Questions:

1.  (TCO 3) Closing temporary accounts is necessary at the end of the accounting period. (1) Explain the closing process, include each set of entries required (15 points) and (2) provide an example of closing the Dividend account in the form of a journal entry. (10 points). (Points : 25)

2.   (TCO 2) As required to complete Course Project 1, one must follow the cycle that includes 10 steps to complete the accounting cycle. (1) Explain how information from the journal entries get into the ledger accounts (15 points) and (2) provide an example of information that would be transferred. (10 points) (Points : 25)

3.  (TCO 4) Thomas Manufacturing had 4 units of their product in inventory at $250 per unit to start the month. During the month, they purchased an additional 7 units at $250 per unit and another 12 units at $275 per unit. Also, at the end of the month, they sold 12 units and ended the month at 8 units. Calculate their ending inventory and cost of goods sold using one of the following:   LIFO, FIFO or Average Cost methods. Show all computations. (Points : 24)

4.   (TCO 4) A retailer needs to determine the cost of the shoes the company purchased in order to determine the inventory value to report on its balance sheet in a particular period. (1) Discuss the steps involved in determining the cost of shoes inventory as reported on the company’s balance sheet (15 points), and (2) use an example to show the impact of purchase discounts and allowances received by the company on the cost of shoes inventory (10 points). (Points: 25)

5.   (TCO 1) To evaluate the financial operations and health of a business, ratio analysis is used. 1) What do profitability ratios indicate about the company? (10 points) 2) Please provide 2 examples of profitability ratios and the related formula and indicate how they can be used in the decision making process. (15 points) (Points: 25)

Essay Questions

1.  (TCO 6) BagODonuts Company bought a used delivery truck on January 1, 2010, for $19,200. The van was expected to remain in service 4 years (30,000 miles).  BagODonuts’ accountant estimated that the truck’s residual value would be $2,400 at the end of its useful life.  The truck traveled 8,000 miles the first year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year.

2.   (TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock: Preferred Stock: 7%, par value $100 per share, 100,000 shares. Common Stock: $1 par value, 500,000 shares. The following transactions occurred during the year:

3.   (TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:  Preferred Stock: 7%, par value $100 per share, 100,000 shares.  Common Stock: $1 par value, 500,000 shares. The following transactions occurred during the year:

4.   (TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions.  Of the seven internal control procedures, list five of these controls and describe how each procedure is implemented (Points: 25)

5.  (TCO 2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order.

6.   (TCO 4) Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory transactions (Points: 25): 

7.   (TCO 4) Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory transactions: