# Accounting – Multiple problems

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1. (TCO A) Platypus Building Inc. won a bid for a new office building contract. Below is info from the project accountant:
Total Construction Fixed Price \$8,000,000
Construction Start Date March 3, 2012
Construction Complete Date December 4, 2013
As of Dec 31â€¦ 2012 2013
Actual cost incurred \$2,500,000 \$3,150,000
Estimated remaining costs \$3,750,000 \$-
Billed to customer \$2,400,000 \$5,300,000
Assuming Platypus Building Inc. uses the completed contract method, what amount of gross profit would be recognized in 2013?
1. \$2,000,000
2. \$2,350,000
3. \$1,650,000
4. \$940,000
2. (TCO A) Kerry Corp purchased a used bottling machine from Bob’s Bottling Inc. on Jan 1, 2012 for \$2100000. Bob accounted for the sale correctly under the installment sales method. It had a book value of \$1575000. Kerry paid with \$300000 cash and a note for \$1800000 with an annual interest of 10%. Kerry agreed to make equal annual payments of \$600000. Kerry Corp made their first payment on Jan 1, 2013 of \$780000 which included interest of \$180000 to date of payment.
As of Dec 31, 2013 Bob has deferred gross profit of ?
1. \$255,000
2. \$330,000
3. \$375,000
4. \$300,000
3. (TCO A) Blue Suede Construction Corp used the percentage-of-completion method of revenue recognition. They were contracted to build the new amphitheater for \$800000. Additional information was provided:
As of Dec 31â€¦. 2012 2013
Percentage of completion 15% 40%
Estimated total expected costs \$550,000 \$580,000
Gross profit recognized (Cumulative) \$50,000 \$99,000
Contracted costs incurred during 2013 wereâ€¦ (Points : 5)
1. \$145,000
2. \$149,500
3. \$151,000
4. \$232,000
4. (TCO A) In industries with high rates of return (such as a magazine distribution company) an alternative method of revenue recognition would be
â€¢ record sales net of an estimate of expected future returns
â€¢ record sales in current period and returns in future periods as they occur
â€¢ do not record any sales until expiration of all return privileges have passed
â€¢ all of the above

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# Accounting Multiple Problems

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Consider the following account starting balances and transactions involving these accounts.
Use T-accounts to record the starting balances and the offsetting entries for the transactions.
The starting balance of Accounts Receivable is \$3,400
The starting balance of Cash is \$9,000
The starting balance of Inventory is \$5,100
1. Receive payment of \$10 owed by a customer
2. Buy \$16 worth of manufacturing supplies for cash
3. Sell product for \$40 with historical cost of \$40
What is the final amount in Cash?
#2
Consider the following account starting balances and transactions involving these accounts.
Use T-accounts to record the starting balances and the offsetting entries for the transactions.
The starting balance of Accounts Payable is \$1,900
The starting balance of Cash is \$9,100
The starting balance of Debt is \$2,400
The starting balance of Inventory is \$4,800
1. Buy \$18 worth of manufacturing supplies on credit
2. Borrow \$53 from a bank
3. Pay \$8 owed to a supplier
What is the final amount in Debt?
#3
Consider the following account starting balances and transactions involving these accounts.
Use T-accounts to record the starting balances and the offsetting entries for the transactions.
The starting balance of Cash is \$8,400
The starting balance of Inventory is \$4,200
The starting balance of Retained Earnings is \$23,500
1. Pay expense of \$2
2. Sell product for \$40 with historical cost of \$32
3. Sell service for \$25
What is the final amount in Retained Earnings?

#4

The T-accounts below summarize transactions of Torche Corporation from February 22 to February 25, 2013:
Cash

Balance
14,700
12
15
80
58

PP&E, Net

44
4

Accounts Receivable

Balance
4,800

Balance
15,800
44

Other Assets

12

Balance
900

Inventory

Balance
3,800
15

Accounts Payable

4

Balance
2,400
15

Debt

Balance
3,700
58

Other Liabilities

Balance
5,000

PaidÂ­In Capital

Balance
6,000
80

Retained Earnings

12

What is the final amount in Total Liabilities & Equity?

Balance
22,900
3

#5
Stuart Company
Balance Sheet
As of March 11, 2013
(amounts in thousands)

Cash
Accounts Receivable
Inventory
Property Plant & Equipment
Other Assets

Total Assets

8,400 Accounts Payable
4,700 Debt
4,200 Other Liabilities
17,200 Total Liabilities
2,800 Paid-In Capital
Retained Earnings
Total Equity
37,300 Total Liabilities & Equity

2,800
3,400
900
7,100
6,700
23,500
30,200
37,300

Use T-accounts to record the transactions below, which occur on March 12, 2013, close the T-accounts, and
construct a balance sheet to answer the question.
1. Borrow \$52,000 from a bank
2. Purchase equipment for \$48,000 in cash
3. Issue \$85,000 in stock
What is the final amount in Total Assets?
#6

Lightspeed Industries
Balance Sheet
As of March 11, 2013
(amounts in thousands)

Cash
Accounts Receivable
Inventory
Property Plant & Equipment
Other Assets

14,100 Accounts Payable
3,200 Debt
4,900 Other Liabilities
16,300 Total Liabilities
500 Paid-In Capital

1,900
3,600
2,000
7,500
7,200

Total Assets

Retained Earnings
Total Equity
39,000 Total Liabilities & Equity

24,300
31,500
39,000

Use T-accounts to record the transactions below, which occur on March 12, 2013, close the T-accounts, and
construct a balance sheet to answer the question.
1. Issue \$80,000 in stock
2. Borrow \$65,000 from a bank
3. Receive payment of \$12,000 owed by a customer
4. Pay \$6,000 owed to a supplier
5. Buy \$17,000 worth of manufacturing supplies on credit
What is the final amount in Total Assets?
#7

Lightspeed Industries
Balance Sheet
As of March 11, 2013
(amounts in thousands)

Cash
Accounts Receivable
Inventory
Property Plant & Equipment
Other Assets

Total Assets

14,100 Accounts Payable
3,200 Debt
4,900 Other Liabilities
16,300 Total Liabilities
500 Paid-In Capital
Retained Earnings
Total Equity
39,000 Total Liabilities & Equity

1,900
3,600
2,000
7,500
7,200
24,300
31,500
39,000

Use T-accounts to record the transactions below, which occur on March 12, 2013, close the T-accounts, and
construct a balance sheet to answer the question.
1. Sell service for \$20,000
2. Pay expense of \$3,000
3. Sell product for \$25,000 with historical cost of \$20,000
What is the final amount in Total Assets?

Statement of Cash flows
#3

The firm invested \$1,000,000 in manufacturing equipment during 2012.
The equipment is being depreciated over five years using straight-line depreciation, starting in 2012.

Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2012
with amounts in thousands.
What is the Net Cash Flow in 2012?
#4

Valley Technology had Net Income for 2012 of \$9,600,000.

The firm invested \$5,000,000 in manufacturing equipment during 2011 but made no additional capital investments in
2012.
The equipment is being depreciated over five years using straight-line depreciation, starting in 2011.
Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2012
with amounts in thousands.
What is the Net Cash Flow in 2012?
#5

Suppose Siam Traders has the following results related to cash flows for 2012:

Net Income of \$9,400,000
Increase in Accounts Payable of \$800,000
Decrease in Accounts Receivable of \$600,000
Decrease in Inventory of \$700,000
Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in
thousands.
What is the Net Cash Flow from Operating Activities?

#6

Suppose Hopewell Corporation has the following results related to cash flows for 2012:

Net Income of \$8,000,000
Increase in Accounts Payable of \$500,000
Increase in Accounts Receivable of \$700,000
Depreciation of \$1,300,000
Decrease in Inventory of \$300,000
Other Adjustments from Operating Activities of -\$900,000
Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in
thousands.
What is the Net Cash Flow from Operating Activities?
#7

Suppose Dansko Integrated has the following results related to cash flows for 2012:

Decrease in Debt of \$200,000
Dividends of \$800,000
Purchases of Property, Plant, & Equipment of \$6,700,000
Other Adjustments from Financing Activities of -\$600,000
Other Adjustments from Investing Activities of \$300,000

Assuming no other cash flow adjustments than those listed above, create a statement of cash flows for financing and
investing activities with amounts in thousands.
What is the Net Cash Flow from Financing and Investing Activities?
#8

Suppose Torche Corporation has the following results related to cash flows for 2012:

Net Income of \$8,500,000
Decrease in Accounts Payable of \$400,000
Increase in Accounts Receivable of \$800,000
Increase in Debt of \$100,000
Depreciation Expenses of \$1,600,000
Purchases of Property, Plant, & Equipment of \$5,400,000
Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in
thousands.
What is the Net Cash Flow?
#9

Suppose Stuart Company has the following results related to cash flows for 2012:

Net Income of \$7,700,000
Decrease in Accounts Payable of \$900,000
Decrease in Accounts Receivable of \$300,000
Decrease in Debt of \$600,000
Depreciation Expenses of \$1,700,000
Dividends of \$800,000
Increase in Inventory of \$800,000
Purchases of Property, Plant, & Equipment of \$7,500,000
Other Adjustments from Financing Activities of \$300,000
Other Adjustments from Investing Activities of \$300,000
Other Adjustments from Operating Activities of \$600,000
Create a statement of cash flows with amounts in thousands.
What is the Net Cash Flow?