FATİH UNIVERSITY
FACULTY OF ECONOMIC AND ADMINISTRATIVE SCIENCES
DEPARTMENT OF MANAGEMENT
MAN 201 PRINCIPLES OF ACCOUNTING I
MIDTERM EXAM
(22/11/2002)
QUESTIONS: 1 | 2 | 3 | 4
QUESTION 1.

On September 1, Paula Marine and her family formed a corporation called PMF Printing, which provides typing, duplicating, and printing services. The following transactions were completed by the business during September.

Sept.1. Issued 10,000 shares of capital stock in exchange for $100,000 cash. This cash is deposited in a bank account in Security Bank.
1. Purchased office equipment for $30,000 from Office Interiors, Inc. Paid $20,000 cash and agreed to pay the balance within 60 days.
1. Purchased land and a small building for $230,000, paying $50,000 cash and signing a 12 month, 8% note payable for the balance. The land was considered to be worth $110,000 and the building $120,000.
1. Purchased a six months insurance policy for $2,700.
4. Received 2,000 cash as advance payment from Tyson Corporation for a service will be rendered in this month.
8. Supplies purchased for $1,300 cash from Office Store.
10. Returned $100 of supplies purchased on September 8. Office Store will be promised to refund the amount within fifteen days.
16. Billed the customers $ 11,000 for the services rendered during the first period of the month.
20. Collected $ 9,000 of the amount billed to customers on September 16.
25. Received payment from Office Store in full settlement of the account receivable created on September 10.
28. Received a $500 invoice for several radio advertisement aired in September.
30. Security Bank paid $500 interest for the amount kept in the bank account during September.
30. Billed customers $ 13,000 for the services rendered during the second period of the month. Of this amount $ 5,500 is received in cash.
30. Declared a dividend of 20 cents per share of capital stock and paid.
30. Paid employees $ 12,500 for salaries.

PMF Printing, adjusts and closes its accounts monthly. The following information is available as a source for preparing adjusting entries on September 30.

a. Interest on notes payable is payable when the loan becomes due.
b. The building is being depreciated over a period of 20 years.
c. Depreciation on the equipment is based upon an estimated useful life of 10 years.
d. Office Supplies consumed during September, amounted to $500
e. On September 30, all of the advance payment from Tyson Corporation has been earned.
f. One month of insurance policy is expired.
g. Income taxes expense for September is %30 of income before taxes. This amount will be paid on October 15.

Required:
a) Prepare journal entries to record the above transactions and Post to the ledger. (30 points)
b) Prepare a trial balance at September 30, 2002. (10 points)
c) Prepare adjusting entries and Post them to the ledger. (14 points)
d) Prepare an adjusted trial balance at September 30, 2002 (10 points)
e) Prepare journal entries to close the accounts. (8 points)
f) Prepare an after-closing trial balance at September 30, 2002 (5 points)
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QUESTION 2.(5 points)
A Company purchased furniture on February 1 for $6,000. If this asset has an estimated useful life of five years, what is the book value of the furniture on June 30?

QUESTION 3.

(8 points) Before making month-end adjustments, net income of Darrol Company was $118,000. Adjusting entries are necessary for the following items:
-Depreciation for the month: $2,100.
-Interest accrued on deposits in banks: $500.
-Office Supplies used: $200.
-Fees earned in the month that had been collected in advance: $2,800.
-Prepaid rent consumed: $800.
How much would be Delix Company's net income after adjusting entries are made for the items listed above?
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QUESTION 4.

(10 points) The ledger accounts of Allison Consulting on December 31, 2001 are listed below in alphabetical order:

Accumulated Depreciation: Equipment
$ 10,800
 Notes Payable .........................
5,000
Capital Stock ...............................
80,000
 Notes Receivable......................
2,000
Cash ..........................................
47,100
 Office Supplies.........................
450
Consulting Fees Receivable ............
34,400
 Prepaid Office Rent ..................
4,200
Equipment ..................................
36,000
 Retained Earnings ....................
?
Income Taxes Payable ..................
17,000
Salaries Payable .....................
1,700
Interest Payable ..........................
100
 Unearned Consulting Fees ........
3,100
Land .........................................
50,000
 Unexpired insurance ................
250

Prepare a balance sheet by using these items and computing the amount of retained earning at December 31, 2002. Include a proper balance sheet heading.
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