ACCOUNTING 112 – Summer 2017
PRACTICE SET EXAM
On pages 4 and 5 of this document, you will
find the adjusted trial balance and the prior period balance sheet for Be
Prepared Inc., a corporation. You will
use these reports to complete each of the four phases of the Practice Set Exam. Each phase is worth 25 points. Please read the instructions carefully as
each phase has a different due date. The
instructions for each phase are as follows:
Phase #1
Using Be Prepared, Inc.’s adjusted trial
balance and prior period’s balance sheet (see pages 5 and 6 of this document),
prepare the following Financial Reports in good form using Microsoft Excel or
Microsoft Word:
·
Multi-Step Income Statement for themonth ofJanuary 2016 (see page 205 in your textbook for guidance).
·
Statement of Retained Earnings for themonth ofJanuary 2016 (see page 550 in your textbook for guidance). Note:
There are no prior period adjustments and all dividends declared are
cash dividends in the amount of $31,060.
Due Date: Monday, June
12, 2017 8:00 am
Submission
method:
Please email your file toemoney@dtcc.edu. Name the file
Phase1firstnamelastname.xls. For
example: Phase1EvelynMoney.xls.
Phase #2
Using Be Prepared, Inc.’s adjusted trial
balance and prior period’s balance sheet, prepare the following Financial
Report in good form using Microsoft Excel or Microsoft Word:
·
Comparative Balance Sheet for themonths ofDecember 2015 andJanuary
2016 (See page 722 in your textbook for guidance).
Due Date: Monday, July
3, 2017 8:00 am
Submission
method:
Please email your file toemoney@dtcc.edu. Name the file Phase2firstnamelastname.xls. For example:
Phase2EvelynMoney.xls.
Phase #3
Use the Comparative Balance Sheet you
prepared in Phase #2 and the following additional information to prepare theStatement of Cash Flows for themonth ofJanuary 2016. Use the
indirect method to prepare the operating activities section.
·
Issued 10,000 new shares of
common stock in exchange for a piece of land.
The stock was selling on the market at an average price of $10 per share
on the date of sale and the par value of the stock was 50 cents.
·
Purchased land with a cost
$250,000. A down payment was made in the
amount of $50,000 cash and a 10% 5-year note payable was signed for the
difference.
·
Purchased additional store
equipment for $50,000 paying cash.
·
The $10,000 notes receivable
was related to the sale of merchandise inventory to a credit customer this
period. Hint: The increase in notes receivable should be
reported as an addition to the operating activities section of the statement of
cash flows.
·
Issued bonds with a face amount
of $800,000 at 97. Hint: The amortization of the bond discount in the
amount of $100 should be reported as an addition to the operating activities
section.
·
Used the cash proceeds from the
bond issue to pay off the mortgage payable of $200,000.
·
The company repurchased 20,000
shares of its common stock on the open market for $9 per share.
·
The company reissued 12,000 of
the treasury shares at a price of $15 per share.
·
Issued 1,500 shares of
preferred stock at $105 per share.
·
Paid cash dividends of $31,060
to preferred and common stockholders.
Due Date: Monday, July
17, 2017 8:00 am
Submission
method:
Please email your file toemoney@dtcc.edu. Name the file
Phase3firstnamelastname.xls. For
example: Phase3EvelynMoney.xls.
Phase #4
Using the Multi-Step Income Statement and
the Comparative Balance Sheets you prepared in the previous phases, prepare the
followingRatios forJanuary 2016:
1. Current Ratio
2. Acid-Test Ratio
3. Debt Ratio
4. Profit Margin Ratio
5. Gross Margin Ratio
