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ACCT 503 Case Study 1 (Gordon
Construction)
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Case Study 1 (Part A)
Analyze the impact of business transactions on accounts; record
(journalize and post) transactions in the books; construct and use a
trial balance) During the first month of operation of Gordon
Construction, Inc., completed the following transactions:
June
2
Gordon received $55,000 cash and issued common stock to the
stockholders.
3 Purchased supplies, $3,000, and equipment, $5,200, on account.
4 Performed services for a client and received cash, $6,300.
7 Paid cash to acquire land, $37,000.
11 Performed services for a customer and billed the customer,
$1,200. Johnson expects to collect within one month.
16 Paid partial for the equipment purchased June 3 on account
$2,800.
17 Paid the telephone bill, $230.
18 Received partial payment from customer on account, $700.
22 Paid the water and electricity bills, $400.

29 Received $5,000 cash for repairing the pipes of a customer.
30 Paid employee salary, $4,300.
30 Declared and paid dividends of $3,000.
▸Requirements
• 1. Record each transaction in the journal. Key each transaction by
date. Explanations are not required.
• 2. Post the transactions to the T-accounts, using transaction dates
as posting references.
• 3. Prepare the trial balance of Gordon Construction, Inc., at
June30, 2014.
• 4. The manager asks you how much in total resources the business
has to work with and, how much it owes.
Adjust the accounts; construct the financial statements) Record the
following month end adjusting entries for Gordon Construction, Inc.
at June 30, 2014
Month end accruals at June 30, 2014:
• a. Accrued advertising revenue at June 30, $3,100.
• b. Supplies used during June, $3,090.
• c. Accrued salary expense at June 30 for Monday, Tuesday, and
Wednesday. The five-day weekly payroll is $6,100 and will be paid on
Friday.
Requirement 2
Prepare adjusted trial balance for Gordon Construction at June 30,
2014.
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ACCT 503 Case Study 2 (Williams Oil)
Case study
(Learning Objectives 2, 4: Explain the components of internal
control; evaluate internal controls) Each of the following situations
reveals an internal control weakness:
Situation a. In evaluating the internal control over inventory for the
Williams Oil Services Company, an auditor learns that the warehouse
receiving clerk is responsible for ordering parts for supply inventory
use in drilling services, counts the inventory when received at the
dock, records the receipts into the inventory ledger, and takes the
annual inventory, No supervisor reviews the receiving clerks work.
Situation b. Nicole Lopez handles employee travel and expense
reports for Scott Sales Services. With the growth in the economy, the
sales team began traveling extensively gaining new business. Because
of the heavy volume, she no longer required the sales team to provide
original airline, hotel, or car rental receipts. She told them to just
keep their meals under the $100 per day per diem and no receipts
were required. She allowed them to use their own credit cards so they
could get the frequent flyer points. She required them to turn in a
summary of the travel expenses quarterly.

Situation c. Michael Jordon is a new employee hired from Craigs List
recommended by a co-worker. Mike was hired as a Human Resource
Assistant. Mikes first day on the job he is told that he should follow
his own judgments when deciding how employee issues such as hiring
and firing of employees, sexual harassment, and ethical infractions
should be handled.
Top of Form
? Requirements
1. Identify the missing internal control characteristic in each
situation.
2. Identify each firms possible problem.
3. Propose a solution to the problem.
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ACCT 503 Case Study 3 (Wang Appliance
Store)

Construct and use a cash budget) Nathan Farmer, chief financial
officer of Wang Appliance Store, is responsible for the company?s
budgeting process. Farmer?s staff is preparing the Wang cash budget
for 2014. A key input to the budgeting process is last year?s statement
of cash flows, which follows (amounts in thousands):
Wang Appliance Store
Statement of Cash Flows
2013
(in thousands)
Cash Flows from Operating Activities
Collections from customers $51,000
Interest Received 500
Purchase of inventory (36,000)
Operating expenses (10,200)

Net cash provided by operating activities 5,300
Cash Flows from Investing Activities
Purchase of equipment
(3,500)
Purchase of investments
(500)
Sale of investments
1,000
Net cash used for investing activities
(3,000 )
Cash Flows from Financing Activities
Payment of long term
debt (400)
Issuance of Stock
2,000

Payment of cash
dividends (500)
Net cash provided by financing activities
1,000
Cash
Increase (decrease) in Cash
3,300
Cash, beginning of year 2,900
Cash, end of year
5,900
? Requirements
1. Prepare the Wang cash budget for 2014. Date the budget simply
?2014? and denote the beginning and ending cash balances as
?beginning? and ?ending.? Assume the company expects 2014 to be
the same as 2013, but with the following changes:
a. In 2014, the company expects a 20% increase in collections from
customers and a 30% increase in purchases of inventory.

b. There will be no sales of investments in 2014.
c. Wang does not plan to issue stock in 2014.
d. Wang plans to end the year with a cash balance of $5,550.
**********************************************
ACCT 503 Course Project Analysis of Nike,
Inc. and Under Armour, Inc.
Course Project: A Financial Statement Analysis
A Comparative Analysis of Nike, Inc. and Under Armour, Inc.
Below is the link for the financial statements for Nike, Inc. for the
fiscal year ending 2014. First, select 2014using the drop-down arrow
labeled Year, and then select Annual Filings using the drop-down
arrow labeled All.

You should select the 10k dated 7/15/2014,and choose to download in
PDF, Word, or Excel format.
http://investors.nike.com/investors/news-events-and-
reports/?toggle=filings
Below is the link for the financial statements for Under Armour, Inc.
for the fiscal year ending 2014.
First, select Annual using the drop-down arrow labeled View, and
then select 2015 using the drop-down arrow labeled Year.
You should select the 10k dated 2/20/2015,and choose to download it
in PDF or Excel format.

http://www.uabiz.com/sec.cfm
A sample project template is available for download from the Course
Resources page’s Course-Specific Resources section.The sample
project compares the ratio performance of Tootsie Roll and Hershey
using the 2014 financial statements of Tootsie Roll and Hershey
provided at their websites.
Description
This course contains a Course Project, where you will be required to
submit one draft of the project at the end of Week 5, and the final
completed project at the end of Week 7. Using the financial
statements for Nike, Inc. and Under Armour, Inc.,respectively, you
will calculate and compare the financial ratios listed further down
this documentfor the fiscal year ending 2014, and prepare your
comments about the two companies’performancesbased on your ratio
calculations. The entire project will be graded by the instructor at the
end of the final submission in Week 7, and one grade will be assigned
for the entire project.

Overall Requirements
For the Final Submission:
Your final Excel workbook submission should contain the following.
You cannot use any other software but Excel to complete this project.
1. A Completed Worksheet Title Page tab, which is really a cover
sheet with your name, the course, the date, your instructor’s name,
and the title for the project.
2. A CompletedWorksheetProfiles tab which contains a one-
paragraph description regarding each company with information
about their history, what products they sell, where they are
located,and so forth.

3. All 16 ratios for each company with the supporting
calculations and commentary on your Worksheet Ratio tab.
Supporting calculations must be shown either as a formula or as text
typed into a different cell.The ratios are listed further down this
document. Your comments for each ratio should include more than
just a definition of the ratio.You should focus on interpreting each
ratio number for each company and support your comments with the
numbers found in the ratios.You need to specifically state which
company performed better for each ratio.
4. The Summary and ConclusionsWorksheet tab is an overall
comparison of how each company compares in terms of the major
category of ratios described in Chapter 13 of your textbook.A nice
way to conclude is to state which company you think is the better
investment and why.
5. The Bibliography Worksheet tab must contain at least your
textbook as a reference. Any other information that you use to profile
the companies should also be cited as a reference.
Required Ratios for Final Project Submission
1. Earnings per Share of Common Stock
2. Current Ratio
3. Gross (Profit) MarginPercentage
4. Rate of Return (Net Profit Margin) on Sales

5. Inventory Turnover
6. Days’ Inventory Outstanding (DIO)
7. Accounts Receivable Turnover
8. Days’ Sales Outstanding (DSO)
9. AssetTurnover
10. Rate of Return on Total Assets (ROA)
11. Debt Ratio
12. Times-Interest-Earned Ratio
13. Dividend Yield[For the purposes of this ratio, use Yahoo
Finance to look up current dividend per share and stock price; just
note the date that you looked up this information.]
14. Rate of Return on Common Stockholders’ Equity (ROE)
15. Free cash flow

16. Price-Earnings Ratio (Multiple) [For the purpose of this ratio,
for Nike, use the market price per share on May 30, 2014,and for
Under Armour, use the market price per share on December 31,
2014.]
The Excel files uploaded in the Dropboxes should not include any
unnecessary numbers or information (such as previous years' ratios,
ratios that were not specifically asked for in the project, etc.).
**********************************************
ACCT 503 Course Project Oracle and
Microsoft Corporation
Course Project
Financial Statement Analysis Project -- A Comparative Analysis of
Oracle Corporation and Microsoft Corporation
Here is the link for the financial statements for Oracle Corporation
for the fiscal year ending 2007. First, select 2007 using the drop-
down arrow labeled for Year on the right-hand side of the page, and
then select Annual Reports using the drop-down arrow labeled Filing
Type on the left-hand side of the page.

You should select the 10k dated 6/29/2007 and choose to download in
PDF, Word, or Excel format.
http://www.oracle.com/us/corporate/investor-relations/sec/index.html
Here is the link for the financial statements for Microsoft Corporation
for the fiscal year ending 2007. You should select the Annual report
dated 8/3/2007 and choose to download in Word or Excel format.
http://www.microsoft.com/investor/SEC/default.aspx?year=2007
A sample Project template is available for download in Doc Sharing.
The sample project compares the ratio performance of Tootsie Roll
and Hershey using the 2007 financial statements of Tootsie Roll and
Hershey provided in Appendix A and Appendix B of your textbook.
Description | Overall Requirements | Grade Information
Description
This course contains a course project where you will be required to
submit one draft of the project at the end of Week 5 and the final
statements for Oracle Corporation and Microsoft Corporation,
respectively, you will calculate and compare the financial ratios listed
further down this document for the fiscal year ending 2007 and
prepare your comments about the liquidity, solvency and profitability

of the two companies based on your ratio calculations. The entire
project will be graded by the instructor at the end of the final
submission in week 7 and one grade will be assigned for the entire
project.
You cannot use any other software but Excel to complete this Project.
1. A completed worksheet title page tab which is really a cover
sheet with your name, my name, the class name, and the date.
2. A completed worksheet profiles tab which contains a one
about their history, what products they sell, where they are located
etc.

3. All 18 ratios for each company with the supporting
calculations and commentary on your worksheet ratio tab. Supporting
calculations must be shown either as a formula or as text typed into a
different cell. The ratios are listed further down this document. Your
comments for each ratio should include more than just a definition of
the ratio. You should focus on interpreting each ratio number for
each company and support your comments with the numbers found in
the ratios.
4. The Summary and Conclusions worksheet tab which is an
overall comparison of how each company compares in terms of the
major category of ratios (Liquidity, Profitability, and Solvency).
5. The Bibliography worksheet tab must contain at least your
textbook as a reference. Any other information you use to profile the
companies should also be cited as a reference.
Required Ratios for Final Project Submission:
1. Earnings per Share
2. Current Ratio
3. Gross Profit Rate
4. Profit Margin Ratio
5. Inventory Turnover Ratio

6. Days in Inventory
7. Receivables Turnover Ratio
8. Average Collection Period
9. Asset Turnover Ratio
10. Return on Assets Ratio
11. Debt to Total Assets Ratio
12. Times Interest Earned Ratio
13. Payout ratio
14. Return on Common Stockholders' Equity Ratio
15. Free Cash Flow
16. Current Cash Debt Coverage Ratio

17. Cash Debt Coverage Ratio
18. Price/Earnings Ratio [For the purpose of this ratio, use the
market price per share on June 1, 2007 for each company]
The Excel files uploaded to the Dropbox should not include any
Please upload your final submission to the Dropbox by the end of
Week 7. See Syllabus/"Due Dates for Assignments & Exams" for due
date information.
For the Draft:
Create an Excel spreadsheet or use the Project template to show your
computations for the first 12 ratios listed above. The more you can
complete regarding the other requirements the closer you will be to
completion when Week 7 arrives. Supporting calculations must be
shown either as a formula or as text typed into a different cell. If you
plan on creating your own spreadsheet, please follow the format
provided in the Tootsie Roll and Hershey template file.
Please upload your draft submission to the Dropbox by the end of
Week 5. See Syllabus/"Due Dates for Assignments & Exams" for due
date information.
**********************************************

ACCT 503 Entire Course
ACCT 503 Week 1-7 All Discussion Questions
ACCT 503 Week 3 Case Study 1 Flower Landscaping Corporation
ACCT 503 Week 4 Midterm Exam Set 1
ACCT 503 Week 4 Midterm Set 2
ACCT 503 Week 4 Midterm Set 3
ACCT 503 Week 5 Case Study 2 Internal Control - LJB Company
ACCT 503 Week 5 Course Project Draft Spreadsheet
ACCT 503 Week 6 Case Study 3 - Cash Budgeting - LBJ Company
ACCT 503 Week 7 Course Project JCP Kohls

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ACCT 503 Final Exam (3 different finals)
1. (TCO A) Which one of the following is an advantage of
corporations relative to partnerships and sole proprietorships?
(Points : 5)
Reduced legal liability for investors
Harder to transfer ownership
Lower taxes
Most common form of organization
2. (TCO A) When a corporation distributes a dividend, _____. (Points
: 5)
the most common form of distribution is a cash dividend
the Dividends account will be increased with a credit
the Retained Earnings account will be directly increased with a debit
the Dividends account will be decreased with a debit
3. (TCOs A, B) Below is a partial list of account balances for Cerner
Company:

Cash $5,000
Prepaid insurance 500
Accounts receivable 2,500
Accounts payable 2,000
Notes payable 3,000
Common stock 1,000
Dividends 500
Revenues 15,000
Expenses 12,500
What did Cerner Company show as total credits? (Points : 5)
$21,500
$21,000
$20,500
$22,000
4. (TCOs B, E) Using accrual accounting, expenses are recorded and
reported only _____. (Points : 5)
when they are incurred, whether or not cash is paid
when they are incurred and paid at the same time
if they are paid before they are incurred
if they are paid after they are incurred

5. (TCO D) Three companies report the same cost of goods available
for sale, but each employs a different inventory costing method. If the
price of goods has increased during the period, then the company
using _____. (Points : 5)
LIFO will have the highest ending inventory
FIFO will have the highest cost of goods sold
All three companies will have the same value for ending inventory.
average cost will have an ending inventory value that falls between
FIFO and LIFO
6. (TCOs A, E) Equipment with a cost of $192,000 has an estimated
salvage value of $18,000 and an estimated life of 4 years or 12,000
hours. It is to be depreciated by the straight-line method. What is the
amount of depreciation for the first full year, during which the
equipment was used 3,300 hours? (Points : 5)
$48,000
$52,500
$49,500
$43,500
7. (TCOs D, G) Joyce Corporation issues 1,000 ten-year, 8%, $1,000
bonds dated January 1, 2007, at 102. The journal entry to record the
issuance will show a _____. (Points : 5)
debit to Cash of $1,020,000
debit to Discount on Bonds Payable for $20,000
credit to Bonds Payable for $1,020,000
credit to Cash for $1,000,0008.(TCO C) Accounts receivable arising
from sales to customers amounted to $80,000 and $70,000 at the

beginning and end of the year, respectively. Income reported on the
income statement for the year was $240,000.Exclusive of the effect of
other adjustments, the cash flows from operating activities to be
reported on the statement of cash flows is _____. (Points : 5)
$240,000
$250,000
$310,000
$230,000
9. (TCO F) One variation of the horizontal analysis is known as
_____. (Points : 5)
nonlinear analysis
vertical analysis
trend analysis
common-size analysis
10. (TCO F) Comparisons of data within a company are an example
of the following comparative basis. (Points : 5)
Industry averages
Intercompany
Intracompany
Interregional
11. (TCO F) Which one of the following is not a characteristic
generally evaluated in ratio analysis? (Points : 5)
Liquidity

Profitability
Marketability of the product
Solvency
12. (TCO F) Short-term creditors are usually most interested in
assessing _____. (Points : 5)
solvency
liquidity
marketability
profitability
13. (TCO F) Long-term creditors are usually most interested in
evaluating _____. (Points : 5)
liquidity
marketability
profitability
solvency
14. (TCO G) To calculate the market value of a bond, we need to
_____. (Points : 5)
find out the present value of all of the future cash payments promised
by the bond
calculate the present value of the principal only
calculate the present value of the interest only
multiply the bond price by the interest rate

1. (TCO A) Which one of the following is an advantage of
corporations relative to partnerships and sole proprietorships?
(Points : 5)
Reduced legal liability for investors
Harder to transfer ownership
Lower taxes
Most common form of organization
: 5)
3. (TCOs A, B) Below is a partial list of account balances for Cerner
Company:
Cash $5,000

Notes payable 3,000
Common stock 1,000
Dividends 500
Revenues 15,000
Expenses 12,500
What did Cerner Company show as total credits? (Points : 5)
$21,500
$21,000
$20,500
$22,000
4. (TCOs B, E) A small and private company may be able to justify
using a cash basis of accounting if it has _____. (Points : 5)
sales under $1,000,000
no accountants on staff
insignificant receivables and payables
all sales and purchases on account

5. (TCO D) Three companies report the same cost of goods available
for sale, but each employs a different inventory costing method. If the
price of goods has increased during the period, then the company
using _____. (Points : 5)
LIFO will have the highest ending inventory
FIFO will have the highest cost of goods sold
All three companies will have the same value for ending inventory.
average cost will have an ending inventory value that falls between
FIFO and LIFO
6. (TCOs A, E) Equipment was purchased for $60,000. Freight
charges amounted to $2,800 and there was a cost of $8,000 for
building a foundation and installing the equipment. It is estimated
that the equipment will have a $12,000 salvage value at the end of its
5-year useful life. Depreciation expense each year using the straight-
line method will be _____. (Points : 5)
$14,160
$11,760
$9,840
$9,600

7. (TCOs D, G) Mendez Corporation issues 2,000 ten-year, 8%,
$1,000 bonds dated January 1, 2007, at 103. The journal entry to
record the issuance will show a _____. (Points : 5)
debit to Cash of $2,000,000
debit to Premium on Bonds Payable for $60,000
credit to Bonds Payable for $2,000,000
credit to Cash for $2,060,000
8. (TCO C) Accounts receivable arising from sales to customers
amounted to $35,000 and $40,000 at the beginning and end of the
year, respectively. Income reported on the income statement for the
year was $120,000. Exclusive of the effect of other adjustments, the
cash flows from operating activities to be reported on the statement of
cash flows is_____. (Points : 5)
$120,000
$125,000
$155,000
$115,000
9. (TCO F) One variation of the horizontal analysis is known as
_____. (Points : 5)

nonlinear analysis
vertical analysis
trend analysis
common-size analysis
10. (TCO F) In a common-size balance sheet, the 100% figure is
_____. (Points : 5)
total current assets
total property, plant, and equipment
total liabilities
total assets
11. (TCO F) In vertical analysis, the base amount for studying salary
and wages expense is generally _____. (Points : 5)
net sales
salary and wages expense in a previous year
gross profit
net income

12. (TCO F) A common measure of profitability is the _____. (Points
: 5)
current ratio
current cash debt coverage ratio
return on common stockholder's equity ratio
debt to total assets
13. (TCO F) Return-on-assets ratio is most closely related to _____.
(Points : 5)
profit margin and debt-to-total-assets ratio
profit margin and asset-turnover ratio
times interest earned and debt-to-stockholders equity ratio
profit margin and free cash flow
_____. (Points : 5)
by the bond

1. (TCO A) An advantage of the corporate form of business is that
_____. (Points : 5)
it has limited life
its owner's personal resources are at stake
its ownership is easily transferable via the sale of shares of stock
it is simple to establish
: 5)
3. (TCOs A, B) Below is a partial list of account balances for Denton
Company:
Cash $7,000

Notes payable 4,200
Common stock 1,400
Dividends 700
Revenues 21,000
Expenses 17,500
What did Denton Company show as total credits? (Points : 5)
$30,100
$29,400
$28,700
$30,800
4. (TCOs B, E) A small and private company may be able to justify
using a cash basis of accounting if it has _____. (Points : 5)
sales under $1,000,000
no accountants on staff
insignificant receivables and payables
all sales and purchases on account
5. (TCO D) In a period of increasing prices, which inventory cost
flow assumption will result in the lowest amount of income tax
expense? (Points : 5)

FIFO
LIFO
The average cost method
Income tax expense for the period will be the same under all
assumptions.
6. (TCOs A, E) Equipment was purchased for $60,000. Freight
charges amounted to $2,800 and there was a cost of $8,000 for
building a foundation and installing the equipment. It is estimated
that the equipment will have a $12,000 salvage value at the end of its
5-year useful life. Depreciation expense each year using the straight-
line method will be _____. (Points : 5)
$14,160
$11,760
$9,840
$9,600
7. (TCOs D, G) Lopez Corporation issues 500 ten-year, 8%, $1,000
bonds dated January 1, 2007, at 96. The journal entry to record the
issuance will show a _____. (Points : 5)
debit to Cash of $500,000
credit to Discount on Bonds Payable for $20,000
credit to Bonds Payable for $480,000

debit to Cash for $480,000
8. (TCO C) Accounts receivable arising from sales to customers
amounted to $35,000 and $40,000 at the beginning and end of the
year, respectively. Income reported on the income statement for the
year was $120,000. Exclusive of the effect of other adjustments, the
cash flows from operating activities to be reported on the statement of
cash flows is _____. (Points : 5)
$120,000
$125,000
$155,000
$115,000
9. (TCO F) Which one of the following is not a tool in financial
statement analysis? (Points : 5)
Horizontal analysis
Circular analysis
Vertical analysis
Ratio analysis
10. (TCO F) In vertical analysis, the base amount for studying salary
and wages expense is generally _____. (Points : 5)
net sales

salary and wages expense in a previous year
gross profit
net income
11. (TCO F) Ratios are most useful in identifying _____. (Points : 5)
trends
differences
causes
relationships among different numbers
12. (TCO F) A common measure of liquidity is _____. (Points : 5)
return on assets
current ratio
profit margin
debt to equity
13. (TCO F) Return-on-assets ratio is most closely related to _____.
(Points : 5)
profit margin and debt-to-total-assets ratio
profit margin and asset-turnover ratio
times interest earned and debt-to-stockholders equity ratio

profit margin and free cash flow
_____. (Points : 5)
by the bond
1. (TCO A) Below you will find selected information (in millions)
from Coca-Cola Co.’s 2012 Annual Report:
................................................................................................................
.........................................................
Required:
1. Using the information provided prepare a Balance Sheet. Separate
the current assets from non-current assets and provide a total for
each. Also separate the current liabilities from the non-current
liabilities and provide a total for each.
2. Using the Balance Sheet from your answer above calculate;
Current Ratio, Days in Inventory, Average Collection Period, Return
on Assets Ratio, Debt to Total Assets and Return on common
stockholders’ equity ratio. (Make sure to show all your work)

2. (TCO B) The following selected data was retrieved from the Wal-
Mart, Inc. financial statements for the year ending January 31, 2013:
................................................................................................................
........................................................................................................
Required:
Using the information provided above:
1. Prepare a multiple-step income statement
2. Calculate the Profit Margin, and Gross profit rate for the company.
Be sure to provide the formula you are using, show your calculations,
and discuss your findings/results.
3. (TCO C) Please review the following real-world Hewlett Packard
Statement of Cash flows and address the 2 questions below:
................................................................................................................
................................................................................................
Required:
1) Please calculate the percentage increase or decrease in cash for
the operating, investing, and financing sections and explain the major
reasons for the increase or decrease for each of these sections.

2) Please calculate the free cash flow for 2012 and explain the
meaning of this ratio.
4. (TCO D) You are CFO of Goforit, Inc., a wholesale distribution
company specializing in emerging technologies. Your CEO is a
brilliant marketer, but relies on you to explain issues and choices in
accounting and finance. She has heard from other members of a CEO
organization to which she belongs that a company’s net income can
vary widely depending on which accounting choices are made from
the “GAAP menu.”
Assuming the goal is to maximize net income, choose an accounting
treatment from each of the following scenarios, and explain to your
CEO why the choice will produce the desired effect on reported Net
Income for the current year. Include in your answer the effect of the
choice on both the income statement and balance sheet.
Required:
a. Goforit carries significant electronics inventory in a competitive
environment where prices are actually falling. Which inventory
valuation method would you choose—LIFO, FIFO, or average cost?
Assume that unit purchases exceed unit sales.
b. Goforit has a large investment in warehouse equipment including
conveyor belts, forklifts, and automated packaging systems. Which
depreciation method would you choose: Straight line (SL) or double
declining balance (DDB)?

5. (TCO F) Please review the following real-world ratios for Johnson
& Johnson and Pfizer for the year ended 2012 and address the 2
questions below.
................................................................................................................
..................................................................................................
Required:
1) Please explain the meaning of each of the Pfizer ratios above.
2) Please state which company performed better for each ratio.
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ACCT 503 Final Exam Guide (2 Set, New
2019)
This Tutorial contains 2 Set of Final Exam

Question 1.1. (TCO D) Please describe the purpose of the Income
Statement and the interrelationship between the income statement and
the other major financial statements that we covered in this class. In
your answer, please also address which financial statements should
be created before the Income Statement, if any, and which financial
statements need to be completed after the Income Statement, if any.
(Points : 25)
Question 1—Set 2
1. Please describe the purpose of the Balance Sheet and the
interrelationship between the balance sheet and the other major
financial statements that we covered in this class. In your answer,
please also address which financial statements should be created
before the Balance Sheet, if any, and which financial statements need
to be completed after the Balance Sheet, if any
Question 2.2. (TCO E) Your friend, Lisa, plans to open a nail salon.
Lisa states that she does not have time to develop and implement a
system of internal controls.
(a) Explain to Lisa the components of internal control. (10 points)
(b) Explain to Lisa at least 5 internal control procedures she must
establish to protect herself against fraud. You should state specific
internal control procedures from the textbook, and relate your answer
to her nail salon business. (15 points) (Points : 25)
Q-2-Set 2
2. Your friend, John, plans to open a parking garage business. John
states that he does not have time to develop and implement a system
of internal controls.
(a) Explain to John the objectives of a system of internal control.

(b) Explain to John at least 5 internal control procedures that he must
establish to protect himself against fraud. You should state specific
internal control procedures from the textbook and relate your answer
to his parking garage business.
solution
Question 3. (TCO A) The following items are taken from the financial
statements of PQR Company for 2013:
Cash $100,000
Instructions:
(1) Create a classified balance sheet in good form for the year ended
2013. (30 points)
(2) Calculate the current ratio and debt ratio and explain your
findings. (6 points) (Points : 36)
Question 3—Set 2
(TCO H) Corporations in need of cash can either issue stock or bonds
to raise capital. What are the differences between these two activities
and why might a company choose one over the other? (Points : 20)

Q-3 Set 3
Question 4.4. (TCO A) The following items are taken from the
financial statements of BCT Company for 2013:
Instructions:
(1) Create a classified balance sheet in good form for the year ended
2013. (30 points)
(2) Calculate the current ratio and debt ratio and explain your
findings. (6 points) (Points : 36)
Question 4. (TCO B) The Caldor Company gathered the following
condensed data for the year ended December 31, 2014:
Instructions:
(1) Prepare a multiple-step income statement for the year ended
December 31, 2014. (30 points)
(2) Compute the gross margin percentage and net profit margin ratio.
Caldor Company’s assets at the beginning of the year were $900,000,
and the assets were $950,000 at the end of the year. To qualify for full
credit, you must state the formula you are using, show your
computations, and explain your findings. (6 points) (Points : 36)
Q-4 Set 2

Question 3.3. (TCO H) Simpson Inc. purchased 5, $4,000, 11% bonds
of Hillsdale Corporation when the market rate of interest was 10%.
Interest is paid semiannually on the bonds, and the bonds mature in 4
years.
Instructions:
Compute the total price paid by Simpson Inc. for the bonds showing
your calculation for the present value of the principal and the present
value of the interest payments.
Present value tables (Exhibit 8-14 and Exhibit 8-15) are available on
pages 452 and 453 of your Harrison, Horngren, and Thomas
textbook. NOTE: Be sure you review the PV Tables completely to
ensure you find the correct period and interest rate for the
calculation. (Points : 20)
Question 5. (TCO C) This is a 2-part question.
Part 1) Indicate which section of the statement of cash flows should
contain each of the following items, and whether each item would
result in an inflow or outflow of cash. The sections are Operating,
Investing, and Financing. (30 points)
Part 2) Please explain how to calculate free cash flow and the
importance of free cash flow to investors. (6 points) (Points : 36)
Q-5 Set 2
5. The Alpha Company gathered the following condensed data for the
year ended December 31, 2014:

Instructions:
(1) Prepare a multiple-step income statement for the year ended
December 31, 2014.
(2) Compute the gross margin percentage and net profit margin ratio.
Alpha Company’s assets at the beginning of the year were
$1,500,000, and the assets were $1,400,000 at the end of the year. To
qualify for full credit, you must state the formula you are using, show
your computations, and explain your findings.
Question 6. (TCO F) This is a 2-part question.
Part 1) Journalize the adjusting entries below at year-end December
31, XXXX. Please share your supporting calculations for the
adjusting entries requiring computations.
(a) The unadjusted balance of the Supplies account is $2,200. The
total cost of supplies remaining is $1,000.
(b) Accrued Service Revenue of $9,000.
(c) Equipment was purchased at the beginning of the year for
$45,000. The equipment’s useful life is 5 years, and the residual value
is $5,000. Record the depreciation for this year.
(d) The weekly payroll is $25,000. Employees are owed for 3 days of
a 5-day work week.
(e) Beginning unearned service revenue is $7,500, and ending
unearned service revenue is $3,500.
(f) The business has interest expense of $750 that is due in January.
(30 points)

Q-7
(TCO G) Please review the following 6 ratios for Langley Company
and XYZ Inc. for the year ended 2014, and address the 2 questions
below.
Instructions: This is a 2-part question.
(1) Explain the meaning of each of the Langley Company ratios
above. (18 points)
(2) State which company performed better for each ratio. (18 points)
(Points : 36)
Question 7 – Set 2
(TCO F) This is a 2-part question.
Part 1) Journalize the adjusting entries below at year-end December
31, XXXX. Please share your supporting calculations for the
adjusting entries requiring computations.
Beginning prepaid insurance, $500. Payments for insurance during
the period are $900. Ending prepaid insurance is $600.
(b) Interest revenue of $1,500 has been earned but not yet received.
(c) Accrued Service Revenue of $12,000
(d) The weekly payroll is $20,000. Employees are owed for 4 days of
a 5-day work week.

The unadjusted balance of the Supplies account is $1,200. The total
cost of supplies remaining is $300.
(f) Equipment was purchased at the beginning of the year for $25,000.
The equipment’s useful life is 5 years, and the residual value is
$5,000. Record the depreciation for this year.
Question 8.8.
(TCO G) Please review the following 6 ratios for Johnson Company
and Lee Enterprises for the year ended 2014, and address the 2
questions below.
Instructions: This is a 2-part question.
(1) Explain the meaning of each of the Johnson Company ratios
above. (18 points)
(2) State which company performed better for each ratio. (18 points)
(Points : 36)
**********************************************
ACCT 503 Group Course Project (A
Comparative Analysis of Celgene
Corporation and Gilead Sciences, Inc)
Group Course Project: A Financial Statement Analysis

A Comparative Analysis of Celgene Corporation and Gilead Sciences,
Inc.
Groups
The students will be assigned to work in teams of two no later than
Week 2. The teams will be required to collaborate at least three weeks
on the project using a collaboration tool, such as Cisco Spark, or
similar technology, and provide evidence of use of the tool. It will be
recommended that the students begin their project no later than week
5, when the draft is due, and continue through the end of week 7,
when the final project is to be delivered.

Financial Statements
Below is the link for the financial statements for Celgene Corporation
http://ir.celgene.com/sec.cfm?view=all
When you arrive at this website, please do the following.
First, under View, select Annual Filings using the drop-down arrow
labeled All Filings and then select 2016 using the drop-down arrow
labeled Year,

You should select the 10k dated 2/11/2016 and choose to download in
PDF, HTML, or Excel format. The PDF format is the best format for
searching.
Below is the link for the financial statements for Gilead Sciences, Inc.
http://investors.gilead.com/phoenix.zhtml?c=69964&p=irol-sec
First, select 2016 under the Year filter using the drop-down arrow
labeled All Years and then select Annual filings under the Groupings
filter using the drop-down arrow labeled All Forms. Press the large
Search button to access the requested annual filing for 2016.

You should select the 10k dated 2/24/2016,and choose to download it
in PDF, Word, or Excel format. The PDF format is the best format for
searching.
A sample project template is available for download from the Course
Resources page’s Course-Specific Resources section. The sample
project compares the ratio performance of Tootsie Roll and Hershey
using the 2014 financial statements of Tootsie Roll and Hershey
provided at their websites.
Description
This course contains a Course Project, where you will be required to
submit one draft of the project at the end of Week 5, and the final
statements for Celgene Corporation and Gilead Sciences, Inc.,
respectively, you will calculate and compare the financial ratios listed
further down this document for the fiscal year ending 2015, and
prepare your comments about the two companies’ performances

based on your ratio calculations. The entire project will be graded by
the instructor at the end of the final submission in Week 7, and one
grade will be assigned for the entire project.
You cannot use any other software but Excel to complete this project.
1. A Completed Worksheet Title Page tab, which is really a cover
sheet with your name, the course, the date, your instructor’s name,
and the title for the project.
2. A Completed Worksheet Profiles tab which contains a one-

about their history, what products they sell, where they are located,
and so forth.
3. All 16 ratios for each company with the supporting calculations
and commentary on your Worksheet Ratio tab. Supporting
calculations must be shown either as a formula or as text typed into a
different cell. The ratios are listed further down this document. Your
comments for each ratio should include more than just a definition of
the ratio. You should focus on interpreting each ratio number for
each company and support your comments with the numbers found in
the ratios. You need to specifically state which company performed
better for each ratio.
4. The Summary and Conclusions Worksheet tab is an overall
comparison of how each company compares in terms of the major
category of ratios described in Chapter 13 of your textbook. A nice
way to conclude is to state which company you think is the better
investment and why.
5. The Bibliography Worksheet tab must contain at least your
textbook as a reference. Any other information that you use to profile
the companies should also be cited as a reference.

Required Ratios for Final Project Submission
1. Earnings per Share of Common Stock
Current Ratio
Gross (Profit) Margin Percentage
Rate of Return (Net Profit Margin) on Sales
Inventory Turnover
Days’ Inventory Outstanding (DIO)
7. Accounts Receivable Turnover
8. Days’ Sales Outstanding (DSO)

Asset Turnover
Rate of Return on Total Assets (ROA)
Debt Ratio
Times-Interest-Earned Ratio
Dividend Yield [For the purposes of this ratio, use Yahoo Finance to
look up current dividend per share and stock price; just note the date
that you looked up this information.]
Rate of Return on Common Stockholders’ Equity (ROE)
Free cash flow
Price-Earnings Ratio (Multiple) [For the purpose of this ratio, look
up the market price per share as of December 31, 2015 for Celgene
Corporation and for Gilead Sciences, Inc..]
The Excel files uploaded in the Dropboxes should not include any
Please upload your final submission to the Week 7 Dropbox by the
Sunday ending Week 7.

For the Draft:
Create an Excel spreadsheet or use the project template to show your
computations for the first 10 ratios listed above. The more you can
complete regarding the other requirements, the closer you will be to
completion when Week 7 arrives. Supporting calculations must be
shown either as a formula or as text typed into a different cell. If you
plan on creating your own spreadsheet, please follow the format
provided in the Tootsie Roll and Hershey template file.
Please upload your draft submission to the Week 5 Dropbox by the
Sunday at the end of Week 5.
Other Helpful Information:

If you feel uncomfortable with Excel, you can find many helpful
tutorials on Excel by performing a Google search.
Chapter 13 contains ratio calculations and comparison comments
related to Apple and Dell, so you will likely find this information
helpful.
BigCharts.com provides historical stock quotes.
Either APA or MLA style can be used to complete the references on
your Bibliography tab. There is a tutorial for APA and MLA style
within the Plagiarism link, which can be accessed through the
Syllabus.

Grade Information
The entire project will be graded by the instructor at the end of the
final submission in Week 7, and one grade will be assigned for the
entire project. The project will count for 15% of your overall course
grade.
**********************************************
ACCT 503 Midterm Exam (4 Sets, 2019)
This Tutorial contains 4 Set of Midterm Exam

1. Question : (TCOs A and E) Your friend, Ellen, has hired you to
evaluate the following internal control procedures.
Explain to your friend whether each of the numbered items below is
an internal control strength or weakness. You must also state which
internal control procedure relates to each of the internal controls.
For the weaknesses, you also need to state a recommendation for
improvement.
(1) The cashier counts the total receipts and reconciles the receipts
with the cash register total.
(2) Electronic documents are password-protected.
(3) The accountant is completely independent of the sales department.
(4) Invoices are not numbered.
(5) Large purchase orders must be approved by a manager.
TCOs A and E) Your friend, Ellen, has hired you to evaluate the
following internal control procedures.

Explain to your friend whether each of the numbered items below is
an internal control strength or weakness. You must also state which
internal control procedure relates to each of the internal controls.
For the weaknesses, you also need to state a recommendation for
improvement.
(1) The cashier counts the total receipts and reconciles the receipts
with the cash register total.
(2) Electronic documents are password-protected.
(3) The accountant is completely independent of the sales department.
(4) Invoices are not numbered.
(5) Large purchase orders must be approved by a manager. (Points :
30)
Set 2
1: Invoices are pre-numbered.
2: The controller approves of the purchases and makes the payment
since he or she is familiar with the purchases.
3: The office manager is in charge of the petty cash fund.
4: Blank checks are stored in the safe.
5: At the end of the day, the total receipts are counted by the cashier
on duty and reconciled to the cash register total. (Points : 30)
Set 3

Invoices are pre-numbered.
The controller approves of the purchases and makes the payment
since he
or she is familiar with the purchases.
The office manager is in charge of the petty cash fund.
Blank checks are stored in the safe.
At the end of the day, the total receipts are counted by the cashier on
duty
and reconciled to the cash register total
Set 4
Question 14. Question : (TCO D) Your friend Dean has hired you to
evaluate the following internal control procedures.
a: Explain to your friend whether each of the numbered items below
is an internal control strength or weakness. You must also state which
principle relates to each of the internal controls.
b: For the weaknesses, you also need to state a recommendation for
improvement.
1: Bonding of the cashiers is not required because all of the cashiers
have significant experience.
2: The treasurer is the only one allowed to sign checks.
3: All employees may operate cash registers.
4: Blank checks are stored in the safe.

5: Supervisors count cash receipts daily.
12. (TCOs E and F) Please prepare the following journal entries.
Indicate which account should be debited and which account should
be credited, along with the dollar amount of the debit and credit.
(1) Investors invest $500,000 in exchange for 50,000 shares of
common stock.
(2) Company purchased equipment for $25,000 on account.
(3) Company paid Rent for $4,000.
(4) Company received $15,000 for services not yet performed.
(5) Employees work Monday through Friday and are paid on Friday.
Salary expense is $10,000 per day and this year, December 31 falls
on a Wednesday. (Points : 30)
Set 2
Question
Please prepare the following journal entries. Indicate which account
should be debited and which account should be credited, along with
the dollar amount of the debit and credit.
common stock.
(2) Company made payment on account for $500.

Salary expense is $20,000 per day, and December 31 falls on a
Tuesday.
(4) Company purchased Supplies for $2,000.
(5) The company needs to record Supplies used for $500.
Set 3
13. Question : (TCOs D and E) Please prepare the following journal
entries. Indicate
which account should be debited and which account should be
credited,
along with the dollar amount of the debit and credit.
Investors invest $50,000 in exchange for 1,000 shares of common
stock.
Company purchased equipment for $10,000 on credit.
Company received $5,000 for services performed.
Company made payment on account for $2,000.
Set 4
Question 13. Question : (TCO D and TCO E) Please prepare the
following journal entries. Indicate which account should be debited
and which account should be credited, along with the dollar amount
of the debit and credit.
a: Investors invest $100,000 in exchange for 10,000 shares of
common stock.

b: Company paid a utility bill for $600.
c: Company received cash of $15,000 for services performed.
d: Company made payment on account for $1,000.
e: Company received $12,000 for services not yet performed.
Set 5
Question 12. Question : (TCOs B and D) Please prepare the
following journal entries. Indicate which account should be debited
and which account should be credited, along with the dollar amount
of the debit and credit.
common stock.
(2) Company made payment on account for $500.
Salary expense is $20,000 per day, and December 31 falls on a
Tuesday.
(4) Company purchased Supplies for $2,000.
(5) The company needs to record Supplies used for $500.
Question 3
.The following items are taken from the financial statements of BGS
Company for 2012:

Cash $500,000
Accounts Receivable 200,000
Supplies 70,000
Accounts Payable 147,300
Unearned Service Revenue 18,000
Equipment, net of accumulated depreciation 212,000
Common Stock 500,000
Retained Earnings 12/31/2011 78,300
Long-term debt 142,400
Service revenue 240,000
Cost of Goods Sold 72,000
Rent expense 36,000
Supplies expense 12,000
Set 2
14. (TCO D) The following items are taken from the financial
statements of SRW Company for 2012:
Cash $375,000
Prepaid Insurance 100,000

Question 4
13. (TCOs B and D) The following items are taken from the financial
statements of Lacey Company for 2012:
Advertising Expense $14,000
Accumulated Depreciation—Equipment 20,000
Cash 44,000
Depreciation Expense 17,000
Common Stock 100,000
Instructions
(a) Calculate the net income. (18 points)

(b) Calculate the balance of Retained Earnings that would appear on
a balance sheet at December 31, 2012. (7 points)
(c) Calculate the gross profit percentage. (5 points) (Points : 30
Lacey Company
Income Statement
Question 13. Question : (TCOs B and D) The following items are
taken from the financial statements of Ashe Company for 2012:
Equipment $100,000
Utilities Expense 11,000
Insurance Expense 9,000
Question 14. Question : (TCO D) The following items are taken from
the financial statements of BGS Company for 2012:
Cash $500,000
Supplies 70,000

Instructions
(a) Please create a classified balance sheet in good form for the year
ended 2012. (25 points)
(b) Please calculate the current ratio. (5 points)
Question 12. Question : (TCOs B and E) The adjusted trial balance of
Gertz Company included the following selected accounts.
Debit Credit
Sales $575,000
Sales returns and allowances $ 50,000
Sales discounts 9,500
Cost of goods sold 347,000

Instructions:
1: Use the above information to prepare a multiple-step income
statement for the year ended December 31, 2010.
2: Calculate the profit margin ratio and gross profit rate. To qualify
for full credit, you must state the formula you are using, show your
computations, and explain your findings.
Question 11. Question : (TCO D) A classmate is considering
dropping his or her accounting class because he or she cannot
understand the rules of debits and credits.
Explain the rules of debits and credits in a way that will help him or
her understand them. Cite examples for each of the major sections of
the balance sheet (assets, liabilities and stockholders' equity) and the
income statement (revenues and expenses).
11. Question : (TCO D) Describe the process of preparing a trial
balance. What is the
purpose of preparing a trial balance? If a trial balance does not
balance,
identify what might be the reasons why it does not balance. If the trial
balance does balance, does that ensure that the ledger accounts are
correct? Explain.

1. Question : (TCO D) An account is an important accounting record
where financial information is stored until needed. Briefly explain (1)
the nature of an account, (2) the different types of accounts, and (3)
the manner in which an account is increased and decreased, and the
normal balance of each type of accounts.
Question 1.1. (TCO A) Assets include (Points : 3)
prepaid insurance and prepaid rent.
dividends paid to shareholders.
loans obtained by the company.
stockholders’ investment in the business.
Question 2.2. (TCO B) For 2014, CAP Corporation reported net
income of $96,000; net sales $1,440,000; and weighted average
shares outstanding of 9,600. There were no preferred dividends. What
was the 2014 earnings per share? (Points : 3)
$100.00
$150.00
$10.00
$15.00
Question 3.3. (TCO C) Issuing debt is an example of a(n) (Points : 3)

operating activity.
investing activity.
financing activity.
noncash investing and financing activity.
Question 4.4. (TCO D) Dividends declared are reported on which of
the following statements? (Points : 3)
Income Statement
Statement of Retained Earnings
Balance Sheet
Statement of Financial Position
Question 5.5. (TCO E) Which of the following describes the normal
balance and classification of the Unearned Revenue account? (Points
: 3)
Credit, liability
Debit, liability
Debit, stockholders’ equity
Credit, stockholders’ equity
Question 6.6. (TCO F) The accrual accounting term used to indicate
recording an expense before paying cash for the item is (Points : 3)

deferral.
accrual.
depreciation.
prepayment.
Question 7.7. (TCO A) LBJ Company recorded the following events
involving a recent purchase of merchandise.
- Received goods for $95,000, terms 2/10, n/30.
- Returned $4,500 of the shipment for credit due to damaged goods.
- Paid $1,000 for freight in.
- Paid the invoice within the discount period.
As a result of these events, the company's merchandise inventory
(Points : 3)
increased by 89,580.
increased by $89,690.
= (95000-4500)*0.98+1000

Question 8.8. (TCO B) In periods of rising prices, which of the
following inventory methods results in the highest gross profit figure?
(Points : 3)
FIFO
LIFO
Average cost method
Cannot be determined based on the information given
Question 9.9. (TCO A) On a classified balance sheet, prepaid
expenses are classified as (Points : 3)
current liabilities.
long-term liabilities.
current assets.
Prepaid expenses do not belong on the Balance Sheet.
Question 10.10. (TCO E) Which of the following is an internal control
procedure? (Points : 3)
Control environment
Comparisons and compliance monitoring
Promote operational efficiency
Encourage employees to follow company policies

Question 1. Question : (TCO A) Which of the following accounts is
recorded as part of stockholders’ equity on the Balance Sheet?
Question 2. Question : (TCO B) For 2014, CAP Corporation reported
net income of $96,000; net sales $1,440,000;and weighted average
shares outstanding of 9,600. There were no preferred dividends. What
was the 2014 earnings per share?
Question 3. Question : (TCO C) Purchasing inventory is an example
of a(n)
Question 4. Question : (TCO D) Dividends declared are reported on
which of the following statements?
Question 5. Question : (TCO E) Which of the following describes the
normal balance and classification of the Unearned Revenue account?
Question 6. Question : (TCO F) The accrual accounting term used to
indicate recording an expense before paying cash for the item is
Question 7. Question : (TCO A) XYZ Company recorded the following
events involving a recent merchandise purchase.
Question 8. Question : (TCO B) In periods of rising prices, which of
the following inventory methods results in the highest gross profit
figure?

Question 9. Question : (TCO A) Which of the following is not a
current liability?
Question 10. Question : (TCO E) Which of the following is an internal
control procedure?
1. Question : (TCOs A, B, and C) Which type of corporate
information is available to
investors?
2. Question : (TCO C) Collecting cash from customers would be an
example of which
type of activity?
3. Question : (TCO A) Resources owned by a business are referred to
as
4. Question : (TCO A) In a classified balance sheet, assets are usually
classified as
5. Question : (TCO B) For 2012, LBJ Corporation reported net
income of $25,000; net
sales $250,000; and weighted average shares outstanding of 5,000.
There
were no preferred stock dividends. What was the 2012 earnings per
share?

6. Question : (TCO D) Which of the following accounts has a normal
balance of a credit?
7. Question : (TCO E) The accrual accounting term used to indicate
recording an
expense before paying cash for the item is _____
:
8. Question : (TCOs A and B) A periodic inventory system would most
likely be used by
a(n) _____
9. Question : (TCOs A and B) LBJ Company recorded the following
events involving a
recent purchase of merchandise.
Comments:
10. Question : (TCO A) In a period of declining prices, which of the
following inventory
methods generally results in the lowest gross profit figure?
Question : (TCOs A, B, and C) Shareholders want answers to all of
the following questions except:

Question 2. Question : (TCO C) Paying cash dividends is an example
of a(n)
Question 3. Question : (TCO C) Buying a new plant would be an
example of which type of activity?
Question 4. Question : (TCO A) Which of the following should not be
classified as a current liability?
Question 5. Question : (TCO B) For 2012, LBJ Corporation reported
net income of $75,000; net sales $750,000;and weighted average
shares outstanding of 7,500. There were no preferred stock dividends.
What was the 2012 earnings per share?
Question 6. Question : (TCO D) Which of the following describes the
normal balance and classification of the Unearned Revenue account?
Question 7. Question : (TCO E) Which of the following statements is
correct?
Question 8. Question : (TCOs A and B) A periodic inventory system
would most likely be used by a(n)
Question 9. Question : (TCOs A and B) LBJ Company recorded the
following events involving a recent merchandise purchase.
- Received goods for $40,000, terms 2/10, n/30

- Returned $1,200 of the shipment for credit due to damaged goods
- Paid $1,000 for freight in
- Paid the invoice within the discount period
Question 10. Question : (TCO A) In a period of declining prices,
which of the following inventory methods generally results in the
lowest gross profit figure?
Question 1. Question : (TCOs A, B, and C) Which of the following
statements concerning users of accounting information is incorrect?
Question 2. Question : (TCO C) Paying cash dividends is an example
of a(n)
Question 3. Question : (TCO C) Buying a new plant would be an
example of which type of activity?
Question 4. Question : (TCO A) On a classified balance sheet,
prepaid expenses are classified as
Question 5. Question : (TCO B) For 2012, LBJ Corporation reported
net income of $75,000; net sales $750,000;and weighted average
shares outstanding of 7,500. There were no preferred stock dividends.
What was the 2012 earnings per share?
Question 6. Question : (TCO D) Which of the following accounts has
a normal balance of a credit?

Question 7. Question : (TCO E) The accrual accounting term used to
indicate recording an expense before paying cash for the item is
Question 8. Question : (TCOs A and B) A periodic inventory system
would most likely be used by a(n)
Question 9. Question : (TCOs A and B) LBJ Company recorded the
following events involving a recent merchandise purchase.
Question 10. Question : (TCO A) In a period of increasing prices,
which of the following inventory methods generally results in the
highest gross profit?
Question 11. Question : (TCO D) A classmate is considering
dropping his or her accounting class because he or she cannot
understand the rules of debits and credits.
Explain the rules of debits and credits in a way that will help him or
her understand them. Cite examples for each of the major sections of
the balance sheet (assets, liabilities and stockholders' equity) and the
income statement (revenues and expenses).

Question 12. Question : (TCOs B and E) The Caltor Company
gathered the following condensed data for the Year Ended December
31, 2010.
Cost of goods sold $ 710,000
Net sales 1,279,000
Administrative expenses 239,000
Interest expense 68,000
Dividends paid 38,000
Selling expenses 45,000
Instructions:
1: Prepare a multiple-step income statement for the year ended
December 31, 2010.
2: Compute the profit margin ratio and gross profit rate. Caltor
Company’s assets at the beginning of the year were $770,000 and
were $830,000 at the end of the year. To qualify for full credit, you
must state the formula you are using, show your computations, and
explain your findings.
Question 13. Question : (TCO D and E) Please prepare the following
journal entries. Indicate which account should be debited and which
account should be credited, along with the dollar amount of the debit
and credit.

a: Investors invest $50,000 in exchange for 1,000 shares of common
stock.
b: Company purchased equipment for $10,000 on credit.
c: Company received $5,000 for services performed.
d: Company made payment on account for $2,000.
e: Company received $7,000 for services not yet performed.
Question 14. Question : (TCO D) Your friend Wendy plans to open a
hair salon. Wendy states that she does not have time to develop and
implement a system of internal controls.
a: Explain to Wendy the objectives of a system of internal control.
b: Explain to Wendy at least four key controls she must establish to
protect herself against fraud. You should state specific internal
control principles and relate your answer to her hair salon business.
**********************************************
ACCT 503 Week 1 Homework (E117A E129B
E22A E123A E124A)

This Tutorial contains Excel Files which can be used to solve for any
values (your Question may have different company name or values,
but that can be solved using Excel file)
E 1-17A
CoffeeShop Doughnuts has current assets of $280 million; property,
plant, and equipment of $430 million; and other assets totaling $170
million. Current liabilities are $170 million and long-term liabilities
total $300 million.
1. Use these data to write CoffeeShop Doughnuts’ accounting
equation.
2. How much in resources does CoffeeShop have to work with?
3. How much does CoffeeShop owe creditors?

4. How much of the company’s assets do the CoffeeShop
stockholders actually own?
E1-29B
Assume Chen, Inc., is expanding into France.
The company must decide where to locate and how to finance the
expansion.
Requirement
Identify the financial statement where these decision makers can find
the following information aboutChen, Inc. In some cases, more than
one statement will report the needed data.
a. Net income

b. Current liabilities
c. Cash spent to acquire the building
d. Adjustments to reconcile net income to net cash provided by
operations
e. Selling, general, and administrative expenses
f. Ending cash balance
g. Ending balance of retained earnings
h. Income tax expense
i. Long-term debt

j. Revenue
k. Total assets
l. Dividends
m. Income tax payable
n. Common stock
E1-22A (similar to)
Assume the Carter Coffee Roasters Corp. ended the month of August
2015 with these data:

Requirement
1. Prepare the income statement and the statement of retained
earnings of
Carter Coffee Roasters Corp., for the month ended August 31,2015
Prepare the income statement.
Start with the heading and then complete the rest of the statement.
Part 1
Carter Coffee Roasters Corp.

Income Statement
For the Month Ended August 31, 2015
E1-23A (similar to)
Assume the Ebert Coffee Roasters Corp. ended the month of August
2015

with these data:
Requirement
1. Prepare the balance sheet of Ebert Coffee Roasters Corp., for
August 31, 2015.
First prepare the balance sheet header, then complete the assets
section of the statement and finally complete the liabilities and
stockholders' equity section of the statement.
E1-24A (similar to)

Assume the Earl Coffee Roasters Corp. ended the month of August
2015
with this data:
Requirement
1. Prepare the statement of cash flows of Earl Coffee Roasters
Corp., for the month ended August 31,
2015.
Explain the relationship among the income statement, statement of
retained earnings,
balance sheet, and statement of cash flows.

Explain the relationship among the income statement, statement of
retained earnings, balance sheet, and statement of cash flows.
Net income on the statement of retained earnings comes directly from
the
income statement
.
Ending retained earnings on the
balance sheet
comes directly from the
statement of retained earnings
.
Ending cash on the

statement of cash flows
is reported on the
balance sheet
**********************************************
ACCT 503 Week 1-7 All Discussion Questions
ACCT 503 Week 1DQ 1 - Financial Reporting Environment and
GAAP
ACCT 503 Week 1DQ 2 - Details of Financial Statements and Ratios
ACCT 503 Week 2DQ 1 - Accounting EquationAccounting Cycle
ACCT 503 Week 2DQ 2 - Accrual Accounting and Adjusting Entries
ACCT 503 Week 3DQ 1 - Merchandising Operations and Income
Statements
ACCT 503 Week 3DQ 2 - Inventory Cost-Flow Assumptions
ACCT 503 Week 4DQ 1 - Understanding Internal Control and
Reporting Cash

ACCT 503 Week 4DQ 2 - Accounting for and Reporting Receivables
ACCT 503 Week 5DQ 1 - Plant Assets and Intangibles
ACCT 503 Week 5DQ 2 - Accounting for Liabilities
ACCT 503 Week 6DQ 1 - Accounting for and Reporting Equity
ACCT 503 Week 6DQ 2 - Statement of Cash Flows
ACCT 503 Week 7DQ 1 - Issues in Income Reporting
ACCT 503 Week 7DQ 2 - Different Tools for Financial Analysis
**********************************************
ACCT 503 Week 2 Homework (E2-20A, E2-
21A, E3-22A, E3-23A, S3-13) (with Excel
File) (Syllabus, 2019)
This Tutorial contains Excel Files which can be used to solve for any
values (your Question may have different company name or values,
but that can be solved using Excel file)
E2-20A

Dr Anna Grayson opened a medical practice specializing in physical
therapy. During the first month of operation (May), the business,
titled. Anna Grayson, Professional Corporation (P.C.), experienced
the following events:
1. Record the transactions in the journal of
Dr. Anna Grayson, P.C. List the transactions by date and give an
explanation for each transaction
6 Grayson invested $138,000 in the business, which in turn
issued its common stock to her.
9 The business paid cash for land costing $63,000.
Grayson plans to build an office building on the land.
12 The business purchased medical supplies for $1,500 on
account.
15 Dr. Anna
P.C., officially opened for business.
15-31
During the rest of the month,
Grayson
treated patients and earned service revenue of
$9,400,
receiving cash for half the revenue earned.
15-31
The business paid cash expenses: employee salaries,

$2,800;
office rent,
$ 900$900;
utilities,
$ 900$900.
31 The business sold supplies to another physician for cost of
$400.
31 The business borrowed
30,000,
signing a note payable to the bank.
31 The business paid
$600
on account.
E3-22A
Clark Truck Rentals Company faced the following situations.
a. The business has interest expense of $ 3,000
that it must pay early in January 2015

b. Interest revenue of $4,500 has been earned but not yet
received.
c. On July 1, 2014, when the business collected $13,900 rent in
advance, it debited Cash and credited Unearned Rent Revenue. The
tenant was paying for two years' rent.
d. Salary expense is $5,500 per daylong dash—Monday through
Friday dash—and
the business pays employees each Friday. For the purpose of this
calculation, assume
December 31 falls on a Thursday.
e. The unadjusted balance of the Supplies account is $3,000.
The total cost of supplies on hand is $ 1,500.
f. Equipment was purchased at the beginning of this year at a
cost of $120,000.
The equipment's useful life is five years. There is no residual value.
Record depreciation for this year and then determine the equipment's
book value.
Journalize the adjusting entry needed at December
31, 2014, for each situation. Consider each fact separately

E3-23A
The adjusted trial balance of
Homemade HamsHomemade Hams,
Inc., follows.
Homemade Hams, Inc.
Adjusted Trial Balance
31-Dec-14
Account (Amounts in thousands)
Cash Debit
cash 4400
Inventories 2,400
Prepaid expenses 1,900
Property, plant, and equipment 16,700
Accumulated depreciation, property, plant, and equipment
Other assets 9,700

Accounts payable
Income tax payable
Other liabilities
Common stock
Retained earnings (beginning, December 31, 2013)
Dividends 1,700
Sales revenue
Cost of goods sold 25,600
Selling, administrative, and general expense 10,400
Income tax expense 2,000
**********************************************
ACCT 503 Week 2 Practice Exercise (E2-
20A, E2-21A, E3-20A, E3-22A, S3-13, E3-
26A)(Syllabus, 2019)
E2-20A
Dr. Kristine Cohen opened a medical practice specializing in physical
therapy. During the first month of operation

(July), the business, titled Dr. Kristine Cohen, Professional
Corporation (P.C.), experienced the following events:
Jul 6 Cohen invested $148,000 in the business, which in turn issued
its common stock to her.
9 The business paid cash for land costing $66,000. Cohen
plans to build an office building on the land.
E2-21A Continued
Requirement 1. Post the entries to the ledger, using T-accounts. Key
transactions by date. (Record transactions from the 15-31 of the
month as occurring on the last day of the month.)
Calculate the balance for each account and enter it on the
appropriate side of each T-account.
E3-20A
Requirement 1. Journalize the adjusting entries. (Record debits first,
then credits. Exclude explanations from any journal entries.)
a. Prepaid insurance, beginning, $300. Payments for insurance
during the period, $2,900. Prepaid insurance, ending, $600.
Requirement 2. Suppose the adjustments were not made. Compute the
overall overstatement or understatement of net income as a result of
the omission of these adjustments.

Enter the amounts of either the overstatement or understatement of
net income as a result of omitting these adjustments. (Use parentheses
or a minus sign when entering understatements.)
Net income over (under) stated by omission of:
Insurance Expense $2,600
Interest Revenue (2,400)
Service Revenue (1,300)
Salary Expense 5,200
Income Tax Expense 7,000
Total over (under) statement of net income $16,600
E3-22A
Dellroy Rentals Company faced the following situations.
a. The business has interest expense of $3,200 that it must pay early
in January 2017.
b. Interest revenue of $4,100 has been earned but not yet received.

c. On July 1, 2016, when the business collected $12,000 rent in
advance, it debited Cash and credited Unearned Rent
Revenue. The tenant was paying for two years' rent.
d. Salary expense is $6,100 per day Monday through Friday and the
business pays employees each Friday. For the
purpose of this calculation, assume December 31 falls on a Thursday.
e. The unadjusted balance of the Supplies account is $3,200. The total
cost of supplies on hand is $1,300.
f. Equipment was purchased on January 1 of this year at a cost of
$180,000. The equipment's useful life is five years.
There is no residual value. Record depreciation for this year and then
determine the equipment's book value.
S3-13
Due to the terms of its lease, Peachtree Services, Inc., pays the rent
for its new office space in one annual payment of
$24,000 on August 1,2016. The lease covers the period of August
1,2016, through July 31, 2017. Peachtree Services has a year-end of
December 31. Assume that Peachtree Services had no other prepaid
rent transactions, nor did it have a Prepaid Rent beginning balance in
2016. Give the journal entries that Peachtree Services would make
for (a) the annual rent payment of
$24,000 on August 1 and (b) the adjusting entry for rent expense on
December 31, 2016. What is the balance of Prepaid Rent at

December 31, 2016?
Give the journal entries that Peachtree Services would make for (a)
the annual rent payment of $24,000 on August 1 and (b) the adjusting
entry for rent expense on December 31, 2016. What is the balance of
Prepaid Rent at December 31, 2016?
(Record debits first, then credits. Exclude explanations from any
journal entries.)
Give the journal entry that Peachtree Services would make for (a) the
annual rent payment of $24,000 on August 1.
E3-26A
Consider the following selected accounts from the records of North
Pole Enterprises at December 31, 2016.
Requirement
1. Prepare the closing entries for North Pole Enterprises at
December 31, 2016. How much net income did North Pole
Enterprises earn during 2016? Prepare a T-account for Retained
Earnings to show the December 31, 2016,
balance of Retained Earnings.
Begin by preparing the closing entries for North Pole Services
Enterprises. Record the entry to close out the revenue accounts.

(Record debits first, then credits. Exclude explanations from any
journal entries. Check your spelling carefully and do not abbreviate.
Use only the account names provided in the problem statement.)
How much net income did North Pole Enterprises earn during 2016?
Prepare a T-account for Retained Earnings to show the December 31,
2016, balance of Retained Earnings. Post the beginning balance and
closing entries to Retained Earnings and determine the ending
balance.
**********************************************
ACCT 503 Week 3 Case Study 1 (Melvin
Plumbing Corporation) **New**
MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE
LISTED BELOW.
There are 10 sheets in the Workbook, including this one.

All of the information that you need for the project is located in this
Workbook.
Requirement #1:
During its first month of operation, the Melvin Plumbing
Corporation, which specializes in residential plumbing,
completed the following transactions.
July 1 Began business by making a deposit in a company bank
account of $90,000, in exchange for 9,000 shares of $10 par value
common stock.
July 3 Paid the current month's rent, $5,500.
July 5 Paid the premium on a 1-year insurance policy, $4,800
July 7 Purchased supplies on account from Little Company,
$900.
July 10 Paid employee salaries, $3,300
Requirement #2:

Post the July journal entries to the following T-accounts and compute
ending balances.
Cash (111) Revenue (411)
Requirement #3:
Prepare a trial balance for July in the space below.
Melvin Plumbing Corporation
Trial Balance
July 31
Requirement #4:
Prepare adjusting entries using the following information in the
General Journal
below. Show your calculations!
a) One month's insurance has
expired.

b) Supplies used during the period
$375.
c) The estimated depreciation on equipment is $175.
Requirement #6:
Prepare an adjusted trial balance in the space below.
Adjusted Trial Balance
July 31
Requirement #7:
Prepare the financial statements for the Melvin Plumbing
Corporation as of July 31 in the space below.
You will only be preparing the income statement, statement of
retained earnings, and the balance sheet.
The statement of cash flows is a required financial statement, but is
not required for this case study.

Requirement #10:
Prepare a post-closing trial balance as of July 31 in the space below.
Post-Closing Trial Balance
**********************************************
ACCT 503 Week 3 Case Study 1 Flower
Landscaping Corporation
The Entire Case Study is due Sunday at MidnightMountain time at
the end of Week 3.
This Case Study is worth 100 points or 10% of your final course
grade.
This Case Study relates to TCO's D and E and Chapters 3 and 4.
MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE
LISTED BELOW.
There are 10 Sheets in the Workbook including this one.

All of the Information you need for the Project is located in this
Workbook.
Requirements
Requirement 1 - Prepare the Journal Entries in the General Journal
Requirement 2 - Post Journal Entries to the General Ledger
Requirement 3 - Prepare a Trial Balance
Requirement 4 - Prepare the Adjusting Entries
Requirement 5 - Post Adjusting Entries to the General Ledger
Requirement 6 - Prepare an Adjusted Trial Balance
Requirement 7 - Prepare the Financial Statements
Requirement 8 - Prepare the Closing Entries
Requirement 9 - Post Closing Entries to the General Ledger
Requirement 10 - Prepare the Post Closing Trial Balance
Sheet in Workbook
Journal Entries
General Ledger
Trial Balance
Adjusting Entries
General Ledger
Adjusted TB
Financial Statements
Closing Entries
General Ledger

Post Closing TB
Hint for success: review the Week 2 Lecture prior to starting this
project.
There are also hints contained within certain cells on some of the
worksheet tabs.
You can hover over the red pointer at the top right-hand corner of the
cell to read the hint.
Hints are provided for the following balances:
1) The debits for the journal entries on the Journal Entries tab
2) The credits for the journal entries on the Journal Entries tab
3) The cash balance on the General Ledger tab
4) The debits for the trial balance on the Trial Balance tab
5) The credits for the trial balance on the Trial Balance tab
6) The debits for the adjusted trial balance on the Adjusted Trial
Balance tab
7) The credits for the adjusted trial balance on the Adjusted Trial
Balance tab
**********************************************
ACCT 503 Week 3 Practice Exercise (S6-10,
QC6-12, E6-19A, E6-22A, E6-27A, S11-2,
S11-3)(Syllabus, 2019)

S6-10, QC6-12, E6-19A, E6-22A, E6-27A, S11-2, S11-3
This exercise tests your understanding of the four inventory methods.
List the name of the inventory method that best fits the description.
Assume that the cost of inventory is rising.
1. LIFO Results in an old measure of the cost of
ending inventory
2. Average-cost Provides a middle-ground measure of ending
inventory and cost of goods sold
3. LIFO The method of inventory valuation that is disallowed
by IFRS.
4. Applies to all four inventory methods Writes inventory down
when current replacement cost drops below historical cost
5. LIFO Matches the most current cost of goods sold against
sales revenue
6. FIFO Maximizes reported income
7. Specific-unit-cost Used to account for automobiles, jewelry, and
art objects
8. FIFO Results in a cost of ending inventory that is close to the
current cost of replacing the inventory
9. LIFO Generally associated with saving income taxes

10. LIFO Enables a company to buy high-cost inventory at year-
end and thereby decrease reported income and income tax
QC6-12
Putter Company had a 16,000 beginning inventory and $17,000
ending inventory. Net sales were 153,000;purchases, $85,000;
purchase returns and allowances, $5,000; and freight in, $4,000. Cost
of goods sold for the period is:
E6-19A
High Life Inc.'s inventory records for a particular development
program show the following at March 31:
At March 31, 99 of these programs are on hand.
Requirements
1. Compute cost of goods sold and ending inventory, using each
of the following methods:
a. Specific unit cost, with three $165 units and six $175
units still on hand at the end
b. Average cost
c. First-in, first-out
d. Last-in, first-out

2. Which method produces the highest cost of goods sold? Which
method produces the lowest cost of goods sold? What causes the
difference in cost of goods sold?
E6-19A Continued
Requirement 1. Compute cost of goods sold and ending inventory,
using each of the following four inventory methods:
Begin by entering the number of units sold and number of units in
ending inventory. Then calculate cost of goods sold and ending
inventory using (a) specific unit cost, then (b) average cost, then (c)
FIFO, and finally (d) LIFO. (Round the average cost per unit to the
nearest cent. Round all final answers to the nearest whole dollar.)
Requirement 2. Which method produces the highest cost of goods
sold? Which method produces the lowest cost of goods sold?
What causes the difference in cost of goods sold?
Which method produces the highest cost of goods sold?
LIFO

Which method produces the lowest cost of goods sold?
FIFO
The difference in cost of goods sold under the two methods identified
above was caused by
the increase in inventory unit cost
E6-22A
MusicMagic specializes in sound equipment. Because each inventory
item is expensive, MusicMagic uses a perpetual inventory system.
Company records indicate the following data for a line of speakers:
Requirements
1. Determine the amounts that MusicMagic should report for
cost of goods sold and ending inventory two ways:
a. FIFO
b. LIFO
E6-27A
Tilton & Taft, a partnership, had the following inventory data:
2015 2016

Ending inventory at:
FIFO Cost . . . . . . . . $ 21,530 $ 30,320
LIFO Cost . . . . . . . . 13,200 14,000
Cost of goods sold at:
FIFO Cost . . . . . . . . $ 82,960
LIFO Cost . . . . . . . . 99,280
Sales revenue . . . . . . . . . . . 136,000
Requirements
1. Tilton & Taft need to know the company's gross profit
percentage and rate of inventory turnover for 2016
under (a) FIFO, and (b) LIFO.
2. Which method produces a higher gross profit percentage?
Inventory turnover?
Requirement 1. Tilton & Taft need to know the company's gross profit
percentage and rate of inventory turnover for 2016
under (a) FIFO, and (b) LIFO.
Begin by calculating the gross profit percentage. (Enter the
percentage to the nearest tenth of a percent, X.X%.)
Requirement 2. Which method produces a higher gross profit
percentage? Inventory turnover?

FIFO produces a higher gross profit percentage.
LIFO produces a higher rate of inventory turnover.
S11-2
Study the 2016 income statement of Kathy's Imports, Inc., and answer
these questions about the company:
1. How much gross profit did Kathy's Imports earn on the sale of
its products in 2016?
How much was income from continuing operations? Net income?
2. At the end of 2016, what dollar amount of net income would
most sophisticated investors use to predict Kathy's Imports'
net income for 2017 and beyond? Name this item, give its amount,
and state your reason.
1. How much gross profit did Kathy's Imports earn on the sale of its
products in 2016?
How much was income from continuing operations? Net income?
(Enter amounts in thousands. Use parentheses or a minus sign for
losses.)

2. At the end of 2016,what dollar amount of net income would most
sophisticated investors use to predict Kathy's Imports'
net income for 2017 and beyond? Name this item, give its amount,
and state your reason. (Enter amounts in thousands. Use parentheses
or a minus sign for losses.)
Sophisticated investors would use income from continuing
operations in the amount of $ 63,110 thousand.
Kathy's Imports' continuing operations will continue from period to
period This makes income from continuing operations
a good predictor of future net income.
S11-3
Fabulous Life, Inc., reported the following items, listed in no
particular order, at December 31, 2016
(in thousands):
S11-3 Continued

Income tax of 38% applies to all items. .Prepare Fabulous Life's
multistep income statement for the year ended December 31, 2016.
Omit earnings per share. (Use a minus sign or parentheses for
losses.)
Fabulous Life, Inc.
Income Statement
Year Ended December 31, 2016
(Thousands)
**********************************************
ACCT 503 Week 3 Quiz (2 Set)(Syllabus,
2019)
QC6-6
Use the following data of Seaside Sales, Inc.:
Unit Total Units
Units Cost Cost Sold
Beginning inventory 15 $4 $60
Purchase on Apr 25 37 7 259
Purchase on Nov 16 10 9 90

Sales 40 ? ?
Seaside Sales' cost of ending inventory using the average cost method
is
QC11-1
The quality of earnings suggests that
A. net income is the best measure of the results of operations.
B. continuing operations and one-time transactions are of equal
importance.
C. stockholders want the corporation to earn enough income to be
able to pay its debts.
D. income from continuing operations is a more relevant predictor of
future performance than income from one-time transactions.
QC11-10

Deferred Tax Liability is usually
Type of Account Reported on the Statement
A. Short-term
Income statement
B. Long-term
Balance sheet
Your answer is correct.
C. Short-term
Statement of stockholders' equity
D. Long-term
Income statement
QC11-8
Other comprehensive income
A. includes gains and losses on sale of equipment.

B. affects earnings per share.
C. has no effect on income tax.
D. includes unrealized gains and losses on available-for-sale
investments.
QC6-4
Use the following data of Manatee Sales, Inc.:
Unit Total Units
Sales 50 ? ?
Manatee Sales uses a FIFO inventory system. Cost of goods sold for
the period is
Worked Solution
Units Unit Cost Total Cost

Units sold from beginning inventory 22 $5 $110
Units sold from purchase on Apr 25 28 7 196
Cost of goods sold 50 $306
A. $400.
B. $306.
C. $354.
D. $332.
QC6-5
Use the following data of Starfish Sales, Inc.:
Unit Total Units
Sales 45 ? ?
Starfish Sales' LIFO cost of ending inventory would be

A. $206.
B. $264.
C. $138.
D. $405.
QC11-12
An auditor report by independent accountants
A. gives investors assurance that the company's stock is a safe
investment.
B. is ultimately the responsibility of the management of the client
company.
C. gives investors assurance that the company's financial statements
conform to GAAP.
.

D. ensures that the financial statements are error-free.
QC11-2
Which statement is true?
A. All prior-period adjustments are combined with continuing
operations on the income statement.
B. Prior-period adjustments are part of discontinued operations.
C. Discontinued operations are a separate category on the income
statement.
D. All of the above are true.
QC6-13
Hazard Company had a $16,000 beginning inventory and a $20,000
ending inventory. Net sales were $153,000;purchases, $80,000;
purchase returns and allowances, $5,000; and freight in, $9,000. Cost
of goods sold for the period is $80,000.
What is Hazard's gross profit percentage (rounded to the nearest
percentage)?

Worked Solution
Gross profit Net sales
A. 10%
B. 52%
C. 13%.
D. 48%
**********************************************
ACCT 503 Week 4 Quiz (2 Set)(Syllabus,
2019)
QC5-5
Joshua Company had the following information in 2016.

accounts receivable 12/31/16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . $15,000
Allowance for uncollectible account 12/31/16 (before adjustment). . . .
. . . 700
Credit service revenue during 2016. . . . . . . . . . . . . . . . . . . . . . . . . . .
. 47,000
Cash service revenue during 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 13,000
Collections from customers on account during 2016. . . . . . . . . . . . . . .
. . . 45,000
If uncollectible accounts are determined by the aging-of-receivables
method to be $1,260,
the uncollectible-account expense for 2016 would be
Worked Solution
Allowance account, adjusted bal - Allowance account,
unadjusted bal = Uncollectible-account expense
$1,260 - $700 = $560
A. $600
B. $1,260.
C. $1,880.

D. $560.
Q4-37
All of the following are controls for cash received over the counter
except
A. the sales clerk must have access to the cash register tape.
B. a printed receipt must be given to the customer.
C. the customer should be able to see the amounts entered into the
cash register.
D. the cash drawer should open only when the sales clerk enters an
amount on the keys.
QC5-3
lNeal Company had the following information in 2016:

Accounts receivable 12/31/16.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . $6,000
Allowance for uncollectible account 12/31/16 (before adjustment). . . .
. . . 600
Credit service revenue during 2016. . . . . . . . . . . . . . . . . . . . . . . . . . .
. 39,000
Cash service revenue during 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 17,000
Collections from customers on account during 2016. . . . . . . . . . . . . . .
. . . 50,000
Uncollectible accounts are determined by the percent-of-sales method
to be 33% of credit sales. How much is uncollectible-account expense
for 2016?
QC5-13
Net credit sales total $1,357,200. Beginning and ending accounts
receivable are $50,000 and $43,600, respectively. Calculate days'
sales outstanding.(Round interim calculations to two decimal places,
XX.XX and the days' sales outstanding (DSO) up to the next whole
day.)
QC5-1

Hank Neylon Productions held investments in trading securities with
a fair value of $65,000 at December 31, 2016.
These investments cost Hank Neylon Productions $60,000 on January
1, 2016. What is the appropriate amount for
Hank Neylon Productions to report for these investments on the
December 31, 2016,
balance sheet?
A. $65,000
B. $60,000
C. $5,000 gain
D. Cannot be determined from the data given
QC5-6
Daniel Company had the following information in 2016:
If uncollectible accounts are determined by the aging-of-receivables
method to be $1,240, the uncollectible account expense for

2016 would be $490. Using the aging-of-receivables method, the
balance of the Allowance account after the adjusting entry at year-
end 2016 would be
A. $1,990.
B. $1,730.
C. $1,240.
D. $490.
Q4-36
Requiring that an employee with no access to cash do the accounting
is an example of which characteristic of internal control?
A. Monitoring of controls
B. Separation of duties
C. Competent and reliable personnel
D. Assignment of responsibility

Q4-35
All of the following are internal control procedures except
A. adequate records.
B. internal and external audits.
C. Sarbanes-Oxley reforms.
D. assignment of responsibilities.
Q4-45
Which of the following assets are not included in "cash equivalents"
in a typical balance sheet?
A. Time deposits
B. U.S. government securities
C. Certain very low-risk equity securities

D. Foreign government securities
E. All of the above might be included in "cash equivalents."
Q4-34
All of the following are objectives of internal control except
A. to comply with legal requirements.
B. to ensure accurate and reliable accounting records.
C. to safeguard assets.
D. to maximize net income.
**********************************************
ACCT 503 Week 5 Case Study 2 Internal
Control LJB Company

Case Study 2 - Internal Control- Due by Sunday of week 5
LJB Company, a local distributor, has asked your accounting firm to
evaluate their system of internal controls because they are planning
to go public in the future. The President wants to be aware of any new
regulations required of his company if they go public so he met with a
colleague of yours at a local restaurant. The President of the
company explained the current system of internal controls to your
colleague. Your colleague has since been promoted to a tax position
so she has passed on the information below so you can generate
recommendations for the partner at your accounting firm to share
with the President of LJB Company.
Since LJB Company is a relatively lean organization, they have a lot
of faith in their long-term employees. They have one accountant who
serves as Treasurer and Controller which streamlines many of their
processes. In this dual role, he purchases all of the supplies and pays
for these purchases. He also receives the checks and completes the
monthly bank reconciliation. The accountant is so busy that the
company handles petty cash a bit differently. All employees have
access to the petty cash in a desk drawer and are asked to only place
a note if they use any of the cash.
The accountant has recently started using pre-numbered invoices and
wants to buy an indelible ink machine to print their checks. The
President is waiting to hear from you if this is a necessary purchase
before authorizing.
On payday, the checks are picked up by the accountant and left in his
office for pick-up. Before he leaves for the weekend, he will move the
checks into a safe in his office.

The President is still quite embarrassed because he had to fire one of
his employees for viewing pornography on a company computer. He
later found out this individual was a convicted felon who served time
for molesting children. The company had a hard time getting the
employee to admit it was him because the company does not assign
individual passwords. The President expressed his frustration
because both he and the accountant both interview and approve all of
the new hires.
Required:
Based on the above information, prepare a Word document to address
the following:
Inform the President of any new internal control requirements if the
company decides to go public. (7 points) Advise the President of what
the company is doing right (they are doing some things well) and also
recommend to the President whether or not they should buy the
indelible ink machine. When you advise the President, please be sure
to reference the applicable internal control principle that applies. (13
points) Advise the President of what the company is doing wrong
(they are definitely doing some things poorly). Please be sure to
include the internal control principle that is being violated along with
a recommendation for improvement. (20 points)
You must prepare a formal report for the partner to distribute to the
President so no abbreviations or short-hand answers. You also must
cite your references. At a minimum, your textbook should be cited.
Below is a grading rubric for this assignment.

Category
Points
Description
Understanding
10
Demonstrate a strong grasp of the problem at hand. Demonstrate
understanding of how the course concepts apply to the problem.
Analysis
30
Apply original thought to solving the business problem. Apply
concepts from the course material correctly toward solving the
business problem.
Execution
10

ACCT 503 Education Specialist / snaptutorial.com

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