| Caio University coed scen704) Faculty f Engineering i Accounting Credit Hour System Midterm Exar Spring 2086 4 Bembate: | 26/03/2016 | Allowed rime: ahr 20 Answer All Questions Question 1 (6 points): For each of the following, choose the answer that most completely answers the question: a ie Financial statements must be prepared for which time period? A. One year. B. Less than one year. . More than one year D, Any time period ‘A trial Balance that is out of Dalanee indicates that: A. The number of ledger accounts with debit balances is uot equal to the aumber of accounts with credit balances B. A debit has been posted to the wrong account, C. Thera is not an equality of debit and eredit amounts in the ledger. D. A journal catry has been completely omitted from the posting process. Each year, the accountant for Southern Real Estate Campany adjusts the recorded value of each asset (o its market value, Using these market value figures on the balance sheet violates: ‘A. The accounting equation. B. The stable-dollar assumption. C. The business entity concept. ‘D. The cost principle. In a ledger, debit entries cause: ‘AvInereases in owners’ equity, decreases in liabilities, and increases in assets. B. Decreases im liabilities, increases in assets, and deereases in owners" equity. C..Decreascs in assets, decreases in libilities, and increases in owners equity D. Decreases in assets, increases in abilities, and imereases in owners" equity ‘Which financial statement is primarily concerned with reporting the financial position of a business B. The income statement, C. The statement of cash Nlaws. D_All three statements are concerned with the financial Which of tne fotiowing accounts normally has a credit balance? osition of a business at a particule ( A. Cash. B. Servie revenue. C. Accounts receivable. D. Uillites expense ‘Which of the following is correct when a corporation uses cash to pay for an expense? ‘A. Total nsscts will decrease. BB. Retained earnings will decrease C-Owners! equity will decrease, D. All three of the above statements are correct ‘The purchase of equipment on credit is recorded by a: A. Debit to Equipment and a credit to Accounts Payable. B. Bebit to Accounts Payable and a credit (o Equipment. C. Debit te Equipment and a dehit to Accounts Payable, D. Credit to Equipment and a credit to Accounts Payable, The general purpase financial statements prepared anaually by a corporation would not include the: A. Balance sheet. B. Income tax retura. C Income statement D, Statement of cash flows. Pagotls10- ‘The collection of accounts receivable is recarded by a: A. Debit to Cash and a debit to Accounts Receivable. B. Credit to Cash and 2 credit to Accounts Receivable. C.Debit 10 Cash aud a credit to Accounts Receivable. D.-Credit to Cash and a debit (o Accounts Receivable, Ji- Ifa company has 4 profit: A. Assets will be equal to iabllities plus owners! equity B. Assets will be less than Fiabilities plus owners’ equity. C. Assets will be greater than abilities plus owners! equity. D. Owners’ equity will be greater than its assets. 12+ Which of the following is generally not considered an external user of accounting information? stockholders of a corporation, B. Bank lending officers. Financial amilysts. D. Factory managers. Question 2 (7 points): CUFE Truck Rental Company was organized in 2015 and had the following balances for the year ended Dec. 31, 2015 listed in tabular form: (ast [ae,f00[Adaiional Tavesiment within 3015 | 1.050.000 Loan faterest expense at an annual), fi ] Seer ae ie ‘Notes Receivable 350,000 Capital at Jan. 1,2015 Land_ 1,800,000 Reat expense i Tracks |_ 750,000 | ‘Office Equ [Insurance expense _ [70,000 service revenue “Owners! Drawings (Withdrawal [50,000 ‘Accounts Receivable 250,000, Rent earned revenue Depreciation expense ‘Salaries Payable ‘Wages and salaries expense | 65.00 5 ‘ASyears long term Loan Aecounts Payable 200,000 | (Gneunad snlan 1, 2818) 7,000,000 | Supplies and Tools 100,000 _| Advertising expense 20,000_| dt 1. Prepare CUFE Company's Income Stitement for the year ended Dec.31, 2015. 2. Prepare CUFF Company's Balance Sheet at Dev. 31, 2015. 3. Does CUPE Company's Balance Sheet show a strong or weak financial position as of Dec. 31, 2015? Explain briefly with special reference to curreal assets and short term liabilities. Page2sQuestion 3 (7 points} On Juty 1, 2010, Jessie Halverson established an interior decorating business, Photoyenie Desigus, During the month, Jessie Halverson completed the following transactions relaied ta the business: Joly L. Jessie transferred cash from her personal bank xecount to start her new bu 518,000. 4.Paid rent for period of July 4 to end of month $1,750, 10, Purchased a truck for $15,000 paying $1,000 cash and giving a note payable for the remainder. 15. Purehased equipment on account $7,000. 14. Purchased supplies for eash $1,200. 15, Rectived sash for job completed $7,500. 24, Performed services to one of her client's for $8,600 on account. 27. Paid utilities expense, $900. Reauired: ess amounting to (@) Journalize the transactions. (©) Post co the cash and the accounts payable in the ledger account Using T Form and compute its ending Balance. Pageal3Date : Modi Aiswet Middetnn i es 2016 BQ a ears —s- 4 Bay 9-8 I ere (rec) ae Aes -l-A Sf hoe 6. B ee cera _ oS ———— fy CEE Teck, rented Grn Peasy Dacian Shtee —_ Fehon evel Des. 21,205 Revenue aa a Seite Fewer ASocac_ Reb ame) loocoo _ Tat fevenves, Bsdcca_ Ex Pens aD = - — loan idercd Ciéeo oe) Expente? (38200). Prepay taxon. (Booes) Dn caran Ce sence CF#e006). Depes often. (Bo0oe). Ww Sriagliaiaiee LS CES bo, - Adios w Cas . ee Se (AS00090) NODate ; NO: 2). CURE a ee Gap ee IPE Gp eh See Asset s Liabrlhen nals 4soaad Noke Pasjalale. 200e Ge_ Phi. &riprd— Bosse Saleen looesa a | Accents _ Boones Buuileliay 1000606 | low tem lean —__!0 06000 Sapplres— 100000 | totpd.. ljatoilihes _|Eoe00a Neles recente 250000 Contes 5 — Land [200800 Teac Es 4S00c0 Aviad Wetsle _25e00 ~~ Bh ocecat fotel assebs= SOC000 Fob Wabilihen..eowast sls Fp Te gt Gp _ ay ob Owners qed = Gpitel atjJon (205 4 NefiAGee — mitthdtomel’ B4OOD0e = ~pital += tlooaae) + aa +10.50006 Spee = BY oovee + [Sc0ga — 1250000 = Asee00 ft 3) CUFE Gmpuny 5 rate Pesthen 09. Cored assis a, tote Pan Lege Lele, A Cored adhe —— ia ‘SMILE = sal OERE? 3h Shor} tem jabillp = EooooaNO al Cornel. Aatites | Dole. Exphact ion ie. Cz Tey. | Coad 1Boce pire \Bo0e, Toy 4 Ret Expenses 50 —— * Gin ao | Jabs Track \Socs....|. Gash 100.63... Neks paysdble Hoo. July js] quip rreet | 4000 a - | ee Peyable 42a... Toh: Supp ites [200 : oe kA IZo0 load Conde 4500 Cee Servi Revens F506 July 24) Bie F600 BS | Utilihes Bye | Foo ey 2 heh Foo SMILEDate = NO. azs _ = Crohn De G ae Taly | (8600 (450 Tuly 4 Tay 15 4800 Tees Daly 10 [Ze6 Tal fe Goo Tuly 27 —__ 25500 | 4B50 20 65e (Debit bog bate Accounts fogs bla. oe be Foe JeY 13 “Foso Credit balea& SMILECairo University Fin l Exam for Fatt Course 2015 Eaculty of Engineering Subject Accounting Genn 204 Credit Hours Busines Time Allowed Two Hours POBES Agswer ihe following questions ‘Question No, One From the following multiple choice questions, select the correct answer. Show all necessary calculations. Arrange your answer ina table as follows: ‘Question No. | Correci answer | Calculations | 1-Financial statements are designed primarily to a Provide managers with detailed information tailored to the managers! specific information needs. b. Provide people ouside the business organization with information about the company’s financial position and operating results. c. Report to tax authority the company’s taxable income. d. Indicate to investors in a particular company the current market values of their investments. 2-A balance sheet is designed to show: a. How much a business is worth. b. The profitability of the business during the current year ¢. The assets, liabilities, and owners’ equily in the business at the particular date. 4, The cost of replacing the assets and of paying off the liabilities at December 31. 3- From an accounting viewpoint, when is @ business considered an entity separate from its ownexts)? 2. Only when organized as a sole proprietorship. b. Only when organized as a partnership. ¢. Only when organized as a corporation. d. Ineach of the above situations, the business is an accounting entity separate from the activities of the owner(s) 4+ Which of the following will not cause a change in the owners' equity of a business? 2 Paynient of a business debt b, Withdrawal of cash by the owner. ¢. Additional Investment by the owner . d. Losses ftom unprofitable eperafions. 5- A balance sheet shows 4 revenues, liabilities, and owner's equity. b. expenses, drawings, and owner's revenues, expenses, and drawings. . assets, liabilities, and owner's equity. An income statement a summarizes the changes in owner's equity for a specific period of time. : 'b. reports the changes in assets, liabilities, and owner's equity over a period of time Teports the assets, liabilities, and owner's equity at a specific date, presents the revenues and expenses for a spevific period of time. ‘Ts A net loss will result during a time period when a. assets exceed liabilities b. assets exceed owner's equity expenses execed revenues d. revenues exceed expenses. 8- Amr Company began the year with owner’s equity of L-E.175,000. During the year, the company recorded revenues of 1..E.250,000, expenses of L.E.190,000, and had owner drawings of L.E.20,000, What was's owner's equity at the end of the year? aL.E.255,000 bLE215,000 c.L-E.405,000 a1.6.235,000 to be continued L9- At October |, Smithson Enterprises reported owner's equity of L.E.35,000.During October, no additional investments were made and the company eared net income of L.E.4,000. If ownet’s equity at October 31 totals L.E.32,000, what amount of owner drawings were made during the month? a LEO b. LE.1,000 &. 1.6.3,000 d. LB.7,000 10-On January 1, 2009, Afileck Company reported owner's equity of L.E.470,000. During the ‘year, the owner withdrew eash of L.F.20,000. At December 31, 2009, the balance in ‘wmer’s equity was L.F.500,000. Whut umount of net income or net loss would the eompany report for 20097 a, Net income of L. . Net loss of L.E.50,000 ¢. Netincome of | 4. Net income of L.£.$0,000 11+ The double-entry system requires that cach transaction must be tevorded 2. inat least two different accounts. _b. in two sets of books sina journal and in a ledger. dd. first as a revenue and then as an expense 12-Inrecording an accounting transaction in a double-entry system, ‘a thenumber of debit accounts must equal the number of credit accounts. bi there must always be cntries made on both sides of the accounting equation. ¢, theamount of the debits must equal the amount of the credits. a. there must only be two accounts affected by any transaction. 13-‘The first step in the recording process is 10 a. prepare financial statements, b. analyze each transaction for its effect on the accounts, ¢. post to a journal. prepare a trial balance. 14 Robitaille Company received a cash advance of L.E,S08 from a customer. As a result off this event, a. asscts incrcased by L500. +, owner's equity increased by LE.S00. ¢. liabilities decreased by L.E.500. both aand b, 15- Root Company provided consulting services and billed the client L.E.2,500, As azesult of thisevent, a. assets remained unchanged. bargsets increased by L-E2,500. c. owner's equity inereased by 16.2500. d. both bande. Question No. Two: Iva Holz is a Heened CPA, During the first month of operations of her business, the following events and transactions occurred May 1 Holz invested LE. 30,000 cash. 2 Hired a seoretary-receplionist at a salary of LiE. 1,000 per month. 3 Purchased LE. 2500 of supplies on account from Read Supply 7 Paid office reat of L.E. 900 cash for the month. 1 Completed a tax assignment and billed client L.E, 1,100 for services rendered. 12 Received L.E. 3500 advance on a management consulting engagement. 17 Received cash of L,E; 1200 for services completed for H_Amold Company. 31 Paid secretary-reception L.J:. 1,000 salary for the month. 31 Paid 40% of balance due Read Supply Company. Required {@) Journalize the transactions. (b) Post to the ledger accounts ( ause-dhe-dhree-colurne form-for-castt ~secoumanst T-account fom for the-semaining accounts) (©) Prepare a trial balance on May 31, 2009. *QUESTION THREE: Safeway, Inc.. is onc of the world's trom a recent Safeway balance sheet sees i e Tei $ 1748 Receivables a aR - er 3aa2 Merchandice inveniosios rsa ee edz Propaid expenses Heats . z 07S Facures and equipment .. : er cece 5,580.8 ‘Retained eamings Seasecenctenee eee de. 4178 “Total curent tabilties 3464.3 Instructions 4. Using:the information above, compute the amounts of Safeway’s total current assets and total quick assets. b. Compute the company’s (1) event satio, (2) quick ratio, and (3) working capital. (Round to one decitnal place.) From these computations ace you able wo conclude whether Safeway is a good ceedit risk fox short-term exeditors or on the brink of bankruptey? Explain. s QUESTION FO! The following information is available eegardi Co. fora recent four-month period g the total manufacuuring overhead of Borsa Mig. Machine Manufacturing f ours Overhwad Jan. ss ieee u - 3.500 eae | Fabs pars sate ciaiawioceseen eestor reper 3,200 24000 Mar. 5 an 900 283800 184,600 2. Use the high-low method to determine: 1. The variable clement of manufacturing overticad costs per machiae-hove * 2, The fixed clement of mouthly overhead cost BL Bursa expects machine-hours in May to equal 5.300, Use the cost mlatioaships determined in part s to forecast May's manufacturing overhead cost. Qe F-The Fallot is information concerning a product manufactured by Ames Brothers: Sales price per unit 2 : : 2 2 s 7 Variable enst per unit sas 28 eee ES “Total figed manutseturing and operating costs (ner month) cereees 405,000 Determine the following: a. The unit contribution margin, The number of unite that must be sold exch month iw break even. The unit sales level that ust he reached to earn an operating income of $270,000 pec mdath, 3B tromz 2.NO. Mod answer af Gaol Eran for GENNZe4_Crall- 2018) SMILEDate = Q2: NO A] Jounal enteres Dete Explancdion BS face Hoy | Cote, 20000 Kap itek 3060 Lae&ts igverteat of Goh) Noy 2 No erntty May 3..f.. Supplies 2500 Accounts Poyalole 25005 © Purchesed Saaplier oautted? = Rent Expentes oo — Goh he 400 CPaich aPhice vest) Mey 1 | Atcods recehmbele \loo Service fevenne (10a Cieitled elec for secvite prosidal May 12 Coal, REGS uneacaed Be Ren 2500 Kfeceived Goby Be Future coven, How 14 Gk tZa0. Seryite fevenn ee (2a0 Checetved rsh her se cute. : 4 Hay3i | sSaletiee Expernseo_..| 1000 Gosh l9@6, ist (Raid Slates = SMILE[355° Credit bela Date = NOG Dote x plans fon So ce Becoud s Foye de (ottk2me) | 1900 : Moy 31 Cash fecn (paid cradiber an a (coma) ' — bb > Coal, Ox ie Boaoo G00 B50 ee 1200 \9o0 (ooo 252 Debt balera) i Ale recenable Capita | ah tl G. 7 a SEneG Neo a ee ok Debit baleda ) Alc... Pogable ; le =r fe Bens he = 2500 as 102Q. ee Looe 2520 160 (Cradh be has) "S| Sizes : Bx (Gett Gn enental yerrenne balan te ) Oe eet BSco _Date NO: Ba cepentes Salates Expeana “Pe & De o 400 1000 Foo (6e0) Debit balance CDeb-+ ba huts) 2 Wa Hele, cPA “tried balinte May 31,2004 Tle. | Ba [en Gsh BtB00 Supplies 2500 Accoucts Veceivalele 11 Go reat Expenses 4900 Seles laaga Pita Boca | Servic fenaw Rog | Gneates| revenve S5eq | A ccoudds Payable ISe0 | ZA30@ | 3ARae SMILEDate : NO: es Guet assts = Gsh +. cenmbl + iaverdaries f= prepaid e-Working capital A romeQuestion Three: E ‘The management of Eresno Processing Company has assist you to compute the following:: 4° The contribution margin and the coatribution margin ratio per ton “ be The break-even sales volume in dollarsandtons 7 no 4 ,| c- Assume that the company’s budget calls for an operating income of $ 240000 compute the sales volume required to reach this profit objective stated in dollars and tons. C= ay oe Fae fog ee “|?eoo soe ‘You have determined the company's cost structure to be as follows: ‘Variable cost per ton $ 150, Total fixed $ 640000, sales price per tar $200, Question Four: “The following is the information related to production and administrative ‘eosts for the four months of ProGlide Co. otal units preduced ‘Total administrative costs Jan——_____-_-_____00 $25060 Fep——_—______ 350 $25040\\ ~~ s2si94 ~ $§25280 a+ ‘The variable cost of administrative cost per unit be The fixed cost of monthly administrative cost. - What amount of administrative cost should ProGilde expect in a mouth in which it has scheduled 930 units of productions? ZL 2g a RF BModel Answer fl Fal exam Eu 2914 Ql: a) Dot e Explanation D G- ae | va Gpilad [ecees a Sapient LODO & s/ Cook F606 Ale Pesble PROCESS [ piped ene <| 6000 lof adn Booo land 200e 15% SEV even] 2003 a Salmien Expoky A00G \ Gol 4 aoe Ave receiabie | A006 is/\ Servia reve 4000 Caaks SIG V3 thet Canc reves 5000 Con 2500 22h 2 Ale seceliwable 2500 a Ubiihes Exposes | [oom eeES fife Pesjalple /000 A/e Pejable 2008 Oo, o/| Gok 2a00Qib Corl Dy Gye VA Jeoocae 3000 I 6000 &% iy 200m \S00 yj laf 5000 2f| 2500 2eoo 397, O 4e00 (Debit balana) Qaz- thal brazil sence L Mardle Co - pecdats ae NekinGme /8secsv§03| S4ece gz | 2e0ceny 0.04 Goods z si 7 nig ee! | ee Gocas/ 200008 Ros AE tectiabh, bre 5 ce & pede Pesooe at esi [zecaen [1 00500 $2 times rwedor tan ens 4.5 tras | 1Borweco KO-S 2c606 10-4 G times Wer By Spree Ce Boooss — Pars 60e0c0s, | 4oonee - looses Bo oss brailian stom Pleucts bo stranger aor UNer intone 1S Vyas pereteye 4 Glen nl Ch ee ee etek held i spat B/ AL vecendia Thao Ske A/Dreedels Tarnote ve heofun heQ3r- D antihtn wongn fats toorf ~ Ika Sag Per ton Pesta caper patient eee b pease Soe ) prod tuen Pest Sues Zt a oa G4eG0° ; _ 12800 ie sO brea. even Pads dollan = “Tabel eemne = poaKl28e ee e) fer Gee = ahocce # brooto-+aies. < troeo unt N= Ketone ao Gubbio e719" eee 5a os = 3520000 A Ose- Gut pad = 25280-25010 _ — 2 : ae g50 22 4 Plas b) > Fixed ar 25230 — 24 K9S0= acces 2h SCS SO boas f or = 26040 — ey fer Nez 330 ut Spl Gaps Fe Ve eo Ts Q4xKGRS = 25732 dé