….. Exam …..


1- Ex:

Gomez computing sells merchandise for $5,000 cash on September 30,

2009 cost of merchandise is $2,900. The Sales tax law required Gomez to
collect 4 % sales tax on every dollar of merchandise sold.

record the entry for the $5,000 sales and its applicable sales tax .also
record the entry that show the remittance or the 4% tax on this sale to
the state government on October 15.

2- Ex:

Ticket master receive$ 4,000,000 in advance ticket sales for a four tour
date of rolling stone.

Record the advance ticket sales on October 31.record the revenue

earned for' the first concert date of November 5, assuming it represents
one fourth of the advance ticket sales.

3- Ex:

Mr: Kareem
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 ….. Exam …..
On November 7, 2005 Ortez Company borrows $150,000 cash by
signing a 90- day, 8% note payable with a face value of $150,000.

1. Compute the accrual interest payable on December 31,2005

2. Prepare journal entry to record the issuance of the note
3. Prepare entry to record payment of the note at maturity.

4- Ex:
On September 11, 2004, home store sells Mobile for $ 400 with one
year warranty that covers parts. Warranty expense is estimated at 5% of
sales. On July 24, 2005, the Mobile is brought in four repairs covered
under the warranty requiring $ 35 in materials taken from the repairs
parts inventory.

Prepare the July 24, 2005, entry to record the warranty repairs.

5- Ex:

Mr: Kareem
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 ….. Exam …..
A car is sold for 15,000 on June 1, 2005 with one year warranty on
parts. Warranty expenses are estimated at 1 .5 % of selling price at each
calendar year end. On March 1, 2006 the car is returned for warranty
repairs costing 135. The amount recorded as warranty expense in

March 1 is

a) 0
b) 60
c) 75
d) 135

6- Ex:

Paris Company offer an annual bonus to employees equal to 4 % of

the net income after deducting the bonus. The estimated net income for
the year is expected to be $ 500,000. If the company meets certain net
income goals.

Prepare journal entry to record a bonus owed to its workers.

Solve

Mr: Kareem
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 ….. Exam …..

1)The entry of September 30,2009

Cash 5,200
Sales 5,000
Sales tax payable 200
(5,200 x 4%)

The entry of October 15, 2009 would be:

Sales tax payable 200

Cash 200

2)The entry of October 31 would be:

Cash 4,000,000
Unearned revenue 4,000,000

The entry of November 5 would be:

Unearned revenue 1,000,000

1 1,000,000
( 4 x 4,000,000) service revenue

3)The entry of November 7,2005

Cash 150,000
Notes payable 150,000

The entry of December 31, 2005

Interest expense 1,800

Interest payable 1,800
54
(150,000 x 8% x 360 )

The entry of payment the note and interest on February 6, 2005

Notes payable 150,000

Mr: Kareem
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 ….. Exam …..
Interest payable 1,800
Interest expense 1,200
36
(150,000 x 8% x 360 )
153,000
cash

4)The entry to record warranty expense would be:

Warranty expense 20
Estimated warranty liabilities
20
(400 x 5%)

The entry to record warranty repairs would be:

Estimated warranty liabilities 35

Parts inventory 35

5)
a) -0-

6)
B= 4% (500000 – B)
B= 20,000 – 0.04B
1.04B = 20,000
20,000
B = 1.04 = $ 19,230.8

So, bonus = $ 19,230.8

The entry would be:

Employee bonus expense $ 19,230.8

bonus payable $ 19,230.8

Mr: Kareem
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