The adjusted trial balance of Fargo Company as of July 31, 2014


Question Description:

25

The adjusted trial balance of Fargo Company as of July 31, 2014 is presented below. (Read that again,think about what that means about where Fargo is in the accounting cycle.) Notice that the total debitsand credits for each account are indicated (including the beginning balances) rather than the usual accountbalance. For example, the cash account had transactions which resulted in a total of $67,700 debits(including the beginning balance) and a total of $55,400 credits.All adjusting entries have been made for the month of July 2014, except the adjustment for inventory.Fargo’s fiscal year end is June 30 ATTACHMENT PREVIEW Download attachment 5 pages Wells Fargo.pdf You are only allowed to work with your group members and your professor. No tutors or other groups. ACG 340 Case 4: Fargo The adjusted trial balance of Fargo Company as of July 31, 2014 is presented below. (Read that again, think about what that means about where Fargo is in the accounting cycle.) Notice that the total debits and credits for each account are indicated (including the beginning balances) rather than the usual account balance. For example, the cash account had transactions which resulted in a total of $67,700 debits (including the beginning balance) and a total of $55,400 credits. All adjusting entries have been made for the month of July 2014, except the adjustment for inventory. Fargo’s fiscal year end is June 30. Account Debit Credit $67,700 $55,400 Cash 58,000 54,400 Accounts Receivable 700 1,100 Allowance for Doubtful Accounts 60,000 Inventory 1,200 400 Prepaid Advertising 1,700 1,300 Office Supplies on Hand 22,000 1,500 Office Equipment 400 7,600 Accumulated Depreciation 31,900 40,000 Accounts Payable 800 Salaries Payable 100 Interest Payable 4,000 8,200 Dividends Payable 3,000 30,000 Notes Payable 12,600 Common Stock 20,000 Paid-In Capital in Excess of Par 19,900 Retained Earnings 7,200 Dividends Declared 61,000 Sales 2,200 Sales Returns 500 Sales Discounts 42,000 Purchases 900 Purchase Returns and Allowances 400 Purchase Discounts 9,200 Salaries Expense 1,300 Office Supplies Expense 700 Insurance Expense 600 Advertising Expense 500 Bad Debt Expense 400 Miscellaneous Expense 300 Depreciation Expense 300 Interest Expense 200 Gain on Sale of Office Equipment $315,800 $315,800 Totals 0 You are only allowed to work with your group members and your professor. No tutors or other groups. Using the trial balance of gross balances for Fargo and the additional information given below, answer the following questions about the operations of Fargo. Put answers in box when given. Each question is worth half a point. 1. Compute the amount of interest paid in July. At June 30, 2014, $20 was payable. (Hint: Think of converting from accrual basis to cash basis.) 2. How much of Accounts Receivable were “written off” the month? (Hint: Run the ADA t-account) 3. What is Fargo’s Net Realizable Value of Accounts Receivable at the end of July? 4. What was the amount of cash received on the sale of office equipment? 5. Assuming that the office equipment has a five year estimated life, no estimated salvage value, and no depreciation is taken during the month of purchase or sale, how much office equipment was acquired during the month? 6. How old is the office equipment that was neither sold nor acquired during the month? 7. How much cash was paid on Accounts Payable during the month? Assume the beginning balance of Accounts Payable in July was zero. 1 You are only allowed to work with your group members and your professor. No tutors or other groups. 8. If the beginning balance in Note Payable was $20,000, what amount of Notes Payable did Fargo issue in in July? 9. How much of the Note Payable was paid off during July? 10. If all vendors sell to Fargo on terms 2/10, n/30, what was the total amount of purchases discounts which were allowed to lapse. No purchases were made in the last 10 days of July. 11. If there was no prepaid advertising at the beginning of t…

Answer

25