You are given the following 12/31/2013 and excerpts from the 3/31/2014 Balance Sheet for
ABC Retailing along with a record of ABC’s cash receipts and disbursements for the first
calendar quarter of 2014.
ABC RETAIL INC. 12/31/2013 BALANCE SHEET
Assets 12/31/13 Liabilities and OE 12/31/13
Cash 24 Accounts Payable 18
Accts Receivable 21 Salaries and Wages Payable 4
Inventory 67 Deferred Revenue 15
Note Receivable 20 Dividends Payable 5
Prepaid Rent Expense 30 Bank Loans
and Accrued Interest 150
Land 25
Buildings & Equipment 460
Less: Common Stock 100
Accum Dep (195)
Trademarks – net book value 40 Retained Earnings 200
Total Assets 492 Total Liabs and OE 492
ABC RETAIL INC. 3/31/2014 BALANCE SHEET
Assets 3/31/14 Liabilities and OE 3/31/14
Cash ? Accounts Payable 25
Accts Receivable 35 Salaries and Wages Payable 6
Inventory 90 Deferred Revenue 10
Note Receivable 16 Dividends Payable 8
Prepaid Rent Expense 38 Bank Loans
and Accrued Interest 155
Land 25
Buildings & Equipment ?
Less: Common Stock 100
Accum Dep (210)
Trademarks – net book value 39 Retained Earnings ?
Total Assets ? Total Liabs and OE ?
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Cash Receipts and Disbursements for the period 1/1/2014 – 3/31/2014
Receipts
Collections from customers . . . . . . . . . . . . 550
From sale of Buildings and Equipment . . . . 60
Payments received on Note Receivable . . . . 5
Disbursements
Purchases of Inventory . . . . . . . . . . . . . . . . . 300
Purchases of Buildings and Equipment . . . . . 75
Payments of Rent . . . . . . . . . . . . . . . . . . . . . 100
Payments to salaries and wages . . .. . . . . . . . 55
Payments of dividends . . . . . . . . . . . . . . . . . . 5
Payments of Taxes . . . . . . . . . . . . . . . . . . . . . 25
Payments of Interest . . . . . . . . . . . . . . . . . . . . 4
PART I In this part you will be asked to reconstruct some of the transactions that took place during Q1
2014. You will also use this information in the subsequent parts of this exam.
1) XYZ recognized Depreciation Expense of $25 during Q1 2014. Give the journal entry for the
recognition of Depreciation Expense during Q1 of 2014.
2) XYZ recognized a Gain on Sale of Building and Equipment of $15 during Q1 2014. Give the
journal entry for the sale of Building and Equipment during Q1 of 2014.
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3) How much inventory was purchased by XYZ during Q1 2014? (HINT: All Accounts Payable
are for Inventory.)
4) Given your answer to the previous question, what was Cost of Goods Sold Expense for XYZ
during Q1 2014?
5) What was Sales Revenue during Q1 2014?
6) What was Rent Expense during Q1 2014?
7) What was Interest Expense during Q1 2014?
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8) All cash receipts for Notes Receivable during Q1 2014 are principal payments. What was Interest
Revenue on Notes Receivable during Q1 2014?
9) What was Salary and Wage Expense during Q1 2014?
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