I need help with my accounting fargo assignment, please. Questions # 3, 4, 5, 7

Question

I need help with my accounting fargo assignment, please. Questions # 3, 4, 5, 7 and 11 only.

I got everything else figured out. Could you include calculations or t-accounts as well, to better understand the concept?

Thank you.

11) If there was no prepaid advertising at the beginning of the period, what was the total cash outlay for advertising in July?

Thank you so much in advance, I really appreciate all your help!

Name: Fargo Homework Assignment This assignment focuses on account analysis. You have Fargo's adjusted trial balance and are asked to analyze the activity in selected accounts to determine information about beginning balances, ending balances and activity during the period. We will discuss how to get started with this exercise in class on Monday, January 30. Bring your copy of the case to class. This is a hand-in assignment -you are to work independently. I will check your work on Monday, February 6 and Monday, March 20 (these wil count as two separate homework checks). The completed assignment is due April 10 (hard copy) The July 31, 2014 adiusted trial balance of Fargo Company is presented below. Notice that the total debits and credits for each account are listed (including the beginning balances) rather than the usual All adjusting entries have been made for account ending balance. Fargo's fiscal year end is June 30. the month of July 2014, except the adjustment for invent DEBIT 68,500 $ 54,600 58,000 54,400 1,100 Cash Allowance for Credit Losses Inventory Prepaid Advertising Office Supplies Office Equipment Accumulated Depreciation Accounts Payable Salaries Payable Interest Payable Dividends Payable Notes Payable Common Stock APIC-C/S Retained Earnings Sales Revenue Sales Returns Sales Discounts Purchases Purchase Returns and Allowances Purchase Discounts Salaries Expense Office Supplies Expense Insurance Expense Advertising Expense Bad Debt Expense Miscellaneous Expense Depreciation Expense Interest Expense Gain/Loss on Sale of Equipment Totals 1,200 22,000 31,900 7,600 40,000 100 3,500 8,200 3,000 30,000 14,200 20,000 19,900 42,000 400 9,200 1,300 200

Explanation / Answer

Solution 3:

Depreciation expense for july = $300

Depreication for whole year = $300*12 = $3,600

Therefore original cost of office equipment held on beginning of july = 3600*5 = $18,000

Therefore office equipment acquired during July = $22,000 (Total Debit of office equipment) - $18,000 = $4,000

Solution 4:

Accumulated depreciation on equipment neither sold nor acquired during the month = $7,600 - $400 = $7,200

Depreciation for 1 month = $300

Life of Office equipment already consumed = $7,200 /$300 = 24 months

Therefore office equipment was 24 months old.

Solution 5:

Payment made to accounts payable = Debit of accounts payable - Purchase return and allowances

= $31,900 - $900 = $31,000

It is assumed that all purchase return and allowances are pretaining to credit purchases and purchase discount pretaining to cash purchases.

Solution 7:

Ending balance of accounts receivables = $58,000 - $54,400 = $3,600

Ending balance of allowance for credit losses = $1,100 - $700 = $400

Net realizable value of accounts receivable at July 31, 2014 = $3,600 - $400 = $3,200

Solution 11:

Cash outlay for advertising = Debit to Prepaid advertising + Debit to advertising expense - Credit to prepaid advertising

= $1,200 + $600 - $400 = $1,400

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