1) Using the information given below, prepare general journal entries to record the
March 16 sale assuming a cash sale and the FIFO method is used.
2) Describe source documents and their purpose.
3) List the five basic principles of accounting information systems.
4) Jorgensen Department Store has three departments: Clothing, Toys, and Jewelry. The
most recent income statement, showing the total operating profit and departmental
results is shown below:
Based on this income statement, management is planning on eliminating the hardware
department, as it is generating a net loss. If the hardware department is eliminated, the
toy department will expand to fill the space, but sales will not change in total, nor will
direct expenses. None of the allocated expenses will be avoided, but they will be
reallocated. Clothing will be allocated $200,000 of these expenses, and Toys will be
allocated $150,000 of these expenses.
Prepare a new income statement for Jorgensen Department Store, showing the results if
the Hardware Department is eliminated. Should the Hardware Department be
eliminated?
5) ____________________ refer to merchandise that customers return to the seller after
a sale.
6) Refer to the following information about the Painting Department in the Richardson
Factory for the month of June. Richardson Factory uses the FIFO method of inventory
costing.
Compute equivalent units for direct materials, direct labor and overhead for June.
7) Listed below are a number of accounts. Use the table below to classify each account.
Indicate whether it is a temporary or permanent account, whether it is included in the
Income Statement or Balance sheet, and if it is closed at the end of the accounting
period, and, if so, how it is closed. The first one is done as an example.
8) Explain how to compute dividend yield and discuss how it is used in analysis of a
company’s financial condition.