d. $120,000 Presenting accounts receivable at gross amount, less allowance for doubtful accounts. Indicates a shorter time span between the purchase and sale of inventory. Alice, the owner of a small restaurant, employs four different servers on her day shift. $30,000. 1. July 1 - Issued 10,000 shares of common stock at $11 per share. Ulrich had cost of goods sold of $6.7 million, ending inventory of $2.2 million, and average inventory of $1.9 million. A company has 4 million common shares authorized, 2.5 million shares issued and 100,000 treasury shares. Credit card discounts A) $16,000 Only the shares outstanding will quadruple to 4.8 million and the par value will be reduced to $.25 per share. Yes, because the investor acquired additional shares without paying a brokerage fee. a) What is an inequality? B. B. capital in excess of par value is debited and retained earnings is credited. The owner's capital account before closing had a balance of $297,000. The balance in the inventory account is updated with each inventory purchase and sale transaction. Which of the following describes the effect of the inventory error on the 2014 financial statements? To estimate the current market value of the asset. The journal entry to write-down inventory does not affect pretax income. Gross profit $100,000 2 Assets are overstated and net income is overstated. Presenting accounts receivable net of allowance for doubtful accounts. C. The charter authorized the issuance of 500,000 shares. A company issued 100,000 shares of common stock with a par value of $1 per share. E. C. A decrease in stockholders' equity and a decrease in an asset. 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: b. B) stated rate of interest is greater than the market rate of interest. a. How much was Carp's beginning inventory? B. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The owner's capital account before closing had a balance of $312,000. If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? $210 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).. C. D. 1. $1,060 1. Reflects an increase in amount due from a customer. Axle has the better turnover for both years. Its days' sales in inventory equals: (use 365 days a year), (ending inventory/COGS) * 365 = days' sales in inventory When the bond is issued, the market rate of interest is 10 percent. Debit Bond Interest Payable $22,000; credit Cash $22,000. \text{Unearned Lockbox Fees} && 8,340\\ The machine has a useful life of 8 years and a residual value of $10,000. E. Written, recorded, sent to payees, and received and paid by the bank. Issued by the bank. 1. The ending owner's capital balance after closing is: __ $186,000 __ $63,400 __ $81,800 __ $361,400 __ $379,800 The market rate of interest has increased since the bonds were sold. C) $32,000 The company signed a note payable with interest at 6 percent per year. Annual interest expense for a single bond issue continues to increase over the life of the bonds. C. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. Assume earnings per common share are$1.00 and market price per common share is $20. Calculate dividend yield, price/earnings ratio, and return on equity. D. an audit of financial statements helps investors and others to know that they can rely on the information presented in the financial statements. a. B. When the bond was issued the market rate of interest was 10 percent. Net Income$119,600 If the ending balance in accounts payable decreases from one period to the next, which of the following is true? A disclosure note is required when the loss is reasonably possible and the amount cannot be reasonably estimated. $18,000. $2,920. It is computed by dividing net income by weighted average common shares outstanding. The current period's entry to record the warranty expense is: Siglo,Withdrawals30,000DeliveryServiceRevenue283,470LockboxFeesEarned28,800TruckDriversWagesExpense120,600OfficeSalariesExpense44,400Gas,Oil,andTruckRepairsExpense31,050InterestExpense7,200625,836625,836\begin{array}{lrr} On July 12, it paid the full amount due. C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. Current ratio is calculated by dividing current assets by current liabilities. The present value of an annuity of $10,000 per year for 10 years discounted at 8 percent is what amount? When a stock dividend (on par value stock) is declared and issued Increases the market value of the Bonds Payable. A gain on sale of $12,000. On July 28, it paid the full amount due. Two C. A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. Expired insurance, 306030603060$b. 1. Revenue expenditures decrease net income. D. C. d. .52 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. A. B. merchandise inventory refers to products that a company owns and plans to sell to customers, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. Credit. Assets and stockholders' equity are both understated. D. Recording revenue in December 2009 for units sold but not yet paid for in full, 1. $6,000. An NSF check returned on a customer account Factory overhead, Consider the following information: beginning inventory 10 units @ $20 per unit; first purchase 35 units @ $22 per unit; second purchase 40 units @ $24 per unit; 50 units were sold. The local bank is currently charging an annual interest rate of 12 percent for car loans. If a company records prepayment of expenses in an asset account, the adjusting entry when all or part of the prepaid asset is used or expired would: 1. D) $362,500 a. 1. 1. Eaton Company issued $5 million in bonds. The owner's capital account before closing had a balanc e of $315,000. C. Goodwill SigloDeliveryServiceTrialBalanceAugust31,2014, Cash10,072AccountsReceivable29,314PrepaidInsurance5,340DeliverySupplies14,700OfficeSupplies2,460Land15,000Building196,000AccumulatedDepreciationBuilding53,400Trucks103,800AccumulatedDepreciationTrucks30,900OfficeEquipment15,900AccumulatedDepreciationOfficeEquipment10,800AccountsPayable9,396UnearnedLockboxFees8,340MortgagePayable72,000R. Which statement regarding treasury stock is false? 35. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. Jan 29 150 units were sold 28 units-11 units = 17 units* 205 = 3485 ending inventory. Current ratio helps to assess a company's ability to pay its debts in the near future. Which one is motivated by an intrinsic reward? $1,090 A. 1. C. for the year is: 1. (sales - COGS = gross profit) 386000-218000. The bonds were sold at a discount. \text{Building} & 196,000\\ 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. E. An error in the financial statements. A. $150,000 \end{array} Cash payments to suppliers exceeded current period purchases. $233,600 - $43,000 = $190,600. Both (a) and (b). a. Debit Accounts Payable $1,500; credit Cash $1,500. Require that cash be deposited daily at the bank. \hline Date of record. B. increase total assets. 1.600 pipes were produced for Job M1. B. If a period-end inventory amount is reported in error, it can cause a misstatement in all of the following except: The Net Income for the year is: $81,300 Net sales will not change. The owner's capital account before closing had a balance of $307,000. Debit Notes Receivable $7,500; credit Cash $7,500. drives up the domestic price of sugar and increases their B. The ending owner's capital balance after closing is: Multiple Choice $187,000 $82,300 $381,300 $362,500 $63,500 Treasury stock is considered to be issued but not outstanding. C. Closing accounts. What was Landseeker's accounts payable turnover ratio in 2008? If total revenues for the period are $60,200, total expenses are $43,600, and withdrawals are $9,900, what is the ending balance in the F. Mercury, Capital account after all closing entries are made? C) less than the market rate of interest. \text{Delivery Supplies} & 14,700\\ C. $21,500 C. $279,300 GreenLawn Co. provides landscaping services to clients. b. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. Debit Investment in Common Stock $7,000; credit Cash $7,000. $66,667. How much was Cassie's ending inventory? Current assets plus current liabilities. The issue price was $9,668 based on an 8% effective interest rate. Shares outstanding, shares issued, shares authorized. D. \hline \text { Internet & Phone Bundle } & 1,198.80 \\ Estimated depreciation on the building,$14,400, \quad\quad e. Estimated depreciation on the trucks, 15,45015,45015,450$f. What is the dollar amount of net sales? $4,500, What is the present value factor for an annuity of five periods and an interest rate of 10 percent? D. A. \text{R. Siglo, Withdrawals} & 30,000\\ The Leander offer is better because the cash down payment is less. The bonds were issued at a premium. B. \hline \text { Gutter Replacements } & 2,560.00 \\ D. Williams Company purchased a machine costing $25,000 and is depreciating it over a 10-year estimated useful life with a residual value of $3,000. $1,000 credited to an expense account and debited to a liability account. What is the correct closing entry for the revenue accounts? Increase of $225,000 1. A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semi-annually. $240,000. The F. Mercury, Capital account has a credit balance of $42,000 before closing entries are made. A bond with a face value of $100,000 is sold on January 1. He anticipates that the car will cost $54,000 on January 1, 2016. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. A. D. Amortizing a bond discount: B. 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. A. 1. C. A disclosure note is required when the loss is reasonably possible and the amount can be reasonably estimated. Cost of goods sold. It will estimate higher residual values for its assets. B) decreases the face value of the bonds. 1. A. The company's depreciation expense for 2014 was $15,000 on the building. On July 28, it paid the full amount due. Net income will be overstated, but there would be no affect on total assets. Political corruption. Specific identification. Siglo,Capital128,730R. They are paid on Monday for the five-day workweek ending on the previous Friday. $470 B. $12,000 preferred; $18,000 common. The journal entry to write-down inventory decreases gross profit. A. The journal entry to record the declaration of the cash dividend is: $3,500 D. Real accounts. Select one or more of the choices shown. D. $ 1,000. How much interest will be paid on December 31, 2014? The owner's capital account before closing had a balance of $297,000. Gross accounts receivable less bad debt expense in the asset section of the balance sheet. Net sales will increase $8,000 Assume that year ended December 31, is a Wednesday and all employees will be paid salaries for five full days on the following Monday. 180. Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. A debit to Sales Returns and Allowances and a credit to Accounts Receivable: What should be the allocation of this property's costs in the company's accounting records? E. All the statements above are correct. Hull Company reported the following income statement information for 2015: 3.84 Which of the following describes the correct action to be taken when preparing your bank reconciliation? The current market rate is 8%. Recognizes that a customer returned merchandise and/or received an allowance. D. account before closing had a balance of $299,000. 1. Gain of $1,500 1. 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: Presenting accounts receivable less bad debt expense and write-offs. E. $9,000. During its first year, the company paid cash dividends of $30,000. Failure to record amortization expense on a patent during the current year will result in which of the following? D) $33,420 None of the above. E) None of the above. Sales $400,000 Replacement of all florescent light tubes in an office. A. The retained earnings account before closing had a balance of $312,000. Betterman is collecting its receivables more quickly than Axle in both years. $5,335 D. $104,500. The journal entry to recognize the potential loss is: (1) a. Debit Unearned Revenue $45,000; credit Cash $45,000. 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. 1. All of the above statements are true. B. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2008. $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. B. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? A. $8,800. Land $75,000; Land Improvements, $30,800; Building, $46,200. Goodwill is not reported unless purchased in an exchange. $229,800 1. Total assets decrease and equity increases. Compute the following: Gain and related tax on the sale if the asset is sold now for $56,060\$56,060$56,060. Fred wants to save enough money each year so that he can purchase a sports car in January 2016. Experts are tested by Chegg as specialists in their subject area. D. Franchises, 1. $3,520. B. D. 1. $100,000 The owner's capital account before closing had a balance of $307,000. \hline \text { Electricity } & 1,194.00 \\ $188,000 B. What was the net income earned during the year? On March 2, it purchased 10 units at $22 each. C. How many of the following statements regarding goodwill are true? ((10*12)+(15*14))/(10+15) = 13.20 Assets are understated and net income is overstated. $15,000 On January 1, 2005, the Homer-Preston Company issued 5-year bonds with a face value of $400,000, a stated rate of 8%, and interest payments due every six months on June 30 and December 31. B. Affect only balance sheet accounts. The Net Income Cost of goods sold is increased as sales are recorded. $250 1. Gracey's also has $600,000 of common stock outstanding. Gain of $500 The owner's capital account before closing had a balance of $299,000. The interest is payable annually each December 31. The company's earnings per share is: On January 1, a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. The cash receipt was recorded as unearned fees. B. D. b. D. is less able to pay off their current obligations with their current assets. B. retained earnings will decrease. A. B. debit Unearned Fees, $516; credit Fees Earned, $516. C. $2,000. Participating preferred stock. 1. D. An increase in an asset and an increase in stockholders' equity. C. $3,100 Was it within the 35% recommendation? Tinker's inventory turnover during 2014 was closest to: The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. C. It is reported on the balance sheet as a current liability. Transaction analysis, posting to the ledger, journal entries Question Answered step-by-step C. A portion of the $100,000 plus interest in the Current Liability section and the remainder of the principal plus interest in the Long-Term Liability section. $5,000 Debit Accounts Payable $7,500; credit Notes Payable $7,500. Roberts Company uses the straight-line amortization method. D. The company will be unable to declare a 4/1 split because they do not have enough authorized shares to issue the needed 4.8 million shares. C. $13,000 A. Using the FIFO perpetual inventory method, what is the value of inventory after the October 4 sale? 0.50. Bonds payable will be credited for the par value of the bond. A debit to loss on sale for $2,625. The purchase of supplies for cash would E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. b. Debit Cash $1,600; credit Accounts Payable $1,600. The cost of shipping for the merchandise is $7 per unit. \hline \text { Window Repairs } & 580.10 \\ B) $679,575 D. Either (b) or (c), 1. $19.8 billion When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced. e. $9,424, Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. The company's sales for the current period are $185,000. 1. Debit 11 units are sold on October 4. C. The shares authorized, issued, outstanding, and held in treasury will all quadruple while the par value will be reduced to $.25 per share. 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. an asset other than cash. A. The retained earnings account before closing had a balance of $312,000. B. Fund Transfer automatically paid by the bank monthly, not yet recorded by Maxi E. B. C. The debit to cash will be less than the credit to accounts receivable on May 19. The owner's capital account before closing had a balance of $314,000. It is estimated that the policy benefits U.S. sugar The beginning inventory balance is correct. b. B. E. Current basis accounting. A. Its gross profit equals $168,000, true The ending retained earnings balance after closing is: $200,000 Business: tara westmont the stockholder of tiptoe shoes inc had . Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $202,000, expenses of $112,200, and withdrew $24,800 from the business during the current year. RowanCompany,May2016DirectmaterialsDirectmanufacturinglaborJobM1$75.000275.000JobM2$56.000209.000. \text{Direct materials} & \text{\$ 75.000} & \text{\$ 56.000}\\ A. The market rate on the January 1, 2005, issue date was 10%. A. After posting the entries to close all revenue and expense accounts, the income summary account of Cleaver Auto Services has a $5,900 debit balance. On April 1, Griffith Publishing Company received $1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. $82,300 is the correct answer. A. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. E. D. (sales - gross profit = COGS) 382,800-160,700, A company had sales of $386,000 and cost of goods sold of $218,000. Cr. net purchases during the period and ending inventory. Purchase of merchandise on credit. In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information: B. D. None of the above. Dr. insurance expense 2,000 D. C. is accounted for in exactly the same manner as a stock split. A company wishes to report the highest earnings possible for financial reporting purposes. C. Is recorded when a customer takes a discount. What is the amount of the cost of goods sold for this sale? \text{Office Supplies} & 2,460\\ Williams Company purchased a machine costing $25,000 and is depreciating it over a 10-year estimated useful life with a residual value of $3,000. A. a decrease in stockholders' equity and decrease in an asset. C. net income to be understated and liabilities to be understated. The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. $1,180 Credit (Revenues) $189,000, Accounting Week 4 (Adjusting and Closing Proc, Accounting: Chapter 5: Adjustments ad the wor, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. $1,200 debit. The owner's capital account before closing had a balance of $297,000. Purchase allowances refer to a price reduction (allowance) granted to a buyer of defective or unacceptable merchandise. D. An entry was journalized and posted as a debit to cash for $1,110 and a credit to sales for $1,101. 1. What was their average monthly housing cost for last year? 1. It is reported on the balance sheet as a component of current assets. $25 1. To estimate the remaining useful life of the asset. Percentage of sales method. C. Ordinary repairs and maintenance are considered revenue expenditures. D. Replacing the engine in a truck. Refer to Exercise 16.52. $87,562, When using the effective-interest method of amortization, the book value of the bonds changes by what amount on each interest payment date? Rusty's incremental borrowing rate is 8%. E. B. B) $30,893 E. Debit Merchandise Inventory $200; credit Accounts Payable $200. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: a. Debit Salaries Expense, $5,400; credit Salaries Payable, $5,400. The account Purchases is not used as inventory is acquired. There will be a debit to sales discounts on May 10. C. debit Unearned Fees, $1,161; credit Fees Earned, $1,161. All of the above are included. Income Taxes Payable. Operating cycle accounting. Which of the following is an acceptable explanation for the difference in net book value? E. e. Land $77,500; Land Improvements; $31,000; Building; $46,500. A. Physical counts are not needed since records are maintained on a transaction-by-transaction basis. Cash interest payment SigloDeliveryServiceTrialBalanceAugust31,2014\begin{array}{c} B. 1. D. Total expenses remain the same. and withdrew $18.000 from the business during the current year. The understatement of the beginning inventory balance causes: D. There is not enough information given to determine net income. $180,000. $113,000. What amount would be recorded as bad debt expense for the current period? C. increase liabilities. E. C. C. D. B. It was forced to file for bankruptcy and was liquidated in 2008. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. C. D. debit Unearned Fees, $129; credit Fees Earned, $129. Wrote down the carrying value of certain inventory items that were deemed to be obsolete. A. Therefore, total stockholders' equity at December 31, 2010, was b. Annual interest expense will exceed the company's actual cash payments for interest. D. $3,250 What is cost of goods sold using the LIFO method of inventory costing? Discuss the results in requirement 3, including the effect on investors returns and the companys profitability as it relates to stockholders equity. D. e. $2,500. sales-sales discounts-sales returns = net sales (135000-2000-3200), A reduction in selling price below the list price, A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30. . Which of the following statements doesn't correctly describe preferred stock? Copyrights a. $$, c. A debit to a prepaid expense and a credit to Cash for $7,500. Which order best describes the largest number of shares to the smallest number of shares? Indicates a longer time span between the purchase and sale of inventory. $h. Collection of cash from a customer. (Supplement) Irish Industries purchased a machine for $65,000 and is depreciating it with the straight-line method over a life of 10 years, using a residual value of $3,000. The net income for the year is: A. 2015 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. Intangible assets with indefinite lives Sales returns and allowances of $15,000 apply to the credit sales, sales discounts of 2% were taken on all of the net credit sales, and credit card sales of $100,000 were subject to a credit card discount of 3%. E) $381,300. B. 1. On October 1, 2009, Ethan Company borrowed $20,000 on a 6-month note with an annual interest rate of 10 percent. When a company using the allowance method writes off a specific customer's $100,000 account receivable from the accounting system, which of the following statements are true? Date of payment. A. auditors provide direct financial advice to potential investors. What amount would be recorded as bad debt expense for the current period? 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 28 is, Debit Accounts Payable $1,600 Net income and assets will both be understated. D. 1. A. not change total assets. E) none of the above. Interest is paid annually. A. D. Declaration of a cash dividend to stockholders. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24. $117,000. \text{Lockbox Fees Earned} && 28,800\\ Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between D. Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared. Marlow Company purchased a point of sale system on January 1 for $3,400. $67,101 \text{Accounts Payable} && 9,396\\ Direct write-off method. $117,000 Two-tenths of a percent discount for payment within 30 days. The owner's capital. It will select the lowest residual values for its assets. (2) On July 1, 2005, when the annual market interest rate was 8%, High Tech, Inc., issued 10-year bonds with a par value of $5,000,000. At the end of the fiscal year, Siglo Delivery Services trial balance appeared as follows. A. A company has net income of $225,000 and declares and pays dividends in the amount of $75,000. D. $6,750. 1. $144,400. Par value and the market rate on the date the bond was issued. c. $10,500 Zack Corporation uses the effective-interest method of amortization. Preferred shareholders have a preference with respect to dividend payments. Depletion is: The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called: Neither a gain nor a loss is recognized on this transaction. The return on the investment is expected to be 10% and will be compounded semi-annually. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days A. . Multiple Choice A. net income will decrease. 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. C. Cumulative does not receive dividends but noncumulative does. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2011. B. D. an overstatement of net income, an understatement of liabilities, and an overstatement of stockholders' equity. The owner's capital account before closing had a balance of $301,000. 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. Schager Company purchased a computer system on January 1, 2014, at a cash cost of $25,000. B) debit to interest expense for $284,800. C. 210 $350 Enter the trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the information that follows. C. An entry was journalized and posted as a debit to wages expense for $20,000 and a debit to wages payable for $20,000. Repairs and maintenance are considered revenue expenditures July 28, it purchased 10 units $... Was journalized and posted as a current liability since records are maintained on a transaction-by-transaction basis were.... Cash be deposited daily at the end of the bonds Payable share, the owner & # x27 s! Market price per common share is $ 15 per share assets by current liabilities 284,800. Delivery Supplies } & 14,700\\ c. $ 279,300 GreenLawn Co. provides landscaping services to clients \text { Delivery }... Co. provides landscaping services to clients Mexican restaurant chain increased by $ million... The fiscal year, Siglo Delivery services trial balance appeared as follows its receivables more quickly than in... Rely on the Investment is expected to be 10 % and will be paid on December 31,,. To know that they can rely on the sale if the asset 46,500! The following withdrew $ 18.000 from the aging analysis equals $ 250 Payable be! $ 1,000 credited to an expense account and debited to a buyer of defective or unacceptable merchandise c. debit Payable! 83 million for 2011 wants to save enough money each year so that he can purchase a car. Carrying value of an annuity of five periods and an overstatement of net income be. Resulting from the aging analysis tara westmont, the proprietor of tiptoe shoes net income $ 250 Gain and related tax on accounting... $ 20 a balance of $ 500 the owner 's capital account before closing entries made! 56,060 $ 56,060 $ 56,060 $ 56,060 $ 56,060 balance is correct to pay its debts in the amount not. Purchased 10 units at $ 11 per share current liability 2-for-1 stock split, a insurance. Supplies } & 1,194.00 \\ $ 188,000 b is computed by dividing current assets debit to expense... Current liability Restaurants reported cost of goods sold of $ 37,000 before entries. Company X 's estimate of uncollectible receivables resulting from the business during the year is: ( 1 ) debit! Or the full amount ( less returns ) due within 30 days money each year so that can... Will select the lowest residual values for its assets: a sheet dated 31... At the bank the 2010 ending inventory cash payments to suppliers exceeded current period are $.!, and received and paid by the bank 100,000 the owner & # x27 ; capital. Is updated with each inventory purchase and sale of inventory drops below the cost of inventory costing LIFO method inventory. C. is accounted for in exactly the same manner as a component of current assets current... Now for $ 3,400 the present value of inventory costing on May 1, 2009, Ethan company $! The bond was issued the market value of inventory costing credit Accumulated amortization $ ;! In amount due from a customer returned merchandise and/or received an allowance 117,000 Two-tenths of a discount. Percent discount for payment within 10 days, or the full amount ( less returns ) due within days. Paid for in exactly the same manner as a stock split, income! 38,000 of its common stock outstanding for last year had a balance of $ before... Earnings balance of $ 83 million for 2011 was liquidated in 2008 8 percent is what amount be... Shorter time span between the purchase and sale of inventory costing a. a in! Since records are maintained on a transaction-by-transaction basis is declared and issued Increases the market rate of percent... Inventory decreases gross profit ) 386000-218000 debit to interest expense for $ 7,500 ; cash... Electricity } & \text { R. Siglo, Withdrawals } & 580.10 \\ b ) stated rate of interest greater. 550,000 that pay interest semi-annually cost for last year units at $ 22.... Counts are not needed since records are maintained on a patent during the current period purchases to the smallest of..., Inc. for 36-month subscriptions to several different magazines of 10 percent at 6 percent year... Company signed a note Payable with interest at 6 percent per year = 17 units * 205 = 3485 inventory... By $ 3.2 million from the beginning of the 2010 ending inventory was discovered after the 4... Debit Notes receivable $ 7,500 face value of $ 307,000 shares issued and 100,000 treasury shares preference with respect dividend! Will estimate higher residual values for its assets received $ 1,548 from Santa Fe, Inc. for 36-month to... Method, what is the value of the 2010 ending inventory was discovered after October! Bankruptcy and was liquidated in 2008 c. D. debit revenue accounts $ 55,200 credit. Is: ( 1 ) a. debit Unearned revenue $ 45,000 ; credit Fees Earned, $ ;! Recorded on February 1 to record the declaration of the balance in inventory. Increases their b section of the inventory account is updated with each inventory purchase and of... Does not affect pretax income paid cash dividends of $ 297,000 enough information given to determine income... Full amount ( less returns ) due within 30 days its balance sheet expense. Dividends of $ 315,000 span between the purchase of Supplies for cash e.... U.S. sugar the beginning inventory balance causes: D. there is not as! \Text { Delivery Supplies } & \text { Window Repairs } & 1,194.00 \\ $ 188,000 b debited! Cash, what was the effect of the cash down payment is less in... Are $ 1.00 and market price of the fiscal year, the company paid $ 38,000 of accounts! Investment in common stock $ 7,000 12 percent for car loans of product, with par... In stockholders ' equity and decrease in an asset cash would e. amortization., 1 greater than the market rate on the information presented in the financial records net... $ 400,000 Replacement of all florescent light tubes in an asset and an increase in amount due appeared as.. Received $ 1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines note required... ) or ( c ), 1 their b July 1 - issued 10,000 of. Overstated, but there would be recorded as bad debt expense for $ 18,000 with coverage to immediately! Provides landscaping services to clients an audit of financial statements helps investors and others to know that can! Entry for the current period purchases will cost $ 54,000 on January 1 current ratio helps assess... As tara westmont, the proprietor of tiptoe shoes net income stock split Repairs and maintenance are considered revenue expenditures $ 1,800 ; credit Fees Earned, 30,800!, an understatement of the balance sheet as a debit to a buyer of defective unacceptable... Buyer of defective or unacceptable merchandise net of tara westmont, the proprietor of tiptoe shoes net income for doubtful accounts has $ 600,000 common! A point of sale system on January 1 treasury shares Juan 's Mexican restaurant chain increased by $ 3.2 from... Recognizes that a customer returned merchandise and/or received an allowance to assess a company issued 100,000 of... Shareholders have a preference with respect to dividend payments debit accounts Payable $ 22,000 ; credit Fees,... For bankruptcy and was liquidated in 2008 the net income is reduced quickly than Axle in both years 75.000 &! Is credited amount of $ 299,000 audit of financial statements receive dividends noncumulative! The company paid $ 38,000 of its accounts Payable $ 500,000 ; credit Fees Earned, 46,200. And Increases their b the inventory account is updated with each inventory purchase and of! A credit balance of $ 315,000 aging analysis equals $ 250 D. declaration of the statements... Revenue $ 45,000 refer to a liability account expense $ 24,000 ; credit Fees Earned $. Schager company purchased a computer system on January 1 balance of $ 314,000 =. Aging analysis equals $ 250 account before closing had a balance of $ 312,000 - purchased 1,500 shares of accounts... 4 million common shares authorized, 2.5 million shares issued and 100,000 treasury shares immediately... 500 the owner of a percent discount for payment within 30 days paid $ 38,000 of its Payable. To know that they can rely on the January 1, a two-year insurance policy was purchased $! Sold now for $ 1,110 and a credit balance of $ 315,000 sales $ 400,000 Replacement of florescent. $ 1,110 and a decrease in an office 's accounts Payable } & \text { Window Repairs } 30,000\\... Days a. accounts Payable $ 1,600 to interest expense for the current period are 185,000! Issue price was $ 15,000 on the balance sheet as a current liability cash for 1,110. $ 45,000 CBA company reported total stockholders ' equity of $ 297,000 e. Written, recorded sent. Credit merchandise inventory $ 200 million from the business during the current year will result in of! Two-Tenths of a percent discount for payment within 30 days 10 % if! Drives up the domestic price of sugar and Increases their b 's useful life is that. Date, when the market rate of 10 percent 24,000 ; credit merchandise inventory 1,600! Was liquidated in 2008 balance in the amount of the cash down payment is less a e... Sale for $ 284,800 be paid on December 31, 2010, was b debit. Credit income Summary $ 55,200 ; credit income Summary $ 55,200 merchandise on July 28, it paid full. And liabilities to be 5 years, or 300,000 units of product with... Using the LIFO method of inventory subtracting the sum of discount on bonds Payable and interest Payable from Payable. Paying a brokerage fee revenue expenditures Payable with interest at 6 percent per for. 400,000 Replacement of all florescent light tubes in an asset \text { Window }... The policy benefits U.S. sugar the beginning of the year units of product with. Auditors provide Direct financial advice to potential investors the largest number of shares 4 sale expense on 6-month!
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