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ACC 205 Week 1 Assignment Student
Guidance Report
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Exercises 2.
Basic computations. The following selected balances were extracted
from the accounting records of Rossi Enterprises on December 31,
20X3:
a. Determine Rossi's total assets as of December 31.
b. Determine the company's total liabilities as of December 31.
c. Compute 20X3 net income or loss.
5. Accounting equation; analysis of owner's equity. Sportscar
Repair revealed the following financial data on January 1 and
December 31 of the current year.
Assets Liabilities

January 1 $45,000 $20,000
December 31 49,000 31,000
a. Compute the change in owner's equity during the year by
using the accounting equation.
b. Assume that there were no owner investments or withdrawals
during the year. What is the probable cause of the change in owner's
equity from part (a)?
c. Assume that there were no owner investments during the year.
If the owner withdrew $17,000, determine and compute the
company's net income or net loss. Be sure to label your answer.
d. If owner investments and withdrawals amounted to $13,000
and $2,000, respectively, determine whether the company operated
profitably during the year. Show appropriate calculations.
8. Financial statement relationships. The following information
appeared on the financial statements of the Altoona Repair Company:
1. By picturing the content of and the interrelationships among
the financial statements, determine the following:
a. Total revenues for the year
b. Total owner investments
c. Total assets
Problems 3.

Statement preparation. The following information is taken from the
accounting records of Grimball Cardiology at the close of business
on December 31, 20X1.
Accounts Payable $14,700 Surgery Revenue $175,000
Surgical Expenses 80,000 Cash 60,000
Surgical Equipment 37,000 Office Equipment 118,000
2. All equipment was acquired just prior to year-end.
Conversations with the practice's bookkeeper revealed the following
data:
Rose Grimball, capital (January 1, 20X1) $300,000
19X1 owner investments 2,000
19X1 owner withdrawals 22,000
3. Instructions
a. Prepare the income statement for Grimball Cardiology in
good form.
b. Prepare a statement of owner's equity in good form.
c. Prepare Grimball's balance sheet in good form.

5.Financial statement preparation. On October 1, 20X6, Susan
Thompson opened Thompson Decorating Services, a sole
proprietorship. Susan began operations with $50,000 cash, 60% of
which was acquired via an owner investment. The remaining amount
was obtained from a bank loan. A review of the accounting records
for October revealed the following:
• Asset purchases: Van, $16,000; office equipment, $4,000; and
decorator (household) furnishings, $17,000. These amounts were
paid in cash except for $2,100 that is still owed for the furnishings
acquisition.
Instructions
d. Prepare an income statement for the month ending October
31, 20X6.
e. Prepare a statement of owner's equity for the month ending
October 31, 20X6.
f. Prepare a balance sheet as of October 31, 20X6.
Chapter 2 Exercise 3
3. Basic journal entries. The following April transactions pertain
to the Jennifer Royall Company:
4/1: Received cash of $15,000 and land valued at $10,000 from
Jennifer Royall as an investment in the business.
4/5: Provided $1,200 of services to Jason Ratchford, a client.

4/5: Ratchford agreed to pay $800 in 15 days and the remaining
amount in May.
4/9: Paid $250 in salaries to an employee.
4/24: Borrowed $7,500 from Best Bank by securing a 6-month loan.
Prepare journal entries (and explanations) to record the preceding
transactions and events.
4. Trial balance preparation. Brighton Company began
operation on March 1 of the current year. The following account
balances were extracted from the general ledger on March 31; all
accounts have normal balances.
Accounts Payable $ 12,000 Interest Expense $ 300
Fees Earned 18,900
a. Determine the cost of the company's land by preparing a trial
balance.
b. Determine the firm's net income for the period ending March
31.
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ACC 205 Week 1 Chapter 1 2 Quiz and Video
Quiz
ACC 205 Week 1 Chapter 1,2 Quiz and Video Quiz
1. In accounting the concept of materiality refers to
________________.
Question 2. 2. Typically accounting transactions are recorded and
reported at _______________.
Question 3. 3. The accounting equation is
____________________________.
Question 4. 4. An accountant should be able to work in the profession
in the ___________________.
Question 5. 5. In accounting, a debit means
________________________.
Question 6. 6. All of the following accounts are decreased with a
credit except______________________.
Question 7. 7. A T-account is ________________________.
Question 8. 8. In accounting the General Journal is
___________________________.

Question 9. 9. In accounting a chart of accounts refers to
_______________________.
Question 10. 10. If the Trial Balance is in balance at the end of the
accounting period this insures that________. (Points : 1)
Part 2
Question 1. 1. The accounting equation will appear on every
published financial statement.
Question 2. 2. Accounting has its own language.
Question 3. 3. Assets identify what a firm owes.
Question 4. 4. Liabilities identify what a firm owns.
Question 5. 5. All accounting must be done using an Excel
spreadsheet.
1. A balance sheet reveals the assets, liabilities and equity of a
particular business over a designated period of time.
Question 2. 2. An Income Statement reveals a firms assets, liabilities
and equity at a particular moment in time.
Question 3. 3. The Statement of Retained Earnings builds a bridge
between the retained earnings that existed at the beginning and the
end of the accounting period.

Question 4. 4. A Cash Flow Statement is identical to the firm’s bank
account and is used to reconcile the checking account each month.
Question 5. 5. GAAP is the organization that makes the rules for
accounting that all firms follow.
1. Journal entries must be prepared before financial statements can
be created for a firm.
Question 2. 2. T-accounts are part of the published financial
reporting package of statements each month.
Question 3. 3. An Income Statement will explain the value of current
assets a firm has acquired.
Question 4. 4. Liabilities will be listed on a firm’s balance sheet.
Question 5. 5. Dividends are part of current assets for a firm since
they will be paid with cash.
Question 1. 1. In accounting a debit indicates an increase in an
account.
Question 2. 2. In accounting a credit increases a liability account.
Question 3. 3. In accounting a credit increases an asset account.
Question 4. 4. In accounting there are no debits or credits entered in
the equity accounts.
Question 5. 5. A trial balance is a listing of all accounts and their
balances at a given moment in time.
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ACC 205 Week 1 DQ 1 Accounting Equation
As you have learned in this week’s readings the Accounting Equation
is + Owners’ Equity. Is the accounting equation true in all
instances? Provide sample transactions from your own experiences
to demonstrate the validity of the Accounting Equation.
Guided Response:
Review several of your peers’ postings and identify some core
components that you feel should be included in every transaction.
Respond to at least two of your peers and provide recommendations
to extend their thinking. Challenge your peers by asking a question
that may cause them to reevaluate or add components to their
transactions.
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ACC 205 Week 1 DQ 2 Accounts

What does the term “account” mean? What are the different
classifications of accounts? How do the rules for Debits and Credits
impact accounts? Please provide an example of how debits and
credits impact accounts.
Guided Response:
Analyze several of your peers’ postings. Let at least two of your
peers know if this knowledge could be used in their everyday lives. Is
so, how? If not, why not?
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ACC 205 Week 1 Journal Balance Sheet
Journal
Balance Sheet Journa
The Balance Sheet is a financial snap shot of a company at a
particular point in time. The Balance Sheet lists the assets, liabilities,
and equity of the company. Reflect on your personal financial
situation, can you apply the concepts of the Balance Sheet? What did
you learn from this reflection?
Carefully review the Grading Rubric for the criteria that will be used
to evaluate your journal entry.
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Guidance Report
Exercise 4
4. Accounting for prepaid expenses and unearned revenues. Hawaii-
Blue began business on January 1 of the current year and offers
deep-sea fishing trips to tourists. Tourists pay $125 in advance for an
all-day outing off the coast of Maui. The company collected monies
during January for 210 outings, with 30 of the tourists not planning
to take their trips until early February.
Hawaii-Blue rents its fishing boat from Pacific Yacht Supply. An
agreement was signed at the beginning of the year, and $72,000 was
paid for the rights to use the boat for 2 full years.
1. Prepare journal entries to record (1) the collection of monies from
tourists and (2) the revenue generated during January.
2. Calculate Hawaii-Blue's total obligation to tourists at the end of
January. On what financial statement and in which section would this
amount appear?
3. Prepare journal entries to record (1) the payment to Pacific Yacht
Supply and (2) the subsequent adjustment on January 31.
4. On what financial statement would Hawaii-Blue's January boat
rental cost appear?

Exercise 8
8. Closing entries. Gomez Company had the following adjusted
trial balance on December Prepare the closing entries that Gomez
would record on December 31.
Problem 3
Adjusting entries. You have been retained to examine the records of
Kathy's Day Care Center as of December 31, 20X3, the close of the
current reporting period. In the course of your examination, you
discover the following:
1. On January 1, 20X3, the Supplies account had a balance of
$2,350. During the year, $5,520 worth of supplies was purchased,
and a balance of $1,620 remained unused on December 31.
2. Unrecorded interest owed to the centertotaled $275 as of
December 31.
3. All clients pay tuition in advance, and their payments are
credited to the Unearned Tuition Revenue account. The account was
credited for $75,500 on August 31. With the exception of $15,500,
which represented prepayments for 10 months' tuition from several
well-to-do families, all amounts were for the current semester ending
on December 31.
4. Depreciation on the school's van was $3,000 for the year.
5. On August 1, the center began to pay rent in 6-month
installments of $21,000. Kathy wrote a check to the owner of the
building and recorded the check in Prepaid Rent, a new account.
6. Two salaried employees earn $400 each for a 5-day week. The
employees are paid every Friday, and December 31 falls on a
Thursday.

7. Kathy's Day Care paid insurance premiums as follows, each
time debiting Prepaid Insurance:
Date Paid Policy No. Length of Policy Amount
Feb. 1, 20X2 1033MCM19 1 year $540
Jan. 1, 20X3 7952789HP 1 year 912
Aug. 1, 20X3 XQ943675ST 2 years 840
Instructions
The center's accounts were last adjusted on December 31, 20X2.
Prepare the adjusting entries necessary under the accrual basis of
accounting.
Chapter 4 Exercises
3. Bank reconciliation and entries. The following information
was taken from the accounting records of Palmetto Company for the
month of January:
1. January bank reconciliation.
2. Prepare any necessary journal entries for Palmetto.
Exercise 6
6. Allowance method: estimation and balance sheet disclosure.
The following preadjusted information for the Maverick Company is
available on December 31:
Accounts receivable $107,000
Allowance for uncollectible accounts 5,400 (credit balance)
Credit sales 250,000

1. Prepare the journal entries necessary to record Maverick's
uncollectible accounts expense under each of the following
assumptions:
(1) Uncollectible accounts are estimated to be 5% of Credit Sales.
(2) Uncollectible accounts are estimated to be 14% of Accounts
Receivable.
2. How would Maverick's Accounts Receivable appear on the
December 31 balance sheet under assumption (1) of part (a)?
3. How would Maverick's Accounts Receivable appear on the
December 31 balance sheet under assumption (2) of part (a)?
Problem 4
3. Allowance method: analysis of receivables. At a January
20X2 meeting, the president of Sonic Sound directed the sales staff
"to move some product this year." The president noted that the credit
evaluation department was being disbanded because it had restricted
the company's growth. Credit decisions would now be made by the
sales staff.
By the end of the year, Sonic had generated significant gains in sales,
and the president was very pleased. The following data were provided
by the accounting department:
The $12,444,000 receivables balance was aged as follows:
Assume that no accounts were written off during 20X2.
Instructions
1. Estimate the amount of Uncollectible Accounts as of
December 31, 20X2.
2. What is the company's Uncollectible Accounts expense for
20X2?

3. Compute the net realizable value of Accounts Receivable at
the end of 20X1 and 20X2.
4. Compute the net realizable value at the end of 20X1 and 20X2
as a percentage of respective year-end receivables balances. Analyze
your findings and comment on the president's decision to close the
credit evaluation department.
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Quiz
1. The accrual basis of accounting
means_______________________.
Question 2. 2. Under accrual basis accounting revenue is not
recognized until _________________.
Question 3. 3. The matching principle states
______________________________.

Question 4. 4. Adjusting entries apply to
___________________________.
Question 5. 5. Depreciation is
_________________________________________.
Question 6. 6. Which one of the following is not one of the seven steps
in the accounting cycle?
Question 7. 7. All of the following would be included as cash or cash
equivalents except ____________.
Question 8. 8. Which of the following is not considered a control
feature for cash receipts?
Question 9. 9. Which of the following is not considered a control
feature for cash disbursements?
Question 10. 10. When looking at a firm’s balance sheet if the
accounts receivable account is followed by an account that reads
“less Allowance for Uncollectible Accounts” a reader can
assume_______.
Part 2
Question 1. 1. Cash received from a customer in advance of an order
being shipped is considered revenue by the firm.
Question 2. 2. If no cash is received then revenue cannot be
recognized based on the matching principle.
Question 3. 3. The cash account will never have an adjusting entry
when closing the books.

Question 4. 4. Expenses must be paid for before they can be
recognized.
Question 5. 5. The accounting cycle for a firm is considered to be one
year.
1. The Historical Cost Principle divides the economic life of a
business into artificial time periods.
Question 2. 2. An accounting time period that is one year long is
called the fiscal year.
Question 3. 3. Under accrual accounting revenue should be
recognized when cash is received.
Question 4. 4. The matching principle means expenses should be
recognized in the same accounting period as the revenue they helped
produce.
Question 5. 5. Adjusting journal entries are only necessary for
revenues that are unrecognized at the end of the accounting period.
. Postage stamps would be considered a cash equivalent.
Question 2. 2. A note receivable due in 16 months would be
considered a cash equivalent. Question 3. 3. A good cash control is
to take cash register receipts and hide them in the back room until
later in the week when a bank deposit can be made.
Question 4. 4. An accounts receivable is an amount due from a
customer.
Question 5. 5. A note receivable and an account receivable are the
same thing, just with a different name.
1. Cash control refers to insuring everyone has access to the petty
cash drawer so they can make change when needed.
Question 2. 2. A bank reconciliation by someone external to the cash
process is considered an internal control.

Question 3. 3. Petty cash is the primary account for a firm to pay bills
out of.
Question 4. 4. The Direct Write-off method of bad debt recognition is
not recognized by GAAP as acceptable.
Question 5. 5. The Allowance Method of recognizing bad debt
expense is not recognized as GAAP acceptable.
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ACC 205 Week 2 DQ 1 Accounting Cycle
Financial statements are a product of the accounting cycle. Think
about two different companies, one a manufacturing company, the
other a retail company. Why would different companies have
different accounting cycles? Would you expect the steps of the
accounting cycle to be the same for each company? Why or why not?
Guided Response:
Review several of your peers’ postings and identify what steps of the
accounting cycle that you feel are the most critical. Respond to at
least two of your peers and provide recommendations to extend their
thinking. Challenge your peers by asking a question that may cause
them to reevaluate their position on the accounting cycle.
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ACC 205 Week 2 DQ 2 Bank Reconciliation

What is the purpose of a bank reconciliation? What are the reasons
there are differences between the cash reported in the accounting
records and the cash balance in the bank statements?
peers know what happens to the discrepancies between the book
balance and the bank balance. Could these differences just be written
off.
Guided Response:
A bank reconciliation reconciles the bank account balance per the
books to the actual bank balance. Outstanding checks, deposits in
transit, and bank errors are reasons there are differences between the
cash reported in the accounting records and the cash balance in the
bank statements.
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ACC 205 Week 2 Journal Income Statement
Journal

The Income Statement measures the income and expenses of a
company over a specific period of time. Reflecting on your personal
financial statement for the past month, can you apply the principles of
the Income Statement? What did you learn from this experience?
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Guidance Report
Chapter 5, Exercise 1
Inventory errors and income measurement. The income statements of
Keagle Company for 20X3 and 20X4 follow.
20X3 20X4
Sales $100,000 $109,000
Cost of goods sold 62,000 74,000
Gross profit 38,000 35,000
Expenses 26,000 22,000
Net income $12,000 $ 13,000

A recent review of the accounting records discovered that the 20X3
ending inventory had been understated by $4,000.
a. Prepare corrected 20X3 and 20X4 income statements.
b. What is the effect of the error on ending owner’s equity for 20X3
and 20X4?
Chapter 5, Problem 2
Inventory valuation methods: computations and concepts. Wave
Riders Surfboard
Company began business on January 1 of the current year. Purchases
of surfboards were as follows:
1/3: 100 boards , $125
3/17: 50 boards , $130
5/9: 246 boards , $140
7/3: 400 boards , $150
10/23: 74 boards , $160
Wave Riders sold 710 boards at an average price of $250 per board.
The company uses a periodic inventory system.

Instructions
a. Calculate cost of goods sold, ending inventory, and gross profit
under each of the following inventory valuation methods:
• First-in, first-out
• Last-in, first-out
• Weighted average
b. Which of the three methods would be chosen if management’s goal
is to
(1) produce an up-to-date inventory valuation on the balance sheet?
(2) approximate the physical flow of a sand and gravel dealer?
(3) report low earnings (for tax purposes) for a separate electronics
company that
has been experiencing declining purchase prices?
Depreciation methods. Betsy Ross Enterprises purchased a delivery
van for $30,000 in January 20X7. The van was estimated to have a
service life of 5 years and a residual value of $6,000. The company is
planning to drive the van 20,000 miles annually. Compute

depreciation expense for 20X8 by using each of the following
methods:
a. Units-of-output, assuming 17,000 miles were driven during 20X8
b. Straight-line
c. Double-declining-balance
Depreciation computations. Alpha AlphaAlpha, a college fraternity,
purchased a new heavy-duty washing machine on January 1, 20X3.
The machine, which cost $1,000, had an estimated residual value of
$100 and an estimated service life of 4 years (1,800 washing cycles).
Calculate the following:
a. The machine’s book value on December 31, 20X5, assuming use of
the straight-line depreciation method
b. Depreciation expense for 20X4, assuming use of the units-of-output
depreciation method. Actual washing cycles in 20X4 totaled 500.
c. Accumulated depreciation on December 31, 20X5, assuming use of
the double-declining-balance depreciation method.
Chapter 6, Problem 2

Depreciation computations: change in estimate. Aussie Imports
purchased a specialized piece of machinery for $50,000 on January
1, 20X3. At the time of acquisition, the machine was estimated to have
a service life of 5 years (25,000 operating hours) and a residual value
of $5,000. During the 5 years of operations (20X3220X7), the
machine was used for 5,100, 4,800, 3,200, 6,000, and 5,900 hours,
respectively.
Instructions
a. Compute depreciation for 20X3220X7 by using the following
methods: straight line, units of output, and double-declining-balance.
b. On January 1, 20X5, management shortened the remaining service
life of the machine to 20 months. Assuming use of the straight-line
method, compute the company’s depreciation expense for 20X5.
c. Briefly describe what you would have done differently in part (a) if
Aussie Imports had paid $47,800 for the machinery rather than
$50,000 In addition, assume that the company incurred $800 of
freight charges $1,400 for machine setup and testing, and $300 for
insurance during the first year of use.
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Quiz

1. Gross Profit is ___________________.
Question 2. 2. All of the following are considered part of inventory
cost except__________.
Question 3. 3. In a period of rising raw material costs the inventory
cost flow assumption that will provide the firm with the highest net
income would be _______________________.
Question 4. 4. A physical inventory ______________________.
Question 5. 5. Property, Plant, and Equipment normally includes all
of the following except ___________.
Question 6. 6. All of the following costs would be included in the cost
of a piece of equipment purchased except _________________.
Question 7. 7. When putting an asset into service the useful life is
determined by all the methods below except ________________.
Question 8. 8. When selecting a depreciation method to use for
depreciable equipment, all of the following would be viable
alternatives except _________________.
Question 9. 9. Expenses incurred after acquisition of an asset and
after it has been put into service would be ________________.
Question 10. 10. Taking a “Big Bath” when a firm incurs an
impairment loss means _______________.
Part 2

1. Multi-step income statement means many steps are involved in
creating it.
Question 2. 2. A service business would not have any inventory to sell
on their books.
Question 3. 3. FIFO inventory cost flow is used when materials
received first are sold first.
Question 4. 4. FIFO and LIFO inventory cost methods will still leave
the firm with the same net income at the end of the accounting period
when material costs are rising.
Question 5. 5. Weighted Average inventory costing will always
produce a higher inventory valuation than either FIFO or LIFO will.
1. FIFO stands for Fast Inventory From Overstock.
Question 2. 2. The inventory cost flow (FIFO/LIFO) must match the
physical flow of goods.
Question 3. 3. A firm using the perpetual inventory system will update
inventory records continually.
Question 4. 4. The specific identification method of inventory
valuation would be ideal for a paint manufacturer.
Question 5. 5. The Retail inventory method is only used by service
firms.
1. Once a useful life is established for an asset it cannot be changed.
Question 2. 2. Once a depreciation method is chosen for an asset that
depreciation method cannot be changed.
Question 3. 3. Straight-line depreciation is the most common
depreciation method in use. Question 4. 4. Double declining balance
depreciation is used only when an asset is expected to decline in
value rapidly due to changes in technology.

Question 5. 5. Payment for repairs to a newly purchased piece of
equipment that was damaged during shipment can also be capitalized
as a necessary cost of getting the machinery functional.
1. PPE is a catch all term used to accumulate costs for miscellaneous
expense items in an organization.
Question 2. 2. On the balance Sheet PPE items are usually listed from
high cost to low cost.
Question 3. 3. The value of a capital purchase to be recorded on the
books would be the sticker price of the item purchased.
Question 4. 4. Purchasing small hand tools for the maintenance
department would be an example of a capital purchase because they
can be used for more than one accounting period.
Question 5. 5. Depreciation is a method used for a firm to calculate
the FMV of an asset.
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ACC 205 Week 3 DQ 1 LIFO vs. FIFO
The controller of Sagehen Enterprises believes that the company
should switch from the LIFO method to the FIFO method. The
controller’s bonus is based on the next income. It is the controller’s
belief that the switch in inventory methods would increase the net
income of the company. What are the differences between the LIFO

and FIFO methods?
Guided Response:
peers know if a company is better off it switches from a LIFO method
to a FIFO method? Why or why not?
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ACC 205 Week 3 DQ 2 Depreciation
There is a variety of depreciation methods used to allocate the cost of
an asset to all of the accounting periods benefited by the use of the
asset. Your client has just purchased a piece of equipment for
$100,000. Explain the concept of depreciation. Which of the
following depreciation methods would you recommend: straight-line
depreciation, double declining balance method, or an alternative
method?
Guided Response:
Let at least two of your peers know if a company would use an
accelerated depreciation method for their financial statements or their
tax returns. Why do you believe this would be the case?
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ACC 205 Week 3 Journal Inventory Journal

Reflect for a moment on the LIFO (Last in First Out) and FIFO (First
in First Out) inventory methods. If you were starting a small
manufacturing company, what inventory method do you believe
would provide the most accurate financial statements? Why do you
believe this is the case?
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Guidance Report
Chapter 7 Exercise 2 and 4
2. Accrued liability: current portion of long-term debt. On July
1, 20X1, Hall Company borrowed $225,000 via a long-term loan.
Terms of the loan require that Hall pay interest and $75,000 of
principal on July 1, 20X2, 20X3, and 20X4. The unpaid balance of the
loan accrues interest at the rate of 10% per year. Hall has a
December 31 year-end.
a. Compute Hall's accrued interest as of December 31, 20X1.

b. Present the appropriate balance sheet disclosure for the
accrued interest and the current and long-term portion of the
outstanding debt as of December 31, 20X1.
c. Repeat parts (a) and (b) using a date of December 31, 20X2,
rather than December 31, 20X1. Assume that Hall is in compliance
with the terms of the loan agreement.
4. Payroll accounting. Assume that the following tax rates and
payroll information pertain to Brookhaven Publishing:
5. Social Security taxes: 6% on the first $55,000 earned
6. Medicare taxes: 1.5% on the first $130,000 earned
7. Federal income taxes withheld from wages: $7,500
8. State income taxes: 5% of gross earnings
9. Insurance withholdings: 1% of gross earnings
10. State unemployment taxes: 5.4% on the first $7,000 earned
11. Federal unemployment taxes: 0.8% on the first $7,000 earned
The company incurred a salary expense of $50,000 during February.
All employees had earned less than $5,000 by month-end.
a. Prepare the necessary entry to record Brookhaven's February
payroll that will be paid on March 1.
b. Prepare the journal entry to record Brookhaven's payroll tax
expense.

Chapter 7 Problem 2
2. Current liabilities: entries and disclosure. A review of
selected financial activities of Visconti's during 20XX disclosed the
following:
12/1: Borrowed $20,000 from the First City Bank by signing a 3-
month, 15% note payable. Interest and principal are due at maturity.
2/10: Established a warranty liability for the XY-80, a new product.
Sales are expected to total 1,000 units during the month. Past
experience with similar products indicates that 2% of the units will
require repair, with warranty costs averaging $27 per unit.
12/22: Purchased $16,000 of merchandise on account from Oregon
Company, terms 2/10, n/30.
12/26: Borrowed $5,000 from First City Bank; signed a $5,120 note
payable due in 60 days.
12/31: Repaired six XY-80s during the month at a total cost of $162.
12/31: Accrued 3 days of salaries at a total cost of $1,400.
12/31: Accrued vacation pay amounting to 6% of December's
$36,000 total wage and salary expense.
Instructions
a. Prepare journal entries to record the preceding transactions
and events.
b. Determine accrued interest as of December 31, 20XX, and
prepare the necessary adjusting entry or entries.

c. Prepare the current liability section of Visconti's December
31, 20XX balance sheet
Chapter 8 Problem 1
Issuance of stock: organization costs. Snowbound Corporation was
incorporated in July. The firm's charter authorized the sale of
200,000 shares of $10 par-value common stock. The following
transactions occurred during the year:
7/1:
Sold 45,000 shares of common stock to investors for $18 per
share. Cash was collected and the shares were issued.
7/7: Issued 600 shares to Sharon Dale, attorney-at-law, for
services rendered during the corporation's organizational phase.
Dale charged $12,600 for her work.
8/11: Sold 20,000 shares to investors for $22 per share. Cash was
collected and the shares were issued.
12/14: Issued 30,000 shares to the MJB Company for land valued at
$900,000.
Instructions
Prepare journal entries to record each transaction.
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Quiz
1. Current Liabilities are _____________________________.
(Points : 1)
Question 2. 2. The Unearned Revenue account is used to record
____________________. (Points : 1)
Question 3. 3. A contingent liability like a lawsuit is required to be
recorded when the probability of an unfavorable outcome is
__________________. (Points : 1)
Question 4. 4. An employer is required to match certain payroll taxes
like ________________. (Points : 1)

Question 5. 5. If a firm plans to conduct business in multiple states
what organization form is required? (Points : 1)
Question 6. 6. The form of business organization that has a perpetual
existence is the ___________. (Points : 1)
Question 7. 7. The concept of mutual agency in relationship to a
partnership means______________. (Points : 1)
Question 8. 8. A sole proprietor __________________. (Points : 1)
Question 9. 9. The journal entry needed when a partner contributes
assets to the partnership would include ____________________.
(Points : 1)
Question 10.10. The term par value in a business organization refers
to_________________. (Points : 1)

Part 2
1. A stockholder in a corporation has limited liability.
Question 2. 2. Income for a partner incurs double taxation since the
partnership is a taxable entity. (Points : 1)
Question 3. 3. A partnership has perpetual existence since someone
can purchase the share of the partnership belonging to a deceased
partner upon their death.
Question 4. 4. A sole proprietor cannot have employees and remain a
sole proprietor.
Question 5.5. Treasury stock is stock that has been repurchased by
the issuing corporation.
**********************************************************************************
ACC 205 Week 4 DQ 1 Current Liability
What is a current liability? From a user of financial statements
perspective why do you believe current liabilities are separated from
long-term liabilities? Based on your current experience and any
additional research you may have done provide two examples of
situations where businesses collect monies from customers and

employees and reports these amounts as a current liability.
Guided Response:
Review several of your peers’ postings and identify the core
components of a current liability. Respond to at least two of your
peers and provide recommendations to extend their thinking.
Challenge your peers by asking a question that may cause them to
reevaluate if their example is a current liability.
**********************************************************************************
ACC 205 Week 4 DQ 2 Client
Recommendations
A client comes to you thinking about starting a consulting business.
Specifically your client is interested in what type of entity should be
created for this new business. Based on your readings or any
additional research you may have done, discuss the advantages and
disadvantages of the following: sole proprietorship, partnership, and
corporation. Based on these advantages and disadvantages provide a
clear recommendation to your client.
Let at least two of your peers posts know if an alternative choice of
entity would be possible. What would be the benefits of this new
entity choice? Would there be any disadvantages associated with this
new entity selection.
Guided Response:
Let at least two of your peers posts know if an alternative choice of
entity would be possible?. What would be the benefits of this new

entity choice? Would there be any disadvantages associated with this
new entity selection.
**********************************************************************************
ACC 205 Week 4 Journal Future Obligations
Journal
The current liability section of the balance sheet lists the liabilities
that are due within the next 12 months. Reflecting on your current
financial situation, apply the concept of current liabilities. What does
this analysis tell you about your future obligations? What did you
learn from this experience?
**********************************************************************************
Guidance Report

Liquidity ratios. Edison, Stagg, and Thornton have the following
financial information at the close of business on July 10:
Compute the current and quick ratios for each of the three
companies. (Round calculations to two decimal places.) Which firm is
the most liquid? Why?
Suppose Thornton is using FIFO for inventory valuation and Edison
is using LIFO. Comment on the comparability of information between
these two companies.
If all short-term notes payable are due on July 11 at 8 a.m., comment
on each company's ability to settle its obligation in a timely manner.
Computation and evaluation of activity ratios. The following data
relate to Alaska Products Inc.:
The company is planning to borrow $300,000 via a 90-day bank loan
to cover short-term operating needs.
Compute the accounts-receivable and inventory-turnover ratios for
20X5. Alaska rounds all calculations to two decimal places.
Study the ratios from part (a) and comment on the company's ability
to repay a bank loan in 90 days.
Suppose that Alaska's major line of business involves the processing
and distribution of fresh and frozen fish throughout the United States.
Do you have any concerns about the company's inventory-turnover
ratio? Briefly discuss.
Chapter 9 Problem 1
Horizontal and vertical analysis. The following financial statements
pertain to Waterloo Corporation:

Instructions
Prepare a horizontal analysis of the balance sheet, showing dollar
and percentage changes. Round all calculations in parts (a) and (b)
to two decimal places.
Prepare a vertical analysis of the income statement by relating each
item to net sales.
Briefly comment on the results of your analysis.
Chapter 9 Problem 2
Ratio computation. The financial statements of the Lone Pine
Company follow.
Instructions
Compute the following items for Lone Pine Company for 20X2,
rounding all calculations to two decimal places when necessary:
Quick ratio
Current ratio
Inventory-turnover ratio
Accounts-receivable-turnover ratio
Return-on-assets ratio
Net-profit-margin ratio
Return-on-common-stockholders' equity
Debt-to-total assets
Number of times that interest is earned
Dividend payout rate
Chapter 9 Problem 3

Financial statement construction via ratios. Incomplete financial
statements of Lock Box Inc. are presented as follows:
Further information is the following:
Cost of goods sold is 60% of sales. All sales are on account.
The company's beginning inventory is $5 million; inventory-turnover
ratio is 4.
The debt-to-total-assets ratio is 70%.
The profit margin on sales is 6%.
The firm's accounts-receivable-turnover ratio is 5. Receivables
increased by $400,000 during the year.
Instructions
Using the preceding data, complete the income statement and the
balance sheet.
**********************************************************************************
ACC 205 Week 5 Chapter 9 Quiz and Video
Quiz
ACC 205 Week 5 Chapter 9 Quiz and Video Quiz

Question 1. 1. Common-size financial statements
means___________________.
Question 2. 2. Vertical analysis of a financial statement
involves_______________.
Question 3. 3. Horizontal analysis of a financial statement
involves______________.
Question 4. 4. Which of the following would not be considered a
liquidity ratio?
Question 5. 5. Which of the following would not be considered a debt
service ratio?
Question 6. 6. Turnover analysis indicates______________.
Question 7. 7. Gross profit margin_________________.
Question 8. 8. Earnings per share (EPS) is considered to
be________________.
Question 9. 9. Dividend yield is determined
by___________________________.
Question 10. 10. Book value per share___________________.
Part 2
1. The current ratio is considered a liquidity ratio.

Question 2. 2. The Quick Ratio equals current assets divided by
current liabilities.
Question 3. 3. Debt service ratios determine a firm’s available cash
flow to meet operating expenses.
Question 4. 4. When performing a vertical analysis on a firms Income
statement each financial figure is listed as a percentage of Cost of
Goods Sold.
Question 5. 5. Ratio analysis is a preferred method of analyzing a
firm’s financial position because a firm cannot manipulate financial
information that would impact the value of the ratios.
**********************************************************************************
ACC 205 Week 5 DQ 1
ACC 205 Week 5 DQ 1
**********************************************************************************
ACC 205 Week 5 DQ 2

ACC 205 Week 5 DQ 2
**********************************************************************************
ACC 205 Week 5 Final Paper Paper (Boeing
General Electric Lowes Home) (3 Papers)
This Tutorial contains 3 Papers
Paper 1: Boeing
Paper 2: General Electric
Paper 3: Lowe’s Home
Final Paper
Focus of the Final Paper
Write a five to seven page financial statement analysis of a public
company, and formatted according to APA style as outlined in the
Ashford Writing Center. In this analysis you will discuss the
financial health of this company with the ultimate goal of making a
recommendation to other investors. Your paper should consist of the

following sections: introduction, company overview, horizontal
analysis, ratio analysis, final recommendation, and conclusions.
Here is a breakdown of the sections within the body of the
assignment:
Company Overview
Provide a brief overview of your company (one to two paragraphs at
most). What industry is it in? What are its main products or
services? Who are its competitors?
Horizontal Analysis of Income Statement and Balance Sheet
Prepare a three-year horizontal analysis of the income statement and
balance sheet of your selected company. Discuss the importance and
meaning of horizontal analysis. Discuss both the positive and
negative trends presented in your company.
Ratio Analysis
Calculate the current ratio, quick ratio, cash to current liabilities
ratio, over a two year period. Discuss and interpret the ratios that
you calculated. Discuss potential liquidity issues based on your
calculations of the current and quick ratios. Are there any factors
that could be erroneously influencing the results of the ratios?
Discuss liquidity issues of competitive companies within the same
industry.
Recommendation
Based on your analysis would you recommend an individual invest in
this company? What strengths do you see? What risks do you see?
It is perfectly acceptable to state that you would recommend avoiding
this company as long as you provide support for your position.
Writing the Final Paper
1. Must be five to seven double-spaced pages in length, and
formatted according to APA style as outlined in the Ashford Writing

Center.
2. Must include a title page with the following:
a. Title of paper
b. Student’s name
c. Course name and number
d. Instructor’s name
e. Date submitted
3. Must begin with an introductory paragraph that has a succinct
thesis statement.
4. Must address the topic of the paper with critical thought.
5. Must end with a conclusion that reaffirms your thesis.
6. Must document all sources in APA style, as outlined in the
Ashford Writing Center.
7. Must include a separate reference page, formatted according to
APA style as outlined in the Ashford Writing Center.
to evaluate your assignment.
**********************************************************************************
ACC 205 Week 5 Final Paper Paper
(Microsoft StarBucks) (2 Papers)

Paper 1: Microsoft
Paper 2: StarBucks
Final Paper
assignment:
Company Overview
Ratio Analysis

industry.
Recommendation
Center.
a. Title of paper
b. Student’s name
e. Date submitted
thesis statement.

**********************************************************************************
ACC 205 Week 5 Final Paper Paper (Walmart,
Qualcomm) (2 Papers)
Paper 1: Walmart
Paper 2: Qualcomm
Final Paper

assignment:
Company Overview
Ratio Analysis
industry.
Recommendation
Center.

a. Title of paper
b. Student’s name
e. Date submitted
thesis statement.
**********************************************************************************
ACC 205 Week 5 Journal Most Important Ratio
Journal
Most Important Ratio Journal
Reflect for a moment on the ratios (working capital, current ratio,
quick ratio, debt to asset, debt to equity, times interest earned, gross
margin and net margin) presented this week. If you were considering

investing in a company what ratio would be the most important to
you? Formulate and argument to defend your position.
**********************************************************************************

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