Accounting Homework

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TRADITIONAL HOMEWORK ITEMS – FALL 2023 – ACT 3391
General Instructions for the Traditional Homework – refer to the instructions for traditional item no. 1.
9. (2 points) Prepare AJEs that should be made on 12-31-21, the end of the accounting year, for each of the following situations. If
no AJE is required, indicate “none.” Assume the company only makes AJEs at the end of the accounting year. In addition, identify
the impact, if any, on the financial statements if you failed to make the appropriate AJE. Indicate NE for no impact, U for
understatement, and O for overstatement. Use the following format to indicate the impact of failing to make the required entry for
each situation.
Assets
XX
a.
b.
Liabilities
XX
Expenses
XX
Revenues
XX
Net Income
XX
Owners’ Equity
XX
On March 1, 2021, the company collected $1,200 of rent for 12 months in advance. The journal entry to record the receipt
included a credit to a temporary account.
On September 30, 2021, the company rented equipment for 6 months and paid $6,000 in advance. The journal entry to record
the payment included a debit to a temporary account.
10. (3 points) X Company’s financial records showed the following during 2020:
Office rental revenues
$100,000
Wages & salaries paid
$40,000
X follows the accrual basis of accounting. The following were taken from X’s balance sheets:
Office rental receivables
Wages & salaries payable
Unearned office rental revenue
a.
b.
12-31-20
$13,000
19,000
7,000
12-31-19
$10,000
23,000
5,000
What were office rental receipts during 2020?
What was wages & salaries expense during 2020?
11. (1 point total) Write the best accounting word/phrase that describes the following. Write ONLY ONE word/phrase next to each
item. DO NOT ABBREVIATE.
Net income minus preferred dividends divided by the weighted average of
shares outstanding.
The income statement category for a disposal of a component of a business.
12. (2 points) M recorded entries for (1) the issuance of common stock for $40,000, (2) the payment of $5,500 of accounts payable,
(3) the collection of $3,400 of accounts receivable, (4) the incurrence and payment of $2,200 of utilities expense, and (5) the
declaration of a $1,000 cash dividend on M’s common stock. What net effect do these five entries have on M’s total owners’ equity?
Make sure your final answer (a) is one net dollar amount AND (b) indicates if total owners’ equity is increased OR decreased
by your net dollar amount.
13. (4 points) Changes in all of E’s balance sheet accounts during the current year, EXCEPT the change in E’s retained earnings
account follow. Compute E’s net income (or net loss) for the year assuming the only two entries E made to her retained earnings
account during the year were for a cash dividend declared and paid of $15,000 and her net income (or net loss) for the year. (This is
NOT a statement of cash flows problem – do NOT format it like a statement of cash flows problem.)
Cash increased
Fixed assets decreased
Accumulated depreciation increased
Accounts payable decreased
Unearned revenue decreased
Common stock increased
Additional paid-in-capital increased
$40,000
$24,000
$12,000
$27,000
$11,000
$ 5,000
$36,000
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14. (2 points) Penning Corporation reported the following:
Net income
Dividends on common stock
Dividends on preferred stock
Weighted average common shares outstanding
$940,000
$45,000
$100,000
230,000
What should Penning report as its earnings per share? Round your answer to the nearest penny.
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TRADITIONAL HOMEWORK ITEMS – FALL 2023 – ACT 3391
General Instructions for the Traditional Homework – refer to the instructions for traditional item no. 1.
15. (2 points) The following items may be reflected in a company’s statement of cash flows. For each item, indicate which, if any,
of the 3 sections of the statement of cash flows the item would be reflected in. Assume the statement is prepared using the
indirect method.
1.
Selling a fixed asset for more than book value.
2.
Borrowing money.
3.
Using cash to pay a dividend to stockholders.
16. (10 points) Diane’s balance sheets as of December 31, 2016 and 2017 are presented below:
2016
2017
Cash
Accounts receivable
Prepaid expenses
Property, plant, and equipment – at cost
Accumulated depreciation
TOTAL ASSETS
$100,000
200,000
40,000
250,000
( 50,000)
$540,000
$140,000
195,000
25,000
340,000
( 80,000)
$620,000
Accrued wages payable
Unearned revenues
Dividends payable
Long-term debt
Common stock
Additional paid-in-capital
Retained earnings
TOTAL LIABILITIES & SE
$ 26,000
44,000
0
50,000
23,000
67,000
330,000
$540,000
$
5,000
4,000
25,000
90,000
26,000
90,000
380,000
$620,000
SELECTED OTHER INFORMATION:
1. During 2017, Diane reported net income of $150,000.
2. During 2017, Diane both borrowed on a long-term basis and paid back some long-term debt. During 2017, Diane borrowed
$60,000.
3. During 2017. Diane both bought and sold some property, plant, and equipment (PP&E). A machine Diane sold during 2017
originally cost her $25,000. Diane sold the PP&E for $10,000. At the time of the sale, the PP&E had accumulated
depreciation of $18,000.
4. During 2017, Diane issued additional common stock.
5. During 2017, Diane declared four quarterly dividends. 2017 was the first year in which Diane declared dividends.
6. During 2017, Diane did NOT enter into any non-cash investing or financing activities.
Prepare Diane’s Statement of Cash Flows (in good form) for the year ended December 31, 2017. Diane uses the indirect method.
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