You applied for a position of Accounts Supervisor, at a prestigious company. Your evaluation, during the interview process, is the completion of the below test in accounting, comprising eight(8) questions.
1. The following unadjusted and adjusted trial balances were taken from the current year's accounting system for High Point, Inc.
In general journal form, present the six adjusting entries that explain the changes in the account balances from the unadjusted to the adjusted trial balance.
2. During physical stock take in one of its sports shops, Severino recorded the following:
Product Units Cost per unit Market value per unit
Helmets 35ea. $45 $48
Bats 51ea. $78 $75
Shoes 48pr. $82 $79
Balls 30pks. $40 $41
Uniforms 80ea. $36 $38
Using the lower of cost or market valuation for ending inventory, applied separately for each item of stock, prepare the journal to adjust the inventory balance, if necessary.
3. A company had the following purchases during the current year:
On December 31, there were 26 units remaining in ending inventory. These 26 units consisted of 2 from January, 4 from February, 6 from May, 4 from September and 10 from November. Using the specific identification method, what is the cost of the ending inventory?
A.$3,500; B.$3,800; C.$3,960; D.$3,280
4. A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:
All sales are made on credit. Based on past experience, the company estimates 0.5% of credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
A. $1,225 B. $925 C. $1,525 D. $4,500
5. Temper Company has credit sales of $3.10 million for year 2010. Temper estimates that 0.9% of the credit sales will not be collected. On December 31, 2010, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $2,222. Temper prepares a schedule of its December 31, 2010, accounts receivable by age. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here:
Assuming the company uses the aging of Accounts Receivable method, what is the amount that Temper will enter as the Bad Debt Expense in the December 31 adjusting journal entry?
A.$25,246.40; B.$27,468.40; C.$23,024.40; D.$27,900.00
6. Action Travel has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the actual direct deposit of payroll for the first week of January?
A. $5,404. B. $5,708. C. $4,792. D. $8,000.
7. Given the following selected accounts from the books of Holman Groceries Company;
a. Prepare the multi-step income statement, in proper form, for period ended 7/13/2016.
Sales $283,620 Sales discount $3,100
Transportation-in 7,425 Purchases returns/allowances 1,820
Purchases 101,180 Transportation-out 5,060
Beginning inventory 98,250 Sales returns/allowance 4,645
Purchase discount 8,300 Sales salaries expenses 28,740
Warehouse rent 12,000 Office rent 18,000
Insurance expense 4,800 (60% selling) Lighting and heating 9,600 (30% administration)
Admin salaries expense 10,300 Advertising expense 8,400
Supplies expense 6,600 (35% selling) Miscellaneous expense 12,900 (50% selling)
The value of closing inventory, after physical stock-take, was $72,100.
b. Calculate both the gross profit margin and the profit margin, for 2016 for this company.
8. The following trial balance was prepared from the general ledger of Hal's Auto Repair.
Since the trial balance did not balance, you decided to examine the accounting records. You found that the following errors had been made:
1. A purchase of supplies on account for $245 was posted as a debit to Supplies and as a debit to Accounts Payable.
2. An investment of $500 cash by the owner was debited to Common Stock and credited to Cash.
3. In computing the balance of the Accounts Receivable account, a debit of $600 was omitted from the computation.
4. One debit of $300 to the Dividends account was posted as a credit.
5. Office equipment purchased for $800 was posted to the Repair Equipment account.
6. One entire entry was not posted to the general ledger. The transaction involved the receipt of $125 cash at the time repair services were performed.
Required: Prepare a corrected trial balance for the Hal's Auto Repair as of October 31.
This Project must be completed and returned by 5/01/2017. No late submission will be accepted. You may return it earlier than the due date, if you wish to do so.