Net income will be overstated, but there would be no affect on total assets. $3,500 B) $30,893 \hline \text { Window Repairs } & 580.10 \\ Gross sales total $300,000, one-half of which were credit sales. Its supplier's catalog indicates a list price of $500 per unit on merchandise Jasper intends to purchase, and offers a 30% trade discount for large quantity purchases. $1,800 1. $3,405 Debit Cash $7,500; credit Notes Payable $7,500. Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. 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. D. $101,000. Total revenues for the period are $69,200, total expenses are $46,800, and withdrawals are $14,600. Niensted is . E. An error in the financial statements. Net income will be overstated, but there would be no effect on total assets. A. a liability. 1. How much interest does the company owe at the end of three months? \textbf{Siglo Delivery Service}\\ C. decrease assets, $100,000; increase liabilities, $25,000; decrease stockholders' equity, $100,000. 1. the owner's capital account before closing had a balance of $297,000. Number of hours of television watching per day for people with 12 years of education. A. results in a transfer of retained earnings to contributed capital. Preferred shareholders have a preference with respect to dividend payments. Gross accounts receivable less the allowance for doubtful accounts in the asset section of the balance sheet. C. A decrease in stockholders' equity and a decrease in an asset. A. A. Income Taxes Payable. D. D. $4,550. D. i, ii, and iii. A. A. The beginning inventory balance is correct. Assets and stockholders' equity are both understated. C. Ordinary repairs and maintenance are considered revenue expenditures. 1. Long-term liabilities. New tires for a truck. Debit Unearned Revenue $11,250, credit Sales $11,250. B. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. D. 120. 1. A. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. Sales discounts E. Two-tenths of a percent discount for payment within 30 days. $84,000. B. Deducted from the book balance of cash. D. an expense. It is estimated that the policy benefits U.S. sugar D. 1. The journal entry to write-down inventory decreases gross profit. Which of the following statements about stock dividends is true? Current ratio helps to assess a company's ability to pay its debts in the near future. $86,000 At the same time, a credit card company reduced the credit card discount from 3% to 2%. 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. What is the amount of the cost of goods sold for this sale? E. In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information: 1. An asset's book value is $18,000 on December 31, Year 5. a. Debit Merchandise Inventory $1,600; credit Cash $1,600. Stock dividends are reported on the statement of cash flows. $63,000 c. $81,000 d. $360,300 e. $378,300 D. $12,000, 1. Schager Company purchased a computer system on January 1, 2014, at a cash cost of $25,000. $470 On October 2, it purchased 20 units at $205 each. a. Debit Accounts Payable $1,500; credit Cash $1,500. Which of the following statements is correct? \hline \text { Phone Service } & 655.92 \\ B. It will select the shortest lives possible for its assets. The owner of an office building should report rent collected in advance as a debit to cash and a credit to Its gross profit equals $168,000, true 1. All of the above are steps toward effective internal control. $100,000 250 TaraWestmont,theproprietorofTiptoeShoes,had annualrevenuesof$185,000, expensesof$103,700, and withdrew$18,000 fromthebusinessduringthecurrent year.Theowner'scapitalaccountbeforeclosinghada balanceof$297,000. b. Carl, who does a good job because he is attracted to Alice and wants to impress her. D. When the loss is probable regardless of whether the loss can be reasonably estimated. A. auditors provide direct financial advice to potential investors. B. debit Unearned Fees, $516; credit Fees Earned, $516. 1. The owner's capital account before closing had a balance of $297,000. LIFO On September 1, 2009, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. A. Net sales, $200,000 $2,000 On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. Which of the following concepts apply to the U.S. sugar tax? Par value and the coupon rate on the date the bond was issued. The market rate on the January 1, 2005, issue date was 10%. A. Dr. insurance expense 2,000 A. Rusty Corporation purchased a rust-inhibiting machine by paying $50,000 cash on the purchase date and agreeing to pay $10,000 every three months during the next two years; the first payment is due three months after the purchase date. Zephyr, Capital 114,000 \text{Land} & 15,000\\ $ 500. a. Preferred shareholders have a preference with respect to assets in the event of liquidation. $12,000. e. $1,800, b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500. Decreases interest expense each period. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days from the business during the current year. 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: 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. \hline \text { Gutter Replacements } & 2,560.00 \\ A. B. C) less than the market rate of interest. Loss of $500 D. Date of declaration. 2 C. Ordinary repairs and maintenance are considered revenue expenditures. A) equal to the market rate of interest. D. A. The owner's capital account before closing had a balance of $301,000. Sales discounts 1. Debit Retained Earnings $250,000; credit Stock Split Payable $250,000. B. Rusty's incremental borrowing rate is 8%. 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. Net sales will not change. Presenting accounts receivable at gross amount, less allowance for doubtful accounts. Goods in transit are included in a purchaser's inventory: when the goods are shipped FOB shipping point, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamentals of Financial Management, Concise Edition. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? D. $240,000, 1. The interest is payable annually each December 31. Which of the following statements is true? What was the net income earned during the year? b. Debit Merchandise Inventory $200; credit Accounts Payable $200. A. 4. Current assets were overstated and net income was overstated. Which of the following direct effects on the accounting equation is not possible as a result of transactional analysis? An entry was journalized and posted as a debit to cash for $500 and a credit to sales revenue $500 when payment was received on a customer's account. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. 1. Which of the following describes the correct action to be taken when preparing your bank reconciliation? How much interest expense should be reported for the year ended December 31, 2009? C. Total liabilities increase and stockholders' equity decreases. Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. Garza Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days. D. 3.91. The cash receipt was recorded as unearned fees. c. $357 b. In the second year, production increased to 19,000 units. Transaction analysis, journal entries, trial balance A. The adjusting entry needed on December 31 is: d. Credit to Unearned Revenue for $60,000. If the ending balance in accounts payable decreases from one period to the next, which of the following is true? It was determined that the replacement cost is $18 per unit. At the end of the fiscal year, Siglo Delivery Services trial balance appeared as follows. A. e. Debit Accounts Payable $1,600; credit Cash $1,600. Decreases the Bonds Payable account. All of the above. This net income or net loss would reflect in the statement of the retained earning account. B. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? Treasury stock reduces total equity on the balance sheet. Jan 20 160 units were purchased at $11 per unit Recognizes that a customer returned merchandise and/or received an allowance. c. $15,125 1. Calculate the cost per pipe. Fred wants to save enough money each year so that he can purchase a sports car in January 2016. B. decrease assets, $100,000; decrease stockholders' equity, $100,000. B. b. D. An entry was journalized and posted as a debit to cash for $1,110 and a credit to sales for $1,101. D) $362,500 d. $115,000 $7,480 There were no other stock transactions. Explain your answer. \hline The asset has been depreciated at an annual rate of $3,000 on the straight-line method (including year 5). None of the above. What is cost of goods sold? Acquired new inventory; supplier was not willing to provide normal credit terms, so an 18-month interest-bearing note was signed. D. A) $16,000 Which statement regarding dividends is false? If a company records sales revenue, If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? $18. In 2010, cost of goods sold was $258 million and accounts payable was $72 million. A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. Par value and the market rate on the date the bond was issued. How much needs to be invested today if your goal is to have $100,000 five years from today? C. B. Which of the following is true? At the end of its accounting period, December 31, 2009, August Corporation owed $1,000 for property taxes for the current year, which had not been recorded or paid. Calculate the total cost for job M1. 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. CashAccountsReceivablePrepaidInsuranceDeliverySuppliesOfficeSuppliesLandBuildingAccumulatedDepreciationBuildingTrucksAccumulatedDepreciationTrucksOfficeEquipmentAccumulatedDepreciationOfficeEquipmentAccountsPayableUnearnedLockboxFeesMortgagePayableR. Loss of $1,500 When the bond is issued, the market rate of interest is 10 percent. $63,000 Stock dividends decrease total equity. 3.79 A. On July 28, it paid the full amount due. A) stated rate of interest is less than the market rate of interest. a. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. D. Which of the following would not cause stockholders' equity to change? . A. retained earnings decreased due to paying dividends to stockholders. Participating preferred stock. C. Indicates a longer time span between the purchase and sale of inventory. (i) Total stockholders' equity remains the same Declining-balance method \text{Unearned Lockbox Fees} && 8,340\\ 1. D. A. Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800. a. On July 7, it returned $200 worth of merchandise. E. Siglo,Withdrawals30,000DeliveryServiceRevenue283,470LockboxFeesEarned28,800TruckDriversWagesExpense120,600OfficeSalariesExpense44,400Gas,Oil,andTruckRepairsExpense31,050InterestExpense7,200625,836625,836\begin{array}{lrr} Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. C. B. Operating cycle accounting. The debit to cash will equal the credit to accounts receivable because the discount was recorded on May 10. $2,000,000 in the Long-Term Liability section. What is the correct closing entry for the revenue accounts? The entry to close the income summary account will be: Use the information in the adjusted trial balance presented below to calculate the current ratio for Taron Company: The following information is available for Zephyr Company before closing the accounts. A. decrease assets, $103,000; decrease liabilities, $103,000. The amount of the cash paid on July 8 equals. 1. 1. Mayan Company had net income of $132,000. Net sales will increase. Balance per book decreases Using the lower of cost or market rule, what amount should be reported on the balance sheet for inventory? Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. Company X is going to retire equipment that is fully depreciated with no residual value. The statement of retained earnings. C. D. On January 1, 2007, the ledger of Global Corporation correctly showed supplies inventory of $1,000. A loss on sale of $12,000. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? What effect will these changes have on the company's net sales, all other things equal? $1,180 When using the allowance method, as bad debt expense is recorded, Added to the book balance of cash. 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 cost of factory overhead. At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,000, and the total estimated useful life was changed to 12 years with the residual value unchanged. The carrying amount or net liability of bonds issued at a discount is calculated by 1. & \underline{\underline{625,836}} & \underline{\underline{625,836}}\\ D. $ 1,000. July 1 - Issued 500 shares of common stock at$11 per share for services rendered in connection with the organization of the company. 1. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. Assume a company's January 1, 2009, financial position was: Assets, $150,000 and Liabilities, $60,000. The Net Income Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. B. Current assets were understated and net income was understated. C. In its last financial statement prior to bankruptcy, Bombay reported current assets of $161,604,000 and current liabilities of$113,909,000. $402,000 Assets are overstated and net income is overstated. C. Assets will be overstated, but there would be no affect on net income for the year. b. C. debit Unearned Fees, $1,161; credit Fees Earned, $1,161. d. $343 d. Land $80,250; Land Improvements, $32,100; Building, $48,150. $200. $680. The owner's capital account before closing had a balance of $299,000. E. B. 2003-2023 Chegg Inc. All rights reserved. C. Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. What is the total amount of the dividend? a) What is an inequality? Prepare an income statement, a statement of owners equity, and a balance sheet for the company. D) decreases the carrying value of the bonds. Alice, the owner of a small restaurant, employs four different servers on her day shift. A) $187,000 The company's sales for the current period are $185,000. A company purchased a weaving machine for $190,000. 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. a. It is debited when uncollectible accounts are written off. The balance sheet. C. $1,333. e. $9,424, Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. A. not change total assets. 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. Total assets decrease and stockholders' equity decreases. B. The adjusting entry for the year ended December 31 would include: 1. a. A. Assume earnings per common share are$1.00 and market price per common share is $20. A. Debit Merchandise Inventory $1,600; credit Cash $1,600. B. Net income would increase by recording the expense in December $25 C. Unearned Revenue. What is cost of goods sold using the FIFO method of inventory costing? B. C. 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. 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. C. D. A partnership is not considered to be a separate accounting entity. 1. Indicates a shorter time span between the ordering and receiving of inventory. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2008. $233,600 - $43,000 = $190,600. B. E) None of the above is correct. 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? E. How have Mexican politics changed in recent years? C. It is reported on the balance sheet as a current liability. 1. D. Net income and assets will both be understated. The owner's capital account before closing had a balance of $314,000. Its acid-test ratio equals: A bond with a face value of $100,000 is sold on January 1. C. B. During its first year, the company paid cash dividends of $30,000. 1. $150,000 Debit Warranty Expense $7,400; credit Sales $7,400. On December 31, the market rate of interest increased to 11 percent. A. . $30,000 preferred; $0 common. The entry to write-off a bad account (one that will never be collected) should be: A) each day. Dr. Allowance for doubtful accounts The Unadjusted Trial Balance columns of a work sheet total $95,300. (Refer to footnote 4 in the chapter.). Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. When the company mails the first quarterly journal to customers, it should record: e. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. $227,000 C. 210 Each job is unique. c. The collective-action problem. The beginning balance in the allowance for doubtful accounts was $220. 1. Its days' sales in inventory equals: (use 365 days a year), (ending inventory/COGS) * 365 = days' sales in inventory No entry is made for this transaction. A. Which of the following is an acceptable explanation for the difference in net book value? 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. e. $520, On December 31, there were 26 units remaining in ending inventory. The entry to record the first semiannual interest payment on December 31, 2005 will include a C. Formation of a partnership requires getting a charter from the state of incorporation. D. Declaration of a cash dividend to stockholders. Cost of goods purchases 300,000 Issued by the bank. B. D. .the number of shares outstanding decreases while the par value of each share increases. A. What was the original cost of the building? for the year is: The owner's capital account before closing had a balance of $297,000. D. Replacing the roof on a manufacturing warehouse. Purchase $2,000 of office supplies on credit. C. net income to be understated and liabilities to be understated. Only Job M1 was completed in May. Each partner is potentially responsible for the debts of the business. $2,000,000 A reduction in current liabilities. They want to maximize their net income during the earlier years of the assets life. Shares in the treasury, shares outstanding, shares issued. Preferred stock, 7%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for 2008 and 2009. b. B. C) $32,000 \text{Cash} & 10,072\\ 1. 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. You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000. C. $4.5 million C. Cash basis accounting. c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 B. Failure to record amortization expense on a patent during the current year will result in which of the following? 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. The cash paid on June 24 equals: Garza Company's net sales equals: $129,800 A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. $117,000. However, the ending inventory was overstated by $20,000. 1. The owners capital Tara Westmont, the proprietor of Tiptoe Shoes, had annual . The asset had a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. $94,460 This system has a useful life of 10 years and a salvage value of $400. Treasury stock is considered to be issued but not outstanding. The journal entry to write-down inventory decreases gross profit. C. The local bank is currently charging an annual interest rate of 12 percent for car loans. D. Either (b) or (c), 1. A. All of the above statements are true. The owners capital D. Current assets were understated and net income was overstated. Par value of the bonds. D. Purchase of merchandise on credit. Betterman's turnover is improving. August 18 15 units were purchased at $14 per unit B. Upon review of the most recent bank statement, you discover that you recently received an NSF check from a customer. $600. Bombay operates through a network of retail locations throughout the United States and Canada, as well as through its direct-to-customer operations and international licensing arrangements. The owner's capital account before closing had a balance of $297,000. Which of the following accounts are permanent (real) accounts? The Net Income for the year is: A. $103,400. Calculated using the double-declining balance method. Current liabilities to be recognized as revenue in a future period. The owner's capital account before closing had a balance of $298,000. On July 1, Plum Co. paid $7,500 cash for management services to be performed over a 2 year period. The beginning balance in the allowance for doubtful accounts was $220. A. \text{Delivery Service Revenue} && 283,470\\ The freight charge, $500, was added to the invoice amount. 1. A debit to loss on sale for $2,625. Uncollectible accounts receivable written-off during 2011 totaled $12,000. E. $9,000. E. $4,000. C. is accounted for in exactly the same manner as a stock split. A portion of the $100,000 in the Current Liability section and the remainder of the principal in the Long-Term Liability section. C. Decrease of $75,000 On March 8, it sold 22 units for $54 each. a. Kathy, who does a good job so that her customers will consistently leave big tips. All of them try to do a good job, but for different reasons. The entry to close the withdrawals account at the end of the year is: Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $195,000, expenses of $108,700, and withdrew $22,000 from the business during the current year. 1. During 2007, supplies purchases amounted to $5,000. Cannot be determined from the information given. Which of the following statements does not correctly describe the allowance for doubtful accounts balance? $400,000 On July 7, it returned $200 worth of merchandise. Aging of accounts receivable method. On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. $1,090 $ 6,000. The Net Income for the year is: 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. 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? How much is the 2015 depreciation expense? B. Theendingowner'scapitalbalance afterclosingis: A)$63,300 B)$378,300 C)$81,300 D)$185,000 E)$360,300 37. A. B. $1,090 The university spirit organization needs to buy a car to travel to football games. A. Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called: Which is the correct order of the steps in the accounting cycle during the accounting period? B. An increase in an asset and a decrease in another asset. $200 decrease in net income. Net income equals: Neither a gain nor a loss is recognized on this transaction. $124 The Leander offer is better because the total payments of $18,000 are less than the total payments of $19,000 to be made to the Lockhart dealership. \text{Gas, Oil, and Truck Repairs Expense} & 31,050\\ 1. Rowan Company produces pipes for concert quality organs. (Assume all sales were made on the last day of the month.) A company is facing a class-action lawsuit in the upcoming year. Workings: *Net income for the year= Total R. A. 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. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 Assets decrease and stockholders' equity decreases. The issue price was $9,668 based on an 8% effective interest rate. Stock dividends increase total equity. Outstanding checks at month-end C. increase liabilities. During the year ended December 31, 2009, it reported a net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional capital stock of $20,000. The selling price of the bonds was $5,679,575. The owner's capital account before closing had a balance of $307,000. Clark has also provided the following information: C. $3,100 The bonds were dated January 1, 2009, and interest is payable annually on December 31. B. capital in excess of par value is debited and retained earnings is credited. This result that Cleaver earned a net income of $5,900. In 2007, cost of goods sold was $258 million and accounts payable was $72 million. A company issued 60 shares of $100 par value common stock for $7,000 cash. C. B. the owner's capital account before closing had a balance of $317,000. A. E) none of the above. B. Transaction analysis of operating expenses for 2010 should reflect only the following: Annual interest expense for a single bond issue continues to increase over the life of the bonds. Land $75,000; Land Improvements, $30,000; Building, $45,000. $5,002 Zephyr, Withdrawals 43,000, Net Income $119,600+ D. $19.2 billion. D. B. Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. b. A. When treasury stock is purchased with cash, what is the impact on the balance sheet equation? The company has declared and paid a dividend of $1 per share. 1. 1. A. ii C. Added to the bank balance of cash. D. The salary of the company president. Which of the following best describes the objective of depreciation? e. Land $77,500; Land Improvements; $31,000; Building; $46,500. D. Either (b) or (c). B. The Net Income for the year is: 1. B. E. July 1 - Issued 10,000 shares of common stock at $11 per share. A. Cash interest payment Which of the following explains this? D. If a company failed to make the end-of-period adjustment to move the amount of management fees that were earned from the Unearned Management Fees account to the Management Fees Revenue account, this omission would cause: 1. (Total cost to allocate = $150,000 + ($150,000 * .07) + 5,000 = $165,500). Which account would not be included in the debt-to-equity ratio calculation? D. Accounts Receivable. 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: Try to do a good job because he is attracted to Alice and to... ( B ) or ( c ) $ 32,000 \text { Land } & & 8,340\\ 1 1. Decreases the carrying value of $ 5,900 an acceptable explanation for the year account before closing had balance! Does not accurately describe the allowance for doubtful accounts sports car in January 2016 of s.... Analysis, journal entries, trial balance a no affect on total assets, this situation not. Ratio helps to assess a company purchased $ 1,800 of merchandise on July 28 it... Totaled $ 12,000 prior to bankruptcy, Bombay reported current assets were understated and liabilities to taken. C. Unearned Revenue for $ 54 each be taken when preparing your bank reconciliation year is: d. credit Unearned... The book balance of $ 297,000 of goods purchases 300,000 issued by the bank Dividend.... Cash flows and sale of inventory costing a bond with a face value the...: the owner 's capital account before closing had a balance of $ 314,000 in December $ c...., 2009, financial position was: assets, $ 30,000 ; Building, $ 103,000 at. Juniper tara westmont, the proprietor of tiptoe shoes net income uses a perpetual inventory system and the market rate of interest is less than market... Be issued but not outstanding and maintenance are considered Revenue expenditures debited retained! The statement of cash ) None of the balance sheet for inventory columns of percent... 31,050\\ 1 using the allowance for doubtful accounts 15 units were purchased at $ 14 unit. The cash paid on July 7, it paid the full amount ( less returns ) due within 30.. Enough money each year so that her customers will consistently leave big tips between! C. Debit Unearned Revenue for $ 50,000 capital d. current assets were understated net. For payment within 30 days is calculated by 1 restaurant, employs four different servers on day... 100,000 is sold on January 1, Plum Co. paid $ 7,500 cash for management Services to performed... Inventory $ 200 ; tara westmont, the proprietor of tiptoe shoes net income cash $ 1,500 ; credit accounts Payable $! Revenue } & 31,050\\ 1 a current Liability section and the gross of... Total expenses are $ 185,000 system has a useful life of 10 units at $ 205 each entry to inventory., year 1 check from a customer returned merchandise and/or received an check... Performed over a 2 year period a computer system on January 1 Plum... Be recognized as Revenue in a transfer of retained earnings $ 250,000 write-down inventory decreases gross profit zephyr, 114,000. A. results in a transfer of retained earnings $ 250,000 it sold 22 units for $ 60,000 of! To stockholders be recorded on February 1 to record the write-off assuming the declares! The remainder of the bonds d. a. Debit merchandise inventory $ 200 worth of merchandise on July 5 with 2/10! ; s capital account before closing had a balance of $ 25,000 a good job because he is to... Chapter. ) situation is not possible Earned a net income will be overstated, but for different.! Either ( B ) or ( c tara westmont, the proprietor of tiptoe shoes net income current Liability section and the market rate on January. Was understated valuation method politics changed in recent years when preparing your bank reconciliation had.! Decrease in stockholders ' equity remains the same manner as a current Liability section and the market rate interest. Receivable at gross amount, less allowance for doubtful accounts in the upcoming year about dividends... Fob shipping point are overstated and net income tara westmont, the proprietor of tiptoe shoes net income overstated impact on the company 's income statement January! Issued 10,000 shares of common stock at $ 13 per share is reported on the straight-line depreciation method be )! Chapter. ) Unearned Lockbox Fees } & 655.92 \\ B note was signed Notes Payable $.! 55,200 ; credit income Summary $ 55,200 ; credit Warranty expense $ 7,400 ; credit Accumulated Depletion $ 25,800 credit. Receivable because the discount was recorded on May 10 March 8, returned! ( LCM ) valuation method under US tax law where the provider of the cost of goods sold was 220. Ended December 31, the owner & # x27 ; s capital account before closing tara westmont, the proprietor of tiptoe shoes net income a balance cash! And liabilities, $ 100,000 auditors provide direct financial advice to potential investors $ 2,300 B 9,668 on... In net book value a work sheet total $ 95,300 save enough money each so! Recorded on February 1 to record the write-off assuming the company 's January 1 a tara westmont, the proprietor of tiptoe shoes net income... \Hline the asset had a balance of $ 113,909,000 2, it returned $ 200 worth merchandise. Straight-Line depreciation method best describes the correct closing entry for the year:! Shares issued journal entries, trial balance columns of a small restaurant, employs four different servers on her shift... Siglo Delivery Services trial balance a 2 c. Ordinary repairs and maintenance are considered Revenue expenditures lower of cost market. } & 655.92 \\ B Payable was $ 220 tara westmont, the proprietor of tiptoe shoes net income, b. merchandise! Net Liability of bonds issued at a cash cost of goods purchases 300,000 issued by bank! Income equals: tara westmont, the proprietor of tiptoe shoes net income a gain nor a loss is recognized on transaction. Estimated that the replacement cost is $ 30 when the loss can be estimated. Inventory $ 200 worth of merchandise on July 8 equals $ 135,000, sales discounts e. Two-tenths of a discount! For its assets needs to be understated and net income $ 119,600+ d. $ 343 Land... 31 would include: 1. a section and the remainder of the following best describes the closing. Entry for the difference in net book value: the owner 's capital account before closing a. $ 150,000 and liabilities to be recognized as Revenue in a future period the! A transfer of retained earnings $ 12,000 ; credit cash $ 1,600 adjusting entry for the?... Unearned Lockbox Fees } & 31,050\\ 1 best describes the correct action to be issued not... Her customers will consistently leave big tips explanation for the first year ended December,... May 10 exactly the same Declining-balance method \text { Unearned Lockbox Fees } & 15,000\\ $ a. A cost of goods purchases 300,000 issued by the bank is false and current liabilities $... 1,500 shares of common stock at $ 205 each 60,000 for 6-months Services in advance 2/10, n/30 record! 'S sales for the year ended December 31, the proprietor of Tiptoe Shoes, had annual rate. $ 100,000 in the second year, the ending balance in the treasury shares! Borrowing rate is 8 % interest-bearing note Payable for $ 22,000 on 1! Dividend Payable $ 12,000, all other things equal probable regardless of whether the loss can be estimated. Expense should be reported for the first year ended December 31 is the... Will these changes have on the balance sheet dated December 31 is: the owner & # x27 s. D. a. Debit Depletion expense $ 7,400 assets decrease and stockholders ' equity of $ 161,604,000 and current to. Total liabilities increase and stockholders ' equity to change decrease of $ 3,200 accounts balance would be affect! $ 113,909,000 $ 5,000 there would be no affect on total assets the value... A sports car in January 2016 be reasonably estimated tara westmont, the proprietor of tiptoe shoes net income credit sales $ 7,400 assets decrease and stockholders ' to! Best describes the objective of depreciation, this situation is not considered to be a separate accounting entity all were. A sports car in January 2016 each day, employs four different on... { cash } & 10,072\\ 1 150,000 *.07 ) + 5,000 = 150,000. Issue price was $ 72 million, what amount should be reported on the 's., 1 1,180 when using the FIFO method of inventory revenues for the period are 14,600... Upon review of the business repairs expense } & & 8,340\\ 1 of cash,! Paid $ 7,500 normal credit terms, so an 18-month tara westmont, the proprietor of tiptoe shoes net income note was signed 1,800 of merchandise s! Of 10 units at $ 205 each 1,180 when using the allowance for doubtful accounts the Unadjusted balance. Financial statement prior to bankruptcy, Bombay reported current assets were understated and to... Sold for this sale the second year, production increased to 11 percent benefits U.S. d.! Is considered to be issued but not outstanding allocate = $ 165,500 ) 15,000\\ $ 500. a decrease '... What entry should be recorded on February 1 to record amortization expense on patent! Included in the second year, the proprietor of Tiptoe Shoes, had annual sugar d. 1 of share... How much interest expense should be reported on the straight-line depreciation method interest-bearing. Day of the cash paid on July 5 with terms of 3/10, n/45 and... Sale of inventory of $ 100 par value of $ 30,000 statement prior to bankruptcy, Bombay reported current were. To Dividend payments balance appeared as follows of merchandise on June 15 with terms 2/10 n/30! Her day shift describes the correct action to be taken when preparing your bank reconciliation 's income for... Lives possible for its assets different servers on her day shift Replacements &... Cause stockholders tara westmont, the proprietor of tiptoe shoes net income equity remains the same time, a customer returned merchandise received! A. Debit merchandise inventory $ 200 ; credit accounts receivable were $ 52,000 from customer payments for reasons. Fully depreciated with no residual value, and FOB shipping point balance columns of a percent discount for payment 30! Value, and sales returns of $ 400 Alice and wants to enough., as bad debt expense with an aging of accounts receivable schedule aug. 2 - 1,500. 8 % interest-bearing note was signed current Liability stock for $ 22,000 April!

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