Q1. Enter the following transactions in the two-column journal provided for Marc’s Detailing. You may omit explanations.Mar. 2 purchased auto cleaning supplies from Sung Suppliers for $400 on account.

4 Collected an account receivable of $360 from a customer, Dee-Lux Limousines.5 Paid $175 in partial payment of an account payable to Modern Co for equipment purchased in February.7 Issued capital stock in exchange for $3,500 cash.9 Purchased office equipment from Wally’s Warehouse for $4,200; paid $2,000 cash and issued a note payable due

in 90 days for the balance.

Q2. The accountant for All-Around Consulting prepared the following “adjusted” trial balance at December 31, 2005, after one year of operations prepare closing enteries and the post closing trial balance.

Debit CreditCash.................................................................................................... $ 5,400Accounts Receivable.......................................................................... 4,200Unexpired Insurance........................................................................... 1,800Office Equipment................................................................................ 18,000Accumulated Depreciation: Office Equipment.................................. $ 300Unearned Consulting Fees.................................................................. 3,000Capital Stock....................................................................................... 15,000Retained Earnings, January 1, 2005................................................... 2,400Dividends............................................................................................ 800Consulting Fees Earned...................................................................... 20,000Salaries Expense................................................................................. 6,300Utilities Expense................................................................................. 1,500Rent Expense...................................................................................... 2,400Depreciation Expense......................................................................... 300 ______

$40,700 $40,700

Q3. At the end of the month the unadjusted trial balance of Three Star Company included the following accounts: Debit Credit

Sales (75% represent credit sales).......................................................... $1,380,000Accounts Receivable ............................................................................. $975,000Allowance for Doubtful Accounts.......................................................... 11,750

1 Refer to the above data. If the income statement method of estimating uncollectible accounts expense is followed, and uncollectible accounts expense is estimated to be 2% of net credit sales, the net realizable value of Three Star’s accounts receivable at the end of the month is?

2 Refer to the above data. If Three Star uses the balance sheet approach in estimating uncollectible accounts, and aging the accounts receivable indicates the estimated uncollectible portion to be $24,000, the uncollectible accounts expense for the month is?

Q4. Shown below is a partially completed bank reconciliation for Ruby Transport at August 31, as well as additional data necessary to answer the questions that follow.

RUBY TRANSPORTBank Reconciliation

August 31, 20__Balance per bank statement $25,650Balance per depositor’s records $20,631

Additional informationa Outstanding checks: no. 729, $1,790; no. 747, $350; no. 752, $1,115.b Check no. 742 (for repairs) was written for $568 but erroneously recorded in Ruby’s records as $865.c Deposits in transit, $3,220.d Note collected by the bank and credited to Ruby’s account, $6,900.e NSF check of C. Craig, one of Ruby’s customers, $2,178.f Bank service charge for August, $35.

Q1.

2004

Mar 2 Supplies 430

Accounts Payable 430

Bought supplies from Sung Supplies.*

4 Cash 360

Accounts Receivable 360

Collected from Dee-Lux Limousines.*

5 Accounts Payable 175

Cash 175

Partial payment on amount due to Modern Co.*

7 Cash 3,500

Capital Stock 3,500

Issued stock.

9 Office Equipment 4,200

Cash 2,000

Notes Payable 2,200

Purchased office equipment from Wally’s

Warehouse; note due in 90 days.*

Q2. DR CR

Consulting Fees Earned.................................................. 20,000

Income Summary 20,000

Income Summary 10,500

Salaries Expense........................................... 6,300

Utilities Expense........................................... 1,500

Rent Expense................................................ 2,400

Depreciation Expense................................... 300

Income Summary............................................................ 9,500

Retained Earnings......................................... 9,500

Retained Earnings........................................................... 800

Dividends...................................................... 800

Q3. At the end of the month the unadjusted trial balance of Three Star Company included the following accounts:

Debit Credit

Sales (75% represent credit sales)..................................... $1,380,000

Accounts Receivable ........................................................ $975,000

Allowance for Doubtful Accounts..................................... 11,750

1 Refer to the above data. If the income statement method of estimating uncollectible accounts expense is followed, and uncollectible accounts expense is estimated to be 2% of net credit sales, the net realizable value of Three Star’s accounts receivable at the end of the month is:

a $1,359,300. b $20,700. c $32,450. d $942,550.

2 Refer to the above data. If Three Star uses the balance sheet approach in estimating uncollectible accounts, and aging the accounts receivable indicates the estimated uncollectible portion to be $24,000, the uncollectible accounts expense for the month is:

a $24,000. b $12,250. c $35,750. d $11,750.

Q4.

Shown below is a partially completed bank reconciliation for Ruby Transport at August 31, as well as additional data necessary to answer the questions that follow.

RUBY TRANSPORT

Bank Reconciliation

August 31, 20__

Balance per bank statement $25,650

Add: (1)

Deduct: (2)

Adjusted cash balance $

Balance per depositor’s records $20,631

Add: (3)

Deduct: (4)

Adjusted cash balance $

Additional information

a Outstanding checks: no. 729, $1,790; no. 747, $350; no. 752, $1,115.

b Check no. 742 (for repairs) was written for $568 but erroneously recorded in Ruby’s records as $865.

c Deposits in transit, $3,220.

d Note collected by the bank and credited to Ruby’s account, $6,900.

e NSF check of C. Craig, one of Ruby’s customers, $2,178.

f Bank service charge for August, $35.

1 In Ruby’s completed bank reconciliation at August 31, what dollar amount should be deducted from the balance per bank statement (indicated by 2 above)?

a $2,510. b $3,255. c $2,213. d $3,552.

2 In Ruby’s completed bank reconciliation at August 31, what dollar amount should be added to the balance per depositor’s records (indicated by 3 above)?

a $3,220. b $3,255. c $7,197. d $6,603.

3 In Ruby’s completed bank reconciliation at August 31, what dollar amount should be deducted from the balance per depositor’s records (indicated by 4 above)?

a $1,846. b $3,255. c $2,510. d $2,213.

4 Ruby Transport keeps $500 cash on hand in addition to this checking account and has no other bank accounts or cash equivalents. What amount should appear as Cash in Ruby’s August 31 balance sheet?

a $26,115. c $20,631.

b $25,650. d Some other amount.

5 The necessary adjustment to Ruby Transport’s accounting records as of August 31 includes a net:

a Increase to Cash of $4,390. c Increase to Cash of $4,984.

b Increase to Cash of $1,916. d Decrease to Cash of $35