Day 73: Intro to Notes Receivable

Promissory Note: 

• written promise to pay certain amount on a preset day usually with interest

Types of Receivables

• Accounts Receivable
• Notes Receivable
• current assets less than 12 months
• investments more than 12 months
• Other Receivables
• interest receivable
• income tax refund receivable
• employee advance receivable
• loan receivable

Interest

• charge for using another's money
• I = P * R * T
• time expressed as fraction of a year
• 6 months = 6/12
• 90 days = 90/360

Maturity Value

• Principle (Face Value) plus Interest
• MV = P + I

Issue Date

• Debit Notes Receivable for face value
• Credit Service Fees (or A/R if exchanging A/R for Note)

Maturity Date

• Debit Cash (A/R if dishonored)
• Credit Notes Receivable and Interest Income (I = P * R * T)

E-Learning Day Assignment

Watch this video and take notes. Use  this assignment form to answer questions about the video.

Sub Plans

• pg 407 Discussion Questions 1 through 6
• pg 407 Basic Exercise 8-1, 8-2, 8-3
• pg 409 Exercises 8-3 & 8-4
• pg 411 Exercises 8-13 & 8-14

Petty Cash and Sales Transaction Practice

Work on the following problems:

• pg 360 Multiple Choice #5
• pg 361 Exercise 4
• pg 364 Discussion Questions 2 & 9
• pg 365 BE 7-4
• pg 367 EX 7-12 & 7-13
• pg 370 EX 7-24
• pg 371 PR 7-2A
• pg 374 PR 7-2B

Period 3 Final

Unit 4 Test

After Test start your final exam review

Unit 4 Review

Links:

• Unit 4 Topics
• Ch 10 Topics
• Ch 10 Review Questions
• Ch 12 Topics
• Ch 12 Review Questions 

Final Exam Prep Materials:

• start your final exam review early

Day 51 - Nature of Corporations

1. 4P3R next section in text: Nature of Corporations (pages 498-499)
• preview
• predict
• prior knowledge
• purpose
• read and write
• re-read and adjust
• review (create review tool)
2. Create your own interview questions for Nature of Corporations

Day 154: Ch 12 Preview

We are skipping chapter 11

Preview the Chapter 12 Questions.
Watch the following Chapter 12 videos and take notes as you watch:

• Intro to Corporations (5:10)
• Corporate Form (5:32) 
• Stock Issuance and Treasury Stock (12:11)     
• Cash and Stock Dividends (7:57)

Complete the Chapter 12 Review Questions

Day 153: Ch 10 Quiz B

Day 152: Review Ch 10 Quiz

Day 151: Chapter 10 Quiz

Day 150: Study Day

Prepare the journal entry for the following transactions:

1. The May 1 payroll register showed Gross Pay of $400,000. Employees are paid one week after the end of a pay period. The only deductions are those required by statute (use the following rates: 6.2% and 1.45% for the FICA amounts, hypothetical federal percentage of 15%, and a state rate of 5%).
2. The company also records payroll taxes at the same time as they record the payroll. Use the following rates: 6.2% and 1.45% for the FICA amounts, 5.4% and .8% for the unemployment taxes.
3. The May 15 payroll register showed Gross Pay of $500,000. Employees are paid one week after the end of a pay period. The only deductions are those required by statute (use the following rates: 6.2% and 1.45% for the FICA amounts, hypothetical federal percentage of 15%, and a state rate of 5%).
4. The company also records payroll taxes at the same time as they record the payroll. Use the following rates: 6.2% and 1.45% for the FICA amounts, 5.4% and .8% for the unemployment taxes.
5. On May 16, Minute Services, Inc. issued a 60-day, 4% interest-bearing note with a face amount of $500,000 for the purchase of office equipment.
6. On the maturity date, Minute Services, Inc. paid the above note, in full.
7. On August 19, Fudd Chicken Company borrowed cash from the Bank of Smallsvile by issuing a 90-day, 6% discounted note with a face amount of $200,000.
8. On the maturity date, Fudd Chicken Company paid the above note, in full.

Review Questions:

1. Compare and contrast the following terms: borrower, debtor, creditor, lender.
2. Create a list that classifies different liabilities as either typically long-term or current:
3. Which liabilities would usually be the largest for a company?
4. As it relates to an interest-bearing note, write the formulas to calculate the following: 
• Interest =
• Maturity Value = 
5. Where is Interest Expense recorded on the Income Statement?
6. As it relates to discounted notes, write the formulas to calculate the following:
• Proceeds =
• Discount =
• Maturity Value =
7. Describe the primary differences between an interest-bearing note and a discounted note:
8. Identify the most likely classification of the following accounts: (the first three are done for you; be specific in your answer)
• cash: current asset
• land: long-term asset
• rent expense: operating expense
• note payable:
• mortgage payable:
• interest expense:
9. Use T-accounts or journal entries to illustrate the transactions needed to issue and then pay an interest-bearing note payable for cash:
10. Using T-accounts or journal entries, illustrate the transactions needed to issue and pay a discounted note payable for cash:
11. Why is accurate and timely payroll accounting so important?
12. What items are included in gross pay and how are they calculated?
13. What are the rules associated with overtime pay?
14. What is the formula for calculating net pay?
15. List and describe the different forms used in a payroll system:
16. List and describe the different required (statutory) deductions, including calculations, limits, requirements, and origin if applicable:
17. List and describe various voluntary deductions:
18. List and describe the different employer payroll taxes, including calculations, purpose, and procedures if applicable:

Day 149: Study Day

Prepare the journal entry for the following transactions:

1. On June 2, Biggersly Services, Inc. issued a 60-day, 4% interest-bearing note with a face amount of $20,000 for the purchase of office equipment.
2. On the maturity date, Biggersly Services, Inc. paid the above note, in full.
3. On May 1, Rotini Popcorn Company borrowed cash from the Bank of Venutia by issuing a 90-day, 6% discounted note with a face amount of $100,000.
4. On the maturity date, Rotini Popcorn Company paid the above note, in full.
5. On May 2, Smallsley Services, Inc. issued a 60-day, 4% interest-bearing note with a face amount of $100,000 for the purchase of office equipment.
6. On the maturity date, Smallsley Services, Inc. paid the above note, in full.
7. On July 11, Laslo Candy Company borrowed cash from the Bank of Venutia by issuing a 90-day, 6% discounted note with a face amount of $20,000.
8. On the maturity date, Laslo Candy Company paid the above note, in full.

Day 148: Study Day

LINK: Chapter 10 Review Questions

Day 147: Payroll Entries

Chapter 10 Review Questions

Chapter 10 Practice:

• page 499
• Exercises 3 & 4
• page 506
• Exercise EX 10-12
• page 507
• Exercise EX 10-13

Day 146: Payroll Taxes

Chapter 10 Review Question:

1. List and describe the different employer payroll taxes, including calculations, purpose, and procedures if applicable:

Chapter 10 Practice:

• page 503
• Basic Exercise BE 10-4
• page 506
• Exercise EX 10-11

Day 144: Payroll Deductions

Chapter 10 Review Questions:

1. List and describe the different required (statutory) deductions, including calculations, limits, requirements, and origin if applicable:
2. List and describe various voluntary deductions:

Chapter 10 Practice:

• page 498
• Multiple-choice Question 3
• page 505
• Exercise EX 10-9

Day 143: Gross Earnings

Chapter 10 Review Questions:

1. Why is accurate and timely payroll accounting so important?
2. What items are included in gross pay and how are they calculated?
3. What are the rules associated with overtime pay?
4. What is the formula for calculating net pay?
5. List and describe the different forms used in a payroll system:

Chapter 10 Practice:

• page 498
• Multiple-choice #2
• Exercise 2
• page 503
• Basic Exercise  BE 10-2
• page 505
• Exercise EX 10-8

Day 142: Short-term Notes Payable

Chapter 10 Review Questions:

1. As it relates to discounted notes, write the formulas to calculate the following: 
• Proceeds =
• Discount = 
• Maturity Value =
2. Describe the primary differences between an interest-bearing note and a discounted note:

Chapter 10 Practice:   Link to Textbook Pages

• Page 498:
• Multiple choice 1 & 2 
• Exercise 1
• Page 499:
• Problem Mar 1 thru Oct 30
• Page 503:
• Discussion 1
• BE 10-1
• Page 504:
• EX 10-2
• Page 505:
• EX 10-4 & 10-5

Day 117: Ch 6 Quiz B

After Quiz, watch these videos and take notes:

• Assigning Costs to Fixed Assets (6:57)
• Depreciation Concepts (5:45)
  Depreciation (9:09)
• Straight-line and Units of Production (5:29)
• Double-declining Balance Method (7:03)
• Disposal of Fixed Assets (2:15)
  Sales, Disposals, Depletion, Amortization (3:44)
• Capital and Revenue Expenditures (2:27)
• Natural Resources (4:45) 
• Intangible Assets (5:10)
• Asset Exchanges (5:34)

Day 115: Review Ch 6 Quiz Results

Day114: Ch 6 Quiz A

After the quiz:

• Review your Ch 6 notes
• Prepare for Chapter 6 Quiz B on Tuesday

eLearning Day 113: Ch 6 Practice Questions

eLearning Day Attendance

• fill out this Attendance Form

eLearning Day Assignment

Copy these questions into a Google Doc, share the doc with "anyone who has the link", copy the URL (link) and submit the assignment using the Assignment Submission Form

1. As it relates to the purchasing process, how many documents are sent to the accounting department to be analyzed and compared for accuracy and agreement before the journal entry is made?
2. When should a company take a physical count of inventory
3. Which inventory valuation method is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items?
4. Under which inventory valuation method is ending inventory made up of the oldest purchases?
5. When merchandise sold is assumed to be in the order in which the purchases were made, the company is using which inventory valuation method?
6. What are the two most widely used methods for determining the cost of inventory 
7. Which inventory method that assigns the most recent costs to cost of goods sold?
8. Which inventory costing method reports the most current prices in ending inventory?
9. Under which inventory method do accounting records maintain a continuously updated inventory value?
10. During a period of consistently rising prices, which method of inventory will result in reporting the greatest cost of merchandise sold?
11. If merchandise inventory is being valued at cost and the price level is steadily rising, which method of inventory costing will yield the highest net income?
12. Merchandise in inventory that can be bought elsewhere at a price that is lower than at which it was originally purchased, should be recorded at cost or market price?
13. Merchandise that is out of date, spoiled, or damaged can often be sold only at a price below its original cost. The value of such merchandise is referred to as _______________.
14. Why is it important to efficiently manage your inventory levels?
15. What does inventory turnover measure?
16. What does days sales in inventory measure?

Review Exercises 6-3 and 6-7 in your textbook.

Day 111: Review for Ch 6 Quiz - Inventory

Purchasing Process
Inventory Costing Methods
Comparing Methods
Lower of Cost or Market and Net Realizable Value
Analyzing Inventory Management Efficiency

1. Describe the purchasing process. Include information about the documents used and the departments impacted.
2. What is the difference between a perpetual and a periodic inventory system?
3. When are physical counts of inventory typically performed?
4. Which type of companies would use the specific identification method?
5. Under which inventory method would each of the following be true:
• older inventory
• newer inventory
• higher cost of goods sold
• lower cost of goods sold
• sell old inventory first
• sell new inventory first
• higher value of inventory
• lower value of inventory
• most current costs are used to value inventory
• older costs are used to value inventory
• higher net income
• lower net income
• higher taxes lower taxes
6. Explain the concepts of Lower-of-Cost-or-Market and Net Realizable Value
7. Why is it important to effectively manage your inventories?
8. What is the purpose of the Inventory Turnover calculation and what does it measure?
9. What are the formulas for calculating Inventory Turnover and Days Sales in Inventory

Inventory

EX 6-7 and 6-12

Day 101: Ch 5 Quiz B

Day 100: Review for Ch 5 Quiz

1. How would a service business report revenues from providing a service? 
2. What is the formula to calculate Net Income for a merchandising business?
3. How is Inventory classified on the Balance Sheet?
4. Under the periodic method what is the formula to calculate Net Sales for a merchandiser?
5. What is it called when a seller grants credit to customers for damaged or defective?
6. When would a seller grant a Sales Discount to a customer?
7. How do you determine the total Cost of Merchandise Purchased under the periodic method?
8. How is a Perpetual Inventory System different from a Periodic System?
9. What is another term for Income from Operations?
10. Which types of expenses would not be classified as operating expenses?
11. Which types of expenses would be considered selling expenses?
12. How would revenue from sources other than the primary operating activity be classified?
13. What do we call a separate ledger used to group together accounts with common characteristics?
14. If a customer pays with a MasterCard bank card, which account would be debited?
15. Under a perpetual inventory system, what is the journal entry for a $50 tax exempt sale?
16. What is the name of the source document that outlines the terms of a sale on account?
17. $100 sale on account (2/10 n30). How much cash is collected within and after discount period?
18. Show the journal entries for $100 sale on account made on January 10th (2/10 n/30).
    (Net Method, Perpetual and Gross Method, Periodic)
19. Which source document is typically used when a customer returns merchandise?
20. Show journal entries for $100 purchase on account with $15 freight. (Periodic and Perpetual, FOB Shipping point and FOB Destination
21. Merchandise costing $100 was previously purchased on account with credit terms of 2/10 n30. Show the journal entries using both the perpetual and periodic inventory system and if payment on account is made both within and beyond the discount period.
22. Explain the concept of FOB shipping point:
23. Explain the concept of Sales Tax:
24. What are Trade Discounts?
25. The physical inventory on hand at the end of an accounting period is usually less than the balance in the Merchandise Inventory account due to shoplifting, employee theft or error. This difference is called:
26. To adjust for differences between the physical amount of merchandise in inventory and the amount recorded in the Merchandise Inventory account an adjusting journal entry must be made. If the physical count is less than that recorded in Merchandise Inventory, this entry would:

Day 97: Review Chapter 5 Notes

Work on:

• Multiple Choice Questions 
• #’s 1, 2, 4, & 5 
• on page 259 
• Basic Exercises 
• BE 5-1 through BE 5-4 
• on page 264 
• Exercises 
• 5-1 through 5-8 in packet 
• beginning on page 265

Go over Chapter 5 Notes

Transactions
Credit Terms
FOB
Invoices
Net Amount Method
Returns
Allowances