Question 1 Fill in the blanks: Sales Revenue $800 Beginning Inventory $100 Purchases $700 Available
Question 1
- Fill in the blanks:
Sales Revenue
$800
Beginning Inventory
$100
Purchases
$700
Available for Sale
?
Ending Inventory
$500
Cost of Goods Sold
?
Gross Profit
?
Operating Expenses
$200
Net Income
?
Question 2
-
Assume you serve on the board of a local golf and country club. In preparation for renegotiating the club’s bank loans, the president indicates that the club needs to increase its operating cash flows before the end of the current year. The club’s treasurer reassures the president and other board members that he knows a couple of ways to boost the club’s operating cash flows. First, he says, the club can sell some of its accounts receivable to a collections company that is willing to pay the club $97,000 up front for the right to collect $1 00,000 of the overdue accounts. That will immediately boost operating cash flows. Second, he indicates that the club paid about $200,000 last month to relocate the 18th fairway and green closer to the clubhouse. The treasurer indicates that although these costs have been reported as expenses in the club’s own monthly financial statements, he feels an argument can be made for reporting them as part of land and land improvements (a long-lived asset) in the year-end financial statements that would be provided to the bank. He explains that, by recording these payments as an addition to a long-lived asset, they will not be shown as a reduction in operating cash flows.
Required:
1. Does the sale of accounts receivable to generate immediate cash harm or mislead anyone? Would you consider it an ethical business activity?
2. What category in the statement of cash flows is used when reporting cash spent on long-lived assets, such as land improvements? What category is used when cash is spent on expenses, such as costs for regular upkeep of the grounds?
3. What facts are relevant to deciding whether the costs of the 18th hole relocation should be reported as an asset or as an expense? Is it appropriate to make this decision based on the impact it could have on operating cash flows?
4. As a member of the board, how would you ensure that an ethical decision is made?
Question 3
- Following is the adjusted trial balance of Post Company. Based on this information prepare a Balance Sheet, Income Statement and Statement of Retained Earnings.
POST COMPANY ADJUSTED TRIAL BALANCE Debit Credit Cash 80,000 Accounts Receivable 12,000 Prepaid Insurance 2,000 Equipment 4,000 Accumulated Depreciation 100 Supplies 400 Accounts Payable 800 Wages Payable 200 Unearned Revenue 1,200 Contributed Capital 82,400 Retained Earnings 0 Sales 16,000 Gas Expense 200 Supply Expense 400 Insurance Expense 400 Depreciation Expense 100 Wage Expense 200 Dividends 1,000 100,700 100,700
Question 4
-
Explain the closing entry process and prepare the closing entries in journal form based on the information in question 4.
Question 5
-
POST INC. BANK RECONCILIATION
Cash balance per bank
$8,200
Cash balance per books (general ledger)
$6,500
Outstanding checks
$2,460
Check mailed to the bank for deposit had
not reached the bank by the statement
date.
$500
NSF check returned by the bank for
accounts receivable
$100
July interest earned on the bank statement
$20
Check no. 700 for misc. expense cleared
the bank for $200; erroneously recorded
in the Matrix books for $20
Prepare a bank reconciliation.
Shown the accounting entries that must be made by Matrix in journal entry and T-Account format.
Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code "Newclient" for a 15% Discount!
NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.
