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Exam 3 Softbyte Inc. Balance Sheet December 31, 2012 Assets Cash $500,000 Accounts Receivable 700,000 Inventory...

Exam 3 Softbyte Inc. Balance Sheet December 31, 2012 Assets Cash $500,000 Accounts Receivable 700,000 Inventory 300,000 Property, Plant & Equipment 900,000 Accumulated Depreciation (100,000) 800,000 Total Assets $2,300,000

Liabilities & Equity Accounts Payable $300,000 Notes Payable 1,000,000 Common Stock 500,000 Retained Earnings 500,000 Total Liabilities & Equity $2,300,000

Instructions: Open the balances in the T-accounts (general ledger). Post the journal entries to the T-accounts (general ledger). Prepare an income statement, statement of retained earnings, balance sheet, and statement of cash flows-indirect method. Journal Entries for January 2013

Transaction 1: Services Provided for Cash Description: Receives $155,000 cash from customers for programming services it has provided. Journal Entry: Dr. Cr. Cash 155,000 Sales 155,000

Transaction 2: Receipt of Cash on Account Description: Receives $28,000 in cash from customers who had been billed for services. Journal Entry: Dr. Cr. Cash 28,000 Accounts Receivable 28,000


Transaction 3: Cost Flow Assumption: LIFO Description: Recorded $45,000 in cost of goods sold under the LIFO cost flow assumption. Journal Entry: Dr. Cr. Cost of Goods Sold 45,000 Inventory 45,000

Transaction 4: Recording Depreciation Expense Description: Recorded depreciation expense under the straight-line method. Journal Entry: Dr. Cr. Depreciation Expense 9,000 Accumulated Depreciation 9,000

Transaction 5: Sale of Plant Asset Description: Sale of plant asset for cash. The cash received was equal to the book value. Journal Entry: Dr. Cr. Cash 3,000 Accumulated Depreciation 16,000 Equipment 19,000

Transaction 6: Gain on Sale of Plant Asset Description: Sale of plant asset for cash. The cash received was $2,000 more than the book value resulting in a gain. Journal Entry: Dr. Cr. Cash 5,000 Accumulated Depreciation 16,000 Gain 2,000 Equipment 19,000

Transaction 7: Loss on Sale of Plant Asset Description: Sale of plant asset for cash. The cash received was $500 less than the book value resulting in a loss. Journal Entry: Dr. Cr. Cash 2,500 Loss 500 Accumulated Depreciation 13,000 Equipment 16,000

Transaction 8: Note Given to Borrow from Bank Description: Borrowed $2,000 cash with a 60-day, 12%, $2,000 note. Journal Entry: Dr. Cr. Cash 2,000 Notes Payable 2,000

Transaction 9: Payment of Note Description: Paid the principal and interest on the note in Transaction 8. Journal Entry: Dr. Cr. Notes Payable 2,000 Interest Expense 40 Cash 2,040

Transaction 10: Bond Issue Description: Issued a $100,000 Par Value Bond at a Discount Journal Entry: Dr. Cr. Cash 96,454 Bonds Payable 96,454

Transaction 11: Effective Interest Amortization Description: Recorded bond interest expense under the effective interest method. Journal Entry: Dr. Cr. Bond Interest Expense 4,823 Bonds Payable 823 Cash 4,000

Transaction 12: Issuing Par Value Stock at a Premium Description: Issued common stock and received cash of $50,000 in excess of par value. Journal Entry: Dr. Cr. Cash 350,000 Common Stock , $10 Par Value 300,000 Paid-in Capital in Excess of Par Value, Common Stock 50,000

Transaction 13: Dividend Description: The corporation pays a dividend of $3,800 in cash to the stockholders of Softbyte. Journal Entry: Dr. Cr. Dividends 3,800 Cash 3,800

1.What is the ending cash balance? A. $1,132,114 B. $1,235,553 C. $1,339,885 D. $1,433,559

2.What is the ending accounts receivable balance? A. $675,000 B. $672,000 C. $680,000 D. $685,000

3.What is the ending inventory balance? A. $250,000 B. $255,000 C. $260,000 D. $264,000

4.What is the ending equipment balance net of accumulated depreciation? A. $755,000 B. $768,000 C. $775,000 D. $782,000

5.What is the amount of total assets as of January 31, 2013? A. $2,462,995 B. $2,655,235 C. $2,841,114 D. $2,935,755

6.What is the ending retained earnings balance? A. $575,713 B. $581,972 C. $593,837 D. $615,245

7.What is the amount of net income? A. $90,468 B. $92,743 C. $97,637 D. $99,645

8.What is the amount of total expenses and losses? A. $55,455 B. $57,924 C. $59,363 D. $61,455

9.What is the net increase in cash for the period? A. $632,114 B. $645,935 C. $660,348 D. $662,465

10.What is the net cash provided by operating activities? A. $172,940 B. $178,960 C. $177,244 D. $179,486

11.What is the net cash provided by investing activities? A. $15,325 B. $13,350 C. $12,500 D. $10,500

12.What is the net cash provided by financing activities? A. $435,359 B. $438,915 C. $441,355 D. $442,654 The following information is used to answer question

13 to 16: Bonds: $3,000,000 Par Value
Semiannual Interest Payments
Three-Year Life Annual Contract Rate: 12%
Annual Market Rate: 10%

13.What is the price of the bond? A. $3,152,270.76 B. $3,187,305.54 C. $3,215,852.37 D. $3,330,744.36

14.What is the amount of the bond premium? A. $330,744.36 B. $187,305.54 C. $152,270.76 D. $215,852.37

15.What is the semi-annual cash payment to the bondholder? A. $150,000 B. $160,000 C. $170,000 D. $180,000

16.What is the total amount of interest expense over the life of the bond? A. $927,729.24 B. $945,756.32 C. $955,798.51 D. $963,877.98

The following information is used to answer questions 17 to 20: Bonds: $1,000,000 Par Value
Semiannual Interest Payments, 
Three-Year Life Annual Contract Rate: 6%
Annual Market Rate: 8%

17.What is the price of the bond? A. 963,544.12 B. 952,877.65 C. 947,578.63 D. 925,587.96

18.What is the amount of the bond discount? A. 52,421.37 B. 50,865.35 C. 47,822.45 D. 45,647.24

19.What is the semi-annual cash payment to the bondholder? A. 25,000 B. 30,000 C. 35,000 D. 40,000

20.What is the interest expense for the second semi-annual payment under the effective interest method? A. 37,903.15 B. 38,219.27 C. 38,548.04 D. 38,889.96

Bonus Question!! You have taken out a $25,000 loan to purchase a car. Your interest rate is 6% and your loan term is 4 years. 21.How much is your monthly car payment?A. $524.56 B.$587.13C. $595.39 D.$602.85

Solutions

Expert Solution

1)correct option is "A"

Ending cash balance =Beginning balance+/- all transaction

= 500000+155000+28000+3000+5000+2500+2000-2040+96454-4000+350000-3800=1132114

2)correct option is "B"

Accounts receivable at end =beginning - Receivables collected

     = 700000-28000

       = 672000

3)correct option is "B"

Inventory at end = Beginning value - inventory sold

                = 300000-45000

              =255000

4)correct option is" D"

Plant and equipment at end(Gross) =Beginning + purchase-cost of equipment sold

   = 900000+0-19000-19000-16000

   = 846000

Accumulated depreciation at end =beginning+ current year depreciation -depreciation on equipment sold

= 100000+9000-16000-16000-13000

=64000

Plant and equipment at end (net) = 846000-64000= 782000

ekkarill92 answered 1 year ago
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