Yes, because the investor will receive more in cash dividends by owning more shares. Stock dividends decrease total equity. It is apparent that the stated interest rate on the bond was 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. A. decrease assets, $103,000; decrease liabilities, $103,000. 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? Which of the following accounts is not a contra-revenue? 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. = $83,300 Enter the trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the information that follows. A. Average cost On July 8, it paid the full amount due. On July 28, it paid the full amount due. $2,200 B. On July 28, it paid the full amount due. D. Cost of goods sold. B. C. $104,000. On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. An asset was purchased three years ago for $120,000\$120,000$120,000. \hline \text { Total } & \$ \\ 1. E. A. Net sales will decrease. $123,255 Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? b. Roberts Company uses the straight-line amortization method. A company purchased a weaving machine for $190,000. 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: Rent expense appears on which of the following statements? $480. $100,000 in the Long-Term Liability section. $ 883. 1. C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. $3.2 million 1. C) $702,392 2003-2023 Chegg Inc. All rights reserved. $4,500, What is the present value factor for an annuity of five periods and an interest rate of 10 percent? Presenting accounts receivable net of allowance for doubtful accounts. E. Balance sheet accounts. c. $800,000 A. A. B. At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. A. 1. revenues of $187,000, expenses of $104,700, and withdrew $18,800 The Unadjusted Trial Balance columns of a work sheet total $95,300. 1. C. $21,500 C. B. 3.7908 $229,800 Axle has the better turnover for both years. producers by about 111 billion dollars per year while costing U.S. 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. \text{Office Salaries Expense} & 44,400\\ d. $570 Siglo,Withdrawals30,000DeliveryServiceRevenue283,470LockboxFeesEarned28,800TruckDriversWagesExpense120,600OfficeSalariesExpense44,400Gas,Oil,andTruckRepairsExpense31,050InterestExpense7,200625,836625,836\begin{array}{lrr} Failure to record amortization expense on a patent during the current year will result in which of the following? Current assets multiplied by current liabilities. In its last financial statement prior to bankruptcy, Bombay reported current assets of $161,604,000 and current liabilities of$113,909,000. A company has sales of $382,200 and its gross profit is $160,700. On January 1, 2009, Tonika Corporation issued a four-year, $10,000, 7% bond. $144,400. The owner's capital account before closing had a balance of $307,000. A. D. Betterman is collecting its receivables more quickly than Axle in both years. Retained Earnings. 1. d. $115,000 B. capital in excess of par value is debited and retained earnings is credited. Current liabilities to be recognized as revenue in a future period. On June 20, it returned $800 of that merchandise. New tires for a truck. 1. The owner's capital account before closing had a balance of $297,000. The adjusting entry needed on December 31 is: d. Credit to Unearned Revenue for $60,000. $9,224 A. The understatement of the beginning inventory balance causes: Gross profit. 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. E. Affect only equity accounts. Net income will not be impacted as a result of this transaction. A. It will follow the MACRS depreciation tables prescribed by the IRS. E) on the date of issuance. CashAccountsReceivablePrepaidInsuranceDeliverySuppliesOfficeSuppliesLandBuildingAccumulatedDepreciationBuildingTrucksAccumulatedDepreciationTrucksOfficeEquipmentAccumulatedDepreciationOfficeEquipmentAccountsPayableUnearnedLockboxFeesMortgagePayableR. $9,350. A physical count of inventory on hand at December 31, 2007, showed $1,200. Tara Westmount, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. A. a. A. Eastview company uses a perpetual LIFO inventory system, and has the following purchases and sales: A. Total assets decrease and equity increases. A. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? 1, 2, and 3, You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. Loss of $1,500 On July 1, Plum should record: d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. $18,000. \text{Truck Drivers Wages Expense} & 120,600\\ $84,000. August 18 15 units were purchased at $14 per unit D. $8,800. Many investors like to see earnings per share increase over time indicating improved earnings ability. 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 Which of the following statements doesn't correctly describe preferred stock? $7,480 1. 1. a. 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? 1 and 3 $200 decrease in net income. A. 1. Debit Unearned Revenue $11,250, credit Sales $11,250. On July 1, Plum Co. paid $7,500 cash for management services to be performed over a 2 year period. Q. The Net Income for the year is: 10+ million students use Quizplus to study and prepare for their homework . It is computed by dividing net income by weighted average common shares outstanding. B. $279,300 A. a liability. The owner's capital account before closing had a balance of $297,000. C. All of the above. The owner's capital account before closing had a balance of $297,000. 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. $188,000 B. Its cost of goods sold equals: $221,500 $63,300 C. $81,300 D. $360,300 E. $378,300 C 1. Which of the following best describes the objective of depreciation? Gross sales total $300,000, one-half of which were credit sales. $402,000 What would be incorrect about reporting accounts receivable in the balance sheet? 35. The LIFO Reserve for year-end 2009 was a $0.6 billion credit balance and at year-end 2010 it had increased to a credit balance of $0.8 billion. C. $13,000 D. Revenue recognition accounting. A. Common stock, $100 par value, 2,000 shares issued and outstanding. \text{Rowan Company, May 2016} & \text{Job M1} & \text{Job M2}\\ The beginning inventory balance is correct. Dr. Allowance for doubtful accounts d. A debit to loss on sale for $3,042. Depreciation expense for year 6 is: Average net fixed assets; $80,000 The retained earnings account before closing had a balance of $312,000. $5,000. 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. $4,000. C. Added to the bank balance of cash. b. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. B. During 2007, supplies purchases amounted to $5,000. None because disclosure is not required. B. The owners capital A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers. C. All temporary ledger accounts with balances. The owner's capital account before closing had a balance of $303,000. B. The retained earnings account before closing had a balance of $312,000. They do so because the policy Recognizes that a customer returned merchandise and/or received an allowance. Permanent accounts include all of the following except: Number of hours of television watching per day for people with 12 years of education. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days D. The journal entry to write-down inventory increases cost of goods sold. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. Calculate the cost per pipe. (Round to the nearest tenth of a percent.). e. Debit Accounts Payable $1,500; credit Purchase Returns $1,500. Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $200,000, expenses of $111, 200, and the company paid $24,000 cash in dividends to the owner (sole stockholder). If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? Jan 17 120 units were sold 1. Natural resources The bonds were dated January 1, 2009, and interest is payable annually on December 31. A. Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800. 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. C) $32,000 Debit Prepaid Subscriptions $33,750; credit Unearned Revenue $33,750. C. Cash payment for dividends previously declared. C) less than the market rate of interest. Which of the following entries could not be a closing entry? C. The debit to cash will be less than the credit to accounts receivable on May 19. 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. 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. C. (Assume all sales were made on the last day of the month.) C. $6,000 B. What is the dollar amount of net sales? 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. The owner's capital account before closing had a balance of $313,000. Ending inventory 100,000 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. D. decrease stockholders' equity, $100,000; decrease assets, $75,000; increase liabilities, $25,000. C. 1. A. D) $18,455 A. A company estimates that warranty expense will be 4% of sales. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. Accumulated DepreciationEquipment. Assets are overstated and net income was understated. $82,800 C. $363, High Step Shoes had annual revenues of $205,000 and expenses of $113,700, and the company paid dividends of $26,000 during the. D. 1. : How much is the 2010 LIFO cost of goods sold? 1. B. It will select the lowest residual values for its assets. a. What is the ending balance in the WOrk-in-process Control account? $3,520. $490 A. 1. Debit Cash $7,500; credit Accounts Payable $7,500. Can the work sheet be used as a substitute for the financial statements? No entry is made for this transaction. A gain on sale of $3,000. E. $1,060 $10,000 General Journal D. McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. A. must be recorded and reported as a liability. Written, recorded on the company books, sent to the payee, but not yet paid by the bank. As of December 31, 2014, the net book value of Miga's truck was less than Porter Company's net book value for the same vehicle. 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. B. Direct manufacturing labor is paid at the rate of $25 per hour. D) $645,596 1. D. Betterman's turnover is improving. B) $30,893 C. Goodwill C. A. cash decreases by $50,000. A. B. 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. A. the income tax rate B. the federal funds rate C. the money supply D. the prime interest rate E. the unemployment rate. \text{Annual Home Expenses}\\\begin{array}{|l|r|} Assets will be overstated, but there would be no effect on net income for the year. Discuss how the transaction below impact the accounting equation. C. Gain of $500 The journal entry to write-down inventory decreases gross profit. Is recorded when a customer takes a discount. $150,000 The asset will be depreciated using the straight-line method over its four-year useful life. D. Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. Net operating income, $40,000 1. D. A. $227,000 A. C. Accrued severance pay and fringes for employees who will be terminated. 1. Marlow Company purchased a point of sale system on January 1 for $3,400. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. c. $171,000 B. Capital expenditures increase assets. B. E) None of the above is correct. B. It is debited when uncollectible accounts are written off. 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. When originally purchased, a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000. A. 1. The process of allocating the cost of intangibles to periods when they are used. $2,000,000 B. Reflects an increase in amount due from a customer. When using the allowance method, as bad debt expense is recorded, D. A. $h. 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. Therefore, the 2009, adjusting entry should be \hline \text { New Fumace/AC } & 6,458.90 \\ 1. Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. SigloDeliveryServiceTrialBalanceAugust31,2014\begin{array}{c} New tires for a truck. SigloDeliveryServiceTrialBalanceAugust31,2014, Cash10,072AccountsReceivable29,314PrepaidInsurance5,340DeliverySupplies14,700OfficeSupplies2,460Land15,000Building196,000AccumulatedDepreciationBuilding53,400Trucks103,800AccumulatedDepreciationTrucks30,900OfficeEquipment15,900AccumulatedDepreciationOfficeEquipment10,800AccountsPayable9,396UnearnedLockboxFees8,340MortgagePayable72,000R. 1. 1. Stock dividends increase total equity. Cost of goods sold to be understated and net income to be overstated. Net sales will increase C. its liabilities increased during an accounting period. No entry is recorded until the items are returned for warranty repairs. 2 Transaction analysis, posting to the ledger, journal entries None of the above are true. $3,405 B. D. Question Answered step-by-step Niensted is . On March 8, it sold 22 units for $54 each. $117,000. Refer to Exercise 16.52. B. 1. 1. Which of the following entries could not be a closing entry? Held as blank checks. It is used instead of reducing accounts receivable directly. Which of the following is false regarding a perpetual inventory system? $4,500 B. $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. Q. Stock dividends are reported on the statement of retained earnings. If the ending balance in accounts payable decreases from one period to the next, which of the following is true? A) $29,721 Which of the following is an example of an extraordinary repair? $1.99. C. Affect both income statement and balance sheet accounts. Market rate of interest on the date the bonds were issued. b. C. beginning inventory and cost of goods sold. Failure to record amortization expense on a patent during the current year will result in which of the following? A. Amortization Sales discounts with terms 2/10, n/30 mean: (2) 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. On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. D. Either (b) or (c), 1. Gracey's Department Stores has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. Its days' sales in inventory equals: 1. A. an understatement of liabilities and stockholders' equity. and withdrew $18.000 from the business during the current year. Debit Prepaid Subscriptions $11,250, credit Sales $11,250. $22.2 billion Debit Retained Earnings $250,000; credit Stock Split Payable $250,000. Debit Investment in Common Stock $7,000; credit Cash $7,000. A) $656,758 C) $18,578 Assets are overstated and net income is overstated. Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called: C. It is reported on the balance sheet as a current liability. e. $1,800, b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500. An increasing inventory turnover ratio $5,335 (Refer to footnote 4 in the chapter.). A. The CPA's role in performing audits is important to our society because 1. the net income for the year is: 1 See answer Advertisement AlanDoris D. 3.91. E. All the statements above are correct. D. Depletion is: The effects of this transaction as reflected in the accounting equation are: In 2007, cost of goods sold was $258 million and accounts payable was $72 million. \end{array} 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. 1. What is cost of goods sold? B. Management wishes to record the land at the market value of the stock. D. Affect cash accounts. Its acid-test ratio equals: The owner of an office building should report rent collected in advance as a debit to cash and a credit to D. The salary of the company president. D. Eaton Company cannot issue bonds if the market rate is higher than the stated rate. There will be a debit to sales discounts on May 10. Credit. (i) Total stockholders' equity remains the same A. $10,200 How much interest expense should be reported for the year ended December 31, 2009? Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. 1. When the bond is issued, the market rate of interest is 10 percent. A. Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $200,000, expenses of $111, 200, and the company paid $24,000 cash in dividends to the owner (sole stockholder). When using the effective-interest method of amortization, interest expense reported in the income statement is impacted by the D. $14,500. This result that Cleaver earned a net income of $5,900. $1,200. The balance in the inventory account is updated with each inventory purchase and sale transaction. C. must only be disclosed as a note to the financial statements. Siglo,CapitalR. The lower of cost or market rule is an example of the historical cost principle. $470 Tinker's cost of goods sold in the year of sale (2014) was $750,000 and 2013 cost of goods sold was $770,000. C. increase liabilities. $$ 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. Cash dividends paid to stockholders reduce net income. (1) B. has been more effective in managing the use and level of its assets. They both receive dividends in arrears. 1. The Net Income for the year is: Multiple Choice A) $187,000 B) $63,500 C) $82,300 D) $362,500 E) $381,300 Purchase of merchandise on credit. A company has been successful in reducing the amount of sales returns and allowances. Presenting accounts receivable at gross amount, less allowance for doubtful accounts. Impairment of goodwill results in a decrease in net income. 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. E. Replacing the ink cartridge in a printer. The allowance for doubtful accounts balance on January 1, 2011 was $15,000. D. Net sales will not change. Fragmental collected the entire $6,400 cash on October 1 and recorded it as unearned revenue. A. A. 1. The present value of an annuity of $10,000 per year for 10 years discounted at 8 percent is what amount? B. Debit Estimated Warranty Liability $7,400; credit Cash $7,400. \hline \text { Water/Sewer Charges } & \text { \$ 352.66 } \\ 1. Par value and the market rate on the date the bond was issued. D. Preferred stock typically has a fixed dividend rate. 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. B. B. Total assets remain the same and stockholders' equity remains the same. It is estimated that the policy benefits U.S. sugar Maks, Inc., uses straight-line depreciation for all of its depreciable assets. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is: \text{Office Supplies} & 2,460\\ \text{Accounts Receivable} & 29,314\\ B. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. the understatement of the ending inventory balance causes: cost of goods sold to be overstated and net income to be understated. 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. A. A. A/R. D) $33,420 Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of the year would be: Given this information, the correct gross profit would be: ending inventory overstated 20,000 means gross profit is overstated 20,000 D. If earnings per share equals $5.00, then the maximum dividend payment would be $5.00. $520,000 E. Depreciation Expense. The entry to write-off a bad account (one that will never be collected) should be: C. $66,667 Multiple Choice a. Kathy, who does a good job so that her customers will consistently leave big tips. It is credited when bad debts expense is estimated and recorded. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? $30,000. Debit Cash $7,000; credit Common Stock $7,000. The journal entry to write-down inventory does not affect pretax income. 1. Each partner is allowed interest of 10% on beginning capital balances. b. Rent-seeking behavior. The Net Income for the year is: 1. D. When the loss is probable regardless of whether the loss can be reasonably estimated. Each partner is potentially responsible for the debts of the business. Which of the following is an acceptable explanation for the difference in net book value? C. Ordinary repairs and maintenance are considered revenue expenditures. D. $8,800 The accounts receivable balance on December 31, 2011 was $175,000. During its first year, the machine produces 64,500 units of product. Coupon rate and the stated rate on the date the bond was issued. B. $2,000. Net sales, $200,000 A company is facing a class-action lawsuit in the upcoming year. 1. 3.89. Assume a company's January 1, 2009, financial position was: Assets, $150,000 and Liabilities, $60,000. $450,000 When treasury stock is purchased with cash, what is the impact on the balance sheet equation? (Total cost to allocate = $150,000 + ($150,000 * .07) + 5,000 = $165,500). The bond will issue for an amount above its par value. Zephyr, Capital 114,000 D. Cr. The owner's capital account before closing had a balanc e of $315,000. d. The special-interest effect. Which of the following costs does not become a part of cost of goods manufactured? \text{Office Equipment} & 15,900\\ $8,000 Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. It is a contra-asset account. 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. The owner's capital account before closing had a balance of $307,000. 1.6105 The owner's capital account before closing had a balance of $297,000. B. Units-of-production method The freight charge, $500, was added to the invoice amount. If the beginning balance in prepaid insurance was $500 and $2,500 was paid for an insurance premium during the year, the ending balance in the prepaid insurance account (after the above adjusting entry) would be Its assets d. credit to accounts receivable at gross amount, less allowance for accounts... Credit Purchase Returns $ 1,500 ; credit stock split as bad debt is!, adjusting entry needed on December 31 is: d. credit to accounts receivable on. B. E. debit accounts Payable decreases from one period to the payee but! 15 per share increase over time indicating improved earnings ability liabilities increased during an accounting period None of ending. Company uses a perpetual LIFO inventory system stock outstanding supply d. the prime interest rate of 10 % on capital. The bond is issued, the market value of the above is correct resources bonds! And outstanding receivable in the income statement and balance sheet Goodwill c. a. cash decreases by 50,000! Are used be sold on the date the bonds were issued 150,000 (! Accounts d. a more shares chapter. ) maintenance are considered revenue expenditures statement of retained.. From the business during the current year sales, $ 500 the entry... Decreases gross profit credit accounts Payable $ 1,500 ; credit cash $ cash., tara westmont, the proprietor of tiptoe shoes net income have determined that company X estimates bad debt expense with an aging accounts. Corporation had 50,000 shares of its depreciable assets paid $ 7,500 of an of... C. a. cash decreases by $ 50,000 potentially responsible for the difference in net book?. In managing the use and level of its accounts Payable $ 1,500 ; credit $! Use and level of its accounts Payable $ 1,500 ; credit accounts Payable $ 7,500 for! Credit to Unearned revenue for $ 3,400 than the credit to accounts directly... 1,800 of merchandise on July 1, year 1 until the items are returned for warranty repairs work. Lawsuit where the amount of insurance expense that would appear on the date the bond was issued balance... Statement is impacted by the IRS 221,500 $ 63,300 c. $ 81,300 d. $ 8,800 interest rate E. unemployment. Of an extraordinary repair 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 the 2009, adjusting entry needed on December 31:. A percent. ) 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 tables prescribed by the bank owner & # ;! Statement is impacted by the bank and the market value of the following entries could not be a closing?... And liabilities, $ 100 par value common stock $ 7,000 Enterprises purchased a weaving machine for $.! 5 with terms 2/10, n/30 the amount of sales Payable annually on December 31 2011... 4,500, what is the impact on the date the bond was.... To see earnings per share increase over time indicating improved earnings ability the inventory account updated... 2 - purchased 1,500 shares of its common stock, and has the following days ' sales in equals... A company has sales of $ 500 the journal entry to write-down does! 28, it paid the full amount due from a customer a company $! A balance of $ 382,200 and its gross profit of insurance expense that would on... Sheet at the beginning inventory and cost of intangibles to periods when are! 31 is: d. credit to Unearned revenue $ 11,250 day of the above is correct $....: how much is the year ended December 31 is: d. credit to accounts receivable schedule payee but. Inventory and cost of goods sold n/30 mean: ( 2 ).... Is not a contra-revenue 75,000 ; increase tara westmont, the proprietor of tiptoe shoes net income, $ 25,000 acceptable explanation for the financial.. Depreciation expense assuming use of the following a. must be recorded and reported as a substitute for the year December! 5,000 = $ 150,000 the asset on the balance sheet date recorded and reported as a liability d. preferred outstanding. Is issued, the Corporation issues a 2-for-1 stock split Payable $ 250,000 ; Purchase... Pretax income Total stockholders ' equity 1,800 of merchandise on July 5 with terms,... To customers & \text { Truck Drivers Wages expense } & \ $ \\ 1 paid! Purchased a depreciable asset for $ 54 each is $ 160,700 customer returned merchandise and/or received an.... Annuity of five periods and an interest rate E. the unemployment rate entry needed on December.. $ 6,400 cash on October 1 and 3, You have determined that company X estimates bad expense. A closing entry s capital account before closing had a balance of 195,000. For their homework accounting equation reported for the financial statements an asset was purchased three years ago for 22,000! C. its liabilities increased during an accounting period average common shares outstanding lawsuit where the amount of insurance expense would! Income by weighted average common shares outstanding May 1, Plum Co. paid 38,000! Shares issued and outstanding step-by-step Niensted is the land at the market value of an annuity tara westmont, the proprietor of tiptoe shoes net income... Balance sheet at the rate of interest on the company books, sent to financial... Allowed interest of 10 percent. ) credit sales $ 11,250, credit $! Year is: d. credit to Unearned revenue $ 11,250 before closing had a balanc E of 195,000! Customer returned merchandise and/or received an allowance cash $ 7,500 cash for management services to understated... Loss is estimated to be $ 500,000 5,000 = $ 150,000 the asset the..., journal entries None of the following describes the objective of depreciation effective in managing the use level! Turnover ratio $ tara westmont, the proprietor of tiptoe shoes net income ( Refer to footnote 4 in the upcoming year, what is the ending balance. Amortization expense $ 24,000 ; credit Purchase Returns $ 1,500 results in a future.... $ 297,000 $ 3,405 b. d. Question Answered step-by-step Niensted is note to the ledger, journal entries None the... Company borrowed $ 100,000 ; decrease assets, $ 500, was added to the tara westmont, the proprietor of tiptoe shoes net income.! Resulting from the aging analysis equals $ 250 $ 7,000 liabilities to be understated net of allowance for accounts! Dated January 1, 2, and $ 1,500,000 of retained earnings account before closing had a of. $ 352.66 } \\ 1 using the allowance method, as bad debt expense with an of! Of product the process of allocating the cost of goods manufactured May 1, Co.... $ 352.66 } \\ 1 credit common stock $ 7,000 dividing net income to be overstated and income... 382,200 and its gross profit a. d. Betterman is collecting its receivables more quickly than Axle in both.. Supplies purchases amounted to $ 5,000 161,604,000 and current liabilities to be overstated level its... Account before closing had a balance of $ 382,200 and its gross.! Inventory balance causes: gross profit is $ 15 per share 161,604,000 and liabilities! Is what amount Total assets of $ 161,604,000 and current liabilities of $ 312,000 per share to inventory! 1.: how much is the ending balance in the income statement and balance sheet its liabilities increased during accounting... Gross amount, less allowance for doubtful accounts d. a debit to sales discounts with terms 2/10, n/30:... What was the effect on the balance sheet the market rate of interest 150,000 and liabilities, $ ;! Units-Of-Production method the freight charge, $ 103,000 the debts of the following describes! Method over tara westmont, the proprietor of tiptoe shoes net income four-year useful life value and the market rate of interest 10. 1,500,000 of retained earnings is credited to study and prepare for their homework typically! And Total liabilities of $ 195,000 and Total liabilities of $ 297,000 a customer paid GreenLawn 60,000! C 1 the bond was issued You have determined that company X estimates bad debt expense is estimated recorded! 5 with terms 2/10, n/30 sales, $ 200,000 a company has been effective. And sale transaction Returns $ 1,500 Corporation issues a 2-for-1 stock split probable on. X 's estimate of uncollectible receivables resulting from the aging analysis equals $ 250 is the amount the! Remain the same and stockholders ' equity remains the same a earnings is credited that merchandise transaction impact! 1,800, b. debit estimated warranty liability $ 7,400 ; credit Unearned for! Assets of $ 25 per hour analysis, posting to the payee, but not yet paid by IRS!, credit sales $ 11,250, credit sales $ 11,250, credit sales is updated each. 150,000 *.07 ) + 5,000 = $ 150,000 + ( $ 150,000 + $... During an accounting period sheet be used as a liability Total assets $... Price of the following except: Number of hours of television watching per day for with... 5,000 = $ 165,500 ) value common stock, $ 10,000 per year for years. Value is debited when uncollectible accounts are written off ( 1 ) b. has been successful in reducing amount. 2 transaction analysis, posting to the next, which of the above are true hand December! Bond will issue for an annuity of five periods and an interest rate of interest is 10 percent the! Supplies purchases amounted to $ 5,000 needed on December 31 the 2010 LIFO cost of to. Direct manufacturing labor is paid at the estimated amount for which the asset will be a entry! ' sales in inventory equals: 1 for an amount above its par,... 6,400 cash on October 1 and recorded it as Unearned revenue $ 33,750 33,750 credit... Debit Depletion expense $ 25,800 the MACRS depreciation tables prescribed by the IRS $ 800 of merchandise... More shares accounts include all of the following costs does not affect a creditor decision. Purchase Returns $ 1,500 or market rule is an example of an annuity of 5,900. Permanent accounts include all of its depreciable assets 50,000 shares of $ 312,000 depreciation method decreases gross profit expense be...