THE 2009 Winter ACCOUNTING TRIBE

The First Scrimmage

Circle Teacher

Dr. Kirch Mrs. Kirch Mrs. Freeland

______________________________________
Name (Please Print)

_______________________________
PID

______________________________
Days & Time of your class

Rules:
No cheating
Pledge: By signing my name below, I am promising that:

1) The work I complete is my own,

2) I did not and will not give aid to others,
3) I will not share any information about the examination with those who are taking
It later, and
4) I will report any others that I observe violating these rules.

Signature ___________________________________________________________
Multiple Choice: Please mark your answer on the both Bubble sheet
and on this test. (7 points each)

1) Current Liabilities are

A) by definition, “Bad Things.”

B) equal to Long-Term Liabilities - Owners' Equity.
C) Liabilities that are due now, or even overdue for payment.
D) equal to Current Assets - Expenses for the period.
E) liabilities that will have to be paid within one year.

2) Which of the following changes describes the payment of $1,000 on the principal of a
long-term note payable?

A) Assets and owners' equity increase by $1,000

B) Assets and owners' equity decrease by $1,000
C) Assets and liabilities increase by $1,000
D) Assets and liabilities decrease by $1,000
E) No changes in total assets, liabilities, or owners' equity

3) Which account will NEVER be included in a closing journal entry?

A) Sales
B) Retained Earnings
C) Advertising Expense
D) Wage Expense
E) Cash

4) Chris wants to buy a new Lexus. The cost is $60,000. Chris will put $20,000 down
and pay the rest in five equal annual payments which will begin in one year and which
include interest at 10%. How much are the annual payments?

A) $ 12,000.00
B) $ 8,000.00
C) $ 10,551.90
D) $ 15,827.89
E) Some other number

5) Joshua wants to have $1,000,000 in the bank in five years. If the bank pays interest at
10% compounded semi-annually, how much does he need to deposit today to reach
his goal?

A) $ 79,504.57
B) $ 613,913.25
C) $ 620,921.32
D) $ 200,000.00
E) Some other number
6) Darby’s Company is buying a Tweedle Dee from Brendan Company. The original cost
 on January 1, 2007 was $12,000. Darby put no money down and is making annual
payments on December 31st of $3,165.57 which include interest at 10%. If Darby is
properly amortizing this purchase, the interest expense for 2008 (second year) is

A) $ 316.56
B) $ 800.00
C) $ 1,003.44
D) $ 1,200.00
E) Some other number

7) Still on Darby- Assuming Darby is amortizing the loan correctly, the Principal Balance at
the end of 2007 (end of the first year) would have been

A) $ 8,834.43
B) $ 10,800.00
C) $ 1,965.57
D) $ 10,034.43
E) Some other number

8) How much does Bella need to put in the bank today if she wants to withdraw $20,000
per year for each of the next five years? She will put the money in a bank which pays
8% annually. She will make her first withdrawal exactly one year from today.

A) $ 98,120.14
B) $ 79,854.20
C) $ 100,000.00
D) $ 83,698.31
E) Some other number

9) If Eric Company had a beginning inventory of 3 Tulips at $50 each and he bought 2
more for $60 each on June 1st and then he sold 2 for $100 each on June 15 th and , if
he used FIFO, what would his ending inventory be?

A) $ 70
B) $ 150
C) $ 160
D) $ 170
E) Some other number

10) The matching concept is

A) Debits = Credits
B) Assets = Liabilities + Owners= Equity
C) Revenues - Cost of Goods Sold = Gross Margin
D) Recording all expenses incurred in generating the revenues of the period
E) The same as the book value

11) Kylie invests $10,000 today in an account paying 12% compounded monthly. How
 much will she have 20 years from today?

A) $ 108,925.54
B) $ 96,462.93
C) $ 12,201.90
D) $ 298,000.00
E) Some other number

12) According to the article “What It Takes to Be Great” by Geoffrey Colvin,

which of the following statements is the most accurate?

A) Hours of practice over long periods of time are required to be successful.

B) Innate ability plus practice are required to be successful.
C) Goals are required to be successful.
D) Brutal discipline in practice is required to be successful.
E) Planned goals and evaluating activities are required to be successful.

Answer questions 13 - 21 using your entries and balances calculated for

Problem 1: Jason’s Thingamabobs, Inc. for 20x2.

13) Cost of Goods Sold for 20x2 is

A) $ 72,000
B) $ 64,000
C) $ 66,000
D) $ 130,000
E) Some other number

14) Taxes Payable at 12/31/x2 are

A) $ 17,400
B) $ 20,300
C) $ 10,150
D) $ 8,700
E) Some other number

15) The ending balance in Retained Earnings at 12/31/x2 is

A) $ 241,600
B) $ 266,600
C) $ 291,600
D) $ 259,000
E) Some other number

16) The ending balance in Prepaid Insurance at 12/31/x2 is

 A) $ 12,000
B) $ 18,000
C) $ 4,000
D) $ 6,000
E) Some other number

17) The ending balance in Note Payable-Kevin at 12/31/x2 is

A) $ 50,000
B) $ 35,000
C) $ 45,000
D) $ 40,000
E) Some other number

18) Depreciation Expense for 20x2 is

A) $ 20,000
B) $ 22,000
C) $ 24,000
D) $ 80,000
E) None of the above

19) Prepaid Rent at 12/31/x2 is

A) $ -0-
B) $ 30,000
C) $ 6,000
D) $ 2,000
E) None of the above

20) Wage Expense for 20x2 is

A) $ 58,000
B) $ 50,000
C) $ 70,000
D) $ 38,000
E) None of the above

21) Accumulated Depreciation at 12/31/x2 is

 A) $ 80,000
B) $ 100,000
C) $ 58,000
D) $ 102,000
E) None of the above

Answer questions 22 - 32 using the financial information from Problem 2:

Patrick, Inc. at December 31, 2008.

22) The Total Current Assets at December 31, 2008 was

A) $ 105,000
B) $ 305,000
C) $ 709,000
D) $ 185,000
E) Some other number

23) The Total Current Liabilities at December 31, 2008 was

A) $ 269,000
B) $ 260,000
C) $ 279,000
D) $ 709,000
E) Some other number

24) The Total Liabilities at December 31, 2008 was

A) $ 269,000
B) $ 260,000
C) $ 279,000
D) $ 709,000
E) Some other number

25) The P/E ratio at December 31, 2008 was

A) 6.56
B) 21.96
C) 1.83
D) 12.00
E) None of the above

26) The Total Owners’ Equity at December 31, 2008 was

 A) $ 130,000
B) $ 300,000
C) $ 709,000
D) $ 430,000
E) Some other number

27) The Gross Margin for the year ended December 31, 2008 was

A) $ 825,000
B) $ 500,000
C) $ 300,000
D) $ 325,000
E) Some other number

28) The Operating Income for the year ended at December 31, 2008 was

A) $ 325,000
B) $ 65,000
C) $ 60,000
D) $ 42,000
E) Some other number

29) The Taxable Income for the year ended at December 31, 2008 was

A) $ 325,000
B) $ 65,000
C) $ 60,000
D) $ 42,000
E) Some other number

30) The Earnings Per Share for the year ended at December 31, 2008 was

A) $ 4.20
B) $ 2.10
C) $ 1.83
D) $ 1.40
E) Some other number

31) The Book Value Per Share at December 31, 2008 was
 A) $ 14.33
B) $ 21.50
C) $ 23.63
D) $ 18.76
E) Some other number

32) The Dividends Declared during 2008 were

A) $ 10,000
B) $ 20,000
C) $ -0-
D) $ 42,000
E) Some other number

Name________________________________
Problem 1 Jason’s Thingamabobs, Inc.

Listed below are the accounts and their respective balances for Jason’s Thingamabobs, Inc. at
December 31, 20x1:

Cash $ 153,000
Accounts Receivable 20,000
Inventory (8 Thingamabobs @ $5,000 each) 40,000
Prepaid insurance 12,000
. Equipment 240,000
Accumulated Depreciation 80,000
Security Deposit 2,000
Accounts payable 15,000
Taxes payable 10,000
Wages payable 12,000
Rent Payable 4,000
Note Payable-Kevin 50,000
Common Stock (20,000 shares) 70,000
Retained earnings 226,000

During 20x2 the following transactions occurred:

Paid prior year’s accounts payable.
Received prior year’s accounts receivable.
Purchased 15 Thingamabobs at $6,000 each. Paid 25% down and will pay the rest later.
Sold 12 Thingamabobs for $20,000 each 50% down (cash) and the other 50% will collect later.
Paid 20x1 taxes payable.
Paid cash for wages of $50,000. (includes the $12,000 owed at the end of 20x1).
Paid fifteen months’ rent, $30,000.
Paid $3,000 for advertising for 20x2.
Sold 5,000 shares of common stock for $4.00 each on October 1, 20x2.
Paid annual payment on Note Payable of $15,000, which includes interest. Annual payments on
Note Payable-Kevin are $10,000 principal plus interest at 10% on the unpaid balance.
Paid a $1.00 per share dividend to shareholders.

Also:
During the year the company paid 50% of the 20x2 taxes. The tax rate is 30%.
The Company uses the FIFO inventory system.
At December 31, 20x2, the company owed $20,000 in salaries which had not yet been paid.
The prepaid insurance at 12/31/x1 was for a policy that had exactly two years left (20x2 and
20x3).
The equipment originally cost $240,000, had a ten-year life and was expected to be worth
$20,000 at the end.
The company uses the straight-line method of depreciation.

Prepare all Journal Entries and T-Accounts completely for 20x2 on the pages
provided in the exam. Then answer questions 13 - 21 in the exam based on your
entries.
Prepare Journal Entries for Jason’s Thingamabobs 20x2
Journal Entries, pg 2
Journal Entries, pg 3
Post T-Accounts Name_______________________________
 Name________________________________
Problem 2 Patrick, Inc.
Listed below are the accounts for Patrick, Inc. at December 31, 2008 and their
balances. The amounts listed for the Income Statement accounts are before the
closing entry has been posted. The amounts for the Balance Sheet accounts are after
the closing entry has been posted.

Accounts Payable $200,000

Accounts Receivable 80,000
Accumulated Depreciation 46,000
Advertising Expense 19,000
Building 300,000
Cash 105,000
Common Stock 300,000
Cost of Goods Sold 500,000
Equipment 140,000
Interest Expense 5,000
Inventory 120,000
Depreciation Expense 26,000
Notes Payable, Long-Term 10,000
Security Deposit 10,000
Rent Expense 75,000
Retained Earnings 130,000
Sales 825,000
Salaries Payable 60,000
Salary Expense 100,000
Tax Expense 18,000
Taxes Payable 9,000
Utilities Expense 40,000

Patrick’s beginning balance (12/31/07) in Retained Earnings was $98,000 and the beginning
Common Stock balance was $200,000. The company had 10,000 shares of common stock
outstanding at the beginning of the year. The corporation issued 5,000 shares of common stock on
March 1, 2008, 10,000 shares on April 1, 2008 and another 5,000 shares on October 1, 2008. The
market price of the stock at the end of 2008 was $12.00 per share.

Use the information above to answer questions 22 – 32 on the exam.

Hint: You might want to draft the financial statements on the back sides of your
exam pages.