Hallmark College

Financial & Managerial Accounting Assignment Questions for MBA 1st Year students
1. This problem involves using a work sheet for GHRS Company for the Month ended 2010
July 31, and performing the closing process. The trial balance for GHRS Company, as of
2010 July 31, was as follows:
G H R S Company
Trial Balance
2010 July 31
Acct. No. Account Title Debits Credits
100 Cash $ 10,700
103 Accounts Receivable 8,100
130 Land 40,000
140 Buildings 24,000
200 Accounts Payable $ 1,100
201 Notes Payable 40,000
300 Capital Stock 35,000
310 Retained Earnings, 2010 July 1 3,100
320 Dividends 1,000
402 Horse Boarding Fees Revenue 4,500
404 Riding Lesson Fees Revenue 3,600
507 Salaries Expense 1,400
513 Feed Expense 1,100
540 Interest Expense 200
568 Miscellaneous Expense 800
Total $ 87,300 $87,300
Depreciation expense for the month is USD 200. Accrued salaries on July 31 are USD 300.
A. Journalize the adjusting entries.
B. Journalize the closing entries.
2. Among other items, the trial balance of K Company for 2010 December 31, includes the
following account balances:

Debit Credit

Supplies on Hand $ 6,000

Prepaid Rent 25,200
Buildings 200,000
Accumulated Depreciation Buildings $33,250
Salaries Expense 124,000
Unearned Delivery Fees 4,000
Some of the supplies represented by the USD 6,000 balance of the Supplies on Hand
account have been consumed. An inventory count of the supplies actually on hand at
December 31 totaled USD 2,400.
 On May 1 of the current year, a rental payment of USD 25,200 was made for 12 months’
rent; it was debited to Prepaid Rent.
The annual depreciation for the buildings is based on the cost shown in the Buildings
account less an estimated residual value of USD 10,000. The estimated useful lives of the
buildings are 40 years each.
The salaries expense of USD 124,000 does not include USD 6,000 of unpaid salaries
earned since the last payday.
The company has earned one-fourth of the unearned delivery fees by December 31.
Delivery services of USD 600 were performed for a customer, but a bill has not yet been
sent.
A. Prepare the adjusting journal entries for December 31, assuming adjusting entries
are prepared only at year-end.
B. Based on the adjusted balance shown in the Accumulated Depreciation—Buildings
account, how many years has K Company owned the building?
3. X Co. has made plans for the next year. It is estimated that the company will employ total
assets of Br. 800,000; 50 per cent of the assets being financed by borrowed capital at an
interest cost of 8 per cent per year. The direct costs (cost of goods sold) for the year are
estimated at Br. 480,000 and all other operating expenses are estimated at Br. 80,000.
The goods will be sold to customers at 150 per cent of the direct costs. Tax rate is
assumed to be 50 per cent.
You are required to calculate:
A. Net profit margin;
B. Return on assets;
C. Assets turnover and
D. Return on owners’ equity.
4. Assume the following data for product X:
Beginning inventory 400 units @ $12 = $ 4,800
First purchase 600 units @ $13 = 7,800
Second purchase 700 units @ $13 = 9,100
Third purchase 500 units @ $14 = 7,000
Merchandise available for sale 2,200 units $28,700
 An inventory count at the end of the accounting period shows that 530 units of Product X
are on hand.
Calculate the value of a periodic inventory using the following four costing methods:
A. Specific identification
B. First-in, first out(FIFO)
C. Last-in, first out (LIFO)
D. Weighted average
5. Given the following manufacturing summary account of X company for the year ended
2022:
Manufacturing summary
Beginning Raw material inventory Br 45,000
Beginning work-in-process inventory Br 62,500
Raw materials purchases Br 325,700
Direct labor Br 205,000
Factory overhead Br 195,000
Ending raw materials inventory Br 41,500
Ending work-in-process inventory Br 31,700
Raw materials purchase return &allowance Br 7,600
Required: Prepare the statement/schedule of cost of goods manufactured?

Good Lack & Enjoy It!!!

 Answer

1. A * Depreciation expense-------------------200

Accumulated Depreciation- Building --------------200

* Salaries Payable ------------------------300

Salaries expense --------------------------------------300

B. Closing entry

* Horse Boarding Fees Revenue -------------- 4,500

Riding Lesson Fees Revenue ----------------3,600

Income summary -------------------------- 8100

* Income summary -------------------------- 3500

Salaries Expense ----------------------------------1,400

Feed Expense ------------------------------------- 1,100

Interest Expense------------------------------------- 200

Miscellaneous Expense------------------------------800

* Income summary -------------------------------- 3,100

Retained Earnings -------------------------- 3100

* Capital -------------------------------------1000

Dividends ----------------------------------------- 1,000

2. A * supplies expense ---------------------------- 3600

Supplies ---------------------------------------------------- 3600

* Rent expense ------------------------------- 8400

 Prepaid Rent ------------------------------------------------- 8400

* cost 200,000 - residual value 10,000 = 4750

40 years estimated life

* Deprecation expense ------------------4750

Accumulated Depreciation expense ---------------4750

* Salary expense --------------------6000

Salary payable ---------------------------------6000

* Unearned service fee-------------------- 600

Service income -----------------------------600

B. Accumulated Depreciation building balance ------ (33250 + 4750) = 38,000

K Company owned the building ------------- 2 year

3. A Net profit margin = net income

Net sales
Net sale=1,200,000.00
Less cost of goods sold =480,000.00
GP=720,000.00
Less operating expense =800,000.00
EBIT=640,000
Tax x 0.5=320,000.00
Net income 640,000-320,000
Net income 320,000.00
So net profit margin =1,200,000 3.75%
320,000

B .Return on asset = Net sale = 1,200,000 = 3%

Net asset 400,000

 C. Asset turn over =Net asset

4. A.

B. FIFO
Third purchase 500 units @ $14 = $ 7,000
Second purchase 30 units @ $13 = $ 390
Inventory on hand 530. Units $ 7,390
C. LIFO
Beginning inventory 400 units @ $12 = $ 4,800
First purchase 130 units @ $13 = $ 1,690

Inventory on hand 530 units $ 6490

D. Weighted average
Average unit cost ------------- 28700 2200=13.05
Inventory ---------------------- 530 x 13.05= 6,916.5
5. X company
Statement/schedule of cost of goods manufactured
For the year ended 2022
Beginning work-in-process inventory -----------------------------------------------Br 62,500
Raw materials;-
Beginning Raw material inventory Br 45,000
Raw materials purchases Br 325,700
Less: Raw materials purchase return &allowance Br 7,600
Cost of material available for use Br 363,100
Less Ending raw materials inventory Br 41,500
Cost of materials placed in production Br 321,600
Direct labor Br 205,000
Factory overhead Br 195,000
Total manufacture cost Br 721,600
Total work-in-process during period Br 784,100
Less ending work-in-process inventory Br 31,700
Cost of good manufactured Br 752,400