Financial Accounting Principles Assessment 3: Internal Control and Accounting for Assets Worksheet Use this worksheet to complete the following three exercises for Assessment 3. Refer to the instructions in the course for submitting your assessment.Exercise 3-1 The Scheiffer Company’s most recent bank statement and book balances of cash reconciliations were completed on September 30, 2012. Two checks were reported outstanding: check #6798 for $1135.50 and check #6794 for $524.00. The following information is available for the October 31, 2012 reconciliation. Section of the October 31 Bank Statement Previous Balance Total Checks & Deposits Total Deposits & Credits Current Balance 16,345.50 9,695.55 11,146.85 17,796.80 Checks and Debits Deposits and Credits Daily Balance Date No. Amount Date Amount Date Amount 10/02 6798 1,135.50 10/04 1,214.50 09/30 16,345.50 10/05 7002 815.00 10/11 2,054.55 10/02 15,210.00 10/09 7001 1,788.50 10/20 3,990.25 10/04 16,424.50 10/15 605.75 NSF 10/23 2,436.80 10/05 15,609.50 10/19 7004 954.00 10/29 20.75 IN 10/09 13,821.00 10/22 7003 405.35 10/29 1,430.00 CM 10/11 15,875.55 10/25 7005 1,985.95 10/15 15,269.80 10/26 7007 310.35 10/19 14,315.80 10/30 7009 1,695.15 10/20 18,306.05 10/22 17,900.70 10/23 20,337.50 10/25 18,351.55 10/26 18,041.20 10/29 19,491.95 10/30 17,796.80 From Scheiffer’s Accounting Records Cash Receipts Deposited Date Cash Debit Oct 4 1,214.50 11 2,054.55 20 3,990.25 23 2,436.80 9,696.10 Cash Disbursements Check No. Cash Credit 7001 1,788.50 7002 815.00 7003 405.35 7004 954.00 7005 1,955.95 7006 880.50 7007 310.35 7008 325.10 7009 1,695.15 9,129.90 Cash Account #101 Date Explanation PR Debit Credit Balance Sep 30 Balance 14,686.00 Oct 31 Total receipts R12 9,696.10 24,382.10 31 Total disbursements D23 9,129.90 15,252.20 Check #7005 was drawn correctly for $1985.95 to pay for office equipment. The recordkeeper recorded it as a debit for Office Equipment and a credit to Cash for $1955.95, but misread the amount of the check, which was $1985.95. The non-sufficient funds check for a $605.75 account payment was received from a customer, A. B. Fransen. The company has not yet recorded the returned check. The credit memo is the bank’s collection on a $1450.00 note and shows the deduction of a $20.00 collection fee. The company has not recorded the collection or the fee. Based on the information provided, complete the following tasks: Prepare an October 31, 2012, bank reconciliation for the Scheiffer Company. SCHEIFFER COMPANY Bank Reconciliation October 31, 2012 [Create the bank reconciliation here.] Make the necessary journal entries to adjust the book balance of cash to the reconciled balance. [Create the journal entries here.] For distinguished performance, provide three possible reasons why some of the numbered checks in the sequence are missing from the bank statement.Exerci ...

1. Financial Accounting Principles
Assessment 3: Internal Control and Accounting for Assets
Worksheet
Use this worksheet to complete the following three exercises for
Assessment 3. Refer to the instructions in the course for
submitting your assessment.Exercise 3-1
The Scheiffer Company’s most recent bank statement and book
balances of cash reconciliations were completed on September
30, 2012. Two checks were reported outstanding: check #6798
for $1135.50 and check #6794 for $524.00. The following
information is available for the October 31, 2012 reconciliation.
Section of the October 31 Bank Statement
Previous Balance
Total Checks & Deposits
Total Deposits & Credits
Current Balance
16,345.50
9,695.55
11,146.85
17,796.80
Checks and Debits
Deposits and Credits
Daily Balance
Date
No.
Amount
Date
Amount
Date
Amount

2. 10/02
6798
1,135.50
10/04
1,214.50
09/30
16,345.50
10/05
7002
815.00
10/11
2,054.55
10/02
15,210.00
10/09
7001
1,788.50
10/20
3,990.25
10/04
16,424.50
10/15
605.75
NSF
10/23
2,436.80
10/05
15,609.50

3. 10/19
7004
954.00
10/29
20.75
IN
10/09
13,821.00
10/22
7003
405.35
10/29
1,430.00
CM
10/11
15,875.55
10/25
7005
1,985.95
10/15
15,269.80
10/26
7007
310.35
10/19
14,315.80

4. 10/30
7009
1,695.15
10/20
18,306.05
10/22
17,900.70
10/23
20,337.50
10/25
18,351.55

5. 10/26
18,041.20
10/29
19,491.95
10/30
17,796.80
From Scheiffer’s Accounting Records
Cash Receipts Deposited
Date
Cash Debit
Oct
4

6. 1,214.50
11
2,054.55
20
3,990.25
23
2,436.80
9,696.10
Cash Disbursements
Check No.
Cash Credit
7001
1,788.50
7002
815.00
7003
405.35
7004

7. 954.00
7005
1,955.95
7006
880.50
7007
310.35
7008
325.10
7009
1,695.15
9,129.90
Cash
Account #101
Date
Explanation
PR
Debit
Credit
Balance
Sep
30
Balance
14,686.00

8. Oct
31
Total receipts
R12
9,696.10
24,382.10
31
Total disbursements
D23
9,129.90
15,252.20
Check #7005 was drawn correctly for $1985.95 to pay for office
equipment. The recordkeeper recorded it as a debit for Office
Equipment and a credit to Cash for $1955.95, but misread the
amount of the check, which was $1985.95. The non-sufficient
funds check for a $605.75 account payment was received from a
customer, A. B. Fransen. The company has not yet recorded the
returned check. The credit memo is the bank’s collection on a
$1450.00 note and shows the deduction of a $20.00 collection
fee. The company has not recorded the collection or the fee.
Based on the information provided, complete the following
tasks:
Prepare an October 31, 2012, bank reconciliation for the
Scheiffer Company.
SCHEIFFER COMPANY
Bank Reconciliation
October 31, 2012
[Create the bank reconciliation here.]
Make the necessary journal entries to adjust the book balance of
cash to the reconciled balance.
[Create the journal entries here.]
For distinguished performance, provide three possible reasons
why some of the numbered checks in the sequence are missing

9. from the bank statement.Exercise 3-2
Prepare journal entries for the Russell Company’s 2011 and
2012 transactions summarized below and the company’s year-
end adjustments to Bad Debts Expense. Round off all amounts
to the nearest dollar.
Note: The company uses a perpetual inventory
system.Summarized Transactions
The Russell Company began operations on January 1, 2011, and
completed several transactions that involved credit sales,
accounts receivable collections, and bad debts.2011
Sold merchandize that cost $1,350,000, on credit, for
$1,575,000. Terms n/30.
Wrote off $18,100 of accounts receivable that were
uncollectible.
Received cash in the amount of $822,500 as accounts
receivables payments.
In performing year-end account adjustments, the company
estimated that 2 percent of accounts receivables will not be
collectible.
[Create the 2011 journal entries here.]2012
Sold merchandize that cost $1,325,000, on credit, for
$1,592,000. Terms n/30.
Wrote off $24,500 of accounts receivable that were
uncollectible.
Received cash in the amount of $1,428,300 as accounts
receivables payments.
In performing year-end account adjustments, the company
estimated that 2 percent of accounts receivables will not be
collectible.
[Create the 2012 journal entries here.]Exercise 3-3
On January 1, the Hanover Beverage Company replaced the
palletizing machine on one of its juice lines. The cost of the
machine was $195,000. The machine’s expected life is five
years or 480,000 units, and its estimated salvage value is
$19,500.
The following numbers of units were produced over the next

10. four years:
Year
Units
1
121,000
2
119,500
3
122,600
4
123,000
At the end of the 4th year, the total number of units produced
exceeded expectations.
Note: Depreciation cannot drop below its estimated salvage
value.
Determine the depreciation on the palletizer for each of the four
years, as well as the combined total for all four years. Use two
of the following three methods of depreciation. For
distinguished performance, use all three methods. Round your
answers to the nearest dollar.
Straight-line.
Units-of-production.
Double-declining-balance.
[Provide the depreciation calculations here.]
1
Financial Accounting Principles
Assessment 4: Accounting for Liabilities and Equity Worksheet
Use this worksheet to complete the following three exercises for
Assessment 4. Refer to the instructions in the course for
submitting your assessment.Exercise 4-1
During 2011 and 2012, Data Resources, Inc. engaged in
financial transactions that involved short-term liabilities.
Using the financial transaction information provided below,
determine the following. Record your responses on page 2.

11. All three note maturity dates.
The interest due on all three notes on the dates they mature,
assuming a 360-day year.
The interest expense for the 2011 year-end adjusting entry.
For distinguished performance, determine the interest expense
for 2012.
Note: The company uses a perpetual inventory system.2011
Mar 19
Purchased $41,250 worth of merchandise from Chipcom, on
credit. Terms: 1/10, n/30.
April 29
Replaced the Mar 19 account payable to Chipcom with a 120-
day, $35,000 note at 7% annual interest, plus a cash payment of
$6,250.
Jun 16
Borrowed $55,000 cash from Sunnyvale Bank. Signed a 90-day,
8% interest-bearing note, with a $55,000 face value.
?
Paid Chipcom the amount due on the note on the date of
maturity.
?
Paid Sunnyvale Bank the amount due on the note on the date of
maturity.
Oct 30
Borrowed $18,000 cash from UCB Bank. Signed a 90-day, 7%
interest-bearing note, with a $18,000 face value.
Dec 31
Recorded an accrued interest adjustment on the UCB Bank
note.2012
?
Paid UCB Bank the amount due on the note on the date of
maturity.

12. Chipcom
Sunnyvale Bank
UCB
[Record your answers to item 1 here.]
Prepare journal entries for all 2011 and 2012 events and
transactions for Data Resources, Inc.Exercise 4-2
On January 1, 2012, Fromer issued $3,000,000 of 12-year, 7
percent bonds. Interest is paid semi-annually on June 30 and
December 31. The issue price was $2,592,000.
Prepare the January 1, 2012, journal entry that records the bond
issue.
Compute the following for each semi-annual period:
Cash payment.
Straight-line discount amortization.
Interest expense.
Determine the total interest expense recognized over the life of
the bonds.
Prepare the first two years of an amortization table (use the
straight-line method).
Semiannual
Period-End
Unamortized Discount
Carrying
Value
[Create your amortization table here.]
For distinguished performance, prepare journal entries for the
first two interest payments.
Exercise 4-3
Stockholders’ equity in TransWorld Inc. on December 31, 2010,
is shown below:
Common stock: 60,000 authorized shares, par
value of $15, 25,000 shares issued and outstanding.
$375,000

13. Paid-in capital in excess of par value, common stock
90,000
Retained earnings
430,000
Total equity
895,000
Stockholder equity accounts were affected by the following
transactions in 2011:
Jan 1
TransWorld purchased 2,000 treasury shares at $24/share.
Jan 7
Declared a $3/share dividend, payable on Feb 15 to the Feb 28
stockholders of record.
Feb 15
Paid the dividend (Jan 7 declaration).
May 7
Sold 800 of treasury shares for cash at $27/share.
Aug 15
Sold 1200 of treasury shares for cash at $21/share.
Sep 20
Declared a $3/share dividend, payable on Oct 15 to the Sep 30
stockholders of record.
Oct 15
Paid the dividend (Sep 20 declaration).
Dec 31
Closed the credit balance of $188,000 (from net income) in the
Retained Earnings Income Summary account.
Use the information provided to prepare the following:
Journal entries for the 2011 transactions.
December 31, 2011, retained earnings statement.
TRANSWORLD INC
Statement of Retained Earnings
For Year Ended December 31, 2011
[Create your retained earnings statement here.]
For distinguished performance, prepare the investors’ equity

14. section of TransWorld’s December 31, 2011, balance sheet.
TRANSWORLD INC
Stockholders’ Equity Section of the Balance Sheet
December 31, 2011
[Create your balance sheet here.]
1