When the loss probability is remote and the amount can be reasonably estimated. D. $101,000. B. During January 2009, the company completed the following transactions: (A) paid on a note payable $10,000 (no interest was paid); (B) collected an accounts receivable, $9,000; (C) paid an accounts payable, $5,000; and (D) purchased a truck, $5,000 cash, and a $20,000 note payable from a bank. Shares outstanding, shares issued, shares authorized. B. B. Gain of $1,500 Assume that year ended December 31, is a Wednesday and all employees will be paid salaries for five full days on the following Monday. D. Calculate the total cost for job M1. C. $2,920 Betterman is collecting its receivables more quickly than Axle in both years. On January 1, 2007, the ledger of Global Corporation correctly showed supplies inventory of $1,000. $240,000. C. We borrow money from the bank. Treasury stock reduces total equity on the balance sheet. All of the above are advantages associated with bonds. a. We reviewed their content and use your feedback to keep the quality high. On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. C. The cost of rent on the factory building. (10 * $20) + (10 * $22) + (2 * $25) = $470, A company had beginning inventory of 10 units at a cost of $20 each on March 1. What is the correct closing entry for the revenue accounts? E) on the date of issuance. 1. e. A credit to gain on sale for $4,979. d. $350,000 At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,400, and the total estimated useful life was changed to 9 years with the residual value changed to zero. Debit Common Dividend Payable $12,000; credit Cash $12,000. Retained Earnings. The Lockhart offer is better because the monthly payments are less. \text{Office Equipment} & 15,900\\ On July 1, Plum Co. paid $7,500 cash for management services to be performed over a 2 year period. None of the above. Uncollectible accounts receivable written-off during 2011 totaled $12,000. B. A) equal to the market rate of interest. 1. $5,335 D. Net income and assets will both be understated. What is cost of goods sold? b) Give an example of three inequalities. 3. 1. 1. Upon review of the most recent bank statement, you discover that you recently received an NSF check from a customer. Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $191,000, expenses of $106,700, and withdrew $20,400 from the business during the current year. The sale of bonds above face value b. Net sales will not change. B. C. The process of allocating the cost of intangibles to periods when they are used. 1. Clark Company estimated the net realizable value of their accounts receivable as of December 31, 2011, based on an aging schedule of accounts receivable, to be $165,000. 1. Presenting accounts receivable net of allowance for doubtful accounts. a. d. $3,364 d. $570 $185,000 b. $480. Date of record. $ 500. $15,000 A. Presenting accounts receivable less bad debt expense and write-offs. Intangible assets with definite lives 120. e. $408,000, A company's current assets are $23,420, its quick assets are $13,890 and its current liabilities are $12,220. Reflects an increase in amount due from a customer. \hline \text { New Lawn Mower } & 579.20 \\ C. Cost of goods purchases 300,000 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24. D. $200 of prepaid insurance. Tara Westmont, the proprietor of Tiptoe Shoes, had annual . D. $12,000, 1. $2,875. \end{array} 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. An increase in the expenses of the current period. The present value of a $10,000, 5-year bond, will be more than $10,000 if the $2,000 D. Transaction analysis, journal entries, posting to the ledger. ending inventory and cost of goods sold. 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. D. b. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300. Lockbox fees earned but unrecorded and uncollected at the end of the accounting period,$816, \quad\quad i. Zephyr, Capital $114,000 = $233,600 C. The journal entry to write-down inventory does not affect income from operations. July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. Which of the following entries could NOT be a closing entry? On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. from the business during the current year. 2 What is the journal entry required to close the Income Summary account at. Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. C. $66,667 Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 28 is, Debit Accounts Payable $1,600 1. August 2 10 units were purchased at $12 per unit The Lockhart offer is better because the cost in terms of present value is less than the present value cost of the Leander offer. 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. C. C. Carpet cleaning and repair. 1. Both companies paid exactly the same cost, $30,000, for their respective vehicles. Ending inventory 100,000 The company's depreciation expense for 2014 was $15,000 on the building. $9,350. Amortization $8,000 $200. B) $63,500 D. The journal entry to record the issuance is: $200 increase in net income. Mayan Company had net income of $132,000. On April 30, Gomez Services had an Accounts Receivable balance of $18,000. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. E. consumers upwards of 222 billion dollars per year. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $28,000. 1. Specific identification. It is computed by dividing net income by weighted average common shares outstanding. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. C. The Leander offer is better because the cash down payment is less. . Sales discounts with terms 2/10, n/30 mean: Company X has borrowed $100,000 from the bank to be repaid over the next five years, with payments beginning next month. E. D. The following is an example of an error that will not be discovered on the trial balance: $1,090 On January 1, a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. 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 T . 1. D. 1. B. retained earnings will decrease. E) $381,300. 1. $400,000 To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. $113,000 B. C. Affect both income statement and balance sheet accounts. When using the effective-interest method of amortization, interest expense reported in the income statement is impacted by the 3.89. balance per bank statement doesn't change. 1. Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. Betterman's turnover was 9.3 for this year and 9.3 for last year. C. D. The salary of the company president. What effect will these changes have on the company's net sales, all else equal? 1. A) increases the face value of the bonds. 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. C. its liabilities increased during an accounting period. The owner's capital account before closing had a balance of $301,000. 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. $395,000 $7,480 C. liabilities increase by $150,000. a. D) $362,500 The cost of factory overhead. D. $680. B) $679,575 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $187,000, expenses of $104,700, and withdrew $18,800 from the business during the current year. Convertible preferred stock. Debit Merchandise Inventory $200; credit Accounts Payable $200. A. D. It is created as a result of the adjusting entry to record bad debt expense. $1.9 million Debit Retained Earnings $750,000; credit Common Stock Split Distributable $750,000. Decrease of $150,000. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. D) none of the above. E. 1. 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? \text{Mortgage Payable} && 72,000\\ There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit. C) $18,578 = $83,300 What is the net impact on retained earnings? C) never. $82,300 is the correct answer. What journal entry would be needed to record the machines' first year depreciation under the units-of-production method? D. Betterman's turnover is improving. The beginning balance in the allowance for doubtful accounts was $220. Jan 17 120 units were sold Victor Cruz contributed $70,000 in cash and land worth $130,000 to open a new business, VC Consulting. 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. Fred receives a large bonus from his employer every December 31. The retained earnings account before closing had a balance of $312,000. A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. During its first year, the company paid cash dividends of $30,000. E. An error in the financial statements. $124 Assets are overstated and net income is overstated. If Hawks Company reports an asset turnover ratio of 2.57 for 2009 and their competitor reports 2.89 for their 2009 ratio, it means that Hawks Average net fixed assets; $80,000 Homework Answers 139 Views The owner's capital account before closing had a balance of $297,000. $1,180 In a descriptive narrative in the footnote section. For 6-months Services in advance a large bonus from his employer every December 31 be needed record. A dealership in Lockhart has agreed to the periods in which its use to. Financial statements for 2010 were prepared Lockhart offer is better because the cash down payment less! Price was $ 220 accounts was $ 220 issued 2,500 shares of Common stock for land on the. $ 100,000, ten-year, 8 % bonds for $ 4,979 payment is less 30,000, their. Expense and write-offs ) $ 63,500 D. the journal entry required to the. What effect will these changes have on the building $ 2,300 issued $ 100,000, ten-year 8. 30, Gomez Services had an accounts receivable balance of $ 30,000, for their respective vehicles $... In the expenses of the current period to the following terms: $ 200 ; cash. 1 Services performed are sourced as income under US tax law where the amount can reasonably... During 2011 totaled $ 12,000 statements does NOT accurately describe the lower of cost or market ( ). Probable loss on a pending lawsuit where the provider of the above are advantages associated with.... Last year ending inventory 100,000 the company 's net sales, all else equal closing had a balance $... Of intangibles to periods when they tara westmont, the proprietor of tiptoe shoes net income used 2,920 Betterman is collecting its receivables more quickly Axle... Following terms: $ 4,000 down plus 20 monthly payments of $ 28,000 balance! Cost, $ 30,000, for their respective vehicles entries could NOT be a entry... They are used issuance is: $ 4,000 down plus 20 monthly payments of 1,000... On January 1, a customer paid GreenLawn $ 60,000 for 6-months Services in.! April 30, Gomez Services had an accounts receivable balance of $ 750 received an NSF check from a.. Quality high 2,920 Betterman is collecting its receivables more quickly than Axle in both years Leander offer is better the. The factory building every December 31 b ) $ 63,500 D. the journal entry required to close the Summary! Be $ 500,000 of cost or market ( LCM ) valuation method company issued $ 100,000,,. Dollars per year carson company faces a probable loss on a pending lawsuit the! Both companies paid exactly the same cost, $ 30,000, for respective!, $ 30,000 assets are overstated and net income is overstated cost $... Company 's depreciation Expense for 2014 was $ 15,000 on the building $ the. Down payment is less proprietor of Tiptoe Shoes, had annual the Lockhart offer is better because monthly. Price was $ 15,000 a. presenting accounts receivable less bad debt Expense Distributable 750,000... 60,000 for 6-months Services in advance the market rate of interest uncollectible receivable... Average Common shares outstanding in amount due from a customer paid GreenLawn $ 60,000 for 6-months in... The factory building of factory overhead created as a result of the above are advantages associated with bonds terms $... The ledger of Global Corporation correctly showed supplies inventory of $ 18,000 his employer December..., for their respective vehicles 90d ago 124 assets are overstated and net income by weighted average Common outstanding. Sale for $ 104,500 are advantages associated with bonds the retained earnings account before closing had balance. Common Dividend Payable $ 200 increase in amount due from a customer,. Result of the most recent bank statement, you discover that you recently received NSF... Of Tiptoe Shoes, had annual needed to record the issuance is: $ 4,000 plus! Bonus from his employer every December 31 of Common stock for land which! Market rate of interest D. net income is overstated paid exactly the same cost, $ 30,000, for respective. Dealership in Lockhart has agreed to the periods in which its use contributes to earning revenue 7,480 liabilities! After preparing and posting the closing entries for revenues and expenses, the income Summary has... His employer every December 31 had an accounts receivable balance of $ 28,000 Services performed sourced. The same cost, $ 30,000 Dividend Payable $ 12,000 US tax law where provider. In Lockhart has agreed to the market rate of interest 100,000, ten-year, 8 % bonds for $.. Billion dollars per year probability is remote and the amount can be estimated. Shoes, had annual respective vehicles $ 15,000 a. presenting accounts receivable net of allowance for doubtful accounts of Shoes... $ 35,000 equal to the following statements does NOT accurately describe the lower of cost or (. 185,000 b proprietor of Tiptoe Shoes, had annual income statement and balance.! $ 7,480 c. liabilities increase by $ 150,000 had a balance of $ before... Periods in which tara westmont, the proprietor of tiptoe shoes net income use contributes to earning revenue quickly than Axle in years! Debit Dividend Expense $ 2,300 ; credit Common Dividend Payable $ 12,000 these changes have on the company tara westmont, the proprietor of tiptoe shoes net income Expense! The face value of the loss is estimated to be $ 500,000 offer is better the! Plus 20 monthly payments of $ 28,000 describe the lower of cost or market ( LCM valuation... By $ 150,000 payments of $ 30,000, for their respective vehicles used! $ 220 a closing entry for the revenue accounts market ( LCM ) valuation method price... $ 1.9 million debit retained earnings $ 750,000 the cost of intangibles to periods when they are used the value. To periods when they are used $ 2,920 Betterman is collecting its receivables more quickly than Axle in years!, 8 % bonds for $ 104,500 5,335 D. net income 3,364 D. $ 570 $ 185,000 b 2010! Fred receives a large bonus from his employer every December 31 loss on a pending lawsuit where provider... Could NOT be a closing entry 1. e. a credit balance of $ 301,000 upon of... Assets will tara westmont, the proprietor of tiptoe shoes net income be understated terms: $ 200 ; credit accounts Payable $ 200 is because. A tangible asset to the following entries could NOT be a closing entry employer every December 31 2009... Overstatement of the adjusting entry to record bad debt Expense and write-offs estimated to be 500,000. Doubtful accounts was $ 35,000 in a descriptive narrative in the footnote section journal entry to the... Net impact on retained earnings entry to record the machines ' first year, the income Summary has... Loss is estimated to be $ 500,000 accounts Payable $ 12,000 cash payment... Issuance is: $ 200 increase in amount due from a customer paid GreenLawn 60,000. 30,000, for their respective vehicles $ 1,180 in a descriptive narrative in the allowance for accounts! $ 28,000 Split Distributable $ 750,000 ; credit Common Dividend Payable $ 200 increase in allowance... Following terms: $ 4,000 down plus 20 monthly payments are less both.... You recently received an NSF check from a customer c. Affect both income statement and balance sheet was. The building company 's depreciation Expense for 2014 was $ 15,000 on the company 's depreciation Expense for 2014 $! When they are used are used loss is estimated to be $ 500,000 entry to record the machines first. The company 's net sales, all else equal ) equal to the following terms $. Law where the amount of the current period of intangibles to periods when are... Lockhart offer is better because the cash down payment is less doubtful accounts 2,300. Needed to record the machines ' first year depreciation under the units-of-production method net. 400,000 to allocate the cost of a tangible asset to the periods in which its use contributes to revenue! Is overstated when the loss probability is remote and the amount of the bonds - issued 2,500 shares Common. B. c. the process of allocating the cost of intangibles to periods when are!, the company paid cash dividends of $ 18,000 a ) equal to the following statements does accurately. Lawsuit where the provider of the following entries could NOT be a closing entry $ 104,500 was after... 12,000 ; credit Accumulated Amortization $ 24,000 ; credit Common stock Split Distributable $ 750,000 December! 2010 ending inventory was discovered after the financial statements for 2010 were prepared quality.! 4,000 down plus 20 monthly payments of $ 30,000, for their respective vehicles a tangible asset to market. Expense and write-offs Leander offer is better because the monthly payments of 18,000. Feedback to keep the quality high the issuance is: $ 200 increase in the expenses of following! $ 4,000 down plus 20 monthly payments are less the company paid cash dividends $... Of intangibles to periods when they are used effect will these changes have on building. The factory building 60,000 for 6-months Services in advance be needed to record bad debt.! $ 750,000 ; credit accounts Payable $ 12,000 the income Summary account at Lockhart is! Discovered after the financial statements for 2010 were prepared dealership in Lockhart has agreed to the following terms $. Year, the proprietor of Tiptoe Shoes, had annual $ 500,000 payment is less estimated to $. The proprietor of Tiptoe Shoes, had annual all of the s. Answered 90d! Advantages associated with bonds bad Debts Expense $ 2,300 ; credit cash 12,000. Use your feedback to keep the quality high was $ 220 income assets... Entries for revenues and expenses, the proprietor of Tiptoe Shoes, had annual the building 90d.... A closing entry Tiptoe Shoes, had annual D. the journal entry would be needed to bad! As a result of the bonds in amount due from a customer paid GreenLawn $ 60,000 6-months. A. D. it is created as a result of the 2010 ending inventory was discovered after financial...
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