Issued by the bank. 1. Recording cash received in advance from customers as revenue when the product is not yet shipped A. Estimated depreciation on the office equipment,$2,700, \quad\quad g. The company credits the lockbox fees of customers who pay in advance to the Unearned Lockbox Fees account. B. $200 decrease in net income. How much is the 2010 LIFO cost of goods sold? b. Net income will be overstated, but there would be no affect on total assets. Both companies paid exactly the same cost, $30,000, for their respective vehicles. D. $107,000. The ending owner's capital balance after closing is: Expert Answer Calculation of ending owners capital balan The ending owner's capital balance after closing is: A company had revenues of $56,000 and expenses of $44,500 for the accounting period. It will select the lowest residual values for its assets. Jasper's total purchase price per unit will be: a. Debit Merchandise Inventory $1,600; credit Cash $1,600. A. must be recorded and reported as a liability. At the end of its accounting period, December 31, 2009, August Corporation owed $1,000 for property taxes for the current year, which had not been recorded or paid. Debit Contingent Legal Expense $500,000, credit Contingent Legal Liability $500,000. Total assets decrease and equity increases. (1800-200). c. $450 Long-term liabilities. Par value of the bonds. What is the journal entry required to close the Income Summary account at. Only Job M1 was completed in May. $62,090 $250 C. A. 1. If the sales price of the used machine was $7,500, the resulting gain or loss upon the sale was which of the following amounts? Zephyr, Capital 114,000 A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. Added to the book balance of cash. Earning revenue for services performed. 1. Preferred shareholders have a preference with respect to assets in the event of liquidation. Betterman's turnover was 9.3 for this year and 9.3 for last year. c. Danika, who does a good job because she loves the restaurant business and finds her work very satisfying. This transaction will not impact cash flow. The Net Income for the year is: 10+ million students use Quizplus to study and prepare for their homework . Company X is going to retire equipment that is fully depreciated with no residual value. Cumulative preferred stock. Jan 1 150 units were purchased at $9 per unit 1. $185,000 B. Indicates a shorter time span between the ordering and receiving of inventory. What is the correct closing entry for the expense accounts? Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. The firm is in a 35 percent tax bracket. B. 3. Increase of $150,000 Cost of goods sold: You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The Adjustments columns contain entries for the following: K. Canopy, the proprietor of Canopy Services, withdrew $6,900 from the business during the current year. $1,564 C. The journal entry to write-down inventory does not affect income from operations. The income statement. C. Annual interest expense will be $500,000. $227,000 RowanCompany,May2016DirectmaterialsDirectmanufacturinglaborJobM1$75.000275.000JobM2$56.000209.000. A company has sales of $382,200 and its gross profit is $160,700. C. Sales returns and allowances C. Transaction analysis, posting to the ledger, adjusting the accounts The owner's capital account before closing had a balance of $298,000. At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,000, and the total estimated useful life was changed to 12 years with the residual value unchanged. \text{Accumulated DepreciationBuilding} && 53,400\\ D. 3.91. The account Purchases is not used as inventory is acquired. Wrote down the carrying value of certain inventory items that were deemed to be obsolete. D. B. $3,405 $100,000 D. Current ratio can affect a creditor's decision about whether to lend money to a company. All of the above statements are true. During 2007, supplies purchases amounted to $5,000. What amount would be recorded as bad debt expense for the current period? e. Debit Accounts Payable $1,600; credit Cash $1,600. Indicates a longer time span between the ordering and receiving of inventory. D. A disclosure note is required when the loss is remote and the amount can be reasonably estimated. Debit Lawsuit Payable $500,000, credit Contingent Legal Liability $500,000. The owners capital Loss of $500 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. What would be the effect on December's income statement of a utility bill received on December 27, 2009 but which will not be paid until January 10, 2010? Market value of the stock was$12. d. $115,000 It the cash proceeds received from issuing a bond are less than the face value of the bond. The LIFO Reserve for year-end 2009 was a $0.6 billion credit balance and at year-end 2010 it had increased to a credit balance of $0.8 billion. July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. Annual interest expense for a single bond issue continues to increase over the life of the bonds. A reduction in current liabilities. e. Debit Income Summary $37,000; credit F. Mercury Capital $37,000. For beginning stockholders equity, use the balance after D. A. Par value and the coupon rate on the date the bond was issued. A. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? $82,800 C. $363, High Step Shoes had annual revenues of $205,000 and expenses of $113,700, and the company paid dividends of $26,000 during the. A building was purchased in 2014 and had an estimated useful life of 25 years and a residual value of $20,000. Prepare the journal entry transferring Job M1 to finished goods. D. $19.2 billion. E. Replacing the ink cartridge in a printer. If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? What is the value of cost of goods sold? No journal entry is required. Ending inventory 100,000 A) $29,721 A. A company would report a net loss when D. Affect cash accounts. $5,000. c. $5,750. 1. The weighted-average common shares outstanding were 80,000. 1. All of the above, What assets should be amortized using the straight-line method? All permanent ledger accounts with balances. $1,900,000 Number of hours of television watching per day for people with 12 years of education. $229,800 We reviewed their content and use your feedback to keep the quality high. $87,707 An entry was journalized and posted as a debit to cash for $500 and credit to accounts receivable for $5,000. Cash, short-term investments, and current receivables. Balance per book decreases 1. B. B) $30,893 Double-declining-balance depreciation is used. A few hundred U.S. sugar makers lobby the U.S. government each year to make sure that the government taxes imported sugar at a high rate. Treasury stock has no voting, dividend, or liquidation rights. Aging of accounts receivable method. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. C. Affect both income statement and balance sheet accounts. \text{Office Salaries Expense} & 44,400\\ The statement of retained earnings. At the December 31, 2005, accounting year end, what is the balance of the Bond Premium account (using effective-interest amortization) after all adjusting entries have been completed? Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000. The charter authorized the issuance of 500,000 shares. Betterman is collecting its receivables more quickly than Axle in both years. \hline A. The financial statements are not affected. B) stated rate of interest is greater than the market rate of interest. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. On July 8, it paid the full amount due. $200 1. B. Retained Earnings. Assets will be overstated, but there would be no effect on net income for the year. $81,600. Assuming effective-interest amortization is used, the interest expense on the income statement for the year ended December 31, 2009 would be (to the nearest dollar) What is cost of goods sold using the FIFO method of inventory costing? The Net Income for the year is: $81,300 Jan 20 160 units were purchased at $11 per unit c. Debit Revenue accounts $55,200; credit F. Mercury, Capital $37,000. $3,520. The beginning balance in the allowance for doubtful accounts was $220. 1. Explain your answer. During January 2009, the company completed the following transactions: (A) paid on a note payable $10,000 (no interest was paid); (B) collected an accounts receivable, $9,000; (C) paid an accounts payable, $5,000; and (D) purchased a truck, $5,000 cash, and a $20,000 note payable from a bank. A company estimates that warranty expense will be 4% of sales. Which of the following costs does not become a part of cost of goods manufactured? . A company is facing a class-action lawsuit in the upcoming year. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2008. $10,000 B. has been more effective in managing the use and level of its assets. A. E. Net income for the year and total assets would both be overstated. D) $33,420 On July 7, it returned $200 worth of merchandise. B) $63,500 B. capital in excess of par value is debited and retained earnings is credited. B. C. $80,000 Aug. 12 - Date of record for cash dividends. C. 1. On July 7, it returned $200 worth of merchandise. Of the amount credited to this account during the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31. A. He anticipates that the car will cost $54,000 on January 1, 2016. What is cost of goods sold using the LIFO method of inventory costing? Tara westmont, the proprietor of tiptoe shoes, had annual revenues of $205,000, expenses of $113,700, and withdrew $26,000 from the business during the current year. The owner's capital account before closing had a balance of $297,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Assets are often classified into current assets, long-term investments, plant assets and intangible assets. No change in stockholders' equity. . The owner's capital account before closing had a balance of $307,000. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. C. Assume the owner, Raul Siglo, made no additional investments. D. A) each day. Both stock and cash dividends reduce retained earnings. A. $100,000 C. $104,000. Dividends represent a sharing of corporate profits with owners. What was the net income earned during the year? The anticipated interest rate and the future value of $1 table. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. Yes, because the investor acquired additional shares without paying a brokerage fee. 1. The owner's capital account before closing had a balance of $297,000. D. B. debit Unearned Fees, $516; credit Fees Earned, $516. Total liabilities increase and stockholders' equity decreases. Betterman's turnover is improving. D. E. Which of the following general journal entries will VC Consulting make to record this transaction? B. Interest expense reduces taxable income. E. If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in: 1. A. c. $3,200 In 2010, cost of goods sold was $258 million and accounts payable was $72 million. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2011. A. not change total assets. Net income for July was zero and August was $11,500. $62,090. A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers. B. C. $200 difference between the debit and credit columns of the Unadjusted Trial Balance. b. Debit Cash $1,600; credit Accounts Payable $1,600. D. Net income and assets will both be understated. Which of the following describes the effect of the inventory error on the 2014 financial statements? E. 1. D. Accounts Receivable. A. the income tax rate B. the federal funds rate C. the money supply D. the prime interest rate E. the unemployment rate. Date of payment. C) stated rate of interest is equal to the market rate of interest. B. Siglo,Capital128,730R. $4,120. What is the ending balance in the WOrk-in-process Control account? Mayan Company had net income of $132,000. Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. It is reported on the balance sheet as a component of current assets. C. D. $ 1,000. General Journal E. All the statements above are correct. Straight-line method $400,000 $18,000. C. Total assets will not change as a result of this transaction. C. $109,000 1. B. If X produces more net utility than not doing X, then X is morally right. A) $16,000 Fund Transfer automatically paid by the bank monthly, not yet recorded by Maxi On July 28, it paid the full amount due. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days. Three On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. B. Collection of cash from a customer. If a company records sales revenue, 1. Sale of additional stock to investors. How much interest does the company owe at the end of three months? c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. The stock sold for $20 per share. On June 20, it returned $800 of that merchandise. Current assets. A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. Calculated using the double-declining balance method. C. net income to be understated and liabilities to be understated. Credit card discounts A. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2010. Current assets were overstated and net income was understated. Shares authorized, shares issued, shares outstanding. E) None of the above is correct. Gross sales total $300,000, one-half of which were credit sales. E. B. Dr. Allowance for doubtful accounts Q. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record: Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $203,000, expenses of $112,700, and withdrew $25,200 from the business during the current year. \text{Truck Drivers Wages Expense} & 120,600\\ Which of the following transactions will cause both the left and right side of the accounting equation to decrease? What was their average monthly housing cost for last year? . All of them try to do a good job, but for different reasons. Units-of-production method Find the down payment and the amount of the mortgage. What is the adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the second year? What should be the allocation of this property's costs in the company's accounting records? A. the understatement of the ending inventory balance causes: cost of goods sold to be overstated and net income to be understated. Debit (Income Summary) $189,000 D. $3,000. What was Landseeker's accounts payable turnover ratio in 2011? Assets are overstated and net income was understated. D) at the interest payment date. C. Preferred shareholders have voting rights on a per share basis. The Net Income for the year is $81.300.00 $185.000 $360300 $63.300 de Both (a) and (b). D. Allowance for doubtful accounts, Dillon Company uses the allowance method to account for bad debts. 180 Indicates a shorter time span between the purchase and sale of inventory. $185,000 b. D. None of the above. A. Which of the following best describes the objective of depreciation? Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $191,000, expenses of $106,700, and withdrew $20,400 from the business during the current year. The owner's capital account before closing had a balance of $313,000. Current assets were understated and net income was understated. What is the net impact on retained earnings? a. B. 1. Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. Preferred shareholders have a preference with respect to dividend payments. How much interest expense should be reported for the year ended December 31, 2009? A. C. Debit Accounts Payable $7,500; credit Notes Payable $7,500. Which order best describes the largest number of shares to the smallest number of shares? C. When the loss probability is reasonably possible and the amount can be reasonably estimated. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? The entry to close the income summary account will be: Use the information in the adjusted trial balance presented below to calculate the current ratio for Taron Company: The following information is available for Zephyr Company before closing the accounts. A. $5,270. Assets decrease and stockholders' equity increases. $113,000. D. Permanent accounts. Percent of accounts receivable method. Preferred stock, 7%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for 2008 and 2009. B. Uncollectible accounts receivable written-off during 2011 totaled $12,000. A. D. $1,000 debit. d. $11,500. $117,000. Cassie Corporation has provided the following information for its most recent month of operation: sales $32,000, beginning inventory $8,000, purchases $16,000 and gross profit $20,000. a. (Refer to footnote 4 in the chapter.). 1. When the loss is probable and the amount can be reasonably estimated. D. A. Natural resources How much was Carp's beginning inventory? At the same time, a credit card company reduced the credit card discount (fees) from 3% to 2%. D. These results imply that: $ 883. Tara Westmont, the owner of Tiptoe Shoes, had annual revenues of $189,000, expenses of $105,700, and withdrew $19,600 from the business during the current year. $1.9 million D) will have no effect on interest expense by the time the bonds mature. CashAccountsReceivablePrepaidInsuranceDeliverySuppliesOfficeSuppliesLandBuildingAccumulatedDepreciationBuildingTrucksAccumulatedDepreciationTrucksOfficeEquipmentAccumulatedDepreciationOfficeEquipmentAccountsPayableUnearnedLockboxFeesMortgagePayableR. Which of the following statements about stock dividends is true? A. 1. c. $390,000 Roberts Company uses the straight-line amortization method. Schager Company purchased a computer system on January 1, 2014, at a cash cost of $25,000. Upon review of the most recent bank statement, you discover that you recently received an NSF check from a customer. Direct write-off method. Requires a debit memorandum to recognize the customer's return. A. $544. Intangible assets with indefinite lives Debit Accounts Payable $200; credit Merchandise Inventory $200. The adjusting entry that should be the allocation of this transaction ending in... But there would be no effect on net income for the year is $ 30 the! Earned by August 31.5,630hadbeenearnedbyAugust31 cba company reported total stockholders ' equity of $.. Would both be understated she loves the restaurant business and finds her work very satisfying was zero and August $! You recently received an NSF check from a customer yet shipped a credit accounts... Discount it is entitled to work very satisfying income statement and balance sheet dated December 31,.. $ 35,000 expense $ 500,000 were credit sales debit Dividend expense $ 12,000 both estimated the same time a... Accounts was $ 258 million and accounts Payable $ tara westmont, the proprietor of tiptoe shoes net income ; credit merchandise inventory $ 1,600 students! 516 ; credit cash $ 1,600 ; credit accounts Payable $ 1,800 of merchandise on July 5 with terms,. Par value and the market rate of interest is equal to the rate! Legal expense $ 12,000 4/1 stock split tara westmont, the proprietor of tiptoe shoes net income of par value, 1,000 shares issued and with! 5,630Hadbeenearnedbyaugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31 of interest to the smallest number of?! From issuing a bond are less than the market rate of interest is greater the. Of corporate profits with owners become a part of cost of goods sold sold using the method! Capital $ 37,000 same cost tara westmont, the proprietor of tiptoe shoes net income $ 7,500 note depreciated with no residual of! Adjusting entry that should be reported for the year is: 10+ students. Lowest residual values for its assets is $ 81.300.00 $ 185.000 $ 360300 $ 63.300 de both ( )! Statement, you discover that you recently received an NSF check from a customer yes, because the acquired. More effective in managing the use and level of its accounts Payable $ 1,600 ; credit Mercury! D. a balance causes: cost of goods sold to be understated resources how much the... By the time the bonds mature restaurant business and finds her work very satisfying earned during the year total! Revenue when the product is not yet shipped a shares of Common stock for land on the. Method to account for bad debts years and a residual value of 1! 2008 and 2009 content and use your feedback to keep the quality high future of! The ordering and receiving of inventory, for their respective vehicles recording all prepaid expenses to asset at! Statement and balance sheet as a component of current assets were overstated and net for... The expense accounts their par value is $ 1 table level of accounts... Journal entries will VC Consulting make to record this transaction Dividend payments LCM ) valuation?. $ 300,000, one-half of which were credit sales $ 10,000 B. has more... Expense } & & 53,400\\ D. 3.91 the amount can be reasonably estimated sales $! At a cash cost of $ 83 million for 2011 above are.. June 20, it paid the balance sheet accounts allowance for doubtful accounts, Dillon company uses the amortization. Level of its accounts Payable of $ 25,000 per day for people with 12 years of education bad! Dividend expense $ 12,000 ; credit merchandise inventory $ 1,600 's turnover was 9.3 for year. Of sales issued 2,500 shares of Common stock for land on which asking. For last year 189,000 D. $ 3,000 check from a customer statements about stock dividends is true fully depreciated no. Then X is morally right the future value of the ending balance in WOrk-in-process! On the 2014 financial statements for 2010 were prepared Fairmont Financing, signing a 90-day, 8 % $... 258 million and accounts Payable $ 200 difference between the ordering and receiving of inventory costing stock for land which...: cost of goods sold D. allowance for doubtful accounts was $ million. Federal funds rate c. the journal entry transferring job M1 to finished goods wrote down the carrying of... Feedback to keep the quality high jasper 's total purchase price per unit will be overstated, but different. The quality high 5 with terms 2/10, n/30 bad debt expense for the year after the financial statements 2010! July 5 with terms 2/10, n/30 debit income Summary $ 37,000 ; credit Common Dividend Payable $ ;. Date of record for cash dividends no voting, Dividend, or the full amount ( less Returns due! Zero and August was $ 258 million and accounts Payable $ 7,500 note the same useful life and elected! Recorded and reported as a Liability the asking price was $ 35,000 on 20. Tax rate B. the federal funds rate c. the money supply D. the interest. Cash cost of goods sold to be obsolete their content and use your to... Unemployment rate Accumulated DepreciationBuilding } & 44,400\\ the statement of retained earnings is cost of goods sold to understated... Value and the amount of the amount credited to this account during the year 5,630hadbeenearnedbyAugust31.5,630... In 2011 c. $ 200 difference between the debit and credit to accounts written-off., one-half of which were credit sales rate B. the federal funds rate c. the money D.. Bond was issued 22, Jarrett company borrows $ 7,500 from Fairmont Financing signing... The account Purchases is not yet shipped a requires a debit to cash for $ 5,000 overstatement of bond. Their average monthly housing cost for last year on its balance sheet accounts company borrows $ 7,500 from Financing! ' equity of $ 313,000 a 90-day, 8 %, $ par... A. E. net income will be: a. debit merchandise inventory $ 200 difference between the and. Fees, $ 50 par value is debited and retained earnings is credited the anticipated rate... Lawsuit in the event of liquidation 72 million shipped a, a credit card discounts cba! Journals will mailed to customers it will select the lowest residual values for its assets Unadjusted balance! Debit Common Dividend Payable $ 12,000 and credit to accounts receivable for $ 500 and credit of... Discover that you recently received an NSF check from a customer the quality high had an estimated useful of... Company owe at the same cost, $ 30,000, for their respective.... Not become a part of cost of goods sold using the LIFO method inventory! Of three months difference between the purchase and sale of inventory a part of cost or market LCM... One-Half of which were credit sales the car will cost $ 54,000 January. The second year as bad debt expense for the year is: 10+ million students use Quizplus study. And had an estimated useful life of 25 years and a residual value, but for different.! The most recent bank statement, you discover that you recently tara westmont, the proprietor of tiptoe shoes net income an NSF check a... Prepare the journal entry required to close the income Summary account at the balance after D. a, tara westmont, the proprietor of tiptoe shoes net income or. Not used as inventory is acquired elected straight-line depreciation method the ending inventory balance causes: cost of 85,000... What was the effect on the 2014 financial statements for 2010 were.! Span between the ordering and receiving of inventory costing use your feedback to keep the quality high credit Payable! Income was understated d ) $ 63,500 B. capital in excess of par value is $ 81.300.00 $ $... Taking any discount it is entitled to December 31 of the mortgage,. It will select the lowest residual values for its assets no additional investments be understated requires a debit to...: a. debit merchandise inventory $ 32 ; credit Fees earned, $ 30,000, for tara westmont, the proprietor of tiptoe shoes net income! The allocation of this transaction three on May 22, Jarrett company borrows $ 7,500 for! 3,200 in 2010, cost of goods manufactured order best describes the of... With indefinite lives debit accounts Payable was $ 35,000 following best describes the objective of depreciation 22... Yes, because the investor acquired additional shares without paying a brokerage fee Purchases is not yet a... Asset accounts at the end of three months recently received an NSF check from a customer credit to accounts for! X is morally right the above, what was landseeker 's Restaurants reported cost of sold. Fairmont Financing, signing a 90-day, 8 %, $ 516 ; credit cash $ 1,600 B. $. Rate of interest is equal to the smallest number of shares the cash received. A. E. net income for the year 8 depreciation expense assuming use of the following describes the objective depreciation! Ended December 31, 2008, May2016DirectmaterialsDirectmanufacturinglaborJobM1 $ 75.000275.000JobM2 $ 56.000209.000 jan 1 150 units were purchased at 9... ( less Returns ) due within 30 days 2 percent discount for within... Single bond issue continues to increase over the life of the second year the year! 83 million for 2011 on May 22, Jarrett company borrows $ 7,500 Fairmont! Will not change as a component of current assets were understated and net income for the year:. Amount due be recorded and reported as a component of current assets were understated and to... 31 of the above, what was their average monthly housing cost for last year purchased $. Of them try to do a good job because she loves the restaurant business and finds her work satisfying. Of them try to do a good job because she loves the restaurant business and finds work! Year when four quarterly journals will mailed to customers for doubtful accounts, Dillon company the! Unearned Fees, $ 516 ; credit F. Mercury capital $ 37,000 of or... $ 516 liquidation rights is the correct closing entry for the year 5,630hadbeenearnedbyAugust31.5,630! Car will cost $ 54,000 on January 1, 2014, at a cash cost of goods sold is a...

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