Chapter 8
1. What items other than coins or currency might be included in the balance sheet account cash?
2. What is the account classification (i.e., asset, liability, ect.) of the account Cash Short and Over? How is it deposited of at the end of the fiscal period?
3. What kinds of transactions require additions to book balance? Subtractions for book balances? Subtractions from bank balances?
4. How does the net method of recording purchases differ from the gross method? How would firms that use each method make journal entries for a $1,000 invoice with a 2 percent discount?
Problem 1:
Using the following information, calculate the amount that would be included in Cash and Cash Equivalents on the Way west Hotel balance sheet at December 31, 20x4.
Signed credit card slips—diners club $250
Time deposits $3,256
Money orders $350
Receivable from Bob Golden $200
Petty Cash $100
Signed credit card slips—visa $480
Shares of stock in Motors International $1,000
Certificates of deposits $2,000
Problem 2:
Explain the mechanics of the voucher system and include explanations of the following terms:
Voucher:
Voucher Register:
Check Register:
Vouchers payable:
Tickler file:
Chapter 9
1. What is the ledger account classification for Allowance for Doubtful Accounts? What is its normal balance?
2. If the allowance method of accounting for bad debts indicates a debit balance at the end of the year, were bad debts underestimated or overestimated for the year?
3. What accounts are debited and credited when a specific account is written off during the year under the allowance method of accounting for bad debts?
Problem 1:
On June 15, the Pines Restaurant decided to write of the account of Thomas Sunbart in the amount of $350. The restaurant uses the direct write off method of accounting for bad debts.
Required:
1. Make the necessary journal entry for June 15
•
2. On November 15, Debra Threloff paid firesun resort $500. Make the necessary journal entry or entries to reinstate Debra’s account and record the collection
•
Problem 2:
The FireSun Resort decided to write off the account of Debra Threloff for $500 on Aug 3 FireSun uses the direct write off method of accounting for bad debts
Required:
1. Make the necessary journal entry for Aug 3
•
2. On November 15, Debra Threloff paid FireSun Resort $500. Make the necessary journal entry or entries to reinstate Debra’s account and record the collection
•
Chapter 10
1. Does an overstatement of ending inventory overstate or understate cost of goods sold for the period? What is the effect of the error on net income for the goods?
2. How do the terms under which a supplier ships goods affect inventory valuation and accounting for inventory?
Problem 1:
Based on the following transactions and shipping terms between Coldpac Distributors and Marco’s Pizzer.
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Chapter 81.What items other than coins or currency might be incl.docx
1. Chapter 8
1. What items other than coins or currency might be included
in the balance sheet account cash?
2. What is the account classification (i.e., asset, liability,
ect.) of the account Cash Short and Over? How is it deposited of
at the end of the fiscal period?
3. What kinds of transactions require additions to book
balance? Subtractions for book balances? Subtractions from
bank balances?
4. How does the net method of recording purchases differ
from the gross method? How would firms that use each method
make journal entries for a $1,000 invoice with a 2 percent
discount?
Problem 1:
Using the following information, calculate the amount that
would be included in Cash and Cash Equivalents on the Way
west Hotel balance sheet at December 31, 20x4.
2. Signed credit card slips—diners club $250
Time deposits $3,256
Money orders $350
Receivable from Bob Golden $200
Petty Cash $100
Signed credit card slips—visa $480
Shares of stock in Motors International $1,000
Certificates of deposits $2,000
Problem 2:
Explain the mechanics of the voucher system and include
explanations of the following terms:
3. Voucher:
Voucher Register:
Check Register:
Vouchers payable:
Tickler file:
Chapter 9
1. What is the ledger account classification for Allowance for
Doubtful Accounts? What is its normal balance?
2. If the allowance method of accounting for bad debts
indicates a debit balance at the end of the year, were bad debts
underestimated or overestimated for the year?
3. What accounts are debited and credited when a specific
account is written off during the year under the allowance
method of accounting for bad debts?
Problem 1:
4. On June 15, the Pines Restaurant decided to write of the
account of Thomas Sunbart in the amount of $350. The
restaurant uses the direct write off method of accounting for bad
debts.
Required:
1. Make the necessary journal entry for June 15
•
2. On November 15, Debra Threloff paid firesun resort $500.
Make the necessary journal entry or entries to reinstate Debra’s
account and record the collection
•
Problem 2:
The FireSun Resort decided to write off the account of Debra
Threloff for $500 on Aug 3 FireSun uses the direct write off
method of accounting for bad debts
5. Required:
1. Make the necessary journal entry for Aug 3
•
2. On November 15, Debra Threloff paid FireSun Resort
$500. Make the necessary journal entry or entries to reinstate
Debra’s account and record the collection
•
Chapter 10
1. Does an overstatement of ending inventory overstate or
understate cost of goods sold for the period? What is the effect
of the error on net income for the goods?
6. 2. How do the terms under which a supplier ships goods
affect inventory valuation and accounting for inventory?
Problem 1:
Based on the following transactions and shipping terms between
Coldpac Distributors and Marco’s Pizzeria, determine who
should include the inventory in question on their 12/31/20x8
1. Marco’s received a $4,000 worth of inventory on January 3
that was shipped FOB destination by Coldpac on Dec 28
•
2. Marco’s received $5,000 worth of inventory on January 2
that was shipped FOB shipping point on Dec 24
•
Problem 2:
Only July 6, 20x3, the ProShop at the Hilton Lagoons Hotel
7. ordered golf clubs an clothing that together cost $8,000, which
managers charged to the hotel’s account. On July 15 20x3, the
shop sold $2,500 worth of merchandise, which cost $1,400.
Required:
Journalize the entries for July 6 and July 15 assuming:
1. The Pro Shop uses the periodic inventory system
•
2. The Pro Shop uses the perpetual inventory system
•
8. Chapter 11
1. How is the gain or loss on the sale of property and
equipment asset calculated?
Problem 1:
For each of the following purchases, does the purchase
represent a capital or a revenue expenditure?
a. Complete remodeling of a restaurant dining room at a cost
of $80,000
b. Repainting the exterior of a delivery truck at a cost of
$500
c. Purchase of a pizza oven at a cost of $18,000
d. Purchase of a dozen pencil sharpeners with a life of ten
years at a total cost of $65
e. Overhaul of the engine on a tour bus at a cost of $5,000
extending the life of the bus by five years
f. Purchase of a computer system at a cost of $35,000
9. Problem 2:
Indicate whether the assets below should be listed on the
balance sheet under current assets or property and equipment:
Inventory
Land
Accounts receivable
Leaseholds
Construction in Progress
Prepaid expenses
Notes receivables
Furnishings and equipment
Building
Short term investments
10. Chapter 12
Problem 1:
Longview Hotels operates ten properties in the Midwest. The
company employs the following procedures to control payroll:
a. Tom Johnson, the human resources manager, carefully
interviews all prospective employees, authorizes their hiring,
perpetrates the payroll and distributes the checks
b. Donna Miller, the front desk manager, deletes individuals
from her department’s labor force and provides payroll
11. employees with front desk employees’ wage rates
c. At the end of each shift, hotel dining room employees
write down their hours on a blank sheet of paper and place it on
the desk of the food and beverage manager
d. All employees are paid by checks draw on the general bank
account of the company
e. All individual paychecks are kept in the respective
departments until they are claimed by employees
Required:
Draft a memo suggesting changes that the operation should
make to do better control payroll
Problem 2:
Indicate weather the following statements are true or false and
explain why:
a. If a company is a mom and pop operation, it would be
acceptable under current tax laws to pay employees in cash with
no withholding
b. An employee’s immediate supervisor should hold a check
for the employee if he or she is taking a leave of absence
12. c. Duties regarding the payroll process should be segregated
to ensure that proper payroll procedures are followed
d. The labor force master list should be under the control of
the human resources department
e. Time clocks are great way to ensure the proper recording
of time worked
f. Employees’ wages are provided to payroll by the
marketing department