ANSWERS TO SAMPLE TEST #3

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1 ANSWERS TO SAMPLE TEST #3 PART A: 1 F 16 B 2 T 17 A 3 T 18 D 4 F 19 B 5 F 20 A 6 T 21 C 7 F 22 D 8 T 23 A 9 F 24 B 10 T 25 D 11 A 26 B 12 D 27 D 13 C 28 A 14 B 29 C 15 A 30 A

2 PART B: PROBLEMS (various points - see below - total of 55 pts): 1. Use a checkmark to indicate the journal in which each of the following transactions should be recorded (10 pts): Transaction SJ PJ CRJ CPJ GJ a. Issued Ck. No for $875 for the month's rent. X b. Purchased merchandise, invoice no. 1025, $1,326, agreeing X to pay in 30 days. c. Bought office supplies on account, $88. X d. Sold services amounting to $1,865 for cash. X e. Sold merchandise on account, $1,580. X f. Received $381 from charge customers to apply on account. X g. The owner withdrew $5,000 for personal use. X h. Journalized end-of-the-year closing entries. X i. Purchased merchandise for $1,750 in cash. X k. Received a credit memo for merchandise returned. X 2. Bradley's Appliance Store had the following transactions during the month of May Record the transactions on page 5 of a sales journal and page 8 of a general journal (use the forms on the next page). Total, prove and rule the sales journal as of May 31, 2005 (15 pts). May 5 Sold a refrigerator to Mary Wilson. Issued Sales Slip 452 for $650 plus sales tax of $ Sold a freezer to Samantha Lee. Issued Sales Slip 453 for $900 plus sales tax of $45. 8 Gave Mary Wilson an allowance for scratches on her refrigerator sold on May 5, Sales Slip 452. Issued Credit Memorandum 118 for $57.75, which includes $2.75 of sales tax. 15 Sold a portable television to Jill Hanna. Issued Sales Slip 454 for $345 plus sales tax of $ Sold a microwave over to Salema Miryam. Issued Sales Slip 455 for $175 plus sales tax of $ Accepted a return of a defective microwave oven from Salema Miryam. The oven was originally sold on May 20, Sales Slip 455. Issued Credit Memorandum 199 for $183.75, which includes sales tax of $8.75

3 SALES JOURNAL PAGE _5_ SALES SLIP NO. CUSTOMER'S ACCOUNT DEBITED ACCOUNTS RECEIVABLE DEBIT SALES TAX PAYABLE SALES 2005 May Mary Wilson Samantha Lee Jill Hanna Salema Miryam Totals GENERAL JOURNAL Page 8 DESCRIPTION DEBIT May 8 Sales Returns & Allowances Sales Tax Payable AR / M. Wilson Issued CM Sales Returns & Allowances Sales Tax Payable AR / S. Miryam 9 10 Issued CM Record the following transactions for the month of April 2005 on page 4 of a cash receipts journal (use the form below). Total, prove and rule the cash receipts journal as of April 30 (15 pts). Apr 3 Collected $350 from Margo Daub, a credit customer on account. 8 Kevin Sharp, the owner, invested additional $5,000 cash in business. 9 Received a cash refund of $30 for damaged supplies. 15 Had cash sales of $5,500 plus sales tax of $385. There was a cash overage of $5. 18 Received $800 from Brian Cobb, a credit customer, in payment of his account.

4 20 Received a check from Phil Stout to pay his $700 promissory note plus interest of $ Had cash sales of $3,800 plus sales tax of $266. There was a cash shortage of $5. CASH RECEIPTS JOURNAL Page_4_ 04 Apr DESCRIPTION ACCTS RECEIVABLE SALES TAX PAYABLE SALES OTHER ACCOUNTS POS ACCOUNT NAME T. AMOUNT CASH DEBIT 3 M. Daub Investment Sharp, Capital Cash Refund Supplies Cash Short or 5 Cash Sales Over B. Cobb Collect note Notes 0 from P. Stout Receivable Int Income Cash Short or 5 0 Cash Sales Over Totals On October 5, 2005, the balance of Creative Solutions, Inc's checkbook and Cash account was $16,622. The balance shown on the bank statement on the same date was $14, (15 pts). Notes 5. The following checks were issued but have not been yet paid by the bank: Check 128 for $150.00, Check 132 for $ The firm's records indicate that a deposit of $1, made on September 28 does not appear on the bank statement. 7. A service charge of $7.50 and a debit memorandum of $ covering an NSF check from a credit customer, Julia Anderson, have not yet been entered in the firm's records. Instructions 1. Prepare a bank reconciliation statement for the firm as of September 30, 2005 (use the form on page 4). 2. Record journal entries for any items on the bank reconciliation statement that must be journalized (use the general journal form on page 4). Date the entries October 5, 2005.

5 Creative Solutions, Inc. Bank Reconciliation Statement September 30, 2005 Balance on Bank Statement Additions: Deposit on 09/28 in transit Deductions for outstanding checks: Check Check Total outstanding checks ADJUSTED BANK BALANCE Balance in Books Deductions: NSF Check Bank service Charge ADJUSTED BOOK BALANCE GENERAL JOURNAL DESCRIPTION DEBIT Oct 5 AR / Julia Anderson Bank Fees Expense Cash To record

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