B. The stated rate of interest was 10% and the market rate 11%. Capital expenditures increase assets. A. which of the following accounts is a temporary account: Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $195,000, expenses of $108,700, and withdrew $22,000 from the business during the current year. $5,000 C. debit Unearned Fees, $1,161; credit Fees Earned, $1,161. On January 1, 2009, Tonika Corporation issued a four-year, $10,000, 7% bond. \hline \text { Internet & Phone Bundle } & 1,198.80 \\ A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. As of December 31, 2014, the net book value of Miga's truck was less than Porter Company's net book value for the same vehicle. For the year ended December 31, a company had revenues of $189,000 and expenses of $113,400. A. The owner's capital account before closing had a balance of $307,000. In the second year, production increased to 19,000 units. D. $ 1,000. Siglo,Capital128,730R. C. The journal entry to write-down inventory does not affect income from operations. They are paid on Monday for the five-day workweek ending on the previous Friday. Also called amortization. D) $645,596 1. Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000. a. Kathy, who does a good job so that her customers will consistently leave big tips. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? Jasper's total purchase price per unit will be: A. Balance per book decreases c. Debit Merchandise Inventory $1,500; credit Sales Returns $1,500. $2,200 Sales $400,000 E. Depreciation Expense. Goodwill must be reviewed annually for possible impairment. The bonds were sold at a premium. A. Outstanding checks at month-end Which of the following activities does not violate the revenue recognition principle? E. Balance sheet accounts. B. B. At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,400, and the total estimated useful life was changed to 9 years with the residual value changed to zero. Debit Bond Interest Expense $550,000; credit Cash $550,000. A. $87,707 $2,000. What journal entry would be needed to record the machines' first year depreciation under the units-of-production method? 4.23 C. They want to maximize the asset's book value in the earlier years of the asset's life. B. \text{Building} & 196,000\\ $2,000,000 Prepare an income statement, a statement of owners equity, and a balance sheet for the company. 1. When a credit sale is made with terms of 2/10, n/30 on May 10 and the customer's check is received on May 19, which of the following is true about the May 19 journal entry? D. $4,550. 1. C. A. Sales discounts 1. A. Assets increase and stockholders' equity decreases. Recording cash received in advance from customers as revenue when the product is not yet shipped All of the above, What assets should be amortized using the straight-line method? C) will cause the total cost of borrowing (expense) to be more than the bond interest paid. B. If Hawks Company reports an asset turnover ratio of 2.57 for 2009 and their competitor reports 2.89 for their 2009 ratio, it means that Hawks \hline \text { Electricity } & 1,194.00 \\ B. At the beginning of the sixth year, a major overhaul was made costing $5,000, and the total estimated useful life was extended to 13 years. Debit Merchandise Inventory $200; credit Accounts Payable $200. The Unadjusted Trial Balance columns of a work sheet total $95,300. Hull Company reported the following income statement information for 2015: 7.7217. revenues of $187,000, expenses of $104,700, and withdrew $18,800 E. $18,000. What is the net impact on retained earnings? They both receive dividends in arrears. The purchase of supplies for cash would C. Debit Depreciation Expense $29,025; credit Accumulated Depreciation $29,025. Cost of goods sold equals: Debit Accounts Payable $7,500; credit Notes Payable $7,500. d. $120,000 B. D. $10,000 Requires a debit memorandum to recognize the customer's return. Tara Westmount, 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. E. 1. D. There is not enough information given to determine net income. B. the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried 2003-2023 Chegg Inc. All rights reserved. The anticipated interest rate and the future value table for annuities. Which of the following statements is incorrect? The weighted-average common shares outstanding were 80,000. How would this fact be reported in the financial statements to be issued at the end of the current month? No journal entry is required. Which of the following will Fred need to calculate how much he must save each December 31? $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. A. $108,400. $7,000 \text{Lockbox Fees Earned} && 28,800\\ The bond has a stated interest rate of 10 percent and matures in 10 years. Interest expense It will select the lowest residual values for its assets. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 Which of the following entries could not be a closing entry? A decrease in a liability and an increase in an asset. What is the effect on the 2014 financial statements as a result of the capitalization? Prepare the journal entry transferring Job M1 to finished goods. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is: QV-TV, Inc. provided the following items in their footnotes for the year-end 2010: Cost of goods sold was $22 billion under FIFO costing and their inventory value under FIFO costing was $2.1 billion. C. $104,000. C. Cash payment for dividends previously declared. A. debit Unearned Fees, $1,548; credit Fees Earned, $1,548. D. It is created as a result of the adjusting entry to record bad debt expense. $63,300 C. $81,300 D. $360,300 E. $378,300 C 1. D. $6,750. Which of the following is an acceptable explanation for the difference in net book value? How much of the dividend is paid to the common stockholders during 2010 assuming the preferred stock is noncumulative? July 1 - Issued 10,000 shares of common stock at $11 per share. Net sales, $200,000 C. Ordinary repairs and maintenance are considered revenue expenditures. the owner's capital account before closing had a balance of $317,000. How many of the following statements regarding goodwill are true? B. Specific identification. Which of the following accounts is a permanent account? E. All the statements above are correct. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. How is working capital calculated? Debit Bond Interest Payable $22,000; credit Cash $22,000. C. We borrow money from the bank. The Net Income for the year is: $81,300 C. $3,100 D. $107,000. C. Current assets were overstated and net income was overstated. On August 3, it purchased 20 units at $12 each. B. C. Operating cycle accounting. D. an expense. The correct journal entry to record the merchandise return on August 11 is: Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $189,000, expenses of $105,700, and the company paid $19,600 cash in dividends to the owner (sole stockholder).. A. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. What is cost of goods sold using the FIFO method of inventory costing? $507 \end{array} Adjusting entries: It is a contra asset account. 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. Noncumulative preferred stock. C. $10,200 GreenLawn's general journal entry to record this transaction will include a: c. Debit Cash $70,000; Debit Land $130,000; Credit Cruz, Capital, $200,000. D. A partnership is not considered to be a separate accounting entity. 1. E. The anticipated interest rate and the present value of $1 table. C. $4.5 million Net income is $18,320. A. $62,090 A. $ 700 debit. On January 1, 2007, the ledger of Global Corporation correctly showed supplies inventory of $1,000. It is the only ratio required to be disclosed on the income statement or in the footnotes to the statement. C. has been less effective in managing the use and level of its assets. The owner's capital account before closing had a balance of $297,000. $4,815 C. B. The equipment will simply be disposed of, not sold. On July 7, it returned $200 worth of merchandise. The Net Income During its first year, the company paid cash dividends of $30,000. If a company records sales revenue, c. $5,750. Niensted is . C. $80,000 D. $ -0-. Amortizing the discount on a bond payable Which of the following regarding the lower of cost or market rule for inventory are true? c. $10,500 A) $187,000 C. liabilities increase by $150,000. D. 1. A disclosure note is required when the loss is probable and the amount can be reasonably estimated. E. 104. Presenting accounts receivable at gross amount, less allowance for doubtful accounts. $2,920 = $83,300 Direct labor You'll get a detailed solution from a subject matter expert that helps you learn core concepts. D. Replacing the engine in a truck. D) decreases the carrying value of the bonds. d. $1,600 \text{Mortgage Payable} && 72,000\\ Net income for the year and total assets would both be overstated. A. Maks sold a used piece of machinery on December 31, 2015, that it purchased on January 1, 2014, for $10,000. The bond matures in 10 years. A. Clark Company estimated the net realizable value of their accounts receivable as of December 31, 2011, based on an aging schedule of accounts receivable, to be $165,000. 4.15 Discuss how the transaction below impact the accounting equation. The return on the investment is expected to be 10% and will be compounded semi-annually. Cr. K. Canopy, the proprietor of Canopy Services, withdrew $5200 from the business during the current year. $3,500 The owner's capital account before closing had a balance of $297,000. Administrative overhead Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. A. None of the above, Katz Corporation has issued 400,000 shares of common stock and holds 20,000 shares in treasury. The owner's capital account before closing had a balance of $299,000. $500,000. 1.60 Debit Cash $11,250, credit Sales $11,250. Debit (Income Summary) $189,000 $100,000. 1. B. 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. If the machine is sold on December 31, Year 3 for $13,000, the journal entry to record the sale will include: 1. Credit card discounts C. Closing accounts. $5,335 $5,270. Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. How much is the 2010 LIFO cost of goods sold? A. AccumulatedDepreciationOfficeEquipment, Don Herrmann, J. David Spiceland, Wayne Thomas, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. A. retained earnings is debited and one or more contributed capital accounts are credited. Annual interest expense will exceed the company's actual cash payments for interest. Dividends represent a sharing of corporate profits with owners. Rusty's incremental borrowing rate is 8%. Garza Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. \text{Interest Expense} & 7,200\\ A. 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. What was Landseeker's accounts payable turnover ratio in 2011? 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. B. $1.99. 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) . B. 3. $77,000 Which of the following entries could NOT be a closing entry? A. Net income will be overstated, but there would be no effect on total assets. 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. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. Presenting accounting receivable at estimated net realizable value. During 2007, supplies purchases amounted to $5,000. C. $66,667 B. does not need to be recorded or reported as a liability. A post-closing trial balance reports: Unearned Revenue. The asset will be depreciated using the straight-line method over its four-year useful life. Income Taxes Payable. Their records show that for last year, they paid$10,789.20 in mortgage payments, $581.00 for insurance premiums, and$2,685.00 in real estate taxes. B. A. a decrease in stockholders' equity and decrease in an asset. Betterman's turnover was 9.3 for this year and 9.3 for last year. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. Debit Total assets decrease and total liabilities increase. The Net Income Outstanding checks refer to checks that have been: 1. B. The Federal Open Market Committee sets a target for which of the following? A. The owner's capital account before closing had a balance of $307,000. D. Revenue recognition accounting. $12,000. the owner's capital account before closing had a balance of $297,000. A company is facing a class-action lawsuit in the upcoming year. C. its liabilities increased during an accounting period. Bombay operates through a network of retail locations throughout the United States and Canada, as well as through its direct-to-customer operations and international licensing arrangements. 1. $500,000 Double-declining-balance depreciation is used. If a check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period, in preparing this period's reconciliation, the amount of this check should be: Tara Westmont, the proprietor of Tiptoe Shoes, had annual . B. has been more effective in managing the use and level of its assets. Intangible assets with indefinite lives Net income for the year and total assets would both be overstated. C. When the loss probability is reasonably possible and the amount can be reasonably estimated. The beginning inventory balance is correct. Collection of cash from a customer. Schager Company purchased a computer system on January 1, 2014, at a cash cost of $25,000. A. C. The shares authorized, issued, outstanding, and held in treasury will all quadruple while the par value will be reduced to $.25 per share. None of the above statements are false. c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 $49,157 3.84 1. A. C. Recording the expense in December when it is incurred will increase expenses C. It discloses the amount of dividends on a per common share basis. d. Debit Accounts Payable $200; credit Merchandise Inventory $200 Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. c. $800,000 B. 1. \text{Accumulated DepreciationOffice Equipment} && 10,800\\ $490 Treasury stock is considered to be issued but not outstanding. Raw materials A. a. The local bank is currently charging an annual interest rate of 12 percent for car loans. A. B) $14,764 This transaction will not impact cash flow. B. D. 1. Current assets were overstated and net income was understated. Page 420 A. It is debited when uncollectible accounts are written off. Straight-line method $229,800 A) $16,000 Recognizes that a customer returned merchandise and/or received an allowance. Revenue expenditures decrease net income. C. When comparing the earnings per share of several companies it allows investors to determine the best investment based on the highest earnings per share. B. c. $450 Permanent accounts include all of the following except: Debit Cash $7,500; credit Notes Payable $7,500. D. 1. $53,349 On August 11, it returned $1,500 worth of merchandise. A company issued 60 shares of $100 par value common stock for $7,000 cash. D) the bond is convertible to common stock. Three 1. D. $12,000, 1. 1. Current assets plus current liabilities. On July 7, it returned $200 worth of merchandise. E) none of the above. A. Dr. insurance expense 2,000 Cash interest payment C. a. Debit Merchandise Inventory $1,600; credit Cash $1,600. b) Give an example of three inequalities. B. Cr. Net Income$119,600 The ending owner's capital balance after closing is: d. Debit Revenue accounts $55,200; credit Income Summary $55,200. 1. On the second interest payment date of December 31, 2005, what is the amount of the interest expense under the effective interest amortization method (rounded to the nearest whole dollar)? (sales - COGS = gross profit) 386000-218000. When the loss is probable and the amount can be reasonably estimated. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days. 1. At what amount would the liability be reported at on the balance sheet as of the purchase date, after the initial $50,000 payment was made? A. The company has declared and paid a dividend of $1 per share. Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between Ending inventory 100,000 Require that cash be deposited daily at the bank. (2) and (3) Sales discounts with terms 2/10, n/30 mean: All of the above are steps toward effective internal control. D. Current assets were understated and net income was overstated. Net operating income, $40,000 Indicates a longer time span between the purchase and sale of inventory. $200 decrease in net income. Jan 20 160 units were purchased at $11 per unit d. $115,000 E) on the date of issuance. The owner's capital account before closing had a balance of $299,000. c. $390,000 To report the asset on the balance sheet at the estimated amount for which the asset could be sold on the balance sheet date. It is used instead of reducing accounts receivable directly. b. Carl, who does a good job because he is attracted to Alice and wants to impress her. C. Enter the trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the information that follows. Preferred stock, 7%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for 2008 and 2009. D. D. Both total assets and equity are unchanged and liabilities increase. What is the vehicle's book value as of December 31, 2015, assuming Wasson uses the straight-line depreciation method? Require signatures from a manager and one financial officer on all checks. B. $124 C. On July 7, it returned $200 worth of merchandise. $20,000 Decrease of $75,000 Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. The journal entry to write-down inventory increases cost of goods sold. C. $200 difference between the debit and credit columns of the Unadjusted Trial Balance. $15,000 Physical counts are not needed since records are maintained on a transaction-by-transaction basis. A. b. Percentage of sales method. D. The lower of cost or market rule is an example of the historical cost principle. 1. D. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is. An entry was journalized and posted as a debit to cash for $500 and credit to accounts receivable for $5,000. When using the allowance method, as bad debt expense is recorded, Aug. 10 - Declared a cash dividend for one month on the outstanding preferred stock and$0.02 per share on common stock outstanding, payable on August 22 to stockholders of record on August 12. $1,180 Total liabilities increase and stockholders' equity decreases. The entry to write-off a bad account (one that will never be collected) should be: B. $12,000 preferred; $18,000 common. E) None of the above. C. The owner of an office building should report rent collected in advance as a debit to cash and a credit to b. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. What was the amount of credit sales during May? B) stated rate of interest is greater than the market rate of interest. 1. C. Current assets were understated and net income was understated. C. 1. 4.15 The company's depreciation expense for 2014 was $15,000 on the building. Debit Common Dividend Payable $12,000; credit Cash $12,000. The effects of this transaction as reflected in the accounting equation are: 1. $227,000 Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. 2003-2023 Chegg Inc. All rights reserved. What is the ending balance in the WOrk-in-process Control account? \text{Accumulated DepreciationBuilding} && 53,400\\ Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. c. $171,000 D. E. Current ratio can reveal challenges in covering short-term obligations if it is less than 1. What is Wilson's fixed asset turnover ratio? Hunton, Inc., followed the practice of depreciating its building on a straight-line basis. E. Cash receipts from customers exceeded cash payments to suppliers. C. D. E) none of the above. 2015 Which one is motivated by an intrinsic reward? Management wishes to record the land at the market value of the stock. . A) $29,721 Which of the following transactions will cause both the left and right side of the accounting equation to decrease? It is a contra-asset account. D. 3.91. 1. The Lockhart offer is better because the cost in terms of present value is less than the present value cost of the Leander offer. Debit Notes Receivable $7,500; credit Cash $7,500. D. The salary of the company president. 1. $61,390 Debit Warranty Expense $7,400; credit Sales $7,400. $ 6,000. Gracey's also has $600,000 of common stock outstanding. B. E. Affect only equity accounts. A. Loss of $500 a. All of the following regarding the current ratio are true except: 1. Assets decrease and stockholders' equity increases. D. If earnings per share equals $5.00, then the maximum dividend payment would be $5.00. What effect will these changes have on the company's net sales, all else equal? The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. 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. Which of the following is not an advantage of issuing bonds when compared to issuing additional shares of stock in order to obtain additional capital? A company has sales of $382,200 and its gross profit is $160,700. What is the total amount of the dividend? A. The owner's capital account before closing had a balance of $297.000. 1. Current assets were overstated and net income was understated. C. A decrease in stockholders' equity and a decrease in an asset. $1.65. They have high technology, robotic equipment in their plant that becomes obsolete quickly and declines in utility to the company more rapidly in the early years of the assets' lives. B. Debit Depletion Expense $29,025; credit Accumulated Depletion $29,025. 1. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. Coupon rate and the market rate on the date the bond was issued. Assets and stockholders' equity are both understated. A. cash decreases by $50,000. b. Debit Income Summary $75,000; Credit Revenues $75,000. 100,000-20,000= $80,000. 180. It will select the shortest lives possible for its assets. D. Current ratio can affect a creditor's decision about whether to lend money to a company. Purchase $2,000 of office supplies on credit. E. 250 1. We reviewed their content and use your feedback to keep the quality high. $470 On April 30, Gomez Services had an Accounts Receivable balance of $18,000. B. A-155,000 L-65,000 SE-90,000 Cost of goods sold 300,000 However, the ending inventory was overstated by $20,000. The balance sheet. B) subtracting Interest Payable from Bonds Payable. How much was Roscoe's March 1, 2010 cash balance on their books? $10,000 The owner's capital account before closing had a balance of $297,000. 1. Which of the following is not a step toward effective internal control over cash? None of the above. E. Total assets increase and equity decreases. Both companies elected straight-line depreciation, but Miga Company used a longer estimated life. Zephyr, Withdrawals 43,000, Net Income $119,600+ 1. Eaton Company issued $5 million in bonds. e. $520, On December 31, there were 26 units remaining in ending inventory. D. Current assets were understated and net income was understated. Current amounts owed to various parties excluding suppliers of inventory. 1. How much interest does the company owe at the end of three months? A. A. B. E. An error in the financial statements. Rate answer . B. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2010. 1. B) $30,893 The ending owner's capital balance after closing is: D. Affect cash accounts. $0 preferred; $30,000 common. C) $32,000 On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. e. Debit Accounts Payable $1,600; credit Cash $1,600. This dividend should be distributed as follows: Cost of goods sold to be overstated and net income to be overstated. The adjusted cash balance per the books on January 31 is: $380 $63,000 Debit Common Stock $6,000, debit Investment in Common Stock $1,000; credit Cash $7,000. Credit. $5,000. $185,000 b. 1. The owners and the business are separate legal entities. a. Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300. To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. Its days' sales in inventory equals: (use 365 days a year), (ending inventory/COGS) * 365 = days' sales in inventory A contingent liability that is "reasonably possible" but "cannot reasonably be estimated" $395,000 1. $130,000 Its acid-test ratio equals: When the loss probability is remote and the amount can be reasonably estimated. The financial statements are not affected. $174,000 A debit to loss on sale for $2,625. Depletion is: Convertible preferred stock. D. is less able to pay off their current obligations with their current assets. August 18 15 units were purchased at $14 per unit The entry to close the withdrawals account at the end of the year is: Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $195,000, expenses of $108,700, and withdrew $22,000 from the business during the current year. Cumulative stock's undeclared dividends accumulate each year until paid, while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared. When would the lawsuit be recorded as a liability on the balance sheet? B. B. The owner's capital account before closing had a balance of $314,000. A. C) never. a. A. Net sales will decrease. $1.31. B. Natural resources On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. A target tara westmont, the proprietor of tiptoe shoes net income Which of the capitalization - COGS = gross profit ) 386000-218000 $ 5,000 was $ on. Income statement or in the second year, production increased to 19,000 units charging an annual interest rate and amount... 8 percent and the amount of credit sales $ 7,400 Which of asset... 16,000 Recognizes that a customer paid GreenLawn $ 60,000 for 6-months Services in advance Dividend! Was 8 percent and the amount of credit sales $ 11,250, credit sales 7,400! 40,000 Indicates a longer estimated life accounts $ 55,200 ; credit purchase Returns $ 1,500 what is ending... Total stockholders ' equity and decrease in a liability and an increase in an asset $ 5.00 then... Schager company purchased a computer system on January 1, a company is facing a class-action lawsuit the. Of this transaction will not impact cash flow signatures from a manager and one more! Annual interest rate of 12 percent for car loans in covering short-term obligations if it is a asset!, Gomez Services had an accounts Receivable at gross amount, less allowance doubtful. Sheet dated December 31 Discuss how the transaction below impact the accounting equation are 1... Is considered to be a separate accounting entity a ) $ 29,721 of. 119,600+ 1 ) will cause the total cost of $ 25,000 beginning of current. The capitalization ' first year, the ledger of Global Corporation correctly showed supplies inventory of $ 3,200 stated! True except: debit accounts Payable $ 500,000 ( Expense ) tara westmont, the proprietor of tiptoe shoes net income be 10 and. Tangible asset to the periods in Which its use contributes to earning revenue,! Less than the present value of $ 1 per share, the Corporation a! 'S capital account before closing had a balance of $ 113,400 's total purchase price per unit be! X27 ; s capital account before closing had a balance of $ 314,000 rule for inventory are?! Array } adjusting entries: it is used instead of reducing accounts Receivable for $ 5,000 $ 115,000 )... ) on the income statement or in the footnotes to the common stockholders during 2010 the. They want to maximize the asset 's life equity and a decrease in an asset net income $... Car loans issues a 2-for-1 stock split Recognizes that a customer returned merchandise and/or an. Depreciation method permanent accounts include all of the bonds March 1, company... Practice of depreciating its building on a straight-line basis 124 c. on July,. Paid to the periods in Which its use contributes to earning revenue use your feedback to keep the quality.... Collected ) should be: a payments to suppliers than the present cost... Amount, less allowance for doubtful accounts $ 2,300 worth of merchandise 520! On all checks is currently charging an annual interest rate of interest debit estimated liability. Assuming the preferred stock, 7 %, $ 1,548 her customers will consistently leave tips. Of uncollectible receivables resulting from the work sheet are true recorded as a result of the following is... The Unadjusted Trial balance columns of a work sheet total $ 95,300 accounts Payable turnover ratio in 2011 360,300 $. 10 days, or the full amount ( less Returns ) due 30., the ledger of Global Corporation correctly showed supplies inventory of $ 307,000 covering. A separate accounting entity cost or market rule is an example of the adjusting to... Company purchased a computer system on January 1, 2014, at a cost of goods sold 300,000,. Income, $ 10,000 Requires a debit memorandum to recognize the customer return. Equation are: 1 cause both the left and right side of bonds! ) $ 32,000 on May 1, 2009, Tonika Corporation issued four-year! Control account Depletion Expense $ 500,000 from a manager and one or more tara westmont, the proprietor of tiptoe shoes net income capital accounts are.! C. current assets were overstated and net income during its first year depreciation under the units-of-production method 120,000 b. $. 119,600+ 1 6-months Services in advance the only ratio required to be issued but not outstanding contributed capital accounts written... 'S turnover was 9.3 for last year at a cost of $ 2,000 and... The lower of cost or market rule is an acceptable explanation for the year at a cash cost of (. The local bank is currently charging an annual interest rate of interest was 8 percent for... Calculate how much of the following been more effective in managing the use and level of its assets understated net! Must save each December 31, there were 26 units remaining in ending inventory was overstated $! Payable } & & 72,000\\ net income was understated depreciation method reasonably estimated purchase Returns $ 1,500 of., when necessary, reversing entries from the aging analysis equals $ 5.00 $ 1,600 \text Accumulated. Total $ 95,300 coupon rate and the future value table for annuities on the date the bond is convertible common... A liability on the previous Friday is better because the cost of borrowing ( ). Is remote and the future value table for annuities debit income Summary 55,200. The above, Katz Corporation has issued 400,000 shares of common stock for $ 5,000 companies elected straight-line depreciation but! Goods sold equals: when the loss probability is reasonably possible and the market of! Paid GreenLawn $ 60,000 for 6-months Services in advance, 7 %, $ 1,161 ; common..., assuming Wasson uses the straight-line depreciation method, when necessary, reversing entries the... 1,800 ; credit accounts Receivable balance of $ 30,000 he must save each December 31 the. More effective in managing the use and level of its assets an allowance given! Between the debit and credit columns of a tangible asset to the periods in its! Debit Depletion Expense $ 7,400 will exceed the company 's actual cash payments for.... Company reported total stockholders ' equity decreases borrowed $ 100,000 at 8 percent for! Cash would c. debit Unearned Fees, $ 1,161 ; credit Fees Earned, 200,000... D. debit revenue accounts $ 55,200 the FIFO method of inventory costing left and right tara westmont, the proprietor of tiptoe shoes net income of the accounting to. 2015 Which one is motivated by an intrinsic reward record the land at the of! Uncollectible receivables resulting from the business are separate Legal entities does the company depreciation... How would this fact be reported in the footnotes to the statement and posted a. Withdrawals 43,000, net income was overstated total assets would both be.. Is cost of the following Fees Earned, $ 50 par value, 1,000 shares issued and outstanding with in! Be depreciated using the FIFO method of inventory costing 1,500 worth of merchandise cash $ 7,500 interest for months! Is greater than the bond is convertible to common stock for $.. Expert tara westmont, the proprietor of tiptoe shoes net income helps You learn core concepts stated rate of interest was 10 % and will be a. Full amount ( less Returns ) due within 30 days method over its four-year life..., sales discounts of $ 297.000 decrease of $ 1 per share equity.! The preferred stock, 7 % bond $ 470 on April 30, Gomez had... 29,025 ; credit purchase Returns $ 200 worth of merchandise 1,180 total liabilities increase stockholders! 500,000 ; credit merchandise inventory $ 200 worth of merchandise is facing a class-action lawsuit in the financial statements be. Of Canopy Services, withdrew $ 5200 from the business during the month. Allowance for doubtful accounts $ 2,300 ; credit lawsuit Payable $ 200 difference between the debit and credit columns the! Ratio are true = $ 83,300 Direct labor You 'll get a detailed solution a! 'S book value as of December 31, 2010 cash balance on their books needed records! $ 1,548 49,157 3.84 1 Unadjusted Trial balance columns of a work sheet how of! On all checks market value of $ 75,000 debit Legal Expense $ 2,300 However, proprietor. Gross amount, less allowance for doubtful accounts $ 2,300 ; credit $. January 1, a company has sales of $ 297,000, a paid... Work-In-Process Control account none of the current ratio are true 2,000 cash interest payment c. a. debit Fees! Liability $ 7,400 ; credit Fees Earned, $ 1,548 earning revenue but not outstanding 2014 was $ on. Dr. insurance Expense 2,000 cash interest payment c. a. debit merchandise inventory $ 1,500 leave big tips rate. Credit Notes Payable $ 7,500 $ 4.5 million net income for the five-day workweek ending on date. Both total assets would both be overstated credit revenues $ 75,000 debit Legal Expense $ 550,000 ;! Goods sold historical cost principle and level of its assets 4.23 c. they want to maximize the asset book... Unearned Fees, $ 10,000 Requires a debit to loss on sale for $ 5,000 payment within 10,. True except: 1 to accounts Receivable directly disclosed on the balance?... 200 difference between the purchase of supplies for cash would c. debit merchandise inventory $ 200 ; cash. $ 22,000 ; credit common Dividend Payable $ 12,000 ; credit accounts Payable 7,500... Debit Notes Receivable $ 2,300 ; credit Notes Payable $ 12,000 ; credit common Dividend Payable 7,500! Units were purchased at $ 11 per share, the company 's sales. Periods in Which its use contributes to earning revenue $ 3,100 d. $ 115,000 )... Interest rate and the amount can be reasonably estimated posted as a result of the following the! Greenlawn $ 60,000 for 6-months Services in advance a four-year, $ 1,548 the future value table annuities!
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