Guidance report, Accounting Exercise help

User Generated

Yvffn

Business Finance

Description

  1. Read the video transcripts below for the exercise/problem. The video transcripts completes the problems using the book numbers.
  2. Open the Guidance Report and rework the problem with the changed numbers and place your answers on the guidance report. Do not alter the guidance report.

Complete the following problems and exercises:

Chapter Three, Exercises 4 and 8
Chapter Four, Exercises 3 and 6
Chapter Three, Problem 3
Chapter Four, Problem 3


acc205_week_2_guidance_report.xlsx
chapter_3_exercise_4.docx
chapter_3_exercise_8.docx
chapter_3_problem_3.docx
chapter_4_exercise_3.docx
chapter_3_exercise_4___8.docx
chapter_4_exercise_3___6.docx
chapter_3_problem_3___chapter_4_problem_3.docx

Unformatted Attachment Preview

Your Browser Must be Open to Access Video LISTEN TO AUDIO/VIDEO EXPLAINING THE GUIDANCE REPORT Exercise/ Problem Ch 3 Ex 4 Account to be changed Fish Trip Boat rental Questions Prepare journal entries to record (1) the collection of monies from tourists and (2) the revenue generated during January. Cash Unearned Fish Trips Unearned Fish Trips Earned Fish Trips Calculate Hawaii-Blue's total obligation to tourists at the end On what financial statement and in which section would this What section of the financial statement would this amount Prepare journal entries to record (1) the payment to Pacific Yacht Supply and (2) the subsequent adjustment on January 31. Prepaid Boat Rental Cash Boat Rental Expense Prepaid Boat Rental On what financial statement would HawaiiBlue's January boat rental cost appear? Account to be changed Original Amount Ch 3 Ex 8 Miguel Gomez, Drawing Service Revenue Rent Expense 2,500 38,000 9,000 Service Revenue Capital Capital Rent Expense Insurance Expense Advertising Expense Utilities Expense Capital Drawing Account to be changed Ch 4 Ex 3 Balance per bank Note collected by bank Balance per bank Deposits in transit Outstanding checks Adjusted Bank Balance Balance per company records Bank service charge for January Interest on note collected by bank Note collected by bank NSF check returned by the bank with the bank statement Adjusted Book Balance Ch 4 Ex 6 (1) Uncollectible accounts are estimated to be 5% of Credit Sales. Uncollectible Accounts Expense Allowance for Uncollectible Accounts (2) Uncollectible accounts are estimated to be 14% of Accounts Receivable. Uncollectible Accounts Expense Allowance for Uncollectible Accounts Account to be changed 5% of credit sales 14% of accounts receivable How would Maverick's Accounts Receivable appear on the December 31 balance sheet under assumption (1) of part (a)? Accounts Receivable Less: Allowance for Uncollectible Accounts How would Maverick's Accounts Receivable appear on the December 31 balance sheet under assumption (2) of part (a)? Accounts Receivable Less: Allowance for Uncollectible Accounts Net Receivables Ch 4 Pb 3 Account to be changed Percentage of Accounts Expected to Be Collected What is the company's Uncollectible Accounts expense for 20X2? Compute the net realizable value of Accounts Receivable at the end of 20X1 and 20X2. Net Realizable value 20X1 Accounts receivable Less: Allowance for Uncollectible Accounts Net Realizable Value Compute the net realizable value at the end of 20X1 and 20X2 as a percentage of respective year-end receivables balances. Analyze your findings and comment on the president's decision to close the credit evaluation department. 20X1 Ch 3 Pb 3 Account to be changed Unrecorded interest Total Tuition in advance Depreciation Rent Salaries Feb 1 20X2 Original Amount 275 60000 3000 21000 400 540 Jan 1 20X3 912 YOUR ANSWERS BASED UPON COURSE START DATE Debits Unrecorded interest owed to the center totaled $275 as of December 31. Interest Expense Interest Payable All clients pay tuition in advance, and their payments are credited to the Unearned Tuition Revenue account. The account was credited for $75,500 on August 31. With the exception of $15,500, which represented prepayments for 10 months' tuition from several well-to-do families, all amounts were for the current semester ending on December 31. Unearned Tuition Revenue Tuition Revenue Depreciation on the school's van was $3,000 for the year. Depreciation Expense Accumulated Depreciation On August 1, the center began to pay rent in 6-month installments of $21,000. Kathy wrote a check to the owner of the building and recorded the check in Prepaid Rent, a new account. Rent Expense Prepaid Rent Two salaried employees earn $400 each for a 5-day week. The employees are paid every Friday, and December 31 falls on a Thursday. Salary Expense Salaries Payable Kathy's Day Care paid insurance premiums as follows, each time debiting Prepaid Insurance: Date Feb. Jan. Aug. Paid 1, 20X2 1, 20X3 1, 20X3 Policy No. 1033MCM19 7952789HP XQ943675ST Insurance Expense Prepaid Insurance Ashford University ACC205 Guidance Report Week Two YELLOW INDICATES ACCOUNT AMOUNTS CHANGED Change Account to: Based Upon Course Start Date Original Amount 125 72,000 YOUR ANSWERS BASED UPON COURSE START DATE Jan-Feb 150 78,000 Mar-Apr 175 84,000 May-Jun 200 90,000 Jul-Aug 225 96,000 Sept-Oct 250 102,000 Nov-Dec 275 108,000 YOUR ANSWERS BASED UPON COURSE START DATE 3000 39000 9500 3500 40000 10000 4000 41000 10500 3500 47000 17000 5000 49000 17500 5500 50000 18000 Original Amount 6150 1000 YOUR ANSWERS BASED UPON COURSE START DATE $6,252 1,102 $6,354 1,204 $6,456 1,306 $6,558 1,408 $6,660 1,510 $6,762 1,612 0.06 0.15 0.07 0.16 0.08 0.17 0.09 0.18 0.1 0.19 0.11 0.2 Original Amount 0.05 0.14 YOUR ANSWERS BASED UPON COURSE START DATE Original Amount 0.99 YOUR ANSWERS BASED UPON COURSE START DATE Net Realizable value 20X2 20X2 96% 93% 90% 87% 84% 81% Jan-Feb Mar-Apr May-Jun Jul-Aug Sept-Oct Nov-Dec 300 325 350 370 376 377 70000 71000 74000 75000 79000 83000 4000 4100 4200 4300 4400 4500 24000 30000 36000 42000 48000 54000 500 600 700 800 900 950 600 610 620 640 650 660 1000 Credits 1050 1060 1070 1090 1095 Length of Policy Amount 1 year $540 1 year 912 2 years 840 Chapter 3_Exercise 4 Now we'll review chapter 3, exercise 4. A charter fishing company has sold fishing trips in advance for $125 apiece, and they have sold 210 tickets. And all of these tickets were used in January, except 30 will be used in February. They also rent a boat from another company for $72,000. And that was for 24 months. 2 years. And they've only used the boat for 1 month. Now the first requirement down below is to prepare journal entries to record the collection of the money from the tourists, and, too, the revenue generated during January. So let's look at that. They received $125 for each of the 210 tickets. So down here, I'm multiplying $125 times 210, which equals 26,250. And I debit it cash. Now you notice that I didn't credit revenue, because we received this money in advance, and we have not earned it. So it goes into a liability account that we call unearned revenue. And I've labeled it unearned fish trips. However, in January, we did have fishing trips that we earned, 210 minus the 30 that will be in February. So 180 trips we did earn. So the second journal entry, I'm moving out of unearned fish trips the 180 times $125, which equals the 22,500. And I'm debiting unearned fish trips, moving that finally to revenue earned fish trips. Next requirement, is they want us to calculate Hawaii Blue's total obligation to tourists at the end of January. What they're asking is how much have we not earned and that we owe to the customers that will take their trip in February but perhaps might not and ask for a refund. So I did the 30 trips times $125, and that equals the 3,750. Now they're asking on the next question on what financial statement, which section, would this amount appear. Again this is 3,750 is unearned revenue. It's a liability. So we go into balance sheet, and on the current liabilities section of the balance sheet. Next requirement, they want us to prepare journal entries to record the payments to the specific yacht company-- the company that they're renting the boat from-- and the adjustment January 1. So remember, we paid $72,000 in advance, so we call that prepaid boat rental. And we credit it cash. Now at the end of January, we have used 1/24 of that $72,000, because it covered 24 months. So I will move out of that prepaid boat rental 3,000 by debiting boat rental expense and crediting prepaid boat rental. They ask you, then, on what financial statement would Hawaii Blue's January boat rental cost appear. Well, that boat rental expense will appear on your income statement as an expense. That completes the problem. Thank you very much. Chapter 3_Exercise 8 This problem deals with closing entries at the end of the accounting cycle. We need to close out the revenue accounts and expense accounts and we zero those out and move those amounts to the retained earnings account or capital account, whatever you'd like to call it. This problem calls it capital. And once it moved in there, that determines net income journal entries. One closes out the revenue. Two closes the expenses to the capital account, and three, we close out the withdrawal account. Let's take a look at what they've given us from the book. We have a number of accounts-- cash, accounts payable, prepaid insurance, land, accounts payable. Now we only close revenue and expense accounts. So we only have to do with the one revenue account here, $38,000, and the four expense accounts we'll close out. And then the third journal entry will be the $2,500 to close out the drawing. Let's see how we do that. So if you look down below to close out the revenue account, revenue account has a normal balance of credit, so I debit that account in order to make it zero, and I move that amount as a credit to the capital account. Second journal entry to close out the four expense accounts, which are a debit balance. We credit those four accounts, so it makes those zero. We add up the amount, $21,000, and we debit capital account, which reduces the capital account. The third journal entry is we close out the drawing account, which is up here, $2,500. It's a debit account, so we're going to credit the drawing account, make it zero, and move that to the capital account of $2,500. Now what this ultimately does is increases the capital account by the revenue of $38,000, decreases it by the $21,000 of expenses. So you really had $17,000 net income. But we also reduced the capital account by $2,500 for the drawings. So that's closing entries. Thank you. [MUSIC PLAYING] Chapter 3_Exercise 3 We will review chapter three, problem three, dealing with adjusting entry. You can see up here that they've given this information that we need to adjust. Certain accounts, unrecorded interest, tuition, depreciation, rent, salaries, and insurance. Let's take a look at the first adjustment dealing with the unrecorded interest. So we debit interest expense for the amount listed above, 275, and credit interest payable to 275. Now, the second journal entry, it says all clients pay tuition in advance and their payments are credited to the Unearned Tuition Revenue account. The account was credited for 75,000 August 31. With the exception of 15,500, which represented prepayments for 10 months, tuition several families, all amounts for the current semester are ending on December 31. So what they're saying is that the period from August to December 31, we earned the 75,500 minus the 15,500, which is 60, and we earn half of the 15,500. But then that was for 10 months and we only had the five months, August to December. So we debit unearned tuition revenue for 67,500 and credit tuition revenue or 67,750. All right, next one. We need to record the depreciation. Notice up above it was $3,000, so we debit depreciation expense and we credit accumulated depreciation for $3,000. All right? Now, the next one is dealing with prepaid rent. August 1, the center began to pay rent and 6 month installments of 21,000. Cathy wrote a check to the owner of the building and recorded the check with prepaid rent on new account. So on August 1, she paid six months. So that represented August, September, October, November, December, and January. This is December 31, so we'll only move 5/6 of that amount out of prepaid rent and move it to rent expense or 17,500. Okay, the next adjustment is for salaries. We have two salaried employees that earn 400 each for a five day week. The employees are paid every Friday and December 31 falls on a Thursday. So we owe each employee for 4 days or 80% of the $400, which is $320. So we need to accrue $320, times 2, or $640 for the salaries that we owe these employees. So we debit salary expense 640 and we credit salaries payable. Now on the insurance account, they give us information about when the policies were paid, policy number, the length of the insurance, and the amount. So we have to adjust the prepaid insurance account. This is December 31, 2003, we paid for a one year policy back in February 2002, so that amount has expired, 540. On January 1, we paid for a one year Insurance policy. It is now December 31, so that amount has expired. We also had another policy starting August 1, which lasts two years. And you'll notice up here I said the amount We also had another policy starting August 1, which lasts two years. And you'll notice up here I said the amount was $840, so we have August, September, October, November, December, 5 months of the 24 months has expired. So 524 of that 840 has expired. So we'll take that amount, add it to the 912, add it to the 540, and debit insurance expense, and credit prepaid insurance for 1627. Thank you. [MUSIC PLAYING] Chapter 4_Exercise 3 This is a bank reconciliation problem. And as you can see on top here, they have given us a balance per bank, and a balance for company records, or we call it the balance per books. They give us some other information, the bank service charge, deposits in transit, interest on a note collected by the bank, and the amount of the note collected by the bank. There was an NSF check returned by the bank, and outstanding checks. So down below, down here, we will complete the bank reconciliation. It's composed of two parts. We have the top part here, balance per bank, where we will add or subtract certain items to come down and adjust the bank balance. And the second part down here, balance per company records, and we'll do the same, we'll either subtract certain amounts to come down to an adjusted book balance. These two numbers, 4,010, 4,010 have to agree, and the reconciliation is correct. So what I've done is I've moved the balance per bank down to here, and we had $940 deposits in transit. Now those are deposits that are made on the last banking day after the bank's closing time. So they did not appear on the bank statement, but we're recording the book, so we have to add it to the bank. Outstanding checks, or checks that we deducted from our book balance, we'd send them out. But they haven't cleared the bank yet, so we have an adjusted balance of 4,010. Now the balance per company records, 3,580, the bank deducted the service charge. We saw that in the bank statements, so it's not in the books yet, so we have to subtract that from the books. A collected note for us, $1,000, so we had to record that in the book. So we have to add it to the books, plus $100 interest. And then there was an NSF check returned by the bank. So we received a check, deposited it in the bank and on our books. However, it was a bad check, so the bank deducted it. So now we have to turn around and deduct it from our books, minus 650. We come up with the 4,010 adjusted book balance, which equals the adjusted bank balance. So that's it for the bank reconciliation. Thank you. [MUSIC PLAYING] Chapter 3_Exercise 4 Now we'll review chapter 3, exercise 4. A charter fishing company has sold fishing trips in advance for $125 apiece, and they have sold 210 tickets. And all of these tickets were used in January, except 30 will be used in February. They also rent a boat from another company for $72,000. And that was for 24 months. 2 years. And they've only used the boat for 1 month. Now the first requirement down below is to prepare journal entries to record the collection of the money from the tourists, and, too, the revenue generated during January. So let's look at that. They received $125 for each of the 210 tickets. So down here, I'm multiplying $125 times 210, which equals 26,250. And I debit it cash. Now you notice that I didn't credit revenue, because we received this money in advance, and we have not earned it. So it goes into a liability account that we call unearned revenue. And I've labeled it unearned fish trips. However, in January, we did have fishing trips that we earned, 210 minus the 30 that will be in February. So 180 trips we did earn. So the second journal entry, I'm moving out of unearned fish trips the 180 times $125, which equals the 22,500. And I'm debiting unearned fish trips, moving that finally to revenue earned fish trips. Next requirement, is they want us to calculate Hawaii Blue's total obligation to tourists at the end of January. What they're asking is how much have we not earned and that we owe to the customers that will take their trip in February but perhaps might not and ask for a refund. So I did the 30 trips times $125, and that equals the 3,750. Now they're asking on the next question on what financial statement, which section, would this amount appear. Again this is 3,750 is unearned revenue. It's a liability. So we go into balance sheet, and on the current liabilities section of the balance sheet. Next requirement, they want us to prepare journal entries to record the payments to the specific yacht company-- the company that they're renting the boat from-- and the adjustment January 1. So remember, we paid $72,000 in advance, so we call that prepaid boat rental. And we credit it cash. Now at the end of January, we have used 1/24 of that $72,000, because it covered 24 months. So I will move out of that prepaid boat rental 3,000 by debiting boat rental expense and crediting prepaid boat rental. They ask you, then, on what financial statement would Hawaii Blue's January boat rental cost appear. Well, that boat rental expense will appear on your income statement as an expense. That completes the problem. Thank you very much. Chapter 3_Exercise 8 This problem deals with closing entries at the end of the accounting cycle. We need to close out the revenue accounts and expense accounts and we zero those out and move those amounts to the retained earnings account or capital account, whatever you'd like to call it. This problem calls it capital. And once it moved in there, that determines net income journal entries. One closes out the revenue. Two closes the expenses to the capital account, and three, we close out the withdrawal account. Let's take a look at what they've given us from the book. We have a number of accounts-- cash, accounts payable, prepaid insurance, land, accounts payable. Now we only close revenue and expense accounts. So we only have to do with the one revenue account here, $38,000, and the four expense accounts we'll close out. And then the third journal entry will be the $2,500 to close out the drawing. Let's see how we do that. So if you look down below to close out the revenue account, revenue account has a normal balance of credit, so I debit that account in order to make it zero, and I move that amount as a credit to the capital account. Second journal entry to close out the four expense accounts, which are a debit balance. We credit those four accounts, so it makes those zero. We add up the amount, $21,000, and we debit capital account, which reduces the capital account. The third journal entry is we close out the drawing account, which is up here, $2,500. It's a debit account, so we're going to credit the drawing account, make it zero, and move that to the capital account of $2,500. Now what this ultimately does is increases the capital account by the revenue of $38,000, decreases it by the $21,000 of expenses. So you really had $17,000 net income. But we also reduced the capital account by $2,500 for the drawings. So that's closing entries. Thank you. [MUSIC PLAYING] Chapter 4_Exercise 3 This is a bank reconciliation problem. And as you can see on top here, they have given us a balance per bank, and a balance for company records, or we call it the balance per books. They give us some other information, the bank service charge, deposits in transit, interest on a note collected by the bank, and the amount of the note collected by the bank. There was an NSF check returned by the bank, and outstanding checks. So down below, down here, we will complete the bank reconciliation. It's composed of two parts. We have the top part here, balance per bank, where we will add or subtract certain items to come down and adjust the bank balance. And the second part down here, balance per company records, and we'll do the same, we'll either subtract certain amounts to come down to an adjusted book balance. These two numbers, 4,010, 4,010 have to agree, and the reconciliation is correct. So what I've done is I've moved the balance per bank down to here, and we had $940 deposits in transit. Now those are deposits that are made on the last banking day after the bank's closing time. So they did not appear on the bank statement, but we're recording the book, so we have to add it to the bank. Outstanding checks, or checks that we deducted from our book balance, we'd send them out. But they haven't cleared the bank yet, so we have an adjusted balance of 4,010. Now the balance per company records, 3,580, the bank deducted the service charge. We saw that in the bank statements, so it's not in the books yet, so we have to subtract that from the books. A collected note for us, $1,000, so we had to record that in the book. So we have to add it to the books, plus $100 interest. And then there was an NSF check returned by the bank. So we received a check, deposited it in the bank and on our books. However, it was a bad check, so the bank deducted it. So now we have to turn around and deduct it from our books, minus 650. We come up with the 4,010 adjusted book balance, which equals the adjusted bank balance. So that's it for the bank reconciliation. Thank you. [MUSIC PLAYING] Chapter 4_Exercise 6 This deals with uncollectable accounts. These are accounts receivable that we estimate will not be collected. And we're going to go over 2 methods. The book gives us the balance of accounts receivable, 107,000. The existing balance for the allowance for uncollectable accounts, which is 5,400 which is a credit balance. They give us credit sales. And they're going to use 5% in our calculation for credit sales and 14% for the calculation of accounts receivable. Let's do the first couple journal entries. They want us to do 2 journal entries, based on 2 different assumptions. Number 1, uncollectable accounts are estimated to be 5% of credit sales. So if we multiply 5% times the credit sales of 250,000, that equals 12,500. And there's your journal entry. We debit uncollectable accounts expense, and credit the allowance from uncollectable accounts. Now this is the income statement approach, and when we make that calculation, we don't care what the balance is in the allowance account of 5,400 We ignore it, we do the calculation, and we add it. However, in the next journal entry, this is the balance sheet approach, where we determined that 14% of accounts receivable will be uncollected. So that's what we want the balance to be. So 14% times the accounts receivable, 107,000, this is 14,980. We already have 5,400 there, so we increase it by 9,580. Next part, how would the accounts receivable appear on the balance sheet under part a? So we have the accounts receivable balance of 107,000, less the allowance from uncollectable accounts, 17,900, that was calculated by taking the 12,500 that we added and the existing 5,400 credit balance. So we get net realizable value of 89,100. And the second part, the balance sheet approach, we still use the same balance of accounts receivable, 107,000, but the allowance, now, is 14,980. Remember, we calculated 14% times 107,000. We got that number 14,980. So the net realizable value is 92,020. But you can see, using the 2 different methods, the net realizable value of accounts receivable will be different. Chapter 3_Exercise 3 We will review chapter three, problem three, dealing with adjusting entry. You can see up here that they've given this information that we need to adjust. Certain accounts, unrecorded interest, tuition, depreciation, rent, salaries, and insurance. Let's take a look at the first adjustment dealing with the unrecorded interest. So we debit interest expense for the amount listed above, 275, and credit interest payable to 275. Now, the second journal entry, it says all clients pay tuition in advance and their payments are credited to the Unearned Tuition Revenue account. The account was credited for 75,000 August 31. With the exception of 15,500, which represented prepayments for 10 months, tuition several families, all amounts for the current semester are ending on December 31. So what they're saying is that the period from August to December 31, we earned the 75,500 minus the 15,500, which is 60, and we earn half of the 15,500. But then that was for 10 months and we only had the five months, August to December. So we debit unearned tuition revenue for 67,500 and credit tuition revenue or 67,750. All right, next one. We need to record the depreciation. Notice up above it was $3,000, so we debit depreciation expense and we credit accumulated depreciation for $3,000. All right? Now, the next one is dealing with prepaid rent. August 1, the center began to pay rent and 6 month installments of 21,000. Cathy wrote a check to the owner of the building and recorded the check with prepaid rent on new account. So on August 1, she paid six months. So that represented August, September, October, November, December, and January. This is December 31, so we'll only move 5/6 of that amount out of prepaid rent and move it to rent expense or 17,500. Okay, the next adjustment is for salaries. We have two salaried employees that earn 400 each for a five day week. The employees are paid every Friday and December 31 falls on a Thursday. So we owe each employee for 4 days or 80% of the $400, which is $320. So we need to accrue $320, times 2, or $640 for the salaries that we owe these employees. So we debit salary expense 640 and we credit salaries payable. Now on the insurance account, they give us information about when the policies were paid, policy number, the length of the insurance, and the amount. So we have to adjust the prepaid insurance account. This is December 31, 2003, we paid for a one year policy back in February 2002, so that amount has expired, 540. On January 1, we paid for a one year Insurance policy. It is now December 31, so that amount has expired. We also had another policy starting August 1, which lasts two years. And you'll notice up here I said the amount We also had another policy starting August 1, which lasts two years. And you'll notice up here I said the amount was $840, so we have August, September, October, November, December, 5 months of the 24 months has expired. So 524 of that 840 has expired. So we'll take that amount, add it to the 912, add it to the 540, and debit insurance expense, and credit prepaid insurance for 1627. Thank you. [MUSIC PLAYING]
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer


Anonymous
Really great stuff, couldn't ask for more.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags