ACC 280 Final Exam 1

ACC 280 Final Exam 1 1. Liabilities of a company would not include 2. According the matching principle, the cost of inventory becomes an expense 3. If total liabilities decreased by $15,000 and stockholders' equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period? 4. Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry: 5. Walker Clothing Store had a balance in the Accounts Receivable account of $780,000 at the beginning of the year and a balance of $820,000 at the end of the year. Net credit sales during the year amounted to $8,000,000. The average collection period of the receivables in terms of days was 6. Zendejas Company purchased a ruler for $2.00. The ruler is expected to last for ten years. Tony, the accountant, expensed the cost of the ruler in the year of the purchase. Which constraint has Tony taken into account when making his accounting decision? 7. A debit to an asset account indicates Information below is for question # 8. Risen Company had $250,000 of current assets and $90,000 of current liabilities before borrowing $50,000 from the bank with a 3-month note payable. 8. What effect did the borrowing transaction have on the amount of Risen Company's working capital? 9. The current assets of Kile Company are $150,000. The current liabilities are $120,000. The current ratio expressed as a proportion is 10 . If a corporation distributes cash to its stockholders, then Problem # 1: Instructions Prepare a correct income statement: Hint: you will need to adjust the numbers in the income statement below, with the additional data below the problem (Try some journal entries, and post them to the proper account), and then do the income statement. Your choice on whether you show the entries, although it may help, and show me how you got the numbers! Total Points: 8 Problem # 2 Instructions: Please read the information below, the instructions, and then follow the instructions. First do the entries, and make sure you adjust any accounts that are necessary. Please show all calculations that you want to, as it will help. Total Points 4: Problem # 3 Instructions: (a) Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2008. (For this, just do a basic retained earnings calculation, but no formal statement is required)! (b) Prepare a classified balance sheet for Ken’s Concepts at December 31, 2008 assuming the note payable is a long-term liability. Total Points: 8