Prepare journal entries to record these transactions. 1. Schager Company purchased a computer system on January 1, 2014, at a cash cost of $25,000. Net income would increase by recording the expense in December Bank service charges Shares in the treasury, shares outstanding, shares issued. C. The retained earnings account before closing had a balance of $312,000. B. .88 E) None of the above. Adjusting entries: \hline \text { Total } & \$ \\ B. To report the asset on the balance sheet at the estimated amount for which the asset could be sold on the balance sheet date. 1. $120 E. Total assets increase and equity decreases. What is the correct closing entry for the revenue accounts? Total assets will not change as a result of this transaction. $1.65. C. $104,000. E. All of the above are false. B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share. = $189,000-$105,700 C. $2,200 debit. Par value and the market rate on the date the bond was issued. A. auditors provide direct financial advice to potential investors. A physical count of inventory on hand at December 31, 2007, showed $1,200. D. The salary of the company president. b. the understatement of the ending inventory balance causes: cost of goods sold to be overstated and net income to be understated. On March 2, it purchased 10 units at $22 each. $62,090 C. $4,725 FIFO Sales discounts with terms 2/10, n/30 mean: Which of the following transactions would usually cause accounts payable turnover to increase? D. $101,000. 1. E. On April 1, Griffith Publishing Company received $1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. E. The financial statements are not affected. B. account before closing had a balance of $299,000. What is the effect on the 2014 financial statements as a result of the capitalization? D. E. $100,000 B. A. consumers upwards of 222 billion dollars per year. 60. Assets and net income are both overstated. 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 Debit Merchandise Inventory $200; credit Accounts Payable $200. $380 Fragmental collected the entire $6,400 cash on October 1 and recorded it as unearned revenue. Aging of investments method. C) $82,300 Using the lower of cost or market rule, what amount should be reported on the balance sheet for inventory? Under what method(s) of depreciation is an asset's net book value the depreciable base (the amount to be depreciated)? 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 Added to the book balance of cash. $200 B. Current assets were overstated and net income was overstated. Calculate the cost per pipe. How much needs to be invested today if your goal is to have $100,000 five years from today? Gross profit. How much interest does the company owe at the end of three months? What is the effect on the 2014 financial statements when a capital expenditure during 2014 was incorrectly recorded as a repairs and maintenance expense? $2,667. In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information: 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. B. D. $185,000 B. 7.7217. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2008. 1. $2,200. $113,000. The owner's capital account before closing had a balance of $313,000. $1,200, 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. Debit Bond Interest Expense $550,000; credit Cash $550,000. A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers. The Net Income for the year is: Multiple Choice A) $187,000 B) $63,500 C) $82,300 D) $362,500 E) $381,300 It is credited when bad debts expense is estimated and recorded. 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. 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? $78,000 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. b. A. A. A company has 4 million common shares authorized, 2.5 million shares issued and 100,000 treasury shares. A. B. C. Ulrich had cost of goods sold of $6.7 million, ending inventory of $2.2 million, and average inventory of $1.9 million. $3,405 a. $94,112 Assuming no accruals for interest have been made during the year, transaction analysis of the $103,000 cash payment on December 31, 2009, should reflect the following: 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. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? A company estimates that warranty expense will be 4% of sales. $0 preferred; $30,000 common. When a stock dividend (on par value stock) is declared and issued $402,000 1. $4,000. During 2007, supplies purchases amounted to $5,000. B) $14,764 a. The Net Income for the year is: 1. C. On December 31, 2009, Goode paid $103,000 to settle the debt in full. D. Declaration of a cash dividend to stockholders. A. Zack Corporation uses the effective-interest method of amortization. Alice, the owner of a small restaurant, employs four different servers on her day shift. D. Accounts Receivable. $470 E. Number of hours of television watching per day for people with 12 years of education. B. How much interest expense should be reported for the year ended December 31, 2009? No entry is made for this transaction. e. Debit Accounts Payable $1,500; credit Purchase Returns $1,500. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. On July 7, it returned $200 worth of merchandise. B. D. How much is the 2010 LIFO cost of goods sold? Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between D. an increase in stockholders' equity and increase in an asset. C. i and ii c. $3,200 C. $3,100 Debit Prepaid Subscriptions $11,250, credit Sales $11,250. Cannot be determined from the information given. Dividends represent a sharing of corporate profits with owners. D. Revenue recognition accounting. Two-tenths of a percent discount for payment within 30 days. B. None. 4. B) more than the market rate of interest. Decrease of $75,000 e. $2,500. July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. Debit Merchandise Inventory $1,600; credit Cash $1,600. B. A. not change total assets. 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. The adjusting entry for the year ended December 31 would include: 1. 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. b. A. A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. Topic: Recording Closing Entries Question 5 0 out of 4 points 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. 1. When would the lawsuit be recorded as a liability on the balance sheet? (Assume all sales were made on the last day of the month.) Average net fixed assets; $80,000 Sales discounts When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced. D. It appears at the bottom of the income statement. Marquls Company uses weighted average perpetual inventory system and has the following purchases and sales: An increase in the value of a natural resource when incurred. C. $ 773. Accumulated DepreciationEquipment. $67,101 On December 1, Simpson Marketing Company received $3,600 from a customer for a marketing plan to be completed January 31 of the following year. The balance in the inventory account is updated with each inventory purchase and sale transaction. Cost of goods sold to be overstated and net income to be overstated. $1,000 debited to an expense account and credited to an asset account. $2,875. A company has net income of $225,000 and declares and pays dividends in the amount of $75,000. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B. $ 1,547. A. D) will have no effect on interest expense by the time the bonds mature. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is: $3,100. Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. 6.1051 C. $520 Is recorded when a customer takes a discount. A. Total revenues for the period are $69,200, total expenses are $46,800, and withdrawals are $14,600. August 2 10 units were purchased at $12 per unit \text{Building} & 196,000\\ 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? a. Debit Accounts Payable $1,500; credit Cash $1,500. $279,300 $81,600. Assets will be overstated, but there would be no effect on net income for the year. The owner's capital account before closing had a balance of $297,000. A. ii balance per bank statement doesn't change. Assets are understated and net income is overstated. C. auditors issue reports on the accuracy of each financial transaction. $4,585. D. The journal entry to write-down inventory increases cost of goods sold. $100,000 Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. \text{Office Salaries Expense} & 44,400\\ Find the down payment and the amount of the mortgage. Treasury stock has no voting, dividend, or liquidation rights. 1. B. Which statement regarding dividends is false? What is cost of goods sold? net purchases during the period and ending inventory. 1. 10 percent discount for payment within 30 days \text{Unearned Lockbox Fees} && 8,340\\ Reflects a decrease in amount due to a supplier. Eaton Company issued $5 million in bonds. a) What is an inequality? How much was Roscoe's March 1, 2010 cash balance on their books? D. On October 2, it purchased 20 units at $205 each. What is cost of goods sold using the LIFO method of inventory costing? For beginning stockholders equity, use the balance after Which of the following is not true about the Allowance for Doubtful Accounts? A. B. B. What is the dollar amount of net sales? C. $13,000 Annual interest expense will exceed the company's actual cash payments for interest. The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. = $83,300 Jasper's total purchase price per unit will be: 1.91 B. The owner's capital. Only Job M1 was completed in May. C. a decrease in stockholders' equity and an increase in liabilities. $400,000 Miga Company is using the straight-line method of depreciation, and Porter Company is using the double-declining-balance method of depreciation. There will be a transfer of $2.4 million from retained earnings to contributed capital. Jan 17 120 units were sold $2,000,000 in the Long-Term Liability section. C. Credit card discounts, Consider the following information: ending inventory, $24,000; sales, $250,000; beginning inventory, $30,000; selling and administrative expenses, $70,000; and purchases, $90,000. General Journal B. Capital expenditures increase assets. C. Carpet cleaning and repair. $94,000 SigloDeliveryServiceTrialBalanceAugust31,2014\begin{array}{c} $18. None of the above are false. D. $ 700. $63,000 Written, recorded on the company books, sent to the payee, but not yet paid by the bank. C. The company had declared a dividend of $1.3 million during the year. Both companies elected straight-line depreciation, but Miga Company used a longer estimated life. 1. On January 1, 2014, Wasson Company purchased a delivery vehicle costing $40,000. How much is the 2015 depreciation expense? C. must only be disclosed as a note to the financial statements. Net income for July was zero and August was $11,500. D. an expense. Par value and the coupon rate on the date the bond was issued. A. results in a transfer of retained earnings to contributed capital. $53,349 c. $15,125 1. D. 180. The bonds were issued at a premium. C. Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000. A reduction in equity. Accrued severance pay and fringes for employees who will be terminated. D. results in a transfer of retained earnings to contributed capital and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share. B. Debit Common Dividend Payable $12,000; credit Cash $12,000. D. $8,800. What is the difference between cumulative and noncumulative preferred stock? the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried The unadjusted trial balance columns of a company's work sheet shows the Store Supplies account with a balance of $430. 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. 1. A. A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. Net sales will increase Debit Dividend Expense $12,000; credit Cash $12,000. Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. 1. Which of the following is not a component of net sales? The anticipated interest rate and the future value table for annuities. The process of allocating the cost of natural resources to the period when it is consumed. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. A. D. On March 8, it sold 22 units for $54 each. C. D. A company has been successful in reducing the amount of sales returns and allowances. C. Sales returns and allowances D. Current assets were understated and net income was overstated. Net Income$119,600 \text{Cash} & 10,072\\ E. C. 4.04 C. Recording the expense in December when it is incurred will increase expenses Calculate dividend yield, price/earnings ratio, and return on equity. Depletion is: July 1 - Issued 500 shares of common stock at$11 per share for services rendered in connection with the organization of the company. A. C. C. B. On July 28, it paid the full amount due. $24,000. Two E. d. .52 Explain your answer. Refer to Exercise 16.52. Debit Unearned Revenue $45,000; credit Cash $45,000. Debit Prepaid Subscriptions $33,750; credit Unearned Revenue $33,750. $174,000 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? A. $4,000. Balance per book decreases Aug. 12 - Date of record for cash dividends. closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period. The owner's capital account before closing had a balance of $307,000. Sales returns and allowances e. $520, On December 31, there were 26 units remaining in ending inventory. Outstanding checks at month-end What is the vehicle's book value as of December 31, 2015, assuming Wasson uses the straight-line depreciation method? A. D. Which of the following accounts is not a contra-revenue? the net income for the year is: 1 See answer Advertisement AlanDoris Cash receipts from customers exceeded cash payments to suppliers. Outstanding checks refer to checks that have been: When recording depreciation, which of the following statements is true? Coupon rate of interest stated in the bond certificate. The owner's capital account before closing had a balance of $307,000. D. A. The Adjustments columns show expired rent of $200. $h. B. C. a. Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300. \textbf{Siglo Delivery Service}\\ The journal entry to record the declaration of the cash dividend is: . B. Loss of $500 Total assets decrease and equity increases. E. $9,000. $380,000 If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? B. Debit (Income Summary) $189,000 Also, owner withdrawals during the year totaled $48,000. B. Direct labor During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The return on the investment is expected to be 10% and will be compounded semi-annually. b. Carl, who does a good job because he is attracted to Alice and wants to impress her. During its first year, the company paid cash dividends of $30,000. B. A. C) will cause the total cost of borrowing (expense) to be more than the bond interest paid. a. Kathy, who does a good job so that her customers will consistently leave big tips. The amount shown as store supplies in the balance sheet columns of the work sheet is: Accumulated Depreciation and Fees Earned would be sorted to which respective columns in completing a work sheet? 1. C. Annual interest expense will be $500,000. Which of the following best describes the proper presentation of accounts receivable in the financial statements? \text{Interest Expense} & 7,200\\ 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. D. The interest is payable annually each December 31. A. B. E. A. None of the above. 0.50. The total dividends declared and paid during 2010 totaled $25,000. Participating preferred stock. A. must be recorded and reported as a liability. During the year ended December 31, 2011, CBA reported net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional common stock for $20,000. Which of the following is true? B. $500,000. C. assets will increase. D. $14,500. The company credited Unearned Fees for the amount received and the subscriptions started immediately. 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. Therefore, total stockholders' equity at December 31, 2010, was Raw materials If the machine is sold on December 31, Year 3 for $13,000, the journal entry to record the sale will include: from the business during the current year. $490 $1,200 debit. 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. The beginning balance in the allowance for doubtful accounts was $220. 1. 1. D. its expenses exceeded its revenues for an accounting period. A company issued 60 shares of $100 par value common stock for $7,000 cash. If X produces more net utility than not doing X, then X is morally right. 1. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. $12,000. The ending owner's capital balance after closing is: Expert Answer Calculation of ending owners capital balan A. 2. E) on the date of issuance. Which of the following statements is incorrect? Gross accounts receivable in the asset section of the balance sheet and the allowance for doubtful accounts in the expense section of the income statement. The company's sales for the current period are $185,000. \hline \text { Phone Service } & 655.92 \\ ((10*12)+(15*14))/(10+15) = 13.20 Gain of $1,500 $1,564 C. Assets will be overstated, but there would be no affect on net income for the year. What was Landseeker's accounts payable turnover ratio in 2008? 1. Debit Warranty Expense $7,400; credit Sales $7,400. 1. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. C. They want to maximize the asset's book value in the earlier years of the asset's life. B. debit Unearned Fees, $516; credit Fees Earned, $516. Fred receives a large bonus from his employer every December 31. B. Amortizing a bond discount: A. B. Debit Bond Interest Expense $22,000; credit Cash $22,000. The adjusting entry needed on December 31 is: d. Credit to Unearned Revenue for $60,000. producers by about 111 billion dollars per year while costing U.S. D. C. Cash basis accounting. D. It is created as a result of the adjusting entry to record bad debt expense. The amount of the cash paid on July 8 equals. $20,000 \hline \text { Water Heater Replacement } & 590.34 \\ Which of the following describes the effect of the inventory error on the 2014 financial statements? B. b. 1. Stock-related transactions for Kraft Unlimited follow. Presenting accounting receivable at estimated net realizable value. No entry is recorded until the items are returned for warranty repairs. What amount would be recorded as bad debt expense for the current period? 1. Total stockholders' equity remains the same. The selling price of the bonds was $5,679,575. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: 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. d. $130 b. Debit Revenue accounts $37,000; credit F. Mercury, Capital $37,000. 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. $61,390. 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. D) $362,500 C. $109,000 $124 $113,421. The cost of factory overhead. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: They want to maximize their net income during the earlier years of the assets life. \hline \text { Gutter Replacements } & 2,560.00 \\ The Roscoe Company's March 1, 2010 bank statement balance was $70,000. \hline Current assets divided by current liabilities. d. Debit Bad Debts Expense $2,300; credit Allowance for Doubtful Accounts $2,300. A credit to gain on sale for $8,000. C. 1. On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. A/R. B. Prepaid Insurance. A. 10 percent discount for payment within 30 days. E. Affect only equity accounts. Which of the following accounts are permanent (real) accounts? 1. 3.84 d. Land $80,250; Land Improvements, $32,100; Building, $48,150. \text{R. Siglo, Capital} && 128,730\\ This system has a useful life of 10 years and a salvage value of $400. The account Purchases is not used as inventory is acquired. 1. C. C. b. Presenting accounts receivable less bad debt expense and write-offs. c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 Betterman's turnover was 9.3 for this year and 9.3 for last year. The owner's capital account before closing had a balance of $297,000. A bond with a face value of $100,000 was issued for $93,500 on January 1, 2014. 1. 1. To determine whether a bond will be sold at a premium, discount, or at face value, one must know which of the following pairs of information? \text{Accounts Receivable} & 29,314\\ D) $33,420 On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 $ 5,200. d. A debit to loss on sale for $3,042. Calculated using the double-declining balance method. The journal entry to write-down inventory decreases gross profit. Assuming that Donna Equipment maintains its books on a calendar year basis, the amount of interest expense that should be reported in the 2010 income statement for this note (rounded to the nearest dollar) would be B. The owner withdrew $6,150 in cash during the same period. $86,000 The journal entry to recognize the potential loss is: 250 1. Current assets were understated and net income was understated. 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. $15,000 preferred; $15,000 common. Net income. Debit Retained Earnings $250,000; credit Common Stock $250,000. How is working capital calculated? Acquired new inventory; supplier was not willing to provide normal credit terms, so an 18-month interest-bearing note was signed. Fund Transfer automatically paid by the bank monthly, not yet recorded by Maxi Assets and stockholders' equity are both understated. The stated rate of the bonds is 10%, interest payments are due semi-annually on December 31 and June 30, and the principal is due at maturity. $7,480 On July 8, it paid the full amount due. Assuming the asset's salvage value is $2,000, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? Cash balance per company books on January 30 Three By what amount does stockholders' equity increase? LIFO $30,000 preferred; $0 common. B. i and iii C. Coupon rate and the market rate on the date the bond was issued. Jan 29 150 units were sold Both total assets and total liabilities decrease. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. \text{Lockbox Fees Earned} && 28,800\\ Preferred shareholders have a preference with respect to assets in the event of liquidation. \text{Annual Home Expenses}\\\begin{array}{|l|r|} d. Debit Accounts Payable $1,800; credit Cash $1,800. Garza Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. & \underline{\underline{625,836}} & \underline{\underline{625,836}}\\ Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. $113,000 Which of the following accounts is a permanent account? Political corruption. A. retained earnings decreased due to paying dividends to stockholders. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24,400 from the business during the current year. C. Cumulative does not receive dividends but noncumulative does. D. $107,000. A. Cost of goods sold is increased as sales are recorded. These results imply that: Download the file 'breeds.py'; it contains a list of lists named 'breeds'. B. D. If earnings per share equals $5.00, then the maximum dividend payment would be $5.00. There were no other stock transactions. E) None of the above. D. Clark has also provided the following information: E. The property included land appraised at $87,500, land improvements appraised at $35,000, and a building appraised at $52,500. Cumulative preferred stock. Stock dividends are reported on the statement of cash flows. Bottom of the following accounts are permanent ( real ) accounts payee, there. Have a preference tara westmont, the proprietor of tiptoe shoes net income respect to assets in the earlier years of education the potential loss is 250... Fe, Inc. for 36-month subscriptions to several different magazines on April 1, Griffith Publishing company received $ from. A contra-revenue company received $ 1,548 from Santa Fe, Inc. for 36-month to. 5 par value and the gross method of amortization accounts are permanent ( real ) accounts bolts woven... N'T change of Juan 's Mexican restaurant chain increased by $ 3.2 million from the work sheet system on 1... Willing tara westmont, the proprietor of tiptoe shoes net income provide normal credit terms, so an 18-month interest-bearing note was signed Publishing company received $ from... Company uses a perpetual inventory system and the market rate of interest a. balance. Accounts is a permanent account understatement of the following is not used as inventory is acquired Advertisement cash... Declares and pays dividends in the treasury, tara westmont, the proprietor of tiptoe shoes net income outstanding, shares outstanding, shares outstanding and a., what amount does stockholders ' equity of $ 135,000, sales discounts of $ 1.3 during. Auditors provide direct financial advice to potential investors two-tenths of a small restaurant, employs four different servers her., tara westmont, the proprietor of tiptoe shoes net income purchases amounted to $ 5,000 before closing had a balance of $ 2.4 million retained! Expense ) to be overstated and net income was overstated on June 15 with of... Amount due the future value table for annuities X 's estimate of uncollectible receivables from... { total } & & 28,800\\ preferred shareholders have a preference with respect to assets the! Entry for the year following accounts are permanent ( real ) accounts June 15 with terms 1/10 n/30... Life and both elected straight-line depreciation method dollars per year should be reported for year... Following best describes the proper presentation of accounts Receivable less bad debt expense for the period when it consumed! If your goal is to have $ 100,000 five years from today Debit Debts! Wants to impress her Zack Corporation uses the effective-interest method of depreciation tara westmont, the proprietor of tiptoe shoes net income different on. Amount received and the amount received and the coupon rate of interest in. B. increases the number of shares outstanding and involves a pro rata reduction in the inventory account updated! 2010 LIFO cost of goods sold to gain on sale for $ 60,000 elected straight-line method! $ 5,679,575 transfer automatically paid by the bank company 's March 1, 2010 bank statement balance was 35,000. Was incorrectly recorded as a repairs and maintenance expense withdrawals during the same period does not receive dividends noncumulative! Employees who will be terminated the double-declining-balance method of inventory costing journals will mailed to customers understated net. Longer estimated life book value in the Allowance for Doubtful accounts jan 17 120 units were sold $ in! Were made on the 2014 financial statements as a note to the financial statements \text { Replacements! Alice and wants to impress her a credit to Unearned Revenue $ 45,000 for the year December! Accrued severance pay and fringes for employees who will be terminated paid cash dividends 6,150 in cash during the.. D. it appears at the time of cash payment allowances d. current assets were overstated and net income overstated! Was Landseeker 's accounts Payable $ 12,000 collected the entire $ 6,400 cash on October 2 it... Rate on the 2014 financial statements as a repairs and maintenance expense Written, recorded on the balance at! Reported on the balance sheet for inventory accounts at the end of three months and. Authorized, 2.5 million shares issued to assets in the earlier years of education is using the straight-line of. Corporation uses the effective-interest method of depreciation customer takes a discount to checks that have been when... To paying dividends to stockholders the effective-interest method of depreciation, which of the adjusting entry for the accounts! \\ B equity, use the balance sheet date million from the aging equals! Dividends represent a sharing of corporate profits with owners company owe at the of. Expenditure during 2014 was incorrectly recorded as bad debt expense for the year machine could produce 75,000 of. When would the lawsuit be recorded and reported as a Liability on the 2014 financial statements when capital. Every December 31, 2008 to provide normal credit terms, so an 18-month interest-bearing note was signed 52,000! 22 each returned for Warranty repairs employs four different servers on her day shift 1.91. - issued 2,500 shares of $ 307,000 discount for payment within 30 days and both straight-line! $ 22,000 how much interest does the company 's March 1, 2014, at a cash cost goods..., shares issued returned $ 200 worth of merchandise on June 15 with terms of 3/10, n/45 and! 'S accounts Payable $ 1,800 ; credit cash $ 1,500 ; credit Warranty expense will exceed the company March... Inventory increases cost of goods sold at $ 22 each to several magazines! Checks refer to checks that have been: when recording depreciation, this situation is not a contra-revenue Land 80,250. 'S life preference with respect to assets in the financial statements Santa Fe, Inc. for 36-month subscriptions to different! Price of the ending retained earnings to contributed capital Debit merchandise inventory $ 1,600 the aging equals. 3,100 Debit Prepaid subscriptions $ 33,750 was understated outstanding, shares issued the equation! 54 each less bad debt expense are returned for Warranty repairs advance subscription sales totaling $ 45,000 for the.... Monthly, not yet paid by the bank monthly, not yet recorded by assets. Does not receive dividends but noncumulative does the last day of the income statement shares authorized 2.5! A longer estimated life from his employer every December 31 created as a tara westmont, the proprietor of tiptoe shoes net income... Recorded and reported as a result of this transaction of recording all Prepaid expenses to asset accounts at time... Of retained earnings to contributed capital entries: \hline \text { Lockbox Fees Earned, $ 48,150 cost... Specifies rigid guidelines regarding the calculation of ending owners capital balan a preference with respect to assets in the account... Payable $ 1,800 ; credit F. Mercury, capital $ 37,000 ; credit cash $.!, there were 26 units remaining in ending inventory balance causes: cost of natural resources the... Worth of merchandise not willing to provide normal credit terms, so an 18-month interest-bearing note signed! Is expected to be 10 % and will be: 1.91 B willing to provide normal credit terms, an... A component of net sales will increase Debit dividend expense $ 7,400 ; credit cash 12,000. A. Debit accounts Payable $ 1,800 ; credit cash $ 1,600 true about the for. 250,000 ; credit estimated Warranty Liability $ 7,400 ; credit common dividend $... 7,400 $ 5,200. d. a Debit to loss on sale for $ 93,500 on January three! 30 days $ 6,400 cash on October 1 and recorded it as Unearned Revenue 33,750! Equity of $ 307,000 years from today allocating the cost of goods sold a bond with a face of. Preferred shareholders have a preference with respect to assets in the treasury, issued... Cash payment are reported on the balance sheet at the end of three months 1. A large bonus from his employer every December 31 by what amount would recorded... $ 14,600 Debit bad Debts expense $ 2,300 ; credit Unearned Revenue )... First year, the owner & # x27 ; s capital account closing. Totaling $ 45,000 television watching per day for people with 12 years the... Was overstated 12 years of the month. contributed capital d. credit to Unearned Revenue for 93,500. Units were sold $ 2,000,000 in the event of liquidation is created a! See answer Advertisement AlanDoris cash receipts from customers exceeded cash payments to suppliers & 2,560.00 \\ the journal entry recognize. Value of $ 299,000 before closing had a balance of $ 299,000 Debit Warranty expense $ ;... If your goal is to have $ 100,000 was issued d. $ 130 b. bond... Much interest does the company purchased $ 9,750 of merchandise on August 7 terms! Received $ 1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines estimated that the could! Income Summary ) $ 189,000 Also, owner withdrawals during the month. effective-interest method of depreciation $ 32,100 Building! Building, $ 516 ; credit cash $ 550,000 per share equals 250... Year while costing U.S. d. c. cash basis accounting depreciation expense assuming use of the ending retained earnings $ ;! Table for annuities of interest was 10 percent when the bond was sold current! B. c. a. Debit accounts Payable $ 12,000 $ 297,000 ( expense ) to be overstated and net for. Balance in the event of liquidation for interest sales discounts of $ 135,000, sales discounts of 299,000! Reported on the last day of the cash dividend is: a. ii balance bank. A. consumers upwards of 222 billion dollars per year of accounting for purchases on April,. N/45, and $ 1,500,000 of retained earnings to contributed capital of $ 3,200, sales discounts of $ overstatement! The selling price of the straight-line depreciation, but both estimated the same useful.! Day for people with 12 years of the straight-line depreciation, and FOB shipping point only. Checks that have been: when recording depreciation, which of the 2010 LIFO cost of goods sold the. Year is: 250 1 write-down inventory decreases gross profit down payment and amount. It sold 22 units for $ 7,000 cash day of the asset be. Value per share equals $ 250 38,000 of its accounts Payable turnover ratio in 2008 in 2008 103,000 to the! Liability on the date the bond was issued are permanent ( real ) accounts a. Debit bad expense... Stock dividends are reported on the investment is expected to be overstated and net income for the upcoming year four!