# QUESTION 1 Compute the amount of interest paid in July. At June 30, 2016, \$20 was payable. (Hint: Think of converting from accrual basis to cash…

QUESTION 1

Compute the amount of interest paid in July. At June 30, 2016, \$20 was payable.   (Hint: Think of converting from accrual basis to cash basis.)

QUESTION 2

How much of Accounts Receivable were “written off” the month? (Hint: Run the ADA t-account)

QUESTION 3

What is Fargo’s Net Realizable Value of Accounts Receivable at the end of July?

QUESTION 4

What was the amount of cash received on the sale of office equipment?

QUESTION 5

Assuming that the office equipment has a five year estimated life, no estimated salvage value, and no depreciation is taken during the month of purchase or sale, how much office equipment was acquired during the month?

QUESTION 6

How old (in months) is the office equipment that was neither sold nor acquired during the month?

QUESTION 7

How much cash was paid on Accounts Payable during the month? Assume the beginning balance of Accounts Payable in July was zero

QUESTION 8

If the beginning balance in Note Payable was \$20,000, what amount of Notes Payable did Fargo issue in in July?

QUESTION 9

How much of the Note Payable was paid off during July?

QUESTION 10

If all vendors sell to Fargo on terms 2/10, n/30, what was the total amount of purchases discounts which were allowed to lapse. No purchases were made in the last 10 days of July.

QUESTION 11

If there was no prepaid advertising at the beginning of the period, what was the total cash outlay for advertising in July? (Hint: Think of converting from accrual basis to cash basis.)

QUESTION 12

How much cash was used to pay salaries during the month? Assume the balance in Salaries Payable on July 1 was zero. (Hint: Think of converting from accrual basis to cash basis.)

QUESTION 13

What was the balance of Retained Earnings at the beginning of the fiscal year?

QUESTION 14

If office supplies valued at \$300 were on hand at the beginning of the month, what were the total purchases of office supplies during the month?

QUESTION 15

What journal entry does Fargo make to record the purchase of office supplies?

Debit Office Supplies, Credit Cash.

Debit Cash, Credit Office Supplies.

Debit Office Supplies Expense, Credit Cash.

Debit Office Supplies Expense, Credit Office Supplies?

QUESTION 16

How much cash dividends were paid during the month? Assume that the beginning balance in Dividends Payable at June 30 was \$1,000.

QUESTION 17

Of the cash dividends paid, how much related to the current period?

QUESTION 18

What are net sales for July?

QUESTION 19

If 90% of sales are made on credit and all returns were related to credit sales, what was the beginning balance in Accounts Receivable on July 1? (Hint: Run the AR t-account)

QUESTION 20

How much cash received on accounts receivable in July?  (Hint: Run the AR t-account)

QUESTION 21

Does the company use the gross or net method to record purchases? How do you know?

Gross becuase Purchase Return & Allowances are on the Trial Balance.

Gross because Sales Discounts are on the Trial Balance.

Gross because Purchase Discounts are on the Trial Balance.

Gross because Sales Discounts Forfeited are not on the Trial Balance.

Gross because Purchase Discounts Forfeited are not on the Trial Balance.

Net becuase Purchase Return & Allowances are on the Trial Balance.

Net because Sales Discounts are on the Trial Balance.

Net because Purchase Discounts are on the Trial Balance.

Net because Sales Discounts Forfeited are not on the Trial Balance.

Net because Purchase Discounts Forfeited are not on the Trial Balance.

QUESTION 22

What is the beginning balance in inventory on July 1?

QUESTION 23

What are net purchases for July?

QUESTION 24

Assume that the company did a count of ending inventory and found that they had 70,000 of inventory remaining at the end of July. What is the cost of goods sold for the month of July?

QUESTION 25

Fill in the blanks: The adjusting entry to adjust inventory will include a debit to Ending Inventory, COGS, _______________, and ______________.

Purhcases, and Beginning Inventory.

Purchase Discounts, and Purchase Returns & Allowances.

Purchases, and Purchase Discounts.

Purchases, and Purchase Returns & Allowances.

QUESTION 26

What is the amount of the change to Income Summary account for the closing entry to close nomianl accounts with a normal credit balance at July 31. A positive number indicates a credit to the Income Summary account and a negative number indicates a debit to the Income Summary account. For instance, 100 is a credit to the Income Summary account for \$100, and a -100 is a debit to the Income Summary account for \$100.

QUESTION 27

What is the amount of the change to Income Summary account for the closing entry to close nomianl accounts with a normal debit balance at July 31. A positive number indicates a credit to the Income Summary account and a negative number indicates a debit to the Income Summary account. For instance, 100 is a credit to the Income Summary account for \$100, and a -100 is a debit to the Income Summary account for \$100.

QUESTION 28

What is the amount of the change to Income Summary account for the closing entry to close Income Summary to Retained Earnings at July 31. A positive number indicates a credit to the Income Summary account and a negative number indicates a debit to the Income Summary account. For instance, 100 is a credit to the Income Summary account for \$100, and a -100 is a debit to the Income Summary account for \$100.

QUESTION 29

When closing dividends declared, which account is debited?

Dividends Declared

Income Summary

Accumulated OCI

Retained Earnings

QUESTION 30

After you have adusted inventory and done the four closing entries for the month, what is the ending balance in Retained Earnings on July 31? A positive number indicates a credit balance in the Retained Earnings account and a negative number indicates a debit balance in the Retained Earnings account. For instance, 100 is a credit balance in the Retained Earnings account for \$100, and a -100 is a debit balance in the Retained Earnings account for \$100.

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