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This comprehensive exam covers the accounting cycle, focusing on financial statements and closing entries. It includes a series of transactions for pops inc., a service company using accrual accounting. Students are required to prepare journal entries, post to t-accounts, create adjusting entries, and generate financial statements, including an income statement, statement of changes in equity, and balance sheet. The exam also includes an optional extra credit opportunity to prepare a statement of cash flows.
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This exam of two parts is worth 120 points. Show all work on worksheet for Part # and on the exam for the rest of the problems. You have our regular class time to finish the exam.
Pops Inc. performs service work for clients and uses accrual accounting. Transactions by #:
Show your legible work on the supplied 11" x 17" worksheet, and Cash write your name at the top. Accounts Receivable (A/R) Supplies a. Prepare the journal entries to record the transactions that occurred Equipment in 201x. Omit transaction descriptions. Accumulated Depreciation - Equipment (A/D-EQ) Hint: Use the accounts names given in the "Chart of Accounts." Land Hint: Use the transaction # in lieu of the date in the journal. Salaries Payable Hint: Leave a blank row between journal entry. Common Stock Retained Earnings b. Post the journal entries (#'s 1 - 6) to the T-accounts. Revenues Salaries Expense c. Prepare adjusting entries (#'s7 & 8) for the journal Supplies Expense and then post to the T-accounts. Depreciation Expense Other Operating Expenses d. Prepare the requested financial statements for Income Summary the year ended December 31, 201x. Make sure the balance sheet is in classified format. Income Summary e. Prepare the closing entries (#'s 9 & 10) for the journal and post to the T-accounts. No dividends were paid by Pops Inc. during the year. f. 15% Extra Credit Opportunity (18 points): Prepare a Statement of Cash Flows for Pops Inc. and return it with your exam. Here are the transactions for Pops Inc. for 201x.
Accounts Receivable (A/R)
Common Stock
Revenues
Depreciation Expense
g Cycle)
No dividends were paid by Pops Inc. during the year.
b.
- 1 33,889 23,000 Assets Cash
Calculations: Supplies Expense $890 - $175 = $ d. Pops Company Income Statement For the year ended December 31, 2015 Revenue $ 22, Expenses: Salaries expense $ 2, Other operating expenses 6, Depreciation expense 1, Supplies expense 715 10, Net Income $ 11, Pops Company Statement of Changes in Equity For the year ended December 31, 2015 Common Stock: Beginning balance $ - Contributions during the year 33, Ending balance $ 33, Retained Earnings: Beginning balance $ -
Accounts Receivable Supplies Equipment 6,000 4 890 715 7 2 8, 6,000 175 8, Common Stock Retained Earnings 33,889 1 11,805 11 33,889 11,
Land 1,000 8 2 15, 1,000 15, Income Summary 8 1,000 10 10,195 22,000 9 10 1,000 10 0 11, 11 $11, 0 Accumulated Depreciation - Equipment Depreciation Expense - Equipment