1. What items other than coins or currency might be included in the balance sheet account cash?
2. What is the account classification (i.e., asset, liability, ect.) of the account Cash Short and Over? How is it deposited of at the end of the fiscal period?
3. What kinds of transactions require additions to book balance? Subtractions for book balances? Subtractions from bank balances?
4. How does the net method of recording purchases differ from the gross method? How would firms that use each method make journal entries for a $1,000 invoice with a 2 percent discount?
Using the following information, calculate the amount that would be included in Cash and Cash Equivalents on the Way west Hotel balance sheet at December 31, 20×4.
Signed credit card slips—diners club $250
Time deposits $3,256
Money orders $350
Receivable from Bob Golden $200
Petty Cash $100
Signed credit card slips—visa $480
Shares of stock in Motors International $1,000
Certificates of deposits $2,000
Explain the mechanics of the voucher system and include explanations of the following terms:
1. What is the ledger account classification for Allowance for Doubtful Accounts? What is its normal balance?
2. If the allowance method of accounting for bad debts indicates a debit balance at the end of the year, were bad debts underestimated or overestimated for the year?
3. What accounts are debited and credited when a specific account is written off during the year under the allowance method of accounting for bad debts?
On June 15, the Pines Restaurant decided to write of the account of Thomas Sunbart in the amount of $350. The restaurant uses the direct write off method of accounting for bad debts.
1. Make the necessary journal entry for June 15
2. On November 15, Debra Threloff paid firesun resort $500. Make the necessary journal entry or entries to reinstate Debra’s account and record the collection
The FireSun Resort decided to write off the account of Debra Threloff for $500 on Aug 3 FireSun uses the direct write off method of accounting for bad debts
1. Make the necessary journal entry for Aug 3
2. On November 15, Debra Threloff paid FireSun Resort $500. Make the necessary journal entry or entries to reinstate Debra’s account and record the collection
1. Does an overstatement of ending inventory overstate or understate cost of goods sold for the period? What is the effect of the error on net income for the goods?
2. How do the terms under which a supplier ships goods affect inventory valuation and accounting for inventory?
Based on the following transactions and shipping terms between Coldpac Distributors and Marco’s Pizzeria, determine who should include the inventory in question on their 12/31/20×8
1. Marco’s received a $4,000 worth of inventory on January 3 that was shipped FOB destination by Coldpac on Dec 28
2. Marco’s received $5,000 worth of inventory on January 2 that was shipped FOB shipping point on Dec 24
Only July 6, 20×3, the ProShop at the Hilton Lagoons Hotel ordered golf clubs an clothing that together cost $8,000, which managers charged to the hotel’s account. On July 15 20×3, the shop sold $2,500 worth of merchandise, which cost $1,400.
Journalize the entries for July 6 and July 15 assuming:
1. The Pro Shop uses the periodic inventory system
2. The Pro Shop uses the perpetual inventory system
1. How is the gain or loss on the sale of property and equipment asset calculated?
For each of the following purchases, does the purchase represent a capital or a revenue expenditure?
a. Complete remodeling of a restaurant dining room at a cost of $80,000
b. Repainting the exterior of a delivery truck at a cost of $500
c. Purchase of a pizza oven at a cost of $18,000
d. Purchase of a dozen pencil sharpeners with a life of ten years at a total cost of $65
e. Overhaul of the engine on a tour bus at a cost of $5,000 extending the life of the bus by five years
f. Purchase of a computer system at a cost of $35,000
Indicate whether the assets below should be listed on the balance sheet under current assets or property and equipment:
Construction in Progress
Furnishings and equipment
Short term investments
Longview Hotels operates ten properties in the Midwest. The company employs the following procedures to control payroll:
a. Tom Johnson, the human resources manager, carefully interviews all prospective employees, authorizes their hiring, perpetrates the payroll and distributes the checks
b. Donna Miller, the front desk manager, deletes individuals from her department’s labor force and provides payroll employees with front desk employees’ wage rates
c. At the end of each shift, hotel dining room employees write down their hours on a blank sheet of paper and place it on the desk of the food and beverage manager
d. All employees are paid by checks draw on the general bank account of the company
e. All individual paychecks are kept in the respective departments until they are claimed by employees
Draft a memo suggesting changes that the operation should make to do better control payroll
Indicate weather the following statements are true or false and explain why:
a. If a company is a mom and pop operation, it would be acceptable under current tax laws to pay employees in cash with no withholding
b. An employee’s immediate supervisor should hold a check for the employee if he or she is taking a leave of absence
c. Duties regarding the payroll process should be segregated to ensure that proper payroll procedures are followed
d. The labor force master list should be under the control of the human resources department
e. Time clocks are great way to ensure the proper recording of time worked
f. Employees’ wages are provided to payroll by the marketing department
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