Fundamentals of Accounting

Preliminary Examination

Name: ___________________________________________Course:_____________ Date:___________ Score:______ ____

Listed below are the accounts and their respective balances for J & K, Inc. at December 31, 2014:

Cash $ 50,000
Accounts Receivable 35,000
Inventory (15 @ $3,000 each) 45,000
Prepaid Insurance 5,000
Security Deposit 1,000
Furniture & Fixtures 110,000
Accumulated Depreciation 20,000
Accounts Payable 12,000
Wages Payable 7,000
Taxes Payable 5,000
Rent Payable 2,000
Note Payable 80,000
Common Stock (3,000 shares) 30,000
Retained Earnings 90,000

During 2015 the following transactions occurred:

Paid beginning accounts payable.
Received all beginning accounts receivable.
Purchased 10 Things at $4,000 each. Paid 25% down and will pay the rest later.
Sold 18 Things for $10,000 each at 70% down (cash) and the other 30% due later.
Paid 2014 taxes payable.
Paid cash for wages of $25,000. (Includes the $7,000 owed at the end of 2014).
Received additional payments from customers of $20,000.
Paid 14 months’ rent, $28,000
Paid additional $10,000 to creditors.
Issued 600 shares of common stock for $6,000 on October 1st.
Paid $2,000 advertising for 2015
Paid a $1.00 per share dividend to shareholders on December 31st.
Paid annual payment on Note Payable of $20,000 principal plus interest at 8% on December 31st.
Bought a piece of land for $50,000 on December 31st, putting $10,000 down and mortgaging the rest.
There are no principal payments due until 2009.

Also, during the year the company paid 50% of the 2015 taxes. The tax rate is 30%.
The Company uses the FIFO inventory system.
At December 31, 2015 the company owed $10,000 in wages which had not yet been paid.
The prepaid insurance at 12/31/04 was for a policy that had exactly two years left to run (05,06).
The Furniture & Fixtures originally cost $110,000, had a twenty year life and were expected to be worth
$10,000 at the end.
The market price per share is $80.
Other adjustments?

Prepare Journal Entries, T-Accounts and Financial Statements on the pages provided in the exam. (195
points ) Neatness and format count!

TRIVIA:

What is the scale/measurement of a regular short bond paper?