FACULTY OF ECONOMIC AND
ADMINISTRATIVE SCIENCES
DEPARTMENT OF MANAGEMENT
& DEPARTMENT OF ECONOMICS
MAN
202 PRINCIPLES OF ACCOUNTING II
MIDTERM
EXAM II
Instructor: Ali COSKUN
Duration: 80 Minutes April
27, 2005
Question 1.
An employee of the TST Company had a gross salary of
1,200 YTL in January 2005.
a) Prepare payroll table of the employee in January 2005.
b) Make end of the month adjusting entry to recognize the payroll liabilities related to employee
Social Security Insurance
Premium Employer’s Share is 19.5 % of gross salary
Unemployment Insurance
Premium Employer’s Share is 2 % of gross salary
Social Security Insurance
Premium Employee’s Share is 14 % of gross salary
Unemployment Insurance
Premium Employee’s Share is 1 % of gross salary
Stamp Duty is 0.6 % of gross
salary
Income Tax is 15 % of tax
base (Less than 6,600 YTL)
Question 2.
On
June 1, 2004, Syberspace Computer Corporation
purchased computer parts priced at $300,000 in exchange for a nine-month note payable
with an annual interest rate of 12%, all due at maturity.
a)
Prepare the journal entry on June 1, 2004.
b) Prepare the December 31, 2004
(fiscal year-end), adjusting entry made by Syberspace
with regard to this note payable.
c) Prepare the entry made by Syberspace at maturity date of note, to record payment of note and interest.
Question 3.
Smart Company is a merchandising company that sells
shoes. The Company uses a perpetual inventory system. The following are the
selected transactions completed by the Company during April 2004:
April 10 Purchased inventory
costing 2.000 YTL plus %18 V.A.T. for cash.
April 13 Paid bill for utilities expense for 177 YTL.
(18% V.A.T. included in the amount)
April 22 Sold inventory costing 1.000 YTL on credit.
Total sales price was 1.500 YTL plus %18 V.A.T.
a) Prepare the journal entries to record each of the
transactions.
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.
Trident Corporation is organized early in 2004. The
corporation was authorized to issue 10,000 shares of $50 par value, 8%
cumulative preferred stock and 1,000,000 shares of $2 par value common stock.
The following transactions occurred during 2004:
Jan 3. Trident Corporation issued
250,000 shares of common stock at $20 per share.
Apr 8. Issued 5,000 shares of
preferred stock for cash of $250,000
Dec 2. The board of directors
declared annual dividend of $4 per share on the preferred stock to be paid on
December 27.
Dec 27. Paid the cash dividend
declared on December 2.
Dec 31. After
the revenue and expenses were closed into the Income Summary account, that
account indicated a net income of $70,000.
a) Prepare journal entries
in general journal form to record the above transactions.
b) Prepare closing entries
at December 31, 2004 to close the Income Summary account and the Dividends
account.
Question 5.
When MAGICBOX, INC. Corporation
was incorporated in 2002, authorization was obtained to issue 250,000 shares of
$5 par value common stock and 10,000 shares of 10% cumulative preferred stock.
The preferred stock has a par value of $100. In January 2002, all the preferred
stock was issued at par and 100,000 shares of the common stock were sold $20
per share. At the beginning of 2004, the company reacquired 10,000 shares of
common stock by paying $250,000.
During the first three years
of operations (2002 through 2004) the corporation earned a total of $2,300,000
and paid dividends of $2 per share each year on the common stock.
a) Prepare the
stockholders’ equity section of the balance sheet at December 31, 2004. Include
a supporting schedule showing your computation of retained earnings at the
balance sheet date.