Please check my work
On November 1, 2009, Broom Company received a bank statement that showed a $2,950 balance. Broom showed a $4,010 checking account balance. The bank didn’t return check No. 124 for $1,080 and check No. 138 for $720. A $3,200 deposit made on October 30 was in transit. The bank charged Broom $12 for check printing and $18 for an NSF check. Broom forgot to record a $30 withdrawal at the ATM. The bank also collected a $400 note for Broom. Prepare a bank reconciliation.
Bank statement received by bank =$2,950.00
Check# 124 payment less or didn’t return from bank = $1080
Check# 138 payment less or didn’t return from bank = $720
Transit payment = $3200
Adjusted Bank Balance = $4350
Similarly,
Broom showed checking account balance =$4010
Charging for check printing= $12
Charging for NSF check = $18
Withdrawal record missing by Broom =$30
Note collected for Broom by bank =$400
Adjusted Book Balance = $4350
2. Erasers cost $5 per carton and pencils cost $7 per carton. If an order comes in for a total of 15 cartons for $85, how many cartons of each were bought?
Let Erasers be represented by “e” and pencils by “p”
So, according to given condition,
Total number of cartons of pencils and erasers are
e + p = 15 ------- (I)
Similarly, for the cost function,
5e + 7p = 85 ----------- (II)
Solving simultaneously, we get
e = 10 & p = 5
So, cartons of erasers = 10
Cartons of pencils = 5
3. The price of a hamburger increased from $1.10 to $1.59. What percent did the price increase?
% age change = (1.59-1.10)/1.10 %
= 44.55%
4. Morgan Company received from Lee Company an invoice dated September 27. Terms were 2/10 EOM. List price on the invoice was $5,000 (freight not included). Morgan receives a 9/7 chain discount. Freight charges are Morgan’s responsibility but Lee agreed to prepay the $150 freight charge. Morgan pays the invoice November 9. What does Morgan pay Lee?
List price on Invoice = $ 5000
Chain Discount received by Morgan = 9/7
Freight charges paid by Lee = $150
Fee Paid by Morgan = $4039
5. Sullivan’s Handbags marks up their bags at 45% of the selling price. Pat Sullivan saw a bag at a trade show that she would sell to her customers for $85. What is the most she could pay for the bag and still retain the 45% markup of the selling price?
Price Pat Sullivan sell to her customers = $85
Amount she paid to the trader = $85 – $ (45/100*85)
= $46.75
6. Jeff Jones earns $1,200 per week. He is married and claims four withholding allowances. The FICA rate is as follows: Social Security rate is 6.2% on $97,500; Medicare rate is 1.45%. To date his cumulative wages are $6,000. Each paycheck, his employer also deducts $42.50 for health insurance. What is his net pay? (Calculate FIT by the percentage method.)
Earning per week = $1200
Social Security rate = $6045
Medicare rate = $ 1326.0975
Cumulative wages =$ 6000
Health Insurance = $42.50
Net pay (pay per month) = $18214
7. Lisa Kane borrowed $8,000 on an 8%, 60-day note. After 15 days, Lisa paid $2,000 on the note. On day 45, Lisa paid $1,000 on the note. What is the total interest and ending balance due by the U.S. rule? Use ordinary interest.
Total money Lisa Kane borrowed = $ 8000
Interest on 60-day note = 8%
Balance she should return = $8000 + 8% of $8000
= $8640
After 45 days Lisa paid $2000 so amount left =$8640-$2000
= $ 6640
On 45th Day Lisa Paid $1000 so amount due = $6640-$1000
= $5640
Total Interest = ordinary Interest = 8%
8. On May 12, Bob Campbell accepted a $5,000 note in granting a time extension of a bill of goods bought by Rick Wean. Terms of the note were 8% for 120 days. On July 8, Bob needed to raise cash and discounted the note at Rick’s bank at a discount rate of 9%. Calculate Bob’s proceeds.
Money accepted by Bob Campbell for tome extension granting = $5000
After 120 days Money would be = $5400
Discount Rate = 9%
Total proceedings that Bob acquires = $4914 which is the difference of payment acquire and discounting money i.e. 5400-486=$4914
9. Jacob Fonda deposited $25,000 in a savings account at 10% interest compounded semiannually. At the beginning of Year 4, Jacob deposits an additional $40,000 at 10% interest compounded semiannually. At the end of six years, what is the balance in Jacob’s account?
Amount deposited = $25000
Interest Rate = 10%
After 4th Year $40,000 are deposited more at the interest rate of 10%
So, after the end of six years the value in the account of Jacob Fonda = 25000(F/P, 6, 10%) + 40000(F/P, 3, 10%)
= $116025 + $132400
= $248425
10. Roger Fox made deposits of $900 semiannually to Reel Bank, which pays 6% interest compounded semiannually. After seven years, Roger made no more deposits. What would be the balance in the account eight years later from the last deposit?
Deposits made by Roger Fax semi annually = $900
Compounding rate = 6%
Number of deposits made by Roger after that= 0
After 8 years the balance in the account = (900(P/A, 6%, 14) * (F/P, 6%, 16)
= $24676.55
11. Hercher borrowed $7,000 to travel to London. His loan is to be paid in 48 monthly installments of $190. At the end of 14 months, decides to pay off his loan. What is the final payoff will make?
Total money borrowed by Hercher without any interest = $7000
Before the end of 14th Month the installments he has paid = $190 * 14
= $ 2660
So, final payment will make = $7000 - $2660
= $4340
12. A condo is advertised in The Wall Street Journal for $350,000. It states in the ad that a 20% down payment is required. The rate of interest is 11% on a 25-year mortgage. What would be (A) the monthly payment along with (B) the total cost of interest?
Down payment = 20% of 350,000
= $70000
So net present payment = $280,000
Number of years = 25
Rate of Interest = 11 %
Annual payment = 280,000 (A/P, 11%, 25)
= $ 33247.27
Monthly Payment assuming interest is annual basis = $33247.27/12 = $2770.61
Total cost which he has to pay after 25 years = $280000(F/P, 11%, 25)
= $32,034,800
13. Use this information to calculate the following:
· Sales returns $ 700
· Rent expense 1,288
· Sales discounts 950
· Depreciation expense 600
· Cost of merchandise sold 7,600
· Gross sales 20,900
· Advertising expense 1,650
· Salary expense 2,900
· Heat expense 900
A. Net sales
Net sales = $ 20900 - $700 -$950
= $19250
B. Gross profit
Gross profit = $19250 - $7600
= $11650
C. Total operating expenses
Total Operating Expenses = $1288 + $600 + $1650 + $2900 + $900
= $7338
D. Net Income
Net Income = $11650 - $7338
= $4312
14. A truck costing $25,000 with a residual value of $5,000 was purchased by Rim Corporation. The truck’s estimated life is 10 years. At the end of Year 2, what is the book value using declining-balance method? Assume a depreciation rate of twice the straight-line method.
Factor = 2/10 = 0.2
Year Depreciable Basis Depreciable Calculation Depreciable Expense
1 $30000 $30000 * 0.2 $6000
2 $24000 $24000*0.2 $4800
15. A toy store has a beginning inventory of eight sets of paints at a cost of $1.25 each. During the year, the toy store purchased three at $1.50, five at $2, six at $2.50, and ten at $3. By the end of the year, 21 sets were sold. Calculate the following:
Total cost of paints sets = 8($1.25) + 3($1.50) + 5($2) + 6($2.50) + 10($3) = $69.5
Total inventory = 32
A. The number of paint sets in stock
Total paint sets in stock = 8 + 3 + 5 + 6 +10 – 21 = 11
B. The cost of ending inventory under LIFO
Total cost of inventory sold using LIFO = 10($3) + 6($2.50) + 5($2)
= $55
Remaining items cost = 3($1.50) + 8($1.25) = $14.5
C. The cost of ending inventory under FIFO
Total cost of inventory sold using FIFO = 8($1.25) + 3($1.50) + 5($2) + 5($2.50) =$37
Remaining Items cost = 1($2.50) + 10($3) = $32.50
D. The cost of ending inventory under Weighted Average
Average cost of one paint set = $69.5/32 = $2.172
Cost of Inventory sold using weighted average = $2.172*21 = $45.61
16. Pete’s Warehouse has a market value of $5,000,000. The property in Pete’s area is assessed at 40% of the market value. The tax rate is $105.10 per $1,000 of assessed value. What is Pete’s property tax?
Market Value of Pete’s Warehouse =$5,000,000
Assessed Rate of property in Pete’s area = 40% of $5,000,000
= $ 2,000,000
Tax rate per $1000 of assessed value = $105.10
Tax rate per $2,000,000 of assessed value = $(105.10/1000*2000000)
= $ 210,200
17. Jim Smith, who lives in Territory 5, carries 10/20/5 compulsory liability insurance along with optional collision that has a $200 deductible. Jim was at fault in an accident that caused $1,800 damage to the other auto and $600 damage to his own. Also, the courts awarded $13,000 and $8,000 respectively, to the two passengers in the other car for personal injuries. How much the insurance company pay and what does is Jim’s share of responsibility?
Jim’s insurance will pay damage to that car much-less the $300 deductible which is $600 payment.
All-of-them will pay $4,000 property damage to the other party (maximum property damage limit is $5,000 - 3rd #).
All-of-them will pay $10,000 for bodily injury passenger 1 (maximum per fellow limit - Primary #).
All-of-them will pay $7,000 for bodily injury passenger 2. For a total bodily injury amount of $17,000 (maximum bodily injury per accident limit is $20,000 - second #).
The insurance will pay $600+$4,000+$10,000+$7.000 = $21,600
So,
Jim pays that $300 deductible plus $5,000 (additional bodily injury from passenger 1) for a total of $5,300. Accident total is $26,900 ($4,000 PD, $900 collision, $22,000 bodily injury.
Jim owes $5300 in total. He shall as-well think-of increasing that limits to a minimum of 100/300/50.
18. Jeff Sellers bought 200 shares of Radio Shack stock at $22.35. Eight months later, he sold the stock at $31.76. Assuming a 2% commission charge, what is the bottom line for Jeff?
Total share’s = 200
Price for all shares = 200*$22.35 = $4470
After eight months,
Sale price of stock = (200*31.76) + 2% of $4470 = $6352 + $89.4 = $6441.40
19. Sales at Sullivan Realty totaled 10 homes for the month. They were as follows:
· $99,000
· $109,000
· $126,000
· $158,000
· $160,000
· $175,000
· $182,900
· $185,000
· $189,000
· $210,000
Calculate the mean and median.
Mean = Sum of numbers /total numbers = $ 1,593,900/10 = $ 159,390
Median = 1/2 (n/2 + (n+2)/2)th term = ½ (5th term + 6th term) = ½(160,000+175,000)
Median = $167,500
20. The property of Al’s garage is worth $300,000. Al has a fire insurance policy of $180,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $210,000 damage? If Al met the coinsurance requirement, how much would the insurance company have to pay?
Price of Al’s garage = $300,000
Al has a fire insurance policy of $180,000 that contains an 80% coinsurance clause.
If the damage is $210,000
The payment paid by insurance company would be 80% of $210,000 = $168,000
In the case of coinsurance requirement, the payment that should be paid by the insurance company =$180, 000
21. Earl Miller plans to buy a boat for $19,500 with an interest charge of $2,500. Earl figures he can afford a monthly payment of $650. If Earl has to pay 36 equal monthly payments, by how much can he afford the boat per month?
Total cost of boat = $19,500 + $2500 =$22,000
Total monthly installments = 36
Per month installment = $22,000 /36 = $611.11
He can afford to pay $611.11 per month.
22. Peter Mabel sold a total of 400 Oatmeal ($1.50) and Wheat ($2) breads during the Labor Day weekend. How many of each did Pete sell if total sales were $700?
Price of total product sold by Peter Mabel = 400($1.50+$2) = 1400$
Let Oatmeal sold by peter be ‘x’ and wheat be ‘y’
1.50x + 2y = $1400
x + y = $700
Solving these two equations simultaneously, we get
Total Oatmeal sold = x = 0
Total Wheat sold = y= 700
23. Mel’s Furniture received an invoice dated September 27for five bedroom sets at $3,000 each. The invoice indicated a trade discount of 5/8/3. The seller of the furniture prepaid the freight of $200. Terms were 2/10 EOM. Assuming Mel pays on November 2, what amount would be paid? (Be sure to include the freight cost.)
Payment invoice for 5 bedroom sets = $15,000
Trade discount = 5:8:3
Amount prepaid as freight =$200
Terms were 2:10
Amount paid by MEL = $12,662.37 (including Freight cost)
24. Mobile Oil Company accepted a $10,000, 120-day note, dated March 3, at 8.5% to settle a past due accounts receivable. Mobile Oil discounted the note to raise cash on May 10 at a discounted rate of 9%. What proceeds did Mobile Oil receive?
Mobile Oil Company accepted payment for 120 day note = $10,000
Interest rate to settle a past due accounts = 8.5%
Discount rate =9%
Mobile Oil receive proceedings = $10,149.65
25. Ray Long wants to retire in Arizona when he is 70 years of age. Ray is now 50. He believes he will need $130,000 to retire comfortably. To date, Ray has set aside no retirement money. Assume Ray gets 14% interest compounded semiannually. How much must Ray invest today to meet his $130,000 goal?
Amount needed by Ray Long to retire comfortably = $130,000
Amount Ray must invest today to meet his goal = $130,000(P/F, 14%, 40)
= $650