A) increases the face value of the bonds. D. Eaton Company cannot issue bonds if the market rate is higher than the stated rate. The bonds were dated January 1, 2009, and interest is payable annually on December 31. The statement of retained earnings. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2008. The stated rate of interest was 10% and the market rate 11%. $124 $1,800 On July 28, it paid the full amount due. d. Debit Merchandise Inventory $1,500; credit Cash $1,500. B. 1. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. $470 E. Purchase allowances refer to a price reduction (allowance) granted to a buyer of defective or unacceptable merchandise. Net operating income, $40,000 All permanent ledger accounts with balances. C. $2,200 debit. \text{Accounts Payable} && 9,396\\ An entry was journalized and posted as a debit to cash for $500 and credit to accounts receivable for $5,000. 0.50. The asset had a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. Impairment of goodwill results in a decrease in net income. D. Net income will be decreased when we pay the bill in January. B. A. An increase in the expenses of the current period. Net income would increase by recording the expense in December 1. Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: In its last financial statement prior to bankruptcy, Bombay reported current assets of $161,604,000 and current liabilities of$113,909,000. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? $680. The owner's capital account before closing had a balance of $313,000. $22.2 billion Download the file 'breeds.py'; it contains a list of lists named 'breeds'. $49,157 Which of the following best describes accrued liabilities? What is cost of goods sold using the LIFO method of inventory costing? The cost of shipping for the merchandise is $7 per unit. 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. Each partner is potentially responsible for the debts of the business. Indicates a longer time span between the purchase and sale of inventory. B. Their records show that for last year, they paid$10,789.20 in mortgage payments, $581.00 for insurance premiums, and$2,685.00 in real estate taxes. The owner's capital account before closing had a balance of $297,000. Debit Prepaid Legal Expense $500,000; credit Contingent Legal Liability $500,000. Payment of cash to a supplier for merchandise previously purchased on credit. The Net Income A. Net sales will increase Which of the following is an example of an expense that would most likely be capitalized? What is the journal entry required to close the Income Summary account at. B. C. A. It is debited when uncollectible accounts are written off. A. C) increases the carrying value of the bonds. Gracey's Department Stores has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. 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. D. must be reported as a liability, but not recorded. CashAccountsReceivablePrepaidInsuranceDeliverySuppliesOfficeSuppliesLandBuildingAccumulatedDepreciationBuildingTrucksAccumulatedDepreciationTrucksOfficeEquipmentAccumulatedDepreciationOfficeEquipmentAccountsPayableUnearnedLockboxFeesMortgagePayableR. 1. The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. $520,000 Which of the following regarding the lower of cost or market rule for inventory are true? A. A company has sales of $382,200 and its gross profit is $160,700. Each partner is allowed interest of 10% on beginning capital balances. The company's depreciation expense for 2014 was $15,000 on the building. A. 1. c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300, On February 1, a customer's account balance of $2,300 was deemed to be uncollectible. C. $109,000. B. C. Net sales will decrease. A. On July 28, it paid the full amount due. How much needs to be invested today if your goal is to have $100,000 five years from today? The journal entry to record the declaration of the cash dividend is: $1,200 debit. A. A. Given this information, the correct gross profit would be: ending inventory overstated 20,000 means gross profit is overstated 20,000 e. Debit Accounts Payable $1,500; credit Purchase Returns $1,500. C. Depletion is: Which of the following accounts is a permanent account? a. Transaction analysis, journal entries, trial balance Two Workings: *Net income for the year= Total R. After all of the closing entries are made, what will be the balance in the Zephyr, Capital account? 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. What is the net impact on retained earnings? Total assets decrease and stockholders' equity increases. E) None of the above. 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. B. 1. Cost of goods purchases 300,000 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. Current assets were overstated and net income was understated. 1. The Federal Open Market Committee sets a target for which of the following? Calculate dividend yield, price/earnings ratio, and return on equity. Explain your answer. C. Assets will be overstated, but there would be no affect on net income for the year. Gross sales total $300,000, one-half of which were credit sales. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record: Tinker's cost of goods sold in the year of sale (2014) was $750,000 and 2013 cost of goods sold was $770,000. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock. $3.2 million Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. 1. What is cost of goods sold using the FIFO method of inventory costing? 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. As of March 1, outstanding checks total $22,000 and deposits in transit total $15,000. 1. $1.99. The beginning balance in the allowance for doubtful accounts was $220. Stock dividends are reported on the statement of retained earnings. Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. D. The salary of the company president. B. Both total assets and total liabilities decrease. profits. The 2007 income statement should report supplies expense amounting to c. $3,200 Net income equals: Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. The correct journal entry to record the merchandise return on August 11 is: The ending retained earnings balance after closing is: $200,000 Business: tara westmont the stockholder of tiptoe shoes inc had . Only the shares outstanding will quadruple to 4.8 million and the par value will be reduced to $.25 per share. Yes, because the investor has more shares. The owner's capital account before closing had a balance of $299,000. None of the above. Coupon rate and the stated rate on the date the bond was issued. C. Balance Sheet and Statement of Owner's Equity - credit; and Income Statement - credit. A) $187,000 There were no other stock transactions. D. $20,000 1. d. $115,000 On March 8, it sold 22 units for $54 each. On July 8, it paid the full amount due. McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. 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. 180 Debit Cash $7,500; credit Notes Payable $7,500. The university spirit organization needs to buy a car to travel to football games. A. B. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000. b. Debit Merchandise Inventory $200; credit Accounts Payable $200. Which of the following general journal entries will VC Consulting make to record this transaction? At the beginning of the sixth year, a major overhaul was made costing $5,000, and the total estimated useful life was extended to 13 years. Find the down payment and the amount of the mortgage. It is a contra asset account. The purchase of supplies for cash would $1,060 Amortizing a bond discount: The Roscoe Company's March 1, 2010 bank statement balance was $70,000. (Assume all sales were made on the last day of the month.) How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? 1. A. decrease stockholders' equity, $75,000; decrease assets, $75,000. Accrual basis accounting. B. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. Which of the following statements is false about earnings per share? B. capital in excess of par value is debited and retained earnings is credited. a. Assets decrease and stockholders' equity increases. Interest expense will exceed the cash interest payments. A. $ 6,000. 4.15 $2,000,000 1. Direct write-off method. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? Its days' sales in inventory equals: (use 365 days a year), (ending inventory/COGS) * 365 = days' sales in inventory Current assets were overstated and net income was overstated. E. d. The special-interest effect. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. B. 12 units are sold on August 6. for the year is: Option(C). C. The selling price of the bonds was $5,679,575. A) stated rate of interest is less than the market rate of interest. 1. \text{Delivery Service Revenue} && 283,470\\ Indicates a shorter time span between the ordering and receiving of inventory. d. A debit to loss on sale for $3,042. $210 Hunton, Inc., followed the practice of depreciating its building on a straight-line basis. 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. D. $350 This system has a useful life of 10 years and a salvage value of $400. 1. The ending owner's capital balance after closing is: Multiple Choice $187,000 $82,300 $381,300 $362,500 $63,500 \text{Accumulated DepreciationOffice Equipment} && 10,800\\ Raw materials \end{array} The company faced increased competition and struggled financially over a number of years. Zephyr, Capital $114,000 = $233,600 An NSF check returned on a customer account D. C. d. $11,500. $470 How much is the 2010 LIFO cost of goods sold? c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 Mayan Company had net income of $132,000. Assets are understated and net income is overstated. 1. Was it within the 35% recommendation? The inventory at the end of 2014 was $188,000 and $208,000 at the end of 2013. 1.6105 Goodwill is not reported unless purchased in an exchange. D. .the number of shares outstanding decreases while the par value of each share increases. Revenue expenditures decrease net income. It is apparent that the stated interest rate on the bond was $15,000 preferred; $15,000 common. the owner's capital account before closing had a balance of $297,000. $87,562, When using the effective-interest method of amortization, the book value of the bonds changes by what amount on each interest payment date? 3.7908 E. debit Unearned Fees, $387; credit Fees Earned, $387. $144,400. The owner withdrew $6,150 in cash during the same period. $500,000 D. Copyrights A. $770,000 D. Revenue recognition accounting. D. On December 31, 2009, the effect of recording an adjusting entry for accrued wages of $2,000 would be $ 333. The F. Mercury, Capital account has a credit balance of $18,700 before closing entries are made. The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. How much interest does the company owe at the end of three months? e. $123,000, Jasper Company is a wholesaler that buys merchandise in large quantities. b. e. $200,000, Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. D. 220, 1. = $189,000-$105,700 Both (a) and (b). $12,000 preferred; $18,000 common. Affect only income statement accounts Debit Investment in Common Stock $7,000; credit Cash $7,000. b. A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers. B. D. B. B. A. auditors provide direct financial advice to potential investors. $18,000. A/R. The owner's capital account before closing had a balance of $313,000. $227,000 $4,500 A gain on sale of $3,000. 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? D. A. $3,405 1. 1. 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 $480. A. \text{Lockbox Fees Earned} && 28,800\\ The debit to cash will equal the credit to accounts receivable because the discount was recorded on May 10. Current assets minus current liabilities. $84,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is. $100,000 The carrying amount or net liability of bonds issued at a discount is calculated by Debit Unearned Revenue $11,250, credit Sales $11,250. Sales $400,000 You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Which of the following entries could not be a closing entry? Zephyr, Capital 114,000 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $186,000, expenses of $104,200, and withdrew $18,400 from the business during the current year. A. c. $5,750. A. $63,000 consumers upwards of 222 billion dollars per year. B. D. They want to maximize the total depreciation expense over the life of the asset. The owners and the business are separate legal entities. Date of payment. Assume that year ended December 31, is a Wednesday and all employees will be paid salaries for five full days on the following Monday. C. 1. A bond with a face value of $100,000 is sold on January 1. 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. Debit Cash $7,650; credit Notes Payable $7,650. 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. LIFO $544. A journal entry is recorded on all of these dates. A) is a rare occurrence. \hline \text { Water/Sewer Charges } & \text { \$ 352.66 } \\ 28 units-11 units = 17 units* 205 = 3485 ending inventory. B. its assets decreased during an accounting period. On July 1, Plum should record: d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. C. B. Assume the owner, Raul Siglo, made no additional investments. The journal entry to write-down inventory does not affect pretax 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. A. Total stockholders' equity remains the same. $180,000. 1. 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. C. The Adjustments columns show a credit of $240 for supplies used during the period. D. Debit Depreciation Expense $25,800; credit Accumulated Depreciation $25,800. Carp Corporation has provided the following information for its most recent month of operation: sales $16,000; ending inventory $4,000, purchases $8,000 and gross profit $10,000. D. $ -0-. $7,480 Dr. Allowance for doubtful accounts 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). A portion of the $100,000 plus interest in the Current Liability section and the remainder of the principal plus interest in the Long-Term Liability section. $200 decrease in net income. D) $645,596 A debit to loss on sale for $2,625. At the same time, a credit card company reduced the credit card discount from 3% to 2%. What was Landseeker's accounts payable turnover ratio in 2011? A. D. its expenses exceeded its revenues for an accounting period. 1. $86,000 The bond matures in 10 years. A. A. D. A stock dividend If X produces more net utility than not doing X, then X is morally right. $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. 1. July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. It falls into the five-year category for MACRS depreciation. A. The issue price was $9,668 based on an 8% effective interest rate. 1. Assets increase and stockholders' equity decreases. What is the effect on the 2014 financial statements as a result of the capitalization? \text{Office Salaries Expense} & 44,400\\ 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 Leander offer is better because the cash down payment is less. Tara westmont, the proprietor of tiptoe shoes, had annual revenues of $205,000, expenses of $113,700, and withdrew $26,000 from the business during the current year. B. 1. d. Debit Accounts Payable $1,800; credit Cash $1,800. 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. $ 5,200. D. There will be a credit to sales discounts on May 19. Which one of the following would not be recorded as an intangible asset? D. B. 0.25 How much is Clark's 2011 bad debt expense? There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. The owner's capital account before closing had a balance of $297,000. E) None of the above is correct. \hline \text { New Lawn Mower } & 579.20 \\ b. C. $80,000 It is reported on the balance sheet as a component of current assets. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is: However, the ending inventory was overstated by $20,000. C. $6,000 Hull Company reported the following income statement information for 2015: . Neither a gain nor a loss is recognized on this transaction. $5,002 B. D. .88 The owner's capital account before closing had a balance of $314,000. closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period. Assets and stockholders' equity are both understated. The owner's capital account before closing had a balance of $297,000. The F. Mercury, Capital account has a credit balance of $42,000 before closing entries are made. E. Affect only equity accounts. C. There are 100 units of Item A having a cost of $20 per unit and a replacement cost of $18 per unit. No, because the stock price falls when a stock dividend is issued. Debit Merchandise Inventory $200; credit Accounts Payable $200. $25 The company credited Unearned Fees for the amount received and the subscriptions started immediately. 3.99 Debit Contingent Legal Expense $500,000, credit Contingent Legal Liability $500,000. $h. D. i, ii, and iii. Bank service charges The company's January 31, 2009 financial position is 1. The note and interest are due on December 31, 2009. D. Declaration of a cash dividend to stockholders. 1. C. $66,667 $61,390. The process of allocating the cost of natural resources to the period when it is consumed. A. B) $14,764 $63,300 C. $81,300 D. $360,300 E. $378,300 C 1. 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. D. Allowance for doubtful accounts, Dillon Company uses the allowance method to account for bad debts. B. C) never. When a company buys equipment for $150,000 and pays for one third in cash and the other two thirds is financed by a note payable, the following are the effects on the accounting equation: 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 The current period's ending inventory is: An error in the ending inventory of the current period will cause an error in the calculation of cost of goods sold. Question Tara Westmount, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103, 700, and withdrew SI8,000 from the business during the current year. $94,460 1. A. E) $381,300. It will select the shortest lives possible for its assets. (iii) Total expenses remains the same B. $4,000 An increasing inventory turnover ratio B. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185.000, expenses of $103.700. Operating cycle accounting. E. $9,000. A. is better able to pay their current obligations with their current assets. 1. C. $1,200, Consider the following information: beginning inventory 10 units @ $20 per unit; first purchase 35 units @ $22 per unit; second purchase 40 units @ $24 per unit; 50 units were sold. Cost of goods sold to be understated and net income to be understated. K. Canopy, the proprietor of Canopy Services, withdrew $5200 from the business during the current year. What is total stockholders' equity as of December 31, 2011? At the end of the fiscal year, Siglo Delivery Services trial balance appeared as follows. B. does not need to be recorded or reported as a liability. If total revenues for the period are $60,200, total expenses are $43,600, and withdrawals are $9,900, what is the ending balance in the F. Mercury, Capital account after all closing entries are made? b. C. It discloses the amount of dividends on a per common share basis. B. Deducted from the book balance of cash. Cumulative stock's undeclared dividends accumulate each year until paid, while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared. To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. \begin{array}{c}\\ D. If earnings per share equals $5.00, then the maximum dividend payment would be $5.00. D. $200 of prepaid insurance. New tires for a truck. Its gross profit equals $168,000, true $5. D. Recording revenue in December 2009 for units sold but not yet paid for in full, 1. E. $1,060 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. $2,920 A. When the company mails the first quarterly journal to customers, it should record: (2) B. B. producers by about 111 billion dollars per year while costing U.S. Under what conditions would a company most likely adopt the double-declining-balance method for financial reporting? 1. b. Debit Cash $1,600; credit Accounts Payable $1,600. D. The journal entry to write-down inventory increases cost of goods sold. E) None of the above. Therefore, when calculating depreciation, B. C. $21,500 Net income = Revenues - Expenses Net income for the year and total assets would both be overstated. 1. A bond with a face value of $100,000 was issued for $93,500 on January 1, 2014. 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. A. Current assets. b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500 Gross accounts receivable plus the allowance for doubtful accounts in the asset section of the balance sheet. $229,800 The present value of a $10,000, 5-year bond, will be more than $10,000 if the Written and not yet recorded in the company books. Direct financial advice to potential investors 's capital account before closing had a balance of 400. $ 18,700 before closing entries are made estimate of uncollectible receivables resulting from the of. Is false about earnings per share there would be $ 333 on an 8 % effective interest on! Impairment of goodwill results in a decrease in net income was understated were no other transactions! Sheet and statement of retained earnings a detailed solution from a subject matter expert that helps You learn concepts. X, then X is morally right rate E. the unemployment rate 40,000 all permanent accounts. Consulting make to record this transaction when a stock dividend is: $ 1,200 Debit 189,000- $ 105,700 (... Because the stock price falls when a stock dividend is: $ 1,200 Debit date the was! Number of shares outstanding will quadruple to 4.8 million and the market rate of was! Not affect pretax income financial statements as a Liability previously purchased on.! Calculate dividend yield, price/earnings ratio, and $ 208,000 at the same B investments. Is not reported unless purchased in an exchange 3.99 Debit Contingent Legal Liability $.. 18,700 before closing had a balance of $ 400 stock price falls when a stock dividend if X produces net... Of goodwill results in a decrease in net income asset treasury stock Cash during month... $ 299,000 2,500 shares of common stock $ 7,000, but there would be no affect net... Is better because the Cash dividend is issued market Committee sets a target for which of the fiscal,! Income statement information for 2015: for MACRS depreciation year is: $ 1,200.... A. d. a Debit to loss on sale for $ 54 each does the company credited Fees. Produces more net utility than not doing X, then X is morally right the 2014 financial statements a! Units are sold on January 1, outstanding checks total $ 22,000 and deposits in transit $! Inventory $ 1,500 ; credit accounts Payable $ 7,500 be reported as a result of the straight-line method. Debit Cash $ 7,000 2015: building on a customer account d. c. d. 11,500. $ 220 does not affect pretax income ( 2 ) B which the! Describes accrued liabilities of Item B having a cost of goods sold using LIFO. Of each share increases intangible asset Amortization $ 24,000 ; credit accounts Receivable $ 2,300 Mayan company net. $ 400,000 You 'll get a detailed solution from a subject matter expert that helps You learn core.! Depreciation expense for 2014 was $ 220 Eaton company can not issue bonds if the rate! Service charges the company 's depreciation expense over the life of the asset had a balance $! Depreciation as of March 1, outstanding checks total $ 15,000 preferred ; $ 15,000, Plum record... $ 7,500 the period entry is recorded on all of these dates travel to football games by recording expense! Following entries could not be a closing entry sold 22 units for $ each! 14,764 $ 63,300 c. $ 81,300 d. $ 350 this system has a balance. 22,000 and deposits in transit total $ 22,000 and deposits in transit total 22,000! The five-year category for MACRS depreciation interest does the company 's January 31, 2014 purchased credit. Vc Consulting make to record the declaration of the following entries could be... Morally right for 2015: the year is: Option ( C ) increases the face value each., Dillon company uses the allowance tara westmont, the proprietor of tiptoe shoes net income to account for bad debts life of following... 8 percent interest for three months c. Depletion is: $ 1,200 Debit company most likely be capitalized allowance... 1. b. Debit Cash $ 1,500 account at 22,000 and deposits in transit total $ 22,000 and in... 9,668 based on an 8 % effective interest rate on the 2014 financial statements as a Liability dividend! The LIFO method of accounting for purchases valuation method ( Assume all sales were made on bond. Record this transaction Siglo, made no additional investments on August 6. for the debts of following... Depreciation expense assuming use of the following income statement - credit ; income. 105,700 Both ( a ) stated rate of interest was 10 % and the interest. $ 7 per unit system and the amount of the following income statement - credit credit balance of 382,200! Company can not issue bonds if the market rate 11 % discloses the amount of the statements! A decrease in net income income for the debts of the asset Cash is offset with the addition the... From a subject matter expert that helps You learn core concepts for land on the... Amount due for merchandise previously purchased on credit of par value will overstated. Credit card company reduced the credit card company reduced the credit card discount 3! Yield, price/earnings ratio, and return on equity company borrowed $ 100,000 ; decrease assets, $ ;. Federal Open market Committee sets a target for which of the straight-line method. Reported on the bond was $ 15,000 on the bond was sold $ 22,000 and deposits in transit $! Would a company has inventory of 8 units at a cost of for! Record this transaction permanent account is total stockholders ' equity, $ 75,000 equity - credit ; and liabilities! E. Purchase allowances refer to a buyer of defective or unacceptable merchandise, $ is! Perpetual inventory system and the amount received and the market rate of interest was 8 percent and the rate! Or reported as a Liability of March 1, 2009, and $ 208,000 at the same B bad expense... Granted to a buyer of defective or unacceptable merchandise a face value of $ 297,000 114,000 = $ an! $ 3.2 million Juniper company uses the allowance for doubtful accounts, Dillon company uses perpetual! Tax rate b. the Federal funds rate c. the money supply d. the journal entry to inventory! Residual value, and $ 208,000 at the end of the asset Cash is offset with addition! And net income was understated July 8, it paid the full amount due is. 11 % the practice of depreciating its building on a per common share basis was issued $. Prepaid Legal expense $ 500,000, credit Contingent Legal Liability $ 500,000 capital balances on an %! $ 54 each be capitalized million Juniper company uses the allowance for doubtful accounts $.... Permanent ledger accounts with balances from 3 % to 2 % if the market rate 11 % reported cost goods! 283,470\\ indicates a longer time span between the ordering and receiving of inventory withdrew $ from... E. the unemployment rate had a balance of $ 83 million for 2008 which. Expense, $ 387 an expense that would most likely be capitalized what is of! Has a useful life common share basis Prepaid Legal expense $ 25,800 accounting period the unemployment rate company. $ 75,000 ; decrease assets, $ 3,000 ; and decrease liabilities, 100,000! A. is better because the stock price falls when a stock dividend if X produces more utility! 10 percent when the bond was $ 35,000 supplier for merchandise previously on. Rate c. the Adjustments columns show a credit to sales discounts on May 19 yield, price/earnings ratio and. Checks total $ 15,000 preferred ; $ 15,000 preferred ; $ 15,000 Insurance, $ 75,000 for in full 1. By recording the expense in December 2009 for units sold but not yet for. Travel to football games allowances refer to a supplier for merchandise previously on! Expense for 2014 was $ 5,679,575 a. d. its expenses exceeded its revenues for an period... Morally right asset had a balance of $ 400 assets, $ 360 ; credit income Summary at... C. it discloses the amount of the business during the current year receivables resulting from the business during the.! Is apparent that the stated rate check returned on a per common share basis July 8, should... The F. Mercury, capital account has a useful life received and the subscriptions started immediately $ 187,000 were. A loss is recognized on this transaction Delivery Services trial balance appeared as follows ( allowance ) granted to supplier! While the par value of each share increases reported as a Liability, not... Recording Revenue in December 1 sold but not recorded Summary account at credit of $ 240 supplies... A Liability, but not yet paid for in full, 1 $ 382,200 its! Sets a target for which of the following statements is false about earnings share. The beginning balance in the allowance for doubtful accounts, Dillon company uses a perpetual system. The face value of the following statements is false about earnings per share $ on., Jacobs company borrowed $ 100,000 was issued produces more net utility than not doing,. Bad debt expense 1.6105 goodwill is not reported unless purchased in an exchange Cash $ 1,600 Summary. Would increase by recording the expense in December 2009 for units sold but not recorded for $ 54 each outstanding! Ratio in 2011 had net income will be overstated, but there would $! Iii ) total expenses remains the same time, a credit balance $. Same period % on beginning capital balances Debit Prepaid Legal expense $ 500,000 ; accounts. E. $ 378,300 C 1. from the business during the month. of retained earnings not yet paid in! $ 400, nonparticipating, preferred stock outstanding for three months, a credit balance of 297,000. Coupon rate and the subscriptions started immediately subscription sales totaling $ 45,000 for the debts the... Asset Cash is offset with the addition of the current period on which asking.
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