This document provides instructions and questions for a bonus problem assignment. It includes an answer sheet for students to fill out with their responses to 20 multiple choice and calculation questions. The questions cover various accounting topics like adjusting entries, inventory cost flow methods, stockholders' equity, and bond valuation. Students are instructed to hand in just the completed answer sheet for grading.

1. Ac2001
FALL 2013 BONUS PROBLEM #4
Maximum 3 points
Please answer the questions below using the directions
provided:
· Bonus Problem due in-class ONLY. See your class schedule
for date due (papers will not be accepted after class)
· NAME, ID#, and ANSWERSmust be typed in space provided
· To make your answer easy to grade, please use the answer
sheet provided at the start of the bonus problem.
· Hand in the answer sheet only.
· Sign your name to state that you did your own work.
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ANSWER SHEET FOR BONUS #4 (to hand in)
NAME: ____________________________
ID # _______________________
CLASS TIME : ________
SIGNATURE: ____________________
1.Debit to

2. _______________ (Account Title)
For
$_______________ (Amount)
2.$_______________ (Amount)
3.$_______________ (Amount)
4.$_______________ (Amount)
5.Debit to
_______________ (Account Title)
For
$_______________ (Amount)
6.$_______________ (Amount)
7.$_______________ (Amount)
8._______________ (Method)
9._______________ (MC answer)
10.$_______________ (Amount)
11.$_______________ (Amount)
12.

3. $_______________ (Amount)
13.$_______________ (Amount)
14.$_______________ (Amount)
15.$_______________ (Amount)
16.$_______________ (Amount)
17.$_______________ (Amount)
18.$_______________ (Amount)
19.$_______________ (Amount)
20.$_______________ (Amount)
1.
The unadjusted trial balance amount for the Prepaid Rent
account on December 31, 2013, is $3,600. The rental is for
extra office space for 12 months. The rental started on April 1,
2013 and the $3,600 rental fee was paid on that date. The
required adjusting entry on December 31, 2013 would require a
Debit to
_______________ (Account Title)
For
$_______________ (Amount)
2. Ned Sales had net credit sales in June of $100,000. On June

4. 30, 2013 (before any adjustments) Accounts receivable are
$20,000 and Allowance for Doubtful Accounts has a $100 debit
balance. If Ned Sales estimates bad debt losses as 4% of net
credit sales, the net realizable value of the Accounts Receivable
AFTER the June 30, 2013 adjusting entry is:
$_______________ (Amount)
3. If Mel Corporation sells 60,000 shares of its new $1 par
value common stock to investors for $14 per share, the required
journal entry would require a credit to Common Stock for:
$_______________ (Amount)
4. Jen Industries purchased specialized equipment on July 1,
2011, that cost $85,000, has a residual value of $5,000, and a
useful life of four years. Jen uses the sum of the year’s digits
method. The depreciation expense for the year 2013 is:
$_______________ (Amount)
5.
On September 1, 2013, five months' rent income totaling $5,000
was received on an office rental. The advance collection was
originally recorded by a credit to Rental Revenue. The required
adjusting entry at December 31, 2013 would require a:

5. Debit to
_______________ (Account Title)
For
$_______________ (Amount)
USE THE FOLLOWING INFORMATION FOR QUESTIONS 6
and 7:
Janet Inc., has an inventory for notebooks on January 1 and
purchases of this item during 2013 as follows:
Jan. 1
Beginning inventory
500 units @ $3.00
Mar. 5
Purchase
600 units @ $4.00
Sept. 3
Purchase
900 units @ $5.00
Nov. 4
Purchase
700 units @ $7.00
During 2013, Janet sold 1,200 notebooks at $10.00 each.
Assume Janet uses a Periodic Inventory System.

6. 6. Using FIFO, compute the cost of goods sold on December 31,
2013. $_________.
7. Using LIFO, compute the cost of the ending inventory on
December 31, 2013. $_________.
8. During a period of falling prices, the cost flow assumption
that will generally result in the highestamount of income taxes
paid is: (State correct Inventory Cost Flow Method)
____________________
9. How would this year’s total owners’ equity be affected by a
common “stock” (not cash) dividend that had been declared and
distributed this year?
a. Decrease
b. No effect
c. cannot tell based on this information
d. Increase
(Enter your multiple choice answer A, B, C, D for question 9)
(USE THE FOLLOWING INFORMATION FOR QUESTIONS
10 and 11)

7. Bill Company (which uses a periodic inventory system)
has the following account balances after adjusting entries at
December 31, 2013:
Cash
$ 220,000
Depreciation Expense
20,000
Paid-in Capital from Treasury Stock Transactions, Common
50,000
Other Operating Expenses
45,000
Sales Discounts
5,000
Accumulated Depreciation- Equipment
30,000
Treasury Stock, Common (22,000 shares)
42,000
Preferred Stock 6% ($10 par)
85,000
Merchandise Inventory (1/1/2013)
100,000
Equipment
170,000
Accounts Receivable

8. 90,000
Paid-in Capital in Excess of Par Value, Preferred
27,000
Purchases
700,000
Interest Expense
20,000
Unearned Revenue
8,000
Purchases Returns and Allowances
15,000
Salary Expense
80,000
Paid-in Capital in Excess of Par Value, Common
90,000
Dividends
10,000
Common Stock ($1 par)
167,000
Sales
940,000
Rent Expense
67,000
Bonds Payable (due 2042)

9. 50,000
Accounts Payable
27,000
Retained Earnings (1/1/2013)
80,000
Merchandise inventory on December 31, 2013 is $130,000
10. The total stockholders’ equity at December 31, 2013 is:
$_____________ (amount)
11. The net income for 2013 is:
$_____________ (amount)
QUESTIONS 12- AND 13 ARE BASED ON THE FOLLOWING
INFORMATION:
The stockholders' equity accounts (normal balances) of the
Vermont Corp. as of December 31, 2013, appeared as follows:
Common stock, $1 par (100,000 shares authorized, 64,000
shares issued)
$64,000
Preferred Stock, 10%, $5 Par (40,000 shares authorized, 10,000
shares issued)
50,000
Paid-in capital--excess over par value, common
70,000
Retained earnings

10. 36,000
Treasury Stock (3,000 shares of common stock)
8,000
12. A stockholders' equity section prepared at December 31,
2013, would report total stockholders' equity of:
$___________.
13.
At December 31, 2013, the book value per share of the common
stock is
(Assume no preferred dividends are in arrears) (round to nearest
cent)
$___________.
USE THE FOLLOWING INFORMATION FOR QUESTIONS 14
– 16.
Selected balance sheet account balances are: MO COMPANY
December 31
20132012
Cash
$ 200,000
$ 300,000
Accounts Payable

11. 45,000
60,000
Accounts Receivable
125,000
140,000
Salaries Payable
8,000
4,000
Land
120,000
140,000
Merchandise Inventory
130,000
150,000
Prepaid Rent
52,000
45,000
Income statement items for the year are:
Sales
$800,000
Cost of Goods Sold
380,000
Salary Expense
90,000
Depreciation Expense
40,000

12. Rent Expense
100,000
14.
Cash payments to suppliers for merchandise inventory during
2013 is
$ _____________
15.
Cash collections from customers during 2013 is
$ _____________
16.
Cash payments to employees for salary during 2013 is
$_____________
USE THE FOLLOWING INFORMATION FOR QUESTIONS 17
– 20.
Assume that the following information is relevant for one of the
bond issues of Fran Company:
Face value
$900,000
Bond term
20 years

13. Stated interest rate
10% (paid semiannually)
Market interest rate
8%
Issue date
July 1, 2013
Interest payment dates
June 30 and December 31
Present Value Factors:
4%
5%
8%
10%
Present value of 1 for 20 periods
0.456
0.377
0.215
0.149
Present value of 1 for 40 periods
0.208
0.142
0.046
0.022
Present value of annuity for 20 periods
13.590
12.462

14. 9.818
8.514
Present value of annuity for 40 periods
19.793
17.159
11.925
9.779
(Use only the present value factors shown above to make
calculations.)
17. On July 1, 2013, the amount the bonds should sell for is
$___________
18. The total amount of bond interest to be paid in cash over the
life of the bonds is:
$_____________
19. The amount of interest expense for 2013 using the
effective interest method of amortization is
$__________ (show exact amount including cents)
20. The amount of bond interest paid in cash for 2014 is
$___________