Accounting Lab

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Chapter 7
Homework These problems are not in My Accounting Lab. They can be found in the Textbook Material beginning on page 379. Complete homework using Excel or PDF Working papers (below). Check your work against the homework solutions (below). Turn in your printed homework in class. Practice Problems: Quick Check #1-10 Assigned Problems: E7-13, 19, 20, P7-26A, P7-28A (14 points) Extra Credit: P7-29A (2 points)

Accounting Information Systems
√ Quick Check

Answers: 1. a 2. d 3. b 4. c 5. b 6. d 7. d 8. a 9. c 10. b

Explanations: 5. b. Gross profit = $2,505 (Sales revenue $4,319 – Cost of goods sold $1,814)

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Short Exercises
(5 min.)

S 7-1

Control is the most important feature because a business must safeguard its assets. Favorable cost-benefit relationship must be considered if financial resources are limited.

(5 min.) D Electronic linkages that allow different computers to share the same information C Electronic equipment B Programs that drive a computer A Main computer in a networked system

S 7-2

A. Server B. Software C. Hardware D. Network

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Accounting 7/e Solutions Manual

(5-10 min.)
4

S 7-3

3

1

C O 2 N T R O L

E

T

7

B

S O F T W A R E

E

O

H A R D W A R E E

5

V

F L E X
6

R C R E D I T S

K

N

F

I

(5 min.) Inventory.................................................151 Accounts Payable..................................201 Jan Marks, Capital................................. 301 Jan Marks, Withdrawals........................311 Service Revenue....................................411 Depreciation Expense........................... 531

S 7-4

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(5 min.)

S 7-5

Formula for B4: = B2 – B3 Row: 1 2 3 4 5 Column: A Income Statement: Revenues Expenses Net Income B C

150,000 = B2* 1.08 90,000 = B3* 1.06 60,000 = C2 – C3

Cursor is on cell B4

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Accounting 7/e Solutions Manual

(5 min.) J S CR P CP = = = = = General journal Sales journal Cash receipts journal Purchases journal Cash payments journal

S 7-6

Transactions: CP CR a. b. Cash purchase of inventory Collection of dividend revenue earned on an investment CP CR P S CR CP J P CR J S CP c. d. e. f. g. h. i. j. k. l. m. n. Prepayment of insurance Borrowing money on a long-term note payable Purchase of equipment on account Cost of goods sold along with a credit sale Cash sale of inventory Payment of rent Depreciation of computer equipment Purchase of inventory on account Collection of accounts receivable Expiration of prepaid insurance Sale on account Payment on account

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(5 min.)

S 7-7

1. 2. 3.

$2,071 $4,319 $ 907

Inventory account in the General Ledger Posted to Sales Revenue on November 30 Susan Levy account in the Accounts Receivable Subsidiary Ledger Accounts Receivable account in the General Ledger

4.

$4,319

(5 min.) 1. Accounts Receivable Subsidiary Ledger 2. General Ledger Accounts Receivable debit balance............ $4,319 From the Accounts Receivable Subsidiary Ledger Customer Balance Maria Galvez.................................................. $ 935 Brent Harmon................................................ 694 Susan Levy.................................................... 907 Clay Schmidt................................................. 1,783 Total accounts receivable............................ $4,319

S 7-8

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Accounting 7/e Solutions Manual

(10 min.) 1. 2. Cash receipts during November.. $6,134 Cash collections on account: Nov. 14....................................... $ 900 22....................................... 300 Total..................................... 1,200 Total discounts............................. 35 Decrease in accounts receivable $1,235 Cash sales during November…… $3,172

S 7-9

3.

(5 min.) 1. Inventory...
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