6,000 + 4,000

L = ?

40,000

300

Jan 1 receivables = $10,000. Services on account = $12,000. Cash collections = $6,000. Calculate Dec. 31 receivables.

16,000

400

At the beginning of Year 1, the Unearned Revenue account has a balance of $4,000. During the year, the company receives $3,000 in cash from a customer for services to be performed in the future. By the end of the year, the company has earned $2,500 of this revenue. What is the ending balance in the Unearned Revenue account?

Ending Balance=4,000+3,000−2,500=4,500

500

At the end of Year 2, retained earnings for the Baker Company was $3,150. Revenue earned by the company in Year 2 was $3,400, expenses paid during the period were $1,800, and dividends paid during the period were $1,200. Based on this information alone, what was the amount of retained earnings at the beginning of Year 2?

BRE + $3,400 − $1,800 − $1,200 = $3,150

BRE=$2,750

More Formulas/ PP

100

What is the Accounting Equation?

A = L + E

200

What is the formula of Pre-paid Rent?

Beginning Balance

+ Rent paid in advance

- Rent used (time passed)

= Ending Balance

300

What is the formula of Unearned Revenue?

Beginning Balance

+ Cash received in advance from customer

- revenue earned

= Ending Balance

400

On December 31, Year 1, Hilton Company recognized $900 of accrued salary expense. Hilton paid cash to the employees in Year 2. Which of the following shows how these events will affect Hilton’s ledger accounts on December 31, Year 1?

Salaries Payable +900

Retained Earnings (900)

500

Clayton Company borrowed $10,000 from the State Bank on April 1, Year 1. The one-year note carried a 6% rate of interest. The amount of interest expense that Clayton would report in Year 1 and Year 2, respectively would be

450 & 150

Total annual interest = $10,000 × 0.06 = $600

$600 annual interest ÷ 12 months = $50

$50 per month × 9 months = $450

$50 per month × 3 months = $150

Exam Question Ex.

100

Global Company has assets of $334,000 and liabilities of $100,000. What is the amount of Global's stockholders’ equity?

234,000

200

On January 1, Year 2, accounts payable was $34,000. During Year 2, expenses on account were $83,000. On December 31, Year 2, accounts payable was $26,000.

EAP of $26,000 = BAP of $34,000 + Exp. $83,000 − Payments on account

Payments on account = $91,000

300

At January 1, Year 2 accounts receivable was $29,500. Revenue earned on account was $119,000. Cash collected on accounts receivable during Year 2 was $50,700. What was the ending balance in accounts receivable on December 31, Year 2?

$29,500 BAR + $119,000 revAcc − $50,700 CC 

=$97,800 ending Accounts Receivable

400

How would these events be shown on a HM?

1. Purchased $1,150 of office supplies on account.

2. Determined that at the end of the accounting period $150 of office supplies remained on hand.

1. Supplies +1,150        &         AP +1,150

2. Supplies (1,000)        &         RE (1,000) --(IS)

EB = Supplies 150

500

Financed initial operations by borrowing $50,000 from a local bank. Interest payments on the loan are not due until the loan fully matures.
Adjusted the accounting records on December 31, Year 1, to recognize accrued interest expense on the bank note. The note, issued on July 1, Year 1, had a one-year term and a 6 percent annual

50,000 x .06 x 6/12 

1,500