1. ACG 2021 Exam 2 TA Review

2. Review of Chapters 4 - 7
This power point review is only an OVERVIEW of the MAIN concepts we learned in these chapters. This is not a COMPREHENSIVE review of the material for the exam.

3. NSF Check $350
EFT Payment of Utilities $160
Interest earned on bank deposits of $30
Checks outstanding $2,500
Deposits Outstanding $750
ERROR: A check written for $1,000 is recorded incorrectly by the company as $1,400
Bank Balance
Book Balance
Beg. Balance $20,950
Beg. Balance $19,280

4. NSF Check $350
EFT Payment of Utilities $160
Interest earned on bank deposits of $30
Checks outstanding $2,500
Deposits Outstanding $750
ERROR: A check written for $1,000 is recorded incorrectly by the company as $1,400 1. 4. 2. 5. 3. 6.

5. Ending balance in accounts receivable is $100,000
Ending balance in accounts receivable is $100,000. Sales for the period total $1,500,000. The allowance for AR account has a
Credit balance of $300. Management estimates that $2,000 of receivables will prove to be uncollectible.
Record the journal entry for bad debt expense using the % aging of receivables method
In the next year, a customer with a $1,000 AR balance due declares bankruptcy. Record the write off of the receivable

6. Outstanding receivables total $1,000,000 for the period
Outstanding receivables total $1,000,000 for the period. Sales for the year are $15,000,000. The allowance for AR
Account has a $2,000 debit balance. $40,000 of receivables are estimated to be uncollectible.
Record the estimate for bad debts using the % of aging method
What is the net AR at the end of the year?
Record the entry to write off a $12,000 account

7. On August 1st, 2014 our company lends $10,000 to an employee
On August 1st, 2014 our company lends $10,000 to an employee. The note is to be paid in full in 3 years
With 6% interest due annually (paid every Aug. 1st)
Record issuance of note on August 1st
Record adjusting entry for interest on December 31st

8. Record adjusting entry for interest on a 6 month, $50,000 note receivable issued on October 1st at 8%
Interest. All interest is due at maturity of the note.

9. Date
Number of Units
Cost per Unit
Total
Beginning Inventory 20
$10.00
$200
2/1/2014 50
$12.00
$600
5/15/2014 40
$13.00
$520
Sales for the period total 80 units at $20.00 each. Calculate cost of goods sold and gross profit using the FIFO method

10. Date
Number of Units
Cost per Unit
Total
Beginning Inventory 20
$10.00
$200
2/1/2014 50
$12.00
$600
5/15/2014 40
$13.00
$520
Sales for the period total 80 units at $20.00 each. Calculate cost of goods sold and gross profit using the LIFO method

11. On January 1st, purchase a piece of equipment of $12,000 with a salvage value of $3,000 and a 3 year useful life.
The equipment is expected to be used for a total of 1,000 hours. Actual usage throughout the year totaled 200 hours.
Calculate depreciation using the straight line method

12. On January 1st, purchase a piece of equipment of $12,000 with a salvage value of $3,000 and a 3 year useful life.
The equipment is expected to be used for a total of 1,000 hours. Actual usage throughout the year totaled 200 hours.
Calculate depreciation using the activity-based method

13. On January 1st, purchase a piece of equipment of $12,000 with a salvage value of $3,000 and a 3 year useful life.
The equipment is expected to be used for a total of 1,000 hours. Actual usage throughout the year totaled 200 hours.
Calculate depreciation using the double-declining balance method

14. On August 31st, purchase a machine for $100,000
On August 31st, purchase a machine for $100,000. The machine has an expected residual value of $10,000
and an expected useful life of 10 years. The machine is estimated to be used a total of 45,000 hours.
Actual usage for the year totals 10,000 hours.
Calculate depreciation on the machine using the straight line method. What is the book value?

15. On August 31st, purchase a machine for $100,000
On August 31st, purchase a machine for $100,000. The machine has an expected residual value of $10,000
and an expected useful life of 10 years. The machine is estimated to be used a total of 45,000 hours.
Actual usage for the year totals 10,000 hours.
Calculate depreciation on the machine using the activity-based method. What is the book value?

16. Purchase a patent for $12,000 on January 1st, 2016
Purchase a patent for $12,000 on January 1st, The patent has a legal life of 20 years and a useful life of 12 years
Record the purchase of the patent on January 1st, 2016
Record the amortization expense recorded on December 31st, 2016