Accounting 512

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Date Completed:
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Test 22A (62 pts Work Sheet and 81 pts Preparing Financial Statements for Corporation =Total 143 points)
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General Directions:
The enclosed worksheets are the application portion of the complete Chapter 22 Test (22A).
(The objective portion of Chapter 22 – 22A Obj – is available in our online course through a separate link.)
In order to complete this test, students will need Excel 2007 or newer and basic spreadsheet skills.
Students may complete this test by typing simple values or by using formulas.
Students are only being tested for their understanding of the accounting principles taught in the related chapter
Use the area below to include any comments or concerns regarding the exam.
This is a test and should be completed only by the individual submitting for evaluation. Do not collaborate no
Review your work carefully. Make sure you use Save As when absolutely finished.
Save your finished work to a filename that includes “Test 22A YOUR NAME” in the filename. In other words ad
Submit the completed file for grading to your instructor who will review and provide feedback.
Linda Amor
Name
Date
Test Twenty-Two Part Two Preparing a WorkSheet
On December 31st of the current year, Progressive Center has the following Trial Balance.
Directions: Complete the work sheet for the current year ended December 31. Record the adjustments on the work sheet using the following information.
$40.00 Accrued interest income (Interest Income)
Uncollectible Accounts Expense estimated at 1.0% of sales on account. Sales on account for the year $123,000.00.
Hint: The 1.0% amount you calculate on the $123,000.00 is the amount for the adjustment entry.
$49,500.00 Merchandise Inventory (this is the balance of inventory we still have at the end of the period.)
$400.00 Supplies Inventory (this is the balance we still have at the end of the period.)
$6,920.00 Depreciation Expense – Store Equipment (You need to find the the adjusting amount that should be depreciated. The balance of Accum. Dep. – Store Equipment (asset) should be $6,920 at the end of the year.)
$140.00 Accrued Interest Expense (this is the amount for the adjustment entry for Interest Payable and Interest Expense)
$7,254 Federal Income Tax Expense (total for the year is $7,254. (You need to calculate the adjustment amount.)
Progressive Center
Work Sheet
For Year Ended December 31, 20xx
1
Debit
Cash
Notes Receivable
Interest Receivable
4 Accounts Receivable
5 Allowance for Uncollectable Accounts
6 Merchandise Inventory
7 Supplies
8 Store Equipment
9 Accum. Depr. – Store Equipment
10 Notes Payable
11 Interest Payable
12 Accounts Payable
13 Federal Inc. Tax Payable
14 Dividends Payable
15 Capital Stock
16 Retained Earnings
17 Dividends
18 Income Summary
19 Sales
20 Sales Discount
21 Sales Returns & Allowances
22 Purchases
23 Purchases Discount
24 Purchases Returns & Allowances
25 Cash Short & Over
26 Depreciation Expense – Store Equipment
27 Rent Expense
28 Supplies Expense
29 Uncollectable Accounts Expense
30 Gain on Plant Assets
31 Interest Income
32 Interese Expense
33 Loss on Plant Assets
34 Federal Income Tax Expense
1
2
2
3
Credit
Debit
Trial Balance
Account Title
4
5
Credit
Debit
Adjustments
6
9
Credit
Debit
Income Statement
10
Balance Sheet
Credit
32,550.00
6,000.00
3
35
13,140.00
70.00
46,200.00
2,100.00
53,120.00
5,780.00
14,000.00
16,000.00
4,800.00
54,000.00
29,250.00
19,200.00
325,570.00
4,620.00
1,620.00
250,700.00
2,020.00
1,080.00
6.00
17,000.00
700.00
400.00
710.00
104.00
6,600.00
453,670.00
453,670.00
36
37
Test 22A
Preparing a Worksheet (Part Two)
Name
Date
Test 22 Part 3 – Preparing Financial Statements for a Corporation – Income Statement
Progressive Center’s work sheet was completed in Part Two of this test.
Directions: Use the form below to prepare an income statement. Calculate the following component percentages: (a) cost of merchandise
sold; (b) gross profit on operations; ( c) total operating expenses; (d) income from operations; (e) net addition or deduction resulting from
other revenue and expenses; and (f) net income before federal income taxes. Round percentage calculations to the nearest 0.1%.
Progressive Center
Income Statement
For Year Ended December 31, 20xx
% OF NET
SALES
Operating Revenue:
Sales
Less: Sales Discount
Sales Ret. And Allow.
Net Sales
Cost of Merchandise Sold:
Merchandise Inventory, January 1, 20xx
Purchases
Less: Purchases Discount
Purch. Ret. And Allow.
Net Purchases
Total Cost of Merchandise Available For Sale
Less Mdse. Inventory, Dec. 31, 20xx
Cost of Merchandise Sold:
Gross Profit on Sales
Expenses:
Advertising Expense
Cash Short and Over
Credit Card Fee Expense
Depr. Exp.–Office Equipment
Depr. Exp.–Store Equipment
Insurance Expense
Miscellaneous Expense
Payroll Taxes Expense
Rent Expense
Salary Expense
Supplies Expense–Office
Supplies Expense–Store
Uncollectible Accounts Expense
Utilities Expense
Total Operating Expense
Income From Operations
Other Revenue
Gain on Plant Assets
Interest Income
Total Other Revenue
Other Expenses
Interest Expense
Loss on Plant Assets
Total Other Expenses
Net Addition
Net Income before Federal Income Tax
Less Federal Income Tax Expense
Net Income after Federal Income Tax
Test 22A
Income Statement
Name
Date
Test 22 Part 3 – Statement of Stockholder’s Equity
Directions: Prepare a statement of stockholders’ equity. Use the following additional information to complete the form below.
January 1 balance of capital stock account (9,000 shares issued at $6.00 per share) ………
January 1 balance of retained earnings account ………………………………………………….
$54,000.00
$29,250.00
Progressive Center
Statement of Stockholders’ Equity
For Year Ended December 31, 20xx
Capital Stock:
$6 Par Value
January 1, 200x, 9000 Shares Issued
Issued during Current Year, None
Balance, December 31, 200x, 9000 Shares Issued
Retained Earnings:
Balance, January 1, 200x
Net Income after Federal Income Tax for 200x
Less Dividends Declared during 200x
Net Increase during 200x
Balance, December 31, 200x
Total Stockholders’ Equity, December 31, 200x
Test 22A
Statement of Stockholders’ Equity
Name
Date
Test 22 Part 3 – Preparing Financial Statements for a Corporation – Balance Sheet,
Working Capital, and Current Ratio
Prepare the balance sheet.
Calculate Progressive Center’s (a) working capital and (b) current ratio.
Progressive Center
Balance Sheet
December 31, 20xx
ASSETS
Current Assets:
Cash
Petty Cash
Notes Receivable
Interest Receivable
Accounts Receivable
Less Allowance for Uncollectible Accounts
Merchandise Inventory
Supplies
Prepaid Insurance
Total Current Assets
Plant Assets:
Store Equipment
Less Accumulated Depreciation–Store Equipment