Exam 1 Review
ACC 301
Review Sheet
Exam #1 – Spring 2012
Problem #1
Gerdes Psychological Services, Inc., closes its temporary accounts once each year on December 31. The company recently issued the following income statement as part of its annual report.
GERDES PSYCHOLOGICAL SERVICES, INC.
Income Statement
For the Year Ended December 31, 2007
Revenue: Counseling revenue……………………………. | | $225,000 | Expenses: | | | Advertising expense…………………………... | $ 1,800 | | Salaries expense………………………………. | 94,000 | | Office supplies expense………………………. | 1,200 | | Utilities expense………………………………. | 850 | | Malpractice insurance expense……………….. | 6,000 | | Office rent expense…………………………… | 24,000 | | Continuing education expense………………... | 2,650 | | Depreciation expense: fixtures………………... | 4,500 | | Miscellaneous expense………………………... | 6,000 | | Income taxes expense…………………………. | 29,400 | 170,400 | Net income………………………………………. | | $ 54,600 |
The firm’s statement of retained earnings indicates that a $6,000 cash dividend was declared and paid during 2007. Prepare the necessary closing entries on December 31, 2007.
Problem #2
E3-1B | (Transaction Analysis—Service Company) Brown is a licensed CPA. During the first month of operations of her business (a sole proprietorship), the following events and transactions occurred. | | | April | | | | | | | 3 | Purchased supplies on account $1,610. | | | | | 11 | Completed a tax assignment and billed client $2,530 for services rendered. | | 12 | Received $7,360 advance on a management consulting engagement. | | 17 | Received cash of $5,290 for services completed for Calunga Co. | | 21 | Paid insurance expense $253. | | 30 | Owe the secretary-receptionist $2,668 for the month. | | 30 | A count of supplies indicated that $276 of supplies had been used. | | 30 | Purchased a new computer for $14,030 | | | | | |
Review Sheet
Exam #1 – Spring 2012
Problem #1
Gerdes Psychological Services, Inc., closes its temporary accounts once each year on December 31. The company recently issued the following income statement as part of its annual report.
GERDES PSYCHOLOGICAL SERVICES, INC.
Income Statement
For the Year Ended December 31, 2007
Revenue: Counseling revenue……………………………. | | $225,000 | Expenses: | | | Advertising expense…………………………... | $ 1,800 | | Salaries expense………………………………. | 94,000 | | Office supplies expense………………………. | 1,200 | | Utilities expense………………………………. | 850 | | Malpractice insurance expense……………….. | 6,000 | | Office rent expense…………………………… | 24,000 | | Continuing education expense………………... | 2,650 | | Depreciation expense: fixtures………………... | 4,500 | | Miscellaneous expense………………………... | 6,000 | | Income taxes expense…………………………. | 29,400 | 170,400 | Net income………………………………………. | | $ 54,600 |
The firm’s statement of retained earnings indicates that a $6,000 cash dividend was declared and paid during 2007. Prepare the necessary closing entries on December 31, 2007.
Problem #2
E3-1B | (Transaction Analysis—Service Company) Brown is a licensed CPA. During the first month of operations of her business (a sole proprietorship), the following events and transactions occurred. | | | April | | | | | | | 3 | Purchased supplies on account $1,610. | | | | | 11 | Completed a tax assignment and billed client $2,530 for services rendered. | | 12 | Received $7,360 advance on a management consulting engagement. | | 17 | Received cash of $5,290 for services completed for Calunga Co. | | 21 | Paid insurance expense $253. | | 30 | Owe the secretary-receptionist $2,668 for the month. | | 30 | A count of supplies indicated that $276 of supplies had been used. | | 30 | Purchased a new computer for $14,030 | | | | | |