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Brock University Mid-Term Examination: Fall 2012 Course: ACTG 1P91, Sec. 04, 06, 08 Date of Examination: October 20, 2012 Time of Examination: 10:00-12:00 Number of Pages: 19 Number of Students: 210 Number of Hours: 2 Instructors: N. Chasse, G. Skrubbeltrang,

PLEASE NOTE THE FOLLOWING IMPORTANT INSTRUCTIONS No examination aids other than those specified are permitted. Only non-programmable calculators are allowed. Use or possession of unauthorized materials will automatically result in a grade of zero for this examination. Question 1 Multiple Choice 2 Income and retained earnings 3. Accounting Equation 4. Reporting Operating Results 5. Adjustments 6. Cash Control Time Allotted (minutes) 30 15 20 13 27 15 Maximum Marks 25 10 15 10 20 10 Marks Awarded

Total

120

90

NAME (Please print) ____________________ STUDENT ID NO.______________________ Section Number (please circle) : 04: Wed and Fri – G. Skrubbeltrang 06: Thursday – G. Skrubbeltrang 08: Mon and Wed – N. Chasse

Record your answers in the following table. 2012 Page 2 Question 1 – Multiple Choice (25 marks) Choose the one best answer for each of the following questions. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 C B C C D D D B C A C C A B D A B D D A D B B C B . ONLY THE TABLE WILL BE MARKED.ACTG 1P91 October 20.

Sales Revenue 1.800 Required: a) Calculate net income for the year ended December 31.000 1 mark 360.400 Other Selling and Administrative Expenses 350.000) 1 mark 476.900 1 mark b) Assuming the company had retained earnings of $162.900 1 mark (46.900 120.800 262. 2011.ACTG 1P91 October 20.900 Other Expenses 122.500 43. 2011.000 152.865.000 in dividends during the year.800 122. Inc.900 1 mark .300 350. prepare its statement of retained earnings.800 Advertising and Promotion Expenses 262.400 1. for the fiscal year ended December 31. 2011 and paid out $46.865.800 ½ mark for each item √ (3 marks in total) √ √ √ √ √ √ Net Income 360. 2012 Page 3 Question 2 (10 marks) The following information pertains to Green Thumb. 2011 1 mark for proper date Beginning R/E Add: Net Income Deduct: Dividends Ending R/E 162.500 Interest Expense 43. Wages Expense Advertising and Promotion Expenses Interest Expense Accumulated Amortization Cash Other Expenses Sales Revenue Other Selling and Administrative Expenses 724.300 Less Wages Expense 724. Green Thumb Inc Statement of Retained Earnings 1 mark for company name and statement identfication December 31.000 as of January 1.

a company that specializes in repairing and tuning classical instruments. September 22: Called in a plumber to fix the broken toilet.000 50. 2012: Accounts payable Building Cash Contributed capital Equipment $30.       Required: Using the table provided on the following page. the company had the following activities:  September 1: Dan Auerbach and Patrick Carney. indicate the amount. $4.000 in cash and received 50 common shares of Black Keys Incorporated.800 3.000 112.800 During the month of September. September 10: Received $8.000 Land Equipment Retained Earnings Supplies $45.000 84. September 12: Paid $7. . leave the space blank. 2012 Page 4 Question 3 (15 marks) Black Keys Incorporated. where is no effect. The invoice is payable in 30 days.700 for services performed during the month.000 25. 2012.000 cash from the Black Submarine Academy of Music as advance payment to provide services and repairs to all their classical instruments. The contract is for an eight month period and will begin in October. September 15: Paid salaries.000 in supplies. For each component of the equation. was incorporated as a private company on August 1. The company’s accounts included the following at August 31. Paid $450 bill. 2012. co-founders and co-owners of the company each contributed $20.500.ACTG 1P91 October 20.000 20. show how each transaction for September affects the accounting equation. September 5: Purchased and received $5.000 15. September 30: Billed customers $7. if it increases (+) versus decreases (-). One quarter was received in cash and the balance was billed on account.000 to reduce the amount owing to suppliers on account.

ACTG 1P91 October 20. 2012 Page 5 Question 3 (continued) Shareholders’ Equity +/+/+/+/+/+/+/- Date SEP 1 SEP 5 SEP 10 SEP 12 SEP 15 SEP 22 SEP 30 ASSETS = +/+/+/+/+/+/+/- Liabilities + +/+/+/+/+/+/+/- .

For each transaction. D. B. indicate the account(s) that should be debited and credited by entering the appropriate account number(s) to the right of each transaction. Purchased on credit but did not use supplies this month. Booked blowouts to be done next month. 2012 Page 6 Question 4 (10 marks) The following is a series of accounts for the Sprinkler Blowout Company. C. Performed services for customers this month for cash. didn't collect cash. .ACTG 1P91 October 20. paying part cash and signing a note for the rest. Purchased a building. write none after the transaction. Following the accounts is a series of transactions. # 9 10 11 12 13 14 15 16 Account Title Land Note payable Prepaid insurance Service revenue Supplies Supplies expense Wages expense Wages payable Debit Credit Transactions A. Acct. E. # 1 2 3 4 5 6 7 8 Account Title Accounts payable Accounts receivable Advertising expense Building Cash Contributed capital Income taxes payable Insurance expense Acct. Paid insurance premium for coverage beginning next month. If no journal entry is needed. listed alphabetically and numbered for identification.

700 of supplies on hand. Required: Prepare the adjusting journal entries that should be recorded in the table on the following page. D) Interest earned and receivable on the outstanding notes receivable is $260 for the period. 2012 Page 7 Question 5 (20 marks) ABC Company's unadjusted trial balance includes the following account balances: UNADJUSTED TRIAL BALANCE Account Cash Accounts receivable Interest receivable Supplies Prepaid insurance Notes receivable Property and equipment Accumulated amortization Accounts payable Accrued liabilities Unearned revenue Notes payable Contributed capital Retained earnings Sales revenue Interest revenue Cost of service expense Supplies expense Amortization expense Wage expense Rent expense Insurance expense Totals Debit $ 68. B) The company estimates amortization expense of $8.400 0 0 3. (A blank page follows to record your answer.350 of prepaid insurance expired during the period.100 21.600 9.500 40.150 for the period.800 The following data are available to determine adjusting entries: A) $4. Then.200 87.400 216.500 104. C) A count showed $85.800 0 $708.000 277. prepare an adjusted trial balance.600 8.100 143.800 Credit $ 64.300 138.900 26.000 17.300 1.) .800 $708.500 21.ACTG 1P91 October 20.700 50.900 116.

2012 Page 8 Question 5 [This page left blank intentionally for journal entries] ID A ACCOUNT INSURANCE EXPENSE PREPAID INSURANCE DEBIT 4.ACTG 1P91 October 20.150 8.900 52.150 C SUPPLIES EXPENSE SUPPLIES 52.900 D INTEREST RECEIVABLE INTEREST REVENUE 260 260 1 mark for each line 8 marks in total .350 CREDIT B AMORTIZATION EXPENSE ACCUMULATED AMORTIZATION 8.350 4.

900 √ 8. 2012 Page 9 Question 5 [This page left blank intentionally for Trial Balance] Account Cash Accounts receivable Interest receivable Supplies Prepaid insurance Notes receivable Property and equipment Accumulated amortization Accounts payable Accrued liabilities Unearned revenue Notes payable Contributed capital Retained earnings Sales revenue Interest revenue Cost of service expense Supplies expense Amortization expense Wage expense Rent expense Insurance expense Totals ½ mark for each line item √ (account and balance) 1 mark for proper totals that balance ADJUSTED TRIAL BALANCE Debit Credit $ 68.150 √ 3.560 √ 85.ACTG 1P91 October 20.160 26.350 √ 50.300 √ 1.200 √ 87.500 √ 22.350 √ $717.500 √ 40.650 √ 104.900 √ 116.400 √ 216.800 √ 4.700 √ 4.800 √ √ $ 72.100 √ 143.210 12 marks in total .600 √ 9.210 $717.100 √ 21.400 √ 52.000 √ 17.000 √ 277.

68 Bank service charges for September were $75.77 Outstanding cheques totaled $4. 2012. A cheque from a customer.000. 2012 Page 10 Question 6 (10 marks) On September 30.42. The bank collected a note receivable for Spooky Costume for $2.125. The balance as of September 30. M.21. 2012 in the bank statement was $9. After reviewing the bank statement against the company records. the accounting clerk determined the following information       The September 30th deposit of $6. 2012 the Spooky Costume Company’s general ledger reported a balance in the cash account of $12.815. Interest earned on the account totaled $305.ACTG 1P91 October 20. Myers.651. it was posted by the bank on October 1st. . totaling $2.77 was returned marked “NSF” Required: Prepare the bank reconciliation for Spook Costume Company at September 30.972.547.00.89 does not appear on the September bank statement.