FATέH UNIVERSITY

FACULTY OF ECONOMIC AND ADMINISTRATIVE SCIENCES

DEPARTMENT OF MANAGEMENT & DEPARTMENT OF ECONOMICS

 

MAN 201 PRINCIPLES OF ACCOUNTING I

MIDTERM EXAM I

Instructor: Ali COSKUN

Duration: 75 Minutes                                                                                                                         October 21, 2004

 

QUESTIONS

 

Question 1.

Oliveria Corporation was organized on March 1 2004. In March, the following transactions were carried out by Oliveria Corporation:

 

March  1 Issued 2,500 shares of capital stock in exchange for $25,000 cash.

March  3  Paid rent for the month of March, $5,000.

March  5 Purchased furniture from Star Co. for $33,000. Paid $18,000 at the time of purchase and agreed to pay the entire remaining balance in 15 days.

March  7 Office supplies were purchased from Office Planet for $1,200 on account.

March  9 Returned to Office Planet $50 of supplies that were not needed.  The return of these supplies reduced by $50 the amount owed to Office Planet.

March 10 Obtained a loan from National Bank in the amount of $20,000. Signed a note payable.

March 22 A $700 invoice was received for several newspaper advertisements placed in March.  The entire amount is due on April 8.

March 23 Billed customers $18,000 for the services rendered during the month. Of this amount $7,000 is received in cash.

March 28 Collected $9,000 of the amount billed to customers on March 23.

March 30 Paid employees $ 10,000 for salaries. 

March 31 Declared a dividend of 30 cents per share of capital stock payable on April 15.

 

a)       Prepare journal entries to record the above transactions.

 

Select the appropriate account titles from the following chart of accounts:

Accounts Payable         Capital Stock    Dividends Payable        Rent Expense              Supplies

Accounts Receivable     Cash                Furniture                     Salaries Expense        

Advertising Expense     Dividends         Notes Payable              Service Revenue

 

b)       Post to the ledger.

c)       Prepare a trial balance at March 31, 2004.

 

 

Question 2. The ledger accounts of Allison Consulting on December 31, 2001 are listed below in alphabetical order:

 

Accounts Receivable …………………..…       $ 34,400           Notes Payable ………………………………              5,000

Capital Stock ………………………………              80,000           Notes Receivable …….……………………             2,000

Cash ……………………………….............             47,100           Office Supplies ………………………….…                 450

Equipment ………………………………….              36,000           Retained Earnings ……………………..…                   ?

Income Taxes Payable ……………………          17,000           Salaries Payable ………..…………………              1,700

Interest Payable ………..…………………                 800                                                                                            

 

Prepare a balance sheet at December 31, 2003 by using these items and computing the amount of retained earnings.