I.

TRUE OR FALSE
SET A SET B
1 B B
2 A B
3 A A
4 A A
5 B B
6 A B
7 B A
8 B A
9 B B
10 A A
11 A A
12 B A
13 B B
14 A A
15 A B

III. PROBLEM SOLVING

Jerry Trading
Invoice Price of Scanner 37,500.00
Down payment (3,750.00)
Accounts Payable 33,750.00
Cash Discount (2% x 33,750) (675.00)
Net Accounts Payable 33,075.00
Down payment 3,750.00
Cost of Scanner 36,825.00

Depreciation Expense- 2016

Computer (75,000 x 0.9)/8 8,437.50
Potocopier (120,000x0.95)/12 9,500.00
Scanner (36,825x 0.90)/5*2/12 1,104.75
Depreciation Expense- 2016 19,042.25

Computer Photocopier Scanner Total

Cost 75,000 120,000 36,825.00 231,825.00
Accumulated Dep. (23,203.13) (19,000.00) (1,104.75) (43,307.88)
Carrying Value, 12/31/2016 188,517.13

Omega Merchandising

Note X (7,600 x 121/180) 5,108.89

Note Y(8,800 x60/12) 4,400.00
Interext Expense 9,508.89
Notes Payable (190,000 +220,000) 410,000.00
Discount on Notes Payable (6,891.11)
(7,600+8,800-9,508.89)
Carrying Value 403,108.89

Accounts Receivable, January 1 46,800.00

Credit Sales 420,500.00
Returns made by charge customers (15,500.00)
Collections made beyond the discount period (145,250.00)
Collections made within the discount period (176,400/0.98)) (180,000.00)
Accounts Written-Off (12,000.00)
Accounts Receivable, December 31 114,550.00

Required Allowance (10% x 289,550) 11,455.00

Allowance before Adjustment (Debit) 3,320.00
(8,680-12,000)
Bad Debts Expense 14,775.00

Accounts Receivable, December 31 114,550.00

Allowance for Bad Debts (11,455.00)
Net Realizable Value 103,095.00
II. JOURNALIZING (Explanations were removed)

1 Merchandise Inventory 290,780

Income Summary 290,780

2 Invoice Price of Furniture (38,700 x 0.90) 34,830.00

Cash discount (34,830 x 2%) (696.60)
Incidental Costs 1,170.00
Cost of New Furniture 35,303.40

Furniture Cost Scrap Value Useful Life Annual Dep. 2016- Deprec
A 50,000 2500 5 years 9,500.00 9,500.00 (full year deprec)
B 37,500 3750 5 years 6,750.00 6,750.00 (full year deprec)
C 35,303.40 3530.34 5 years 6,354.61 3,706.86 (seven months)
22,604.61 19,956.86

Depreciation for 2016

Depreciation Expense 19,956.86
Accumulated Depreciation 19,956.86

Depreciation for 2017

Depreciation Expense 22,604.61
Accumulated Depreciation 22,604.61

3 Interest Expense 4,141.67

Discount on Notes Payable 4,141.67

Expired Interest
Note Discount Terms Portion Fraction Expense
A 2100 90 days 40 days 40/90 933.33
B 5500 6 months 3.5 months 3.5/6 3,208.33
4,141.67
4 Case A
Bad Debts Expense 3,432
Allowance for Bad Debts 3,432

Case B Bad Debts Expense 13,932

Allowance for Bad Debts 13,932

Case C Bad Debts Expense 5,925

Allowance for Bad Debts 5,925
(237,000 x 0.025)

Accounts Receivable- January 1 75,000

Credit Sales (395,000 x 0.6) 237,000
Collections:
From current year accounts (237,000 x 0.7) (165,900)
From previous year accounts (75,000 x 0.9) (67,500)
Accounts Receivable- December 31 78,600

Case A Case B
Required Allowance (12% x 78,600) 9,432 9,432
Allowance before adjustment (6,000) 4,500
Bad Debts Expense 3,432 13,932

5 Depreiation for 2015

 Depreciation Expense 17,242.5
Accumulated Depreciation 17,242.5

Depreiation for 2021

Depreciation Expense 18,810
Accumulated Depreciation 18,810

Invoice Price 195,000

Down payment (20% x 195,000) (39,000)
Accounts Payable 156,000
Cash Discount (1% x 156,000) (1,560)
Net Accounts Payable 154,440
Down payment (20% x 195,000) 39,000
Cost 193,440
Incidental Cost (1,800 +2,760) 4,560
Total Cost 198,000

Cost 198,000
Residual Value (0.05 x 198,000) (9,900)
Depreciable Cost 188,100.0
Useful Life 10
Annual Depreciation 18,810.0
Fraction for 2015 11/12
Depreciation- 2015 17,242.5

Entry to record disposal

Cash 75,000.00
Accumulated Depreciation 130,102.50
Store Equipment 198,000.00
Gain on Sale 7,102.50

*Accumulated Depreciation:
Annual Depreciation 18,810.0
No. of Full years used (2016-2021) 6
Accumulated Depreciation (full years) 112860
Depreciation- 2015 (Fractional) 17,242.5
Accumulated Depreciation- Dec. 2021 130,102.5

Selling Price 75,000.00

Carrying Value
Cost 198,000.00
Acc. Dep. (130,102.5) (67,897.50)
Gain on Sale 7,102.50

6 Case A
Bad Debts Expense 25,750.00
Allowance for Bad Debts 25,750.00
(36,250-10,500)
Case B
Bad Debts Expense 46,750.00
Allowance for Bad Debts 46,750.00
(36,250+ 10,500)

Aging Analysis
Percent Est.
Days Past Due Amount Uncollectible Uncollectible
0-30 210,000 2% 4,200.00
 31-60 148,000 5% 7,400.00
61-90 130,000 10% 13,000.00
91-120 36,000 15% 5,400.00
Over 120 25,000 25% 6,250.00
Required Allowance 36,250.00

7 Case A
Merchandise Inventory 288,000
Income Summary 288,000

Case B
Merchandise Inventory 258,000.00
Income Summary 258,000.00

Case A Case B
Beginning Inventory 100,000.00 0.00
Net Cost of Purchases
Purchases 940,000.00 940,000.00
Purchase Returns (80,400.00) (80,400.00)
Purchase Discount (11,844.00) (11,844.00)
(940000*0.7*0.9*0.02)
Net Purchases 847,756.00 847,756.00
Freight-In 12,244.00 860,000.00 12,244.00 860,000.00
Cost of Goods Available for Sale 960,000.00 860,000.00
Percentage Unsold 0.30 0.30
Ending Inventory 288,000.00 258,000.00