Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Operating cycle accounting. c. Debit Revenue accounts $55,200; credit F. Mercury, Capital $37,000. On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. E. D. Either (b) or (c), 1. A) stated rate of interest is less than the market rate of interest. Assets will be overstated, but there would be no effect on net income for the year. $ 6,000. A. . profits. e. $13,750. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $200,000, expenses of $111,200, and withdrew $24,000 from the business during the current year. None of the above are true. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. What would be incorrect about reporting accounts receivable in the balance sheet? balance per bank statement doesn't change. D. total assets increase by $200,000. Percentage of sales method. 1. What was their average monthly housing cost for last year? It is a contra asset account. 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. E. Recognizes that a customer returned merchandise and/or received an allowance. B. 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. Assets increase and stockholders' equity decreases. D. Ending inventory 100,000 1. Total expenses remain the same. The Net Income for the year is: 1. B. $200. C. Debit Depreciation Expense $29,025; credit Accumulated Depreciation $29,025. E. Net sales. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold? $5,855 C. $80,000 Ulrich had cost of goods sold of $6.7 million, ending inventory of $2.2 million, and average inventory of $1.9 million. $81,600. How much is the ending inventory using lower of cost or market on an item-by-item basis? 1. account before closing had a balance of $299,000. C. $229,800 D. Transaction analysis, journal entries, posting to the ledger. Written and not yet recorded in the company books. All of the above. A. A machine costing $75,000 is purchased on September 1, Year 1. 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 fee of $3%. Net income and assets will both be understated. Mayan Company had net income of $132,000. Jan 1 150 units were purchased at $9 per unit D. They want to maximize the total depreciation expense over the life of the asset. Dr. insurance expense 2,000 All of the above, What assets should be amortized using the straight-line method? b. Miga Company is using the straight-line method of depreciation, and Porter Company is using the double-declining-balance method of depreciation. B. e. Land $77,500; Land Improvements; $31,000; Building; $46,500. C. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000. What was Landseeker's accounts payable turnover ratio in 2011? (1800-200). for the year is: Option(C). 1. Aug. 12 - Date of record for cash dividends. On July 7, it returned $200 worth of merchandise. A disclosure note is required when the loss is probable and the amount can be reasonably estimated. Indicates a shorter time span between the ordering and receiving of inventory. What was the amount of credit sales during May? A reduction in current assets. The cash paid on June 24 equals: On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. Show transcribed image text Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of exist205,000, expenses of exist113, 700, and withdrew exist26,000 from the business during the current year. 1. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. 1. D. Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared. 3.89. On July 1, 2009, Gerdin Company borrowed $100,000. The company's depreciation expense for 2014 was $15,000 on the building. 1. $250 \text{Delivery Service Revenue} && 283,470\\ On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. A few hundred U.S. sugar makers lobby the U.S. government each year to make sure that the government taxes imported sugar at a high rate. a) What is an inequality? What effect will these changes have on the company's net sales, all other things equal? 1. $4,585. $h. A) equal to the market rate of interest. Which statement regarding dividends is false? A. 1. $770,000 A. Reflects a decrease in amount due to a supplier. Dividends represent a sharing of corporate profits with owners. D. It is created as a result of the adjusting entry to record bad debt expense. D. Replacing the engine in a truck. Siglo,WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas,Oil,andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad a. B. 1. Accumulated DepreciationEquipment. The company has declared and paid a dividend of $1 per share. The owner's capital account before closing had a balance of $314,000. Multiple Choice A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semi-annually. Net sales will not change. Debit Retained Earnings $250,000; credit Common Stock $250,000. The asset had a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. It is debited when uncollectible accounts are written off. Homework Answers 139 Views D. 3.91. 2015 D. $50,000. The issue price was $9,668 based on an 8% effective interest rate. D. $3,000. b. Debit Income Summary $75,000; Credit Revenues $75,000. A company issued 60 shares of $100 par value common stock for $7,000 cash. General Journal 0.25 Determine the impact of the following transactions on the current ratio for Bombay: Sold long-term assets that represented excess capacity. All of the above are steps toward effective internal control. Preferred shareholders have a preference with respect to assets in the event of liquidation. It is computed by dividing net income by weighted average common shares outstanding. When a company buys equipment for $150,000 and pays for one third in cash and the other two thirds is financed by a note payable, the following are the effects on the accounting equation: 1. What is the ending balance in the WOrk-in-process Control account? 1. and withdrew $18.000 from the business during the current year. Issued by the bank. We reviewed their content and use your feedback to keep the quality high. Market rate of interest on the date the bonds were issued. $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? Assume Idaho Company recorded the following adjusting entry at year-end: Temporary accounts. A company purchased a weaving machine for $190,000. B) $30,893 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: $100,000 4. 1. What is the correct closing entry for the revenue accounts? $229,800 B. net income to be overstated and assets to be understated. 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. A. ending inventory and beginning inventory. E) None of the above. The owner's capital account before closing had a balance of $297.000. D. Eaton Company cannot issue bonds if the market rate is higher than the stated rate. Par value of the bonds. $7,480 All three, Which inventory method provides a better matching of current costs with sales revenue on the income statement and outdated values for inventory on the balance sheet? Bonds payable will be credited for the par value of the bond. We pay a supplier for inventory we previously bought on account. 4.23 A reduction in current liabilities. E. $18,000. B. 1. $1,200 debit. B. None because disclosure is not required. A. The Federal Open Market Committee sets a target for which of the following? A building was purchased in 2014 and had an estimated useful life of 25 years and a residual value of $20,000. Gilbert Company made an ordinary repair to a delivery truck during 2014 at a cost of $500 and capitalized the repair cost. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2008. 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 $297,000. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. $10,200 Assets and net income are both overstated. 1. The owner's capital account before closing had a balance of $299,000. The owner withdrew $37,800 during the year. Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year. 2 C. A disclosure note is required when the loss is reasonably possible and the amount can be reasonably estimated. d. $3,364 B. a decrease in liabilities and increase in stockholders' equity. A. the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried 1. $200 increase in net income. McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. A. On July 28, it paid the full amount due. 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? The owner's capital account before closing had a balance of $297,000. C. Neither assets, total liabilities, nor equity are changed. A) $187,000 Wrote down the carrying value of certain inventory items that were deemed to be obsolete. A. 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. \text{Direct manufacturing labor} & \text{275.000} & \text{209.000}\\ The Net Income for the year is: $81,300 1. Total assets remain the same. Indicates a longer time span between the ordering and receiving of inventory. Bank service charges A portion of the $100,000 in the Current Liability section and the remainder of the principal in the Long-Term Liability section. Increase of $225,000 Real accounts. 1 and 2 B. C. $4.5 million B. equipment increases by $100,000. e. Debit Accounts Payable $1,600; credit Cash $1,600. C. Carpet cleaning and repair. D. 1. Which order best describes the largest number of shares to the smallest number of shares? If the sales price of the used machine was $7,500, the resulting gain or loss upon the sale was which of the following amounts? Enter the trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the information that follows. Debit Unearned Revenue $11,250, credit Sales $11,250. B. c. $15,125 c. Danika, who does a good job because she loves the restaurant business and finds her work very satisfying. $350 Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. Which of the following statements is false about earnings per share? 12*13.20 = $158.40 COGS, An advantage of FIFO is that it assigns the most recent costs to cost of goods sold and does a better job of matching current costs with revenues on the income statement, false; an advantage of FIFO is its inventory on balance sheet approximates its current cost and better matches current costs with revenues, Understating ending inventory understates both current and total assets, Beckenworth had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. The owner's capital account before closing had a balance of $301,000. $210 Debit Warranty Expense $7,400; credit Sales $7,400. On July 8, it paid the full amount due. Natural resources $520,000 Neither a gain nor a loss is recognized on this transaction. Market value of the stock was$12. B. b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500 c. $5,750. \hline \text { Gutter Replacements } & 2,560.00 \\ The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. All permanent ledger accounts with balances. $4,120. A. An asset was purchased three years ago for $120,000\$120,000$120,000. Failure to record amortization expense on a patent during the current year will result in which of the following? Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. On July 1, Plum should record: d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. Of the amount credited to this account during the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31. Goodwill is not reported unless purchased in an exchange. 1. C. A. C. $104,000. D) $645,596 Cash receipts from customers exceeded cash payments to suppliers. Cash, short-term investments, and current receivables. $1,060 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. C. All temporary ledger accounts with balances. The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. A. B. & \underline{\underline{625,836}} & \underline{\underline{625,836}}\\ It is apparent that the stated interest rate on the bond was Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. A. D. D. The F. Mercury, Capital account has a credit balance of $51,000 before closing entries are made. B. During its first year, the company paid cash dividends of $30,000. Which of the following describes the effect of the inventory error on the 2010 financial statements? C) $18,578 To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. Accrual basis accounting. B) decreases the face value of the bonds. A. A contingent liability that is "reasonably possible" but "cannot reasonably be estimated" Net income will be overstated, but there would be no effect on total assets. Collection of cash from a customer. revenues of $187,000, expenses of $104,700, and withdrew $18,800 B. C. $109,000. D. Additions and improvements are considered capital expenditures. 10 percent discount for payment within 30 days. Noncumulative preferred stock. C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. 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? The estimated useful life is 10 years, and the estimated residual value is $3,000. The purchase of supplies for cash would What would be the depreciation expense for the second year of its useful life using the double-declining-balance method? 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. Cash balance per company books on January 30 $7,000 C. $66,667 D. Only revenue and expense accounts. The bonds were sold at a premium. RowanCompany,May2016DirectmaterialsDirectmanufacturinglaborJobM1$75.000275.000JobM2$56.000209.000. D. $107,000. In its last financial statement prior to bankruptcy, Bombay reported current assets of $161,604,000 and current liabilities of$113,909,000. This adjusting entry results in: revenues of $187,000, expenses of $104,700, and withdrew $18,800 $28,000. Cost of goods sold to be overstated and net income to be correct. Explain your answer. 1. Tara Westmont, the proprietor of Tiptoe Shoes, had annual You'll get a detailed solution from a subject matter expert that helps you learn core concepts. They are paid on Monday for the five-day workweek ending on the previous Friday. $30,000. However, the ending inventory was overstated by $20,000. The present value of an annuity of $10,000 per year for 10 years discounted at 8 percent is what amount? $1,180 Total assets decrease and stockholders' equity decreases. A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. $2,920. A decrease in a liability and an increase in an asset. 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. \text{Gas, Oil, and Truck Repairs Expense} & 31,050\\ Sales $400,000 They both receive dividends in arrears. 1. C. A. 1. B. Current liabilities to be recognized as revenue in a future period. 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. 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).. TaraWestmont,theproprietorofTiptoeShoes,had annualrevenuesof$185,000, expensesof$103,700, and withdrew$18,000 fromthebusinessduringthecurrent year.Theowner'scapitalaccountbeforeclosinghada balanceof$297,000. C. 1. E. debit Unearned Fees, $387; credit Fees Earned, $387. E) None of the above is correct. Its cost of goods sold equals: $221,500 Net operating income, $40,000 The Net Income E. The owner withdrew $8,000 in cash during the same period. A gain on sale of $12,000. 1. The general journal entry to record this transaction is: d. Debit Merchandise Inventory $1,500; credit Cash $1,500. $4,500 B. D. $8,800 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $203,000, expenses of $112,700, and withdrew $25,200 from the business during the current year. d. $115,000 $5,000. What amount would be recorded as bad debt expense for the current period? A/R. E. C. Affect both income statement and balance sheet accounts. 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. 1. Coupon rate and the stated rate on the date the bond was issued. Decreases the Bonds Payable account. Direct write-off method. How many of the following statements regarding goodwill are true? 6.1051 The asset has been depreciated at an annual rate of $3,000 on the straight-line method (including year 5). The asset will be depreciated using the straight-line method over its four-year useful life. 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. The bonds were issued at a premium. Also called amortization. A. D. None of the above. (2) and (3) $3,270 Select one or more of the choices shown. We reviewed their content and use your feedback to keep the quality high. The Unadjusted Trial Balance columns of a work sheet total $95,300. The current period's ending inventory is: An error in the ending inventory of the current period will cause an error in the calculation of cost of goods sold. An increase in an asset and a decrease in another asset. SigloDeliveryServiceTrialBalanceAugust31,2014\begin{array}{c} (2) B. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000. 1. C. Formation of a partnership requires getting a charter from the state of incorporation. 1. Each partner is allowed interest of 10% on beginning capital balances. B. Shares authorized, shares issued, shares outstanding. The vehicle has an estimated 6-year life and a $4,000 residual value. A. Three 1. On December 31, 2009, the effect of recording an adjusting entry for accrued wages of $2,000 would be C. Assets will be overstated, but there would be no affect on net income for the year. 1. C. When the loss probability is reasonably possible and the amount can be reasonably estimated. \text{Accumulated DepreciationOffice Equipment} && 10,800\\ Siglo,CapitalR. $9,350. B. Current ratio helps to assess a company's ability to pay its debts in the near future. A. a liability. During the year, the company reported total revenues of $226,000 and expenses of $175,000. c. A credit to accumulated depreciation for $59,375. 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? D. $1,000 debited to a liability account and credited to an asset account. The charter authorized the issuance of 500,000 shares. B. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. E) None of the above is correct. Current assets were understated and net income was overstated. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. 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: A gain on sale of $3,000. Debit Prepaid Legal Expense $500,000; credit Contingent Legal Liability $500,000. The company credited Unearned Fees for the amount received and the subscriptions started immediately. c. $390,000 D. $240,000, 1. Annual interest expense for a single bond issue continues to increase over the life of the bonds. $ 883. E. C. auditors issue reports on the accuracy of each financial transaction. A credit to gain on sale for $8,000. $150,000 a. Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Multiple Choice Debit Income Summary $83,300, credit T. Westmont, Capital $83,300 Debit T. Westmont, Capital $63,700; credit Income Summary $63,700 Debit T. Westmont, Capital $83,300, credit Income Summary $83,300 O o Debit Income Summary $63,700; credit T. Westmont, Capital $63,700 Debit T. Westmont, Capital $301,000; credit Income Summary $301,000. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. How much is the 2015 depreciation expense? A. The Lockhart offer is better because the cost in terms of present value is less than the present value cost of the Leander offer. 1. 1. The owner's capital account before closing had a balance of $299,000. 1. A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers. A. C. a. Eaton Company issued $5 million in bonds. Requires a debit memorandum to recognize the customer's return. A. Debit Retained Earnings $250,000; credit Stock Split Payable $250,000. C. A. B. Net sales will decrease. e. A credit to gain on sale for $4,979. A. \end{array} \hline \text { Internet & Phone Bundle } & 1,198.80 \\ $117,000 Debit (Income Summary) $189,000 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. Which is the correct order of the steps in the accounting cycle during the accounting period? B. Roberts Company should report the book value, or carrying value, for the bonds on the December 31, 2009, balance sheet as How much of the dividend is paid to the common stockholders during 2010 assuming the preferred stock is noncumulative? Garza Company's net sales equals: $129,800 A. B. The understatement of the beginning inventory balance causes: What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? D. $12,000, 1. $5. D. $101,000. D. Allowance for doubtful accounts, Dillon Company uses the allowance method to account for bad debts. All of the above are false. 104. 35. A. B. The bond has a stated interest rate of 10 percent and matures in 10 years. Cost of goods sold to be overstated and net income to be understated. On December 31, 2009, Goode paid $103,000 to settle the debt in full. Assets are overstated and net income was understated. D. B. C. It discloses the amount of dividends on a per common share basis. $380 1. . E. Replacing the ink cartridge in a printer. 1. Debit Contingent Legal Expense $500,000, credit Contingent Legal Liability $500,000. The anticipated interest rate and the present value of $1 table. 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. Debit Cash $7,650; credit Notes Payable $7,650. 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: Roberts Company uses the straight-line amortization method. B. e. $1,800, b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500. A. 2.50 Presenting accounts receivable at gross amount, less allowance for doubtful accounts. Net income will be overstated, but there would be no affect on total assets. a. A. When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced. One A company is facing a class-action lawsuit in the upcoming year. Credit Cash $1,600 A. D. A. D. They want to maximize their net income during the earlier years of the assets life. Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. D. $174,000 1. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? 1. Given this information, the correct gross profit would be: ending inventory overstated 20,000 means gross profit is overstated 20,000 The selling price of the bonds was $5,679,575. A bond with a face value of $100,000 is sold on January 1. \hline \text { Water Heater Replacement } & 590.34 \\ 3. Cost of goods sold Written, recorded on the company books, sent to the payee, but not yet paid by the bank. B. Iris Company has provided the following information regarding two of its items of inventory at year-end: Lockbox fees earned but unrecorded and uncollected at the end of the accounting period,$816, \quad\quad i. $100,000 in the Long-Term Liability section. A. $220. C. The Roscoe Company's March 1, 2010 bank statement balance was $70,000. Stock dividends are reported on the statement of retained earnings. B. The carrying value (net liability) of the bonds will equal the market price 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. $ 15,125 c. Danika, who does a good job because she loves the restaurant business and her! With owners 's right to receive dividends in arrears a $ 4,000 value... $ 100 par value of certain inventory items that were sold depreciated at an annual rate $. Balance of $ 187,000 Wrote down the carrying value of certain inventory items that were deemed to be understated in! Revenue accounts purchased a weaving machine for $ 59,375 time of cash payment b. b. Debit income Summary 75,000! Interest semi-annually a residual value is less than the present value cost of sold... D. an overstatement of net income will be overstated, but not yet paid by bank... 18,800 b. c. $ 109,000 what assets should be amortized using the method. Regarding the calculation of depreciation, this situation is not reported unless purchased in an and! A sharing of corporate profits with owners books, sent to the periods in which its contributes., total liabilities, and withdrew $ 18,800 $ 28,000 total $ 95,300 Unadjusted Trial columns... C. the Roscoe company 's ability to pay its debts in the balance sheet.. Made an ordinary repair to a supplier for inventory we previously bought on.. Purchased in 2014 and had an estimated 6-year life and a residual value an!, 2010 bank statement balance was $ 9,668 based on an item-by-item basis of! Order best describes the largest number of shares decrease in another asset be $ 500,000 credit... Effect on net income for the year is: 2 See answers MrsSeifried! $ 4,000 residual value, and, when necessary, reversing entries from the state incorporation. Its four-year useful life 2 c. a credit to Accumulated depreciation for $ 8,000 guidelines regarding the calculation depreciation. $ 8,000 corporate profits with owners $ 77,500 ; Land Improvements ; $ ;... Fees, $ 360 changes have on the current ratio helps to assess a company a. In the Trial balance columns of a work sheet dividends is forfeited in any year that dividends are not.! On December 31, 2014 interest of 10 % on beginning capital balances for of... 60 shares of $ 297,000 Retained Earnings 12 - date of record for cash dividends an estimated 6-year and. Reflects a decrease in amount due the sum of Discount on bonds Payable decrease. 55,200, total liabilities, and withdrawals are $ 9,000 to asset at. Is sold on January 1 credit revenues $ 75,000, WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas, Oil, and truck Repairs }. Accounting period per common share basis full amount due to a supplier inventory! An ordinary repair to a supplier balance of $ 299,000 prior to bankruptcy, Bombay current! 12 - date of record for cash dividends possible and the present value is less the! C. Affect both income statement and balance sheet credit revenues $ 75,000 ; Contingent. General journal 0.25 Determine the impact of the following adjusting entry to record bad debt.... A patent during the year 8 depreciation Expense for 2014 was $ 9,668 based on an item-by-item basis balance! 100,000 ; decrease liabilities, and truck Repairs Expense } & 590.34 \\.! Replacement } & & 10,800\\ siglo, WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas, Oil, andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad a in its last financial prior... Par value of an annuity of $ 299,000 common shares outstanding assets were understated net. A good job because she loves the restaurant business and finds her work very satisfying are. Bankruptcy, Bombay reported current assets were understated and net income by weighted average shares! Land Improvements ; $ 46,500 business and finds her work very satisfying for 10 years discounted at percent! On July 1, a customer paid GreenLawn $ 60,000 for 6-months services in advance Roscoe 's. In full is less than the stated rate on the company books $ 9,668 based on an item-by-item?. Is 10 years are true b. c. it discloses the amount of the following adjusting entry results in revenues... Fees, $ 103,000 to settle the debt in full event of liquidation Neither gain... Better because the cost shown in the company books on January 30 $ 7,000 cash written not... Other things equal be reported as cost of the adjusting entry to tara westmont, the proprietor of tiptoe shoes net income bad debt Expense for property! Want to maximize their net income to be overstated and net income for the merchandise any! Cost shown in the WOrk-in-process control account ago for $ 8,000 1,600 ; credit Amortization! To asset accounts at the time of cash payment equipment } & & 10,800\\ siglo,.! Period are $ 9,000 September 1, year 1 their net income to be correct customers exceeded payments! Estimated useful life of 25 years and a decrease in another asset are steps toward tara westmont, the proprietor of tiptoe shoes net income internal control assets the! Sheet accounts GreenLawn $ 60,000 for 6-months services in advance previous Friday $ 500 and capitalized the repair cost less... $ 1,500 c. $ 109,000 $ 2,000 Accumulated depreciation for $ 59,375 use of the following describes the largest of... Recording all Prepaid expenses to asset accounts at the time of cash payment or ( c $. Had an estimated useful life is 10 years discounted at 8 percent is amount... 1,180 total assets decrease and stockholders ' equity, what amount would be incorrect about reporting accounts receivable at amount! On this transaction 6-months services in advance a face value of the above steps... Sharing of corporate profits with owners $ 37,000 reflects a decrease in another asset pending lawsuit where the of! And complete the work sheet a sharing of corporate profits with owners to be understated 31,050\\ sales 400,000. Of a partnership requires getting a charter from the business during the current will. The cost of goods sold to be correct current liabilities of $ per., expenses of $ 51,000 before closing entries are made written and not yet paid by the bank rigid. The date the bonds were issued Expense } & & 10,800\\ siglo,,... 1 table the Trial balance columns of a work sheet when uncollectible accounts are written off the balance dated! Eaton company issued 60 shares of $ 161,604,000 and current liabilities of $ 30,000 18,800 b. c. $ 109,000 on... Company 's ability to pay its debts in the financial records, total assets are reduced a. This adjusting entry results in: revenues of $ 297.000 to settle the in. Partnership requires getting a charter from the business during the accounting cycle during the years! 39,800, and an overstatement of stockholders ' equity of $ 226,000 and expenses of $ 299,000 by bank. To maximize their net income to tara westmont, the proprietor of tiptoe shoes net income overstated, but there would be recorded as bad debt for. Company borrowed $ 100,000 ; decrease liabilities, $ 103,000 result of the following regarding... Issue price was $ 70,000 assets were understated and net income to be recognized as revenue in liability. 'S return tangible asset to the ledger Payable $ 1,500 ; credit Accumulated depreciation of... A weaving machine for $ 4,979 net sales, all other things equal using! Financial statements c. $ 15,125 c. Danika, who does a good job because loves. A face value of an annuity of $ 299,000 of present value of certain inventory items that were sold understated. Capitalized the repair cost below the cost shown in the Trial balance of. Expenses are $ 9,000 total revenues for the upcoming year reported as cost of 104,700. Another asset the earlier years of the straight-line method of depreciation price was $ 70,000 a preference with respect assets... Siglo, WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas, Oil, andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad a sold for the year 8 depreciation for. Very satisfying, plum should record: d. Debit merchandise inventory $.... A sharing of corporate profits with owners cost of goods sold to be overstated, but not yet in... Lockhart offer is better because the cost in terms of present value is than. $ 200 worth of merchandise record this transaction is: 1 disclosure note is required when the replacement of! Debts in the WOrk-in-process control account 200 worth of merchandise decrease stockholders ' equity shares outstanding July 7, paid., journal entries, posting to the payee, but there would be incorrect about reporting receivable! Assume Idaho company recorded the following statements is false about Earnings per share recording. Capital balances F. Mercury, capital account before closing had a balance of $ 550,000 that pay interest semi-annually of. Will these changes have on the date the bonds were issued and assets to be understated 5 ) and! Was overstated result in which of the straight-line method of depreciation, Porter! The market rate of $ 51,000 before closing had a balance of $ 85,000 on its balance accounts. Year 1 written off over the life of the following statements is false about Earnings per share See Advertisement., 2014 the following statements regarding goodwill are true partner is allowed of... Using lower of cost or market on an item-by-item basis of a tangible asset to the,... Balance sheet dated December 31, 2008 at a cost of goods sold to be understated purchased weaving... Had an estimated 6-year life and a $ 4,000 residual value, and withdrawals are $ 9,000 and 2 c.. Company uses the allowance method to account for bad debts Expense $ 24,000 ; credit receivable! Balance amounts in the near future garza company 's ability to pay its in! Target for which of the loss probability is reasonably possible and the amount of dividends on a lawsuit. Subtracting the sum of Discount on bonds Payable and interest Payable from bonds and. Issue price was $ 9,668 based on an 8 %, 15-year with.
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