INTERMEDIATE FINANCIAL
ACCOUNTING II (ACC 352) MIDTERM
CONCENTRATIONS (Content to focus
on) A+ GRADED ATHABSCA
UNIVERSITY.
, ACCT 352 MIDTERM CONCENTRATIONS
Question 1 [16 points]
The following selected transactions relate to liabilities of Antique Accents for April 2015.
Antique Accents's fiscal year ends on April 30. Prepare the appropriate journal entries for these
transactions. Note that the sales revenues were exclusive of sales taxes. Enter an appropriate
description when entering the transactions in the journal. Dates must be entered in the format
dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to
2 decimal places.
a) On April 7, 2015, received $7,000 from EastCo toward the purchase of a $82,000 truck to
be delivered on June 9, 2016.
General Journal
Date Account/Explanation PR Debit Credit
7/Apr Accounts receivable 7,000
Cash 7,000
To record cash
Marking:
You have entered the correct amount for 'Cash', however it should have been entered as a debit.
This will cost you 1 mark.
You have not included the 'Liability - customer advance' account in this journal entry. This will
cost you 2 marks.
'Accounts receivable' should not have been included in this journal entry. Any amounts entered
for this account will not be evaluated.
b) During April, received $22,200 of refundable deposits relating to containers used to
transport equipment parts. Record the journal on April 30.
General Journal
Date Account/Explanation PR Debit Credit
30/Apr Cash 22,000
Accounts receivable 22,000
To record cash
Marking:
'Cash' should be debited for the amount of $22,200, but you have not done this. This will cost
you 1 mark.
You have not included the 'Liability - refundable deposits' account in this journal entry. This will
cost you 2 marks.
'Accounts receivable' should not have been included in this journal entry. Any amounts entered
for this account will not be evaluated.
,c) During April, credit sales totaled $710,000. The provincial sales tax rate is 6% and the
goods and services tax rate is 5%. (This is a summary journal entry for the many
individual sales transactions for the period.) Record the journal on April 30.
General Journal
Date Account/Explanation PR Debit Credit
30/Apr Accounts receivable 788,100
Sales 710,000
Sales tax payable 78,100
To record sales tax
Marking:
You have not included the 'PST payable' account in this journal entry. This will cost you 2 marks.
You have not included the 'GST payable' account in this journal entry. This will cost you 2
marks.
'Sales tax payable' should not have been included in this journal entry. Any amounts entered for
this account will not be evaluated.
Question 2 [16 points]
On September 1, 2015, Norm's Technology, a geothermal energy supplier, borrowed $7,500,000
cash to fund a geological survey. The loan was made by CC Bank under a noncommitted short-
term line of credit arrangement. Norm's Technology issued a 270-day, 11% promissory note.
Interest was payable at maturity and calculated daily. Norm's Technology's fiscal period is the
calendar year.
Please make sure your final answer(s) are accurate to 2 decimal places. Enter an appropriate
description when entering the transactions in the journal. Dates must be entered in the format
dd/mmm (ie. January 15 would be 15/Jan).
a) Prepare the journal entry for the issuance of the note by Norm's Technology.
General Journal
Date Account/Explanation PR Debit Credit
1/Sep Accounts payable 7,500,000
Notes payable 7,500,000
To record note payable
Marking:
You have not included the 'Cash' account in this journal entry. This will cost you 2 marks.
'Accounts payable' should not have been included in this journal entry. Any amounts entered for
this account will not be evaluated.
b) Prepare the appropriate adjusting entry for the note by Norm's Technology on
December 31, 2015.
General Journal
, Date Account/Explanation PR Debit Credit
31/Dec Notes payable 7,500,000
Interest expense 279,583.33
Cash 7,779,583.33
To record cash
Marking:
'Interest expense' should be debited for the amount of $273,493.15, but you have not done this.
This will cost you 1 mark.
You have not included the 'Interest payable' account in this journal entry. This will cost you 2
marks.
You have entered 3 accounts in this journal entry when only 2 were required. This will cost you 1
mark.
The following accounts should not have been included in this journal entry: Notes payable, Cash.
Any amounts entered for these accounts will not be evaluated.
$273,493.15 = $7,500,000 × 11% × (121 ÷ 365)
c) Prepare the journal entry for the payment of the note at maturity on May 29.
General Journal
Date Account/Explanation PR Debit Credit
29/May Notes payable 7,500,000
Interest payable 279,583.33
Interest expense 339,166.67
Cash 8,118,750
To record cash
Marking:
'Interest expense' should be debited for the amount of $336,780.82, but you have not done this.
This will cost you 1 mark.
Interest expense = $7,500,000 × 11% × (149 ÷ 365) = $336,780.82
'Interest payable' should be debited for the amount of $273,493.15, but you have not done this.
This will cost you 1 mark.
'Cash' should be credited for the amount of $8,110,273.97, but you have not done this. This will
cost you 1 mark.
Question 3 [15 points]
Spin Master Toys employs 4 employees, who work 8 hours per day and earn 4 cumulative paid
sick days annually (sick days will accumulate if not used). In the fiscal year 2014 the employees
were paid $12 per hour; in 2015, $13 hourly. The raise in the hourly rate was implemented in
2015 and was not planned prior to that year. In the fiscal year 2014, employees took a total of 13
sick days; in fiscal year 2015, 18 sick days. Prior to 2014 there were no sick days accumulated
ACCOUNTING II (ACC 352) MIDTERM
CONCENTRATIONS (Content to focus
on) A+ GRADED ATHABSCA
UNIVERSITY.
, ACCT 352 MIDTERM CONCENTRATIONS
Question 1 [16 points]
The following selected transactions relate to liabilities of Antique Accents for April 2015.
Antique Accents's fiscal year ends on April 30. Prepare the appropriate journal entries for these
transactions. Note that the sales revenues were exclusive of sales taxes. Enter an appropriate
description when entering the transactions in the journal. Dates must be entered in the format
dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to
2 decimal places.
a) On April 7, 2015, received $7,000 from EastCo toward the purchase of a $82,000 truck to
be delivered on June 9, 2016.
General Journal
Date Account/Explanation PR Debit Credit
7/Apr Accounts receivable 7,000
Cash 7,000
To record cash
Marking:
You have entered the correct amount for 'Cash', however it should have been entered as a debit.
This will cost you 1 mark.
You have not included the 'Liability - customer advance' account in this journal entry. This will
cost you 2 marks.
'Accounts receivable' should not have been included in this journal entry. Any amounts entered
for this account will not be evaluated.
b) During April, received $22,200 of refundable deposits relating to containers used to
transport equipment parts. Record the journal on April 30.
General Journal
Date Account/Explanation PR Debit Credit
30/Apr Cash 22,000
Accounts receivable 22,000
To record cash
Marking:
'Cash' should be debited for the amount of $22,200, but you have not done this. This will cost
you 1 mark.
You have not included the 'Liability - refundable deposits' account in this journal entry. This will
cost you 2 marks.
'Accounts receivable' should not have been included in this journal entry. Any amounts entered
for this account will not be evaluated.
,c) During April, credit sales totaled $710,000. The provincial sales tax rate is 6% and the
goods and services tax rate is 5%. (This is a summary journal entry for the many
individual sales transactions for the period.) Record the journal on April 30.
General Journal
Date Account/Explanation PR Debit Credit
30/Apr Accounts receivable 788,100
Sales 710,000
Sales tax payable 78,100
To record sales tax
Marking:
You have not included the 'PST payable' account in this journal entry. This will cost you 2 marks.
You have not included the 'GST payable' account in this journal entry. This will cost you 2
marks.
'Sales tax payable' should not have been included in this journal entry. Any amounts entered for
this account will not be evaluated.
Question 2 [16 points]
On September 1, 2015, Norm's Technology, a geothermal energy supplier, borrowed $7,500,000
cash to fund a geological survey. The loan was made by CC Bank under a noncommitted short-
term line of credit arrangement. Norm's Technology issued a 270-day, 11% promissory note.
Interest was payable at maturity and calculated daily. Norm's Technology's fiscal period is the
calendar year.
Please make sure your final answer(s) are accurate to 2 decimal places. Enter an appropriate
description when entering the transactions in the journal. Dates must be entered in the format
dd/mmm (ie. January 15 would be 15/Jan).
a) Prepare the journal entry for the issuance of the note by Norm's Technology.
General Journal
Date Account/Explanation PR Debit Credit
1/Sep Accounts payable 7,500,000
Notes payable 7,500,000
To record note payable
Marking:
You have not included the 'Cash' account in this journal entry. This will cost you 2 marks.
'Accounts payable' should not have been included in this journal entry. Any amounts entered for
this account will not be evaluated.
b) Prepare the appropriate adjusting entry for the note by Norm's Technology on
December 31, 2015.
General Journal
, Date Account/Explanation PR Debit Credit
31/Dec Notes payable 7,500,000
Interest expense 279,583.33
Cash 7,779,583.33
To record cash
Marking:
'Interest expense' should be debited for the amount of $273,493.15, but you have not done this.
This will cost you 1 mark.
You have not included the 'Interest payable' account in this journal entry. This will cost you 2
marks.
You have entered 3 accounts in this journal entry when only 2 were required. This will cost you 1
mark.
The following accounts should not have been included in this journal entry: Notes payable, Cash.
Any amounts entered for these accounts will not be evaluated.
$273,493.15 = $7,500,000 × 11% × (121 ÷ 365)
c) Prepare the journal entry for the payment of the note at maturity on May 29.
General Journal
Date Account/Explanation PR Debit Credit
29/May Notes payable 7,500,000
Interest payable 279,583.33
Interest expense 339,166.67
Cash 8,118,750
To record cash
Marking:
'Interest expense' should be debited for the amount of $336,780.82, but you have not done this.
This will cost you 1 mark.
Interest expense = $7,500,000 × 11% × (149 ÷ 365) = $336,780.82
'Interest payable' should be debited for the amount of $273,493.15, but you have not done this.
This will cost you 1 mark.
'Cash' should be credited for the amount of $8,110,273.97, but you have not done this. This will
cost you 1 mark.
Question 3 [15 points]
Spin Master Toys employs 4 employees, who work 8 hours per day and earn 4 cumulative paid
sick days annually (sick days will accumulate if not used). In the fiscal year 2014 the employees
were paid $12 per hour; in 2015, $13 hourly. The raise in the hourly rate was implemented in
2015 and was not planned prior to that year. In the fiscal year 2014, employees took a total of 13
sick days; in fiscal year 2015, 18 sick days. Prior to 2014 there were no sick days accumulated
