Orie 3150 HW1 Fa17

ORIE 3150 Homework #1 Due September 6, 2017
Please submit completed homework in the ORIE 3150 slot in the homework submission box in
the first floor of Rhodes Hall by 9:00 PM on the due date.
Guidelines
1. Please use blank or lined 8.5 inch by 11 inch paper in portrait orientation. Please print your
full real name, ORIE 3150, and your section number (201, 202, 203, 204, or 205) in the
upper right hand corner of the front page. We do not need or desire any other information
(we do not need your net id, for example). A cover sheet is not necessary. You should not
hand in the original assignment, keep that for your future reference.
2. Please fasten multiple sheets with a metal staple in the upper left hand corner. If you do not
have a stapler, you should consider acquiring one.
3. One inch (25 mm) margins, please. Top, bottom, right, left. This makes grading much easier
as we can write comments in the margins.
4. Please work problems in order (do not say see attached and skip to the next one)
5. Please use clean pages, not torn from a spiral-bound notebook or recycled paper already
printed on the back.
6. Any printouts should have managed page breaks.
7. Any graphs, tables, balance sheets, income statement, or cash flow statements should be
formatted to print (or printed by hand) on a single page.
8. Graphs should be at least 6.5 (163 mm) wide by 4 (100 mm) high
9. Be sure to include the units of your answer and to indicate your final answer by bolding it,
boxing it or underlining it. Do not provide multiple answers to one question.
10. Do a reality check on your answer. It does not take 800,000 gallons of gasoline to drive a
small car from Ithaca to Syracuse. A boatlift that lifts a 2,000 kg boat does not cost $1.16.
11. Do not attempt to construct equations using ASCII text. Use the Equation Editor function in
Microsoft Word or an equivalent if you type equations. In general, neatly hand-printed
homework is preferred over typed.
12. If you do choose to type the homework, then retype it if corrections must be made. Do not
pencil in corrections after comparing your answers with a classmate.
13. Make sure all sections of all questions are answered. Each problem will carry the same
number of total points, 20 points.
14. Please use the correct format for all numbers, T-accounts, financial statements, etc. And,
please be neat!
1. Apricot Company is selling a piece of land adjacent to its business. An appraisal reported the
market value of the land to be $120,000. The Focus Company initially offered to buy the land
for $107,000. The companies settled on a purchase price of $115,000. On the same day, another
piece of land on the same block sold for $122,000. Under the cost principle, what is the amount
that will be used to record this transaction in the accounting records?
2. At the end of its accounting period, December 31, 2016 , Boos Financial Services has assets
of $575,000 and stockholders' equity of $335,000. Using the accounting equation and
considering each case independently, determine the following amounts.
(a) Boos liabilities as of December 31, 2016.

(b) Boos liabilities as of December 31, 2017, assuming that assets increased by $56,000 and
shareholders' equity decreased by $32,000.
(c) Net income or net loss during 2017, assuming that as of December 31, 2017, assets were
$592,000, liabilities were $450,000, and there were no additional investments or dividends.
3. The accountant for Cort Industries prepared the following list of account balances from the
companys records for the year ended December 31. Use this information to answer the question
that follows.
Revenue $165,000 Cash $30,000

Accounts receivable 16,000 Selling expenses 44,000
Equipment 64,000 Common stock 47,000
Accounts payable 12,000 Interest revenue 3,000
Salaries & wages expense 40,000 Income taxes expense 18,000
Income taxes payable 5,000 Rent expense 20,000
a. Determine the total assets at the end of the current year for Cort Industries.
b. Determine the total liabilities at the end of the current year for Cort Industries.
4. Indicate how the following transactions affect the accounting equation for the Drake
Corporation. The first is done as an example.
(example) Payment of bank loan

Answer: Decrease in Assets, Decrease in Liabilities.
(a) The purchase of supplies on account

(b) The purchase of supplies for cash
(c) Payment of cash dividends to stockholders
(d) Revenues received in cash
(e) Sale made on account
(f) Sale of common stock to investors, receiving cash
5. The Edwards Corporation had the following assets and liabilities on the dates indicated.
Edwards Corporation was incorporated on January 1, 2012 with a cash investment of
$100,000 from its shareholders. The corporations fiscal year ends on December 31 each
year.
Date Total Assets Total Liabilities

December 31, 2012 $400,000 $250,000
December 31, 2013 $560,000 $375,000
December 31, 2014 $700,000 $500,000
During 2012, $15,000 in cash dividends were declared and paid, there were no additional
investments. In 2013, the cash dividends were zero, but investors invested an additional $80,000
cash in the business by purchasing common stock. In 2014, cash dividends of $20,000 were
declared and paid, there were no additional investments. Find the annual net income for each
year, for 2012, 2013, and 2014.
6. The assets and liabilities of Zoolanders Daiye Spa at December 31 and expenses for the year
are listed below. The stockholders' equity was $68,000 ($48,000 in Common Stock and $20,000
in Retained Earnings) at January 1. The shareholders invested in an additional $10,000 of
common stock during the year. Net income for the year is $45,625.
Accounts payable $ 4,375 Spa operating expense $23,760

Accounts receivable 8,490 Office expense 2,470
Cash 13,980 Spa supplies 9,230
Fees earned ??? Wages expense 26,580
Spa furniture & equipment 56,000 Dividends 38,170
Computers 2,130
Prepare an income statement for Zoolanders Daiye Spa for the current year ended December 31.
7. Farley Corporation has the following chart of accounts:

Cash
Common Stock
Accounts Payable
Service Revenue
Accounts Receivable
Dividends
Utilities Expense
Land
Inventory
Retained Earnings
Bank Loan Payable
Note Payable
Salaries Expense
Rent Expense
Supplies
a. On September 1, 2017, Farley purchased land for $47,000 cash. Provide the journal entry.
b. On October 10, 2017, Farley purchased supplies for $1,800 on account. Provide the journal
entry.
c. On October 25, 2017, Farley paid the invoice for the transaction in part b. Provide the journal
entry.
d. On November 1, 2017, Farley paid $200,000 to the bank on an existing bank loan. Provide
the journal entry.
8. Record the following selected transactions in 2017 for the Gerson Corp., which has the
following chart of accounts:
Cash
Common Stock
Accounts Payable
Equipment
Service Revenue
Accounts Receivable
Dividends
Utilities Expense
Land
Inventory
Retained Earnings
Bank Loan Payable
Note Payable
Salaries Expense
Rent Expense
Supplies
April 1 Received $18,000 from sale of common stock.

April 2 Purchased equipment for $27,000, paying $10,000 in cash and giving a note
payable for the remainder.
April 3 Paid $2,300 for rent for April.
April 4 Purchased $1,500 of supplies on account.
April 5 Recorded $9,800 of service revenue earned on account.
9. The Gerson Corp. had the following additional transactions in 2017. Provide the journal
entries.
May 1 Provided services to a client, and collected $2,000 cash at the time of service.
May 3 Provided services to a client, Hycraft Industries, on account, and sent a bill two
days later for $2,400.
May 10 Received the amount due from Hycraft Industries.
10. The bookkeeper for Hockton Industries prepared the following journal entries. Show the
postings to the T accounts.
July 3 Accounts Receivable 1,000

Service Revenue 1,000
July 11 Cash 500

Accounts Receivable 500
July 12 Office Supplies 600

Accounts Payable 600
July 25 Office Furniture 700

Cash 700
11. Prepare a trial balance for the Icepick Corp.
Accounts Payable $ 4,100 Rent Expense $11,500

Accounts Receivable 3,450 Salary Expense 14,000
Cash 6,700 Fees Earned 45,425
Common Stock 17,800 Supplies 3,125
Dividends 7,500 Supplies Expense 1,700
Equipment 14,500 Utilities Expense 4,000
Miscellaneous Expense 850
12. Prepare a trial balance for the Jackson Corp.

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ORIE 3150 Homework #1 Due September 6, 2017

(a) Boos liabilities as of December 31, 2016.

Revenue $165,000 Cash $30,000

(example) Payment of bank loan

(a) The purchase of supplies on account

Date Total Assets Total Liabilities

Accounts payable $ 4,375 Spa operating expense $23,760

7. Farley Corporation has the following chart of accounts:

April 1 Received $18,000 from sale of common stock.

July 3 Accounts Receivable 1,000

July 11 Cash 500

July 12 Office Supplies 600

July 25 Office Furniture 700

11. Prepare a trial balance for the Icepick Corp.

Accounts Payable $ 4,100 Rent Expense $11,500

12. Prepare a trial balance for the Jackson Corp.

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