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Group Assignment AFM April

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23 views

Group Assignment AFM April

Uploaded by

ashenafitechane2016
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Problem 1.

Comprehensive accounting cycle problem


For the past two years Jeni has been providing consultation service in her business known as
Colorful Ideas Consulting service. The firm’s asset as of January 1 was $65,500 (Cash, $30,000;
supplies $4,500; account receivable $6,000; and office equipment $25,000). The firm has no
liabilities transferred from the previous accounting period.

During the month of January, 2022, Colorful Ideas Consulting entered into the following
transactions:

January 1. Paid three months’ rent on a lease rental contract, $6,000.


2. Paid the premiums on property and casualty insurance policies for one year, $2,400.
3. Received cash from clients as an advance payment for services to be provided and
recorded it as unearned fees, $3,800.
5. Purchased additional office equipment on account for $6,500.
6. Received cash from clients on account, $3,500.
10. Paid cash for a newspaper advertisement, $340.
12. Paid creditor for part of the debt incurred on January 5, $2000.
12. Recorded services provided on account for $4,000.
14. Paid part-time workers for two weeks’ salary, $2,400.
17. Received cash from clients for service provision, $6,500.
18. Purchased supplies for cash, $700.
20. Recorded services provided on account for the period January 13–20, $4,800.
24. Recorded cash from cash clients for fees earned for the period January 17–24, $5,650.
26. Received cash from clients on account, $7,800.
27. Paid part-time workers for two weeks’ salary, $2,400.
30. Paid telephone bill for the month of January, $250.
31. Paid electricity bill for January, $600.
31. Recorded cash from cash clients for fees earned for the period January 25–30, $3,700.
31. Jeni withdrew $4,500 for personal use.
Instructions
1. Journalize each transaction in a two-column journal, referring to the following chart
of accounts in selecting the accounts to be debited and credited.

11 Cash 18 Office Equipment


31.Jeni. Capital 3. Supplies Expense
12 Accounts Receivable 19 Accumulated Depreciation
32. Jeni, Drawing 54 Depreciation Expense
14 Supplies 21 Accounts Payable
41. Fees Earned 55 Insurance Expense
15 Prepaid Rent 22 Salaries Payable
51. Salary Expense 59 Miscellaneous Expense
16 Prepaid Insurance 23 Unearned Fees
52. Rent Expense

2. Post the journal to a ledger of four-column accounts.


3. Prepare an unadjusted trial balance.
4. At the end of January, the following adjustment data were assembled. Analyze and use these
data to complete part (5).
a. Insurance expired during January is $200.
b. Supplies on hand on January 31 are $2,800.
c. Depreciation of office equipment for January is $450.
d. Accrued employee’s salary on January 31 is $960.
e. Rent expired during January is $2,000.
f. Unearned fees on January 31 are $1,800
5. Journalize and post the adjusting entries.
6. Prepare an adjusted trial balance.
7. Prepare an income statement, a statement of owner’s equity, and a balance sheet.
8. Prepare and post the closing entries. (Income Summary is account No. 33 in the
chart of accounts.)
9. Prepare a post-closing trial balance.
Problem 2. Cost - volume - profit analysis
Bridal Shoppe sells wedding dresses. The cost of each dress is comprised of the
following: Selling price of $1,000 and variable (flexible) costs of $400. Total fixed
(capacity-related) costs for Bridal Shoppe are $90,000.

A. What is the contribution margin per dress?


B. What is the Bridal Shoppe’s total profit when 200 dresses are sold?
C. How many dresses must Bridal Shoppe sell to reach the breakeven point?
D. How many dresses must Bridal Shoppe sell to yield a profit of $60,000?

Problem 3. Cost - volume - profit analysis


Account Department of the XYZ Co. provides the following data at end of June 2017,
you are required to prepare Cost of Goods Manufactured; Cost of Goods Sold; find out
Gross Profit / Loss &Net profit / Loss and Per unit Manufacturing Cost at the Year ended
May 30th, 2009, assuming that Net Sales of $72,000, Marketing Expense 5%,
Advertising Expense 1 % and Other Expense 3%of Net Sales; Net Purchases $ 36,000
and Direct Expenses are 1 % of Net Purchases; FOH 2/3 of Direct Labor and Direct
Labor cost is $ 15,000. Units are produced during the period was 5,000.
Beginning inv. Ending inv.
Finished Goods 7000 10200
Work in process 8000 15000
Material 8000 8500

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