1. (TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (15 points) and (2) provide an example of the closing of an expense account, Supplies Expense in the form of a journal entry. (10 points) (Points : 15)1. (TCO 6) BagODonuts Company bought a used delivery truck on January 1, 2010, for $19,200. The van was expected to remain in service 4 years (30,000 miles). BagODonuts accountant estimated that the trucks residual value would be $2,000 at the end of its useful life. The truck traveled 8,000 miles the first year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year. 1. Calculate depreciation expense for the truck for each year (2010-2013) using the:a. Straight-line method.b. Double-declining balance method.c. Units of Production method.(For units-of-production and double-declining balance, round to the nearest two decimals after each step of the calculation.)2. Which method best tracks the wear and tear on the van? 3. Which method would BagODonuts prefer to use for income tax purposes? Explain in detail why BagODonuts prefers this method. (Points : 15)2. (TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:Preferred Stock: 7%, par value $100 per share, 100,000 shares.Common Stock: $1 par value, 500,000 shares.The following transactions occurred during the year:1/19/12 Issued 100,000 shares of common stock for $17 cash per share.1/31/12 Issued 3,000 shares of preferred stock for $115 cash per share.11/1/12 Repurchased 30,000 shares of common stock for $22 cash per share.12/1/12 Declared and paid a total dividend of $95,000. Required: 1. Prepare the journal entry for each transaction listed above.2. In your own words, explain the main differences between common and preferred stock.(Points : 15)3. (TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions. Of the seven internal control procedures, list five of these controls and describe how each procedure is implemented. (5 points each with 2 points for listing and 3 points for a description) (Points : 15)4. (TCO 2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order.Account Balance Common stock $5,100 Accounts payable $4,400 Service revenue $17,100 Land $28,800 Note payable $9,500 Cash $5,200 Dividends $6,100 Utilities expense $2,100 Accounts receivable $10,600 Delivery expense $700 Retained earnings $25,600 Salary expense $8,200Prepare the companys trial balance as of June 30, 2012, listing accounts in proper sequence, as illustrated in the chapter. For example, Accounts Receivable comes before Land. List the expense with the largest balance first, the expense with the next largest balance second, and so on.(Points : 15)5. (TCO C) The accounting records of North East Distributors, Inc., reveal the following:Net income 38,000Collection of dividend revenue 7,800Payment of interest 11,000Sales revenue 13,000Loss on sale of land 22,000 Acquisition of land 42,000Depreciation 17,000Decrease in current liabilities 19,000Increase in current assets 24,000Payment of dividends 7,800Payment of income tax 15,000Requirement1.Compute cash flows from operating activities by the indirect method. 2.Also evaluate the operating cash flow of North East Distributors(Points : 15)1. (TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (15 points) and (2) provide an example of the closing of an expense account, Supplies Expense in the form of a journal entry. (10 points) (Points : 15)1. (TCO 6) BagODonuts Company bought a used delivery truck on January 1, 2010, for $19,200. The van was expected to remain in service 4 years (30,000 miles). BagODonuts accountant estimated that the trucks residual value would be $2,000 at the end of its useful life. The truck traveled 8,000 miles the first year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year. 1. Calculate depreciation expense for the truck for each year (2010-2013) using the:a. Straight-line method.b. Double-declining balance method.c. Units of Production method.(For units-of-production and double-declining balance, round to the nearest two decimals after each step of the calculation.)2. Which method best tracks the wear and tear on the van? 3. Which method would BagODonuts prefer to use for income tax purposes? Explain in detail why BagODonuts prefers this method. (Points : 15)2. (TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:Preferred Stock: 7%, par value $100 per share, 100,000 shares.Common Stock: $1 par value, 500,000 shares.The following transactions occurred during the year:1/19/12 Issued 100,000 shares of common stock for $17 cash per share.1/31/12 Issued 3,000 shares of preferred stock for $115 cash per share.11/1/12 Repurchased 30,000 shares of common stock for $22 cash per share.12/1/12 Declared and paid a total dividend of $95,000. Required: 1. Prepare the journal entry for each transaction listed above.2. In your own words, explain the main differences between common and preferred stock.(Points : 15)3. (TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions. Of the seven internal control procedures, list five of these controls and describe how each procedure is implemented. (5 points each with 2 points for listing and 3 points for a description) (Points : 15)4. (TCO 2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order.Account Balance Common stock $5,100 Accounts payable $4,400 Service revenue $17,100 Land $28,800 Note payable $9,500 Cash $5,200 Dividends $6,100 Utilities expense $2,100 Accounts receivable $10,600 Delivery expense $700 Retained earnings $25,600 Salary expense $8,200Prepare the companys trial balance as of June 30, 2012, listing accounts in proper sequence, as illustrated in the chapter. For example, Accounts Receivable comes before Land. List the expense with the largest balance first, the expense with the next largest balance second, and so on.(Points : 15)5. (TCO C) The accounting records of North East Distributors, Inc., reveal the following:Net income 38,000Collection of dividend revenue 7,800Payment of interest 11,000Sales revenue 13,000Loss on sale of land 22,000 Acquisition of land 42,000Depreciation 17,000Decrease in current liabilities 19,000Increase in current assets 24,000Payment of dividends 7,800Payment of income tax 15,000Requirement1.Compute cash flows from operating activities by the indirect method. 2.Also evaluate the operating cash flow of North East Distributors(Points : 15)