Fran Powers created the following budget and reported the actual spending listed. Calculate the variance for each of these categories, and indicate whether it was a deficit or a surplus. (Input all amounts as positive values.) Item Budgeted Actual Variance Deficit/Surplus Food $ 360 $ 298 $ 62 correct surplus correct Transportation $ 320 $ 334 $ 14 correct deficit correct Housing $ 950 $ 982 $ 32 correct deficit correct Clothing $ 110 $ 134 $ 24 correct deficit correct Personal $ 275 $ 231 $ 44 correct surplus correct

Fran Powers created the following budget and reported the actual spending listed. Calculate the variance for each of these categories, and indicate whether it was a deficit or a surplus. (Input all amounts as positive values.)

Item	Budgeted		Actual		Variance	Deficit/Surplus
Food	$	360	$	298	$ 62	surplus
Transportation	$	320	$	334	$ 14	deficit
Housing	$	950	$	982	$ 32	deficit
Clothing	$	110	$	134	$ 24	deficit
Personal	$	275	$	231	$ 44	surplus

For the following situations, calculate the cash surplus or deficit: (Input all amounts as positive values.) Cash Inflows Cash Outflows Difference Surplus/Deficit $ 3,540 $ 3,238 $ 302 correct surplus correct $ 4,788 $ 4,855 $ 67 correct deficit correct $ 4,387 $ 4,198 $ 189 correct surplus correct

For the following situations, calculate the cash surplus or deficit: (Input all amounts as positive values.)

Cash Inflows		Cash Outflows		Difference	Surplus/Deficit
$	3,540	$	3,238	$ 302	surplus
$	4,788	$	4,855	$ 67	deficit
$	4,387	$	4,198	$ 189	surplus

Based on this financial data, calculate the ratios requested: (Round your answers to 4 decimal places.) Liabilities $ 9,400 Net worth $ 65,500 Liquid assets $ 7,800 Current liabilities $ 1,700 Monthly credit payments $ 800 Take-home pay $ 2,775 Monthly savings $ 290 Gross income $ 3,250 a. Debt ratio 0.1435 correct b. Current ratio 4.5882 correct c. Debt-payments ratio 0.2883 correct d. Savings ratio 0.0892 correct

Based on this financial data, calculate the ratios requested: (Round your answers to 4 decimal places.)

Liabilities	$	9,400	Net worth	$	65,500
Liquid assets	$	7,800	Current liabilities	$	1,700
Monthly credit payments	$	800	Take-home pay	$	2,775
Monthly savings	$	290	Gross income	$	3,250

a.	Debt ratio	0.1435
b.	Current ratio	4.5882
c.	Debt-payments ratio	0.2883
d.	Savings ratio	0.0892

Based on the following data, determine the amount of total assets, total liabilities, and net worth. Liquid assets $ 4,520 Investment assets $ 8,990 Current liabilities $ 2,320 Household assets $ 94,390 Long-term liabilities $ 82,730 a. Total assets $ 107,900 correct b. Total liabilities $ 85,050 correct c. Net worth $ 22,850 correct

Based on the following data, determine the amount of total assets, total liabilities, and net worth.

Liquid assets	$	4,520	Investment assets	$	8,990
Current liabilities	$	2,320	Household assets	$	94,390
Long-term liabilities	$	82,730

a.	Total assets	$ 107,900
b.	Total liabilities	$ 85,050
c.	Net worth	$ 22,850

If you borrow $15,500 with a 5 percent interest rate to be repaid in seven equal payments at the end of the next 7 years, what would be the amount of each payment? (Note: Use the present value of an annuity table in the Exhibit 1-3.) (Round your PV factor to 3 decimal places and final answer to the nearest dollar amount.) Amount per payment $ rev: 07_16_2013_QC_32729, 07_29_2013_QC_33022 Explanation: $15,500/5.786 = $2,679

If you borrow $15,500 with a 5 percent interest rate to be repaid in seven equal payments at the end of the next 7 years, what would be the amount of each payment? (Note: Use the present value of an annuity table in the Exhibit 1-3.) (Round your PV factor to 3 decimal places and final answer to the nearest dollar amount.)

  

Amount per payment

$

 rev: 07_16_2013_QC_32729, 07_29_2013_QC_33022

Explanation: $15,500/5.786 = $2,679

If a person spends $10 a week on coffee (assume $500 a year), what would be the future value of that amount over 5 years if the funds were deposited in an account earning 5 percent? Use Exhibit 1-B. (Round your FV factor to 3 decimal places and final answer to the nearest dollar amount.) Future value $ Explanation: $500 × 5.526 = $2,763 (Exhibit 1-B)

If a person spends $10 a week on coffee (assume $500 a year), what would be the future value of that amount over 5 years if the funds were deposited in an account earning 5 percent? Use Exhibit 1-B. (Round your FV factor to 3 decimal places and final answer to the nearest dollar amount.)

  

Future value

$

 

Explanation:

$500 × 5.526 = $2,763 (Exhibit 1-B)

If you desire to have $23,000 for a down payment for a house in six years, what amount would you need to deposit today? Assume that your money will earn 3 percent. Use Exhibit 1-C. (Round your PV factor to 3 decimal places and final answer to the nearest dollar amount.) Deposit $ Explanation: $23,000 × 0.837 = $19,251 (Exhibit 1-C)

If you desire to have $23,000 for a down payment for a house in six years, what amount would you need to deposit today? Assume that your money will earn 3 percent. Use Exhibit 1-C. (Round your PV factor to 3 decimal places and final answer to the nearest dollar amount.)

  

Deposit

$

Explanation: $23,000 × 0.837 = $19,251 (Exhibit 1-C)

Ben Collins plans to buy a house for $160,000. If the real estate in his area is expected to increase in value by 2 percent each year, what will its approximate value be six years from now? Use Exhibit 1-A. (Round your FV factor to 3 decimal places and final answer to the nearest dollar amount.) Value of the house $ Explanation: Using Exhibit 1-A: $160,000 × 1.126 = $180,160

Ben Collins plans to buy a house for $160,000. If the real estate in his area is expected to increase in value by 2 percent each year, what will its approximate value be six years from now? Use Exhibit 1-A. (Round your FV factor to 3 decimal places and final answer to the nearest dollar amount.)

  

Value of the house

$

Explanation:

Using Exhibit 1-A: $160,000 × 1.126 = $180,160

Using the rule of 72, approximate the following amounts. a. If the value of land in an area is increasing 7.5 percent a year, how long will it take for property values to double? (Round your answer to 1 decimal place.) Time period years b. If you earn 9 percent on your investments, how long will it take for your money to double? (Round your answer to 1 decimal place.) Time period years c. At an annual interest rate of 4.5 percent, how long will it take for your savings to double? (Round your answer to 1 decimal place.) Time period years Explanation: a. About 9.6 years (72/7.5) b. About 8 years (72/9) c. About 16 years (72/4.5)

Using the rule of 72, approximate the following amounts.   

a.	If the value of land in an area is increasing 7.5 percent a year, how long will it take for property values to double? (Round your answer to 1 decimal place.)

  

Time period

years

  

b.	If you earn 9 percent on your investments, how long will it take for your money to double? (Round your answer to 1 decimal place.)

  

Time period

years

  

c.	At an annual interest rate of 4.5 percent, how long will it take for your savings to double? (Round your answer to 1 decimal place.)

  

Time period

years

Explanation:

a.	About 9.6 years (72/7.5)

  

b.	About 8 years (72/9)

  

c.	About 16 years (72/4.5)

Account Title Debit Credit Cash $ 7,100 Accounts receivable 29,000 Office supplies 6,270 Trucks 176,000 Accumulated depreciation—Trucks $ 36,256 Land 45,000 Accounts payable 11,100 Interest payable 19,000 Long-term notes payable 45,000 Common stock 17,000 Retained earnings 158,669 Dividends 46,000 Trucking fees earned 123,000 Depreciation expense—Trucks 23,385 Salaries expense 53,466 Office supplies expense 14,000 Repairs expense—Trucks 9,804 Totals $ 410,025 $ 410,025 Use the above adjusted trial balance to prepare Webb Trucking Company’s classified balance sheet as of December 31, 2011.

Account Title	Debit		Credit
Cash	$	7,100
Accounts receivable		29,000
Office supplies		6,270
Trucks		176,000
Accumulated depreciation—Trucks			$	36,256
Land		45,000
Accounts payable				11,100
Interest payable				19,000
Long-term notes payable				45,000
Common stock				17,000
Retained earnings				158,669
Dividends		46,000
Trucking fees earned				123,000
Depreciation expense—Trucks		23,385
Salaries expense		53,466
Office supplies expense		14,000
Repairs expense—Trucks		9,804
Totals	$	410,025	$	410,025

  

Use the above adjusted trial balance to prepare Webb Trucking Company’s classified balance sheet as of December 31, 2011.

Explanation:

Retained earnings  is computed as:
Beginning balance	$	175,669
Plus: Net income ($123,000 – $23,385 – $53,466 – $14,000 – $9,804)		22,345
Less: Dividends		(46,000	)
Ending balance	$	152,014

Following are two income statements for Kendall Co. for the year ended December 31. The left column is prepared before any adjusting entries are recorded, and the right column includes the effects of adjusting entries. The company records cash receipts and payments related to unearned and prepaid items in balance sheet accounts. KENDALL CO. Income Statements For Year Ended December 31 Unadjusted Adjusted Revenues Fees earned $ 24,000 $ 31,200 Commissions earned 42,500 42,500 Total revenues 66,500 73,700 Expenses Depreciation expense—Computers 0 1,800 Depreciation expense—Office furniture 0 2,100 Salaries expense 12,500 15,440 Insurance expense 0 1,560 Rent expense 4,500 4,500 Office supplies expense 0 576 Advertising expense 3,000 3,000 Utilities expense 1,250 1,334 Total expenses 21,250 30,310 Net income $ 45,250 $ 43,390 Analyze the statements and prepare the eight adjusting entries that likely were recorded. (Note: 30% of the $7,200 adjustment for Fees Earned has been earned but not billed, and the other 70% has been earned by performing services that were paid for in advance.)

Following are two income statements for Kendall Co. for the year ended December 31. The left column is prepared before any adjusting entries are recorded, and the right column includes the effects of adjusting entries. The company records cash receipts and payments related to unearned and prepaid items in balance sheet accounts.

  

KENDALL CO. Income Statements For Year Ended December 31
	Unadjusted		Adjusted
Revenues
Fees earned	$	24,000	$	31,200
Commissions earned		42,500		42,500
Total revenues		66,500		73,700
Expenses
Depreciation expense—Computers		0		1,800
Depreciation expense—Office furniture		0		2,100
Salaries expense		12,500		15,440
Insurance expense		0		1,560
Rent expense		4,500		4,500
Office supplies expense		0		576
Advertising expense		3,000		3,000
Utilities expense		1,250		1,334
Total expenses		21,250		30,310
Net income	$	45,250	$	43,390

  

Analyze the statements and prepare the eight adjusting entries that likely were recorded. (Note: 30% of the $7,200 adjustment for Fees Earned has been earned but not billed, and the other 70% has been earned by performing services that were paid for in advance.)
Explanation: Dec. 31 To record earned but unbilled fees.   Fees Earned = (30% × $7,200) = $2,160        To record earned fees collected in advance.   Fees Earned = (70% × $7,200) = $5,040