FATÝH
UNIVERSITY
FACULTY OF
ECONOMIC AND ADMINISTRATIVE SCIENCES
DEPARTMENT OF
MANAGEMENT & DEPARTMENT OF ECONOMICS
FINAL EXAM
Instructor:
ALI COSKUN
Duration: 100 Minutes July 2, 2003
Question 1.
Sonic
Stereo uses a periodic inventory system. Shown below are Sonic's beginning
inventory of a particular product and purchases during January:
Beginning
Inventory (Jan.1) 10 Units x $30
per unit = $300
January
13 Purchased 10 Units x $32
per unit = $320
January
19 Purchased 5 Units
x $34 per unit =
$170
January
26 Purchased 10 Units x $36
per unit = $360
January
18 Sold 11
Units x $60 per unit = $660
January
23 Sold 6 Units
x $65 per unit =
$390
January
28 Sold 14
Units x $70 per unit = $980
On
January 31 physical counts show that 4 units of this product was on hand.
Compute
the dollar amounts of ending inventory on January 31 and the cost of goods sold
during December using the First in First out (FIFO) method.
Question 2.
The ledger accounts of Big Brother
Company on December 31, 2002 are listed
below in alphabetical order:
|
Accounts
payable |
$ 22,000 |
|
Income
Tax Payable |
$ 17,000 |
|
Accounts
receivable
|
40,000 |
|
Interest
payable |
7,350 |
|
Accumulated
depreciation: Equipment |
50,000 |
|
Inventory |
175,000 |
|
Additional paid-in capital: common
stock |
30,000 |
|
Long-term
notes payable |
104,000 |
|
Additional paid-in capital:
treasury stock |
25,000 |
|
Marketable
Securities |
120,000 |
|
Allowance
for doubtful account |
5,000 |
|
Prepaid
rent |
30,000 |
|
Cash |
70,370 |
|
Retained
Earnings |
190,020 |
|
Common
Stock |
500,000 |
|
Salaries
Payable |
5,000 |
|
Equipment |
475,000 |
|
Treasury Stock |
45,000 |
a)
Prepare a balance sheet by using these items at December 31, 2002. Include a
proper balance sheet heading.
b)
Compute Big Brother Company’s: quick ratio, current ratio, working capital, and
debt ratio.
Question
3.
Beta Corporation is a
merchandising company that sells shoes. Beta Corporation uses a perpetual
inventory system. The following are the selected transactions completed by the
Company during April 2002:
April 08 Purchased inventory costing 3.000.000.000 TL plus %18 V.A.T. for cash.
April
11 Paid bill for utilities expense for 354.000.000. (18% V.A.T included in the
amount)
April
17 Sold inventory costing 1.500.000.000 TL on credit. Total sales price was
2.250.000.000 TL plus %18 V.A.T, terms 2/10, n/60.
April
18 Purchased inventory costing 2.000.000.000 TL plus %18 V.A.T. on account.
April
22 Sold inventory at 3.000.000.000 TL plus %18 V.A.T for cash. Cost of the
inventory sold was 1.800.000.000 TL
a)
Prepare the journal entries to record each of the trancastions.
b) At the end of the April make the entries to close V.A.T. Credit
and V.A.T. Received to V.A.T. Matching and Close V.A.T. Matching Account to
V.A.T Carried Forward Account or V.A.T. Payable
Question
4.
During 2003, TST Company disposed
of plant assets in following transactions:
July 1, 2003: TST Company sold a machine that originally cost $200,000 for $80,000 cash. The machine was placed in service on January 1, 1998. It has been depreciated using the straight-line method with an estimated salvage value of $20,000 and an estimated useful life of 10 years.
December 31, 2003: TST Company traded in an old automobile for a new one. The old automobile originally cost $40,000 and its accumulated depreciation amounted to $25,000. The list price of new automobile was $55,000. TST Company received a $10,000 trade – in allowance for the old truck and paid the $45,000 balance in cash.
Prepare the journal entries to
record each of the disposal trancastions.
Question
5.
An income statement of Fast Modem
Company for the current year and the additional information by analyzing
changes in the company’s balance sheet accounts are given below.
FAST MODEM
COMPANY
Income
Statement
For the Year
Ended December 31, 2002
Revenue:
Net Sales
...................................................................................................... $ 9,500,000
Interest Income
............................................................................................
320,000
Gain on Sales of Marketable Securities
.................................................... 70,000
Total revenue and gains
...........................................................................$
9,890,000
Costs and expenses:
Cost of Goods Sold .......................................................................................$
4,860,000
Operating Expenses (including depreciation of $ 740,000)......................3,740,000
Interest Expense
............................................................................................... 270,000
Income Taxes
.................................................................................................... 300,000
Loss on Sales of Plant Assets
....................................................................... 90,000
Total costs, expenses, and losses
........................................................... 9,260,000
Net Income
.....................................................................................................
. $ 630,000
Changes in the company’s balance sheet
accounts over the year are summarized as follows:
|
|
December 31,
|
|
|
Selected account balances: |
2001 |
2002 |
|
Accounts
Payable to suppliers |
$
500.000 |
$
280.000 |
|
Accounts
Receivable |
110.000 |
35.000 |
|
Accrued
Income Tax Payable |
20.000 |
47.000 |
|
Accrued
Interest Payable |
46.000 |
28.000 |
|
Accrued
Interest Receivable |
$
60.000 |
$
85.000 |
|
Accrued
liabilities for operating exp. |
147.000 |
177.000 |
|
Inventory |
800.000 |
540.000 |
|
Short
– term prepayments |
100.000 |
84.000 |
Prepare the operating activities
section of a statement of cash flows using indirect method. Show the supporting
computations.