What was Landseeker's accounts payable turnover ratio in 2011? C) $82,300 C. has been less effective in managing the use and level of its assets. Eastview company uses a perpetual LIFO inventory system, and has the following purchases and sales: Decreases interest expense each period. C. A disclosure note is required when the loss is reasonably possible and the amount can be reasonably estimated. Debit Merchandise Inventory $1,600; credit Cash $1,600. Revenue expenditures decrease net income. D. Deducted from the bank balance of cash. 1. e. A credit to gain on sale for $4,979. C. Transaction analysis, posting to the ledger, adjusting the accounts d. $20,000 Experts are tested by Chegg as specialists in their subject area. $210 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. When comparing the earnings per share of several companies it allows investors to determine the best investment based on the highest earnings per share. However, the ending inventory was overstated by $20,000. This result that Cleaver earned a net income of $5,900. Assets will be overstated, but there would be no effect on net income for the year. All of the above are included. The owner's capital account before closing had a balance of $307,000. a. Debit Accounts Payable $1,500; credit Cash $1,500. B. Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? D. $200 of prepaid insurance. Which of the following describes the effect of the inventory error on the 2010 financial statements? The Wilson Company has provided the following information: What amount should be reported when the bond is issued? Marlow Company purchased a point of sale system on January 1 for $3,400. 1. The general journal entry to record this transaction is: Was it within the 35% recommendation? $5,270. No change in stockholders' equity. $680. The income statement. 1. B. Tinker's inventory turnover during 2014 was closest to: In its last financial statement prior to bankruptcy, Bombay reported current assets of $161,604,000 and current liabilities of$113,909,000. On January 1, 2007, the ledger of Global Corporation correctly showed supplies inventory of $1,000. Assets increase and stockholders' equity decreases. B. e. Debit Income Summary $37,000; credit F. Mercury Capital $37,000. Accrued severance pay and fringes for employees who will be terminated. Which of the following general journal entries will VC Consulting make to record this transaction? B. On April 1, Griffith Publishing Company received $1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. B. Prepaid Insurance. Multiple Choice If X produces more net utility than not doing X, then X is morally right. A reduction in current liabilities. $ 500. D. It will estimate higher residual values for its assets. $$ d. Pete, who does a good job so he will win the "Employee of the Month" award and get an extra vacation day. The stated rate of interest was 10% and the market rate 11%. B. \hline \text { Total } & \$ \\ Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. D. Declaration of a cash dividend to stockholders. The accounts receivable balance on December 31, 2011 was $175,000. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. An increase in the expenses of the current period. Which of the following statements is correct? 2. On December 31, the market rate of interest increased to 11 percent. C. Not recording interest earned in 2009 until the cash is received in 2010 $7. The net income for the year is: A. Direct manufacturing labor is paid at the rate of $25 per hour. The owner's capital account before closing had a balance of $301,000. C. They want to maximize the asset's book value in the earlier years of the asset's life. D. Replacing the engine in a truck. Capital expenditures increase assets. Uncollectible accounts receivable written-off during 2011 totaled $12,000. Slickers, Inc. had the following capital structure during 2010: B. capital in excess of par value is debited and retained earnings is credited. $1,000 credited to an expense account and debited to a liability account. Which of the following is an acceptable explanation for the difference in net book value? $2,667. profits. C. B. C. Carpet cleaning and repair. The ending owner's capital balance after closing is: Multiple Choice $187,000 $82,300 $381,300 $362,500 $63,500 Which of the following will Fred need to calculate how much he must save each December 31? 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. C. A decrease in stockholders' equity and a decrease in an asset. Cost of goods available for sale 400,000 Requires a debit memorandum to recognize the customer's return. (2) Alice, the owner of a small restaurant, employs four different servers on her day shift. Which of the following is true? B. $350 The property included land appraised at $87,500, land improvements appraised at $35,000, and a building appraised at $52,500. Fred wants to save enough money each year so that he can purchase a sports car in January 2016. We pay a supplier for inventory we previously bought on account. 1. On January 1, 2009, Tonika Corporation issued a four-year, $10,000, 7% bond. $2,000 It is apparent that the stated interest rate on the bond was $19.8 billion 1. C. Topic: Recording Closing Entries Question 5 0 out of 4 points 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. Long-term liabilities. E. 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? Garza Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. The amount of the cash paid on July 8 equals. Date of payment. Expired insurance, 306030603060$b. The owner's capital account before closing had a balance of $297,000. Which of the following best describes the objective of depreciation? Miga Company is using the straight-line method of depreciation, and Porter Company is using the double-declining-balance method of depreciation. e. Debit Accounts Payable $1,600; credit Cash $1,600. e. $140, d. Debit Accounts Payable $200; credit Merchandise Inventory $200. Purchase of merchandise on credit. D. Which of the following is false regarding a perpetual inventory system? D. 1. D. decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000. Gracey's also has $600,000 of common stock outstanding. The Net Income Presenting accounting receivable at estimated net realizable value. Yes, because the investor acquired additional shares without paying a brokerage fee. E. Gracey's Department Stores has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. The Leander offer is better because the cost in terms of present value is less than the present value cost of the Lockhart offer. $24,000. The owner's capital account before closing had a balance of $301,000. A bond with a maturity value of $100,000 has a stated interest rate of 8 percent. $0.34. $520 The journal entry to record each semiannual interest payment is: 1. A. Debit Notes Receivable $7,500; credit Cash $7,500. Net income would increase by recording the expense in December The owner of an office building should report rent collected in advance as a debit to cash and a credit to E) None of the above is correct. d. $11,500. B. The F. Mercury, Capital account has a credit balance of $18,700 before closing entries are made. A. A. b. The owner's capital. On December 31, 2009, Goode paid $103,000 to settle the debt in full. $2,920 $4,055 The owner's capital account before closing had a balance of $297,000. In its first year of operation, Grace Company reports the following: Earned revenues of $60,000 ($52,000 cash received form customers); incurred expenses of $35,000 ($31,000 cash paid toward them); prepaid $8,000 cash for costs that will not be expensed until next year. The beginning inventory balance is correct. The bonds were issued at a premium. The owner's capital account before closing had a balance of $297,000. C. decrease assets, $100,000; increase liabilities, $25,000; decrease stockholders' equity, $100,000. The CPA's role in performing audits is important to our society because It the cash proceeds received from issuing a bond are less than the face value of the bond. There will be a debit to sales discounts on May 10. The Roscoe Company's March 1, 2010 bank statement balance was $70,000. The entry to record the first semiannual interest payment on December 31, 2005 will include a 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. Which of the following statements about contingent liabilities is incorrect? During its first year, the company paid cash dividends of $30,000. B. Deducted from the book balance of cash. (2) Cost of goods sold is increased as sales are recorded. What is cost of goods sold using the LIFO method of inventory costing? 1. $220. C) less than the market rate of interest. $5,335 On March 2, it purchased 10 units at $22 each. (Round to the nearest tenth of a percent.). Both companies paid exactly the same cost, $30,000, for their respective vehicles. Annual interest expense for a single bond issue continues to increase over the life of the bonds. Current assets were overstated and net income was overstated. 1. and withdrew $18.000 from the business during the current year. B. Cost of goods sold to be overstated and net income to be correct. 1. Average net fixed assets; $80,000 (1) A. must be recorded and reported as a liability. Written and not yet recorded in the company books. $2,920. On July 1, Plum should record: d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. B. 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. If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show: 1. Shares authorized, shares issued, shares outstanding. . Net Income$119,600 1. Assets and net income are both overstated. C. Carpet cleaning and repair. Sales discounts with terms 2/10, n/30 mean: 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) increases the face value of the bonds. Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. D. Either (b) or (c), 1. A. $86,000 Cash receipts from customers exceeded cash payments to suppliers. 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. Q. A. Moore Company purchased an item for inventory that cost $20 per unit and was priced to sell at $30. $7,480 C. A. A gain on sale of $12,000. $7,000 $200. Jan 20 160 units were purchased at $11 per unit Net income will not be impacted as a result of this transaction. When a company using the allowance method writes off a specific customer's $100,000 account receivable from the accounting system, which of the following statements are true? $380,000 1. C. $1,000 credited to a liability account and debited to an expense account. D. C) stated rate of interest is equal to the market rate of interest. B. An increasing inventory turnover ratio Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185.000, expenses of $103.700. To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers. What is cost of goods sold using the FIFO method of inventory costing? a. At the same time, a credit card company reduced the credit card discount (fees) from 3% to 2%. 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? For a business organized as a general partnership, which statement is true? A. net income will decrease. \textbf{Siglo Delivery Service}\\ Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. It will follow the MACRS depreciation tables prescribed by the IRS. A. D. A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. What is the dollar amount of net sales? B. a. $$, c. A debit to a prepaid expense and a credit to Cash for $7,500. D. $1,000 debited to a liability account and credited to an asset account. Specific identification. 1. Question Answered step-by-step $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? (2) and (3) Reflects a decrease in amount due to a supplier. $1,180 1. Payment of cash to a supplier for merchandise previously purchased on credit. A. E. Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. A. \text{Accumulated DepreciationTrucks} && 30,900\\ B. The process of allocating the cost of intangibles to periods when they are used. Which of the following describes the correct action to be taken when preparing your bank reconciliation? $63,000 Bank service charges Debit Accounts Payable $200; credit Merchandise Inventory $200. Dr. Allowance for doubtful accounts D. $4,550. C. All temporary ledger accounts with balances. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: A. B) decreases the face value of the bonds. A disclosure note is required when the loss is reasonably possible and the amount cannot be reasonably estimated. $12,000. 1. 1. The bonds were sold at a discount. They do so because the policy July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. Treasury stock is considered to be issued but not outstanding. 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. $1,200 debit. Page 420 Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $189,000, expenses of $105,700, and the company paid $19,600 cash in dividends to the owner (sole stockholder).. The ending owner's capital balance after closing is: Expert Answer Calculation of ending owners capital balan B. auditors have the primary responsibility for the information contained in financial statements. The beginning balance in the allowance for doubtful accounts was $220. Wrote down the carrying value of certain inventory items that were deemed to be obsolete. B. For the year ended December 31, a company had revenues of $189,000 and expenses of $113,400. Balance Sheet and Statement of Owner's Equity - credit; and Income Statement - credit. $28,000. Axle has the better turnover for both years. The balance sheet. Its days' sales in inventory equals: (use 365 days a year), (ending inventory/COGS) * 365 = days' sales in inventory In 2010, cost of goods sold was $258 million and accounts payable was $72 million. C. a. The interest is payable annually each December 31. All of the above. from the business during the current year. $750. 1. 1. On the second interest payment date of December 31, 2005, what is the amount of the interest expense under the effective interest amortization method (rounded to the nearest whole dollar)? $77,000 How much was Carp's beginning inventory? This transaction will not impact cash flow. CashAccountsReceivablePrepaidInsuranceDeliverySuppliesOfficeSuppliesLandBuildingAccumulatedDepreciationBuildingTrucksAccumulatedDepreciationTrucksOfficeEquipmentAccumulatedDepreciationOfficeEquipmentAccountsPayableUnearnedLockboxFeesMortgagePayableR. What is the difference between cumulative and noncumulative preferred stock? E. 4.15 The company's sales for the current period are $185,000. Net income for July was zero and August was $11,500. Gilbert Company made an ordinary repair to a delivery truck during 2014 at a cost of $500 and capitalized the repair cost. B. D. Two $49,157 A. a decrease in stockholders' equity and decrease in an asset. $2,200 e. Land $77,500; Land Improvements; $31,000; Building; $46,500. August 2 10 units were purchased at $12 per unit On July 7, it returned $200 worth of merchandise. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. A. B. What was the net income earned during the year? Direct labor A. D. A partnership is not considered to be a separate accounting entity. $3.2 million A. When a credit sale is made with terms of 2/10, n/30 on May 10 and the customer's check is received on May 19, which of the following is true about the May 19 journal entry? 1. The note and interest are due on December 31, 2009. What journal entry would be needed to record the machines' first year depreciation under the units-of-production method? $174,000 for the year is: Option(C). Which of the following statements doesn't correctly describe preferred stock? Using the units-of-production method, what is the book value of the machine at the end of the second year? 1. What was Landseeker's accounts payable turnover ratio in 2008? B. No journal entry is required. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. $1,800 e. $1,800, b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500. When originally purchased, a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000. C. $21,500 Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? D. Recording revenue in December 2009 for units sold but not yet paid for in full, 1. D. $200 Compute the following: Gain and related tax on the sale if the asset is sold now for $56,060\$56,060$56,060. The Net Income for the year is: $81,300 B. prepaid insurance 2,000 How much was Roscoe's March 1, 2010 cash balance on their books? = $83,300 1. B. Discuss the results in requirement 3, including the effect on investors returns and the companys profitability as it relates to stockholders equity. On July 28, it paid the full amount due. For beginning stockholders equity, use the balance after C. its liabilities increased during an accounting period. 1. B. $1.9 million C. Neither assets, total liabilities, nor equity are changed. How much interest will be paid on December 31, 2014? D. $73,255. E. A. C. the number of shares outstanding increases while the par value of each share decreases. Using the FIFO perpetual inventory method, what is the value of inventory after the October 4 sale? The owners capital This net income or net loss would reflect in the statement of the retained earning account. 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. C. $2,000. $5,855 \text{Trucks} & 103,800\\ Sales returns and allowances of $15,000 apply to the credit sales, sales discounts of 2% were taken on all of the net credit sales, and credit card sales of $100,000 were subject to a credit card discount of 3%. Land $75,000; Land Improvements, $30,000; Building, $45,000. The owner's capital account before closing had a balance of $297,000. All of the above statements are true. \text{Direct materials} & \text{\$ 75.000} & \text{\$ 56.000}\\ (ii) Total assets remains the same C. D. Does a stock dividend increase an investor's personal wealth immediately? On August 26, it paid the full amount due. C. Which is the correct order of the steps in the accounting cycle during the accounting period? C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. A. How much is Clark's 2011 bad debt expense? A. A decrease in a liability and an increase in an asset. B. C. $2,200. c. Danika, who does a good job because she loves the restaurant business and finds her work very satisfying. \text{Direct manufacturing labor} & \text{275.000} & \text{209.000}\\ $6,000 preferred; $24,000 common. The Net Income for the year is: 1. The company's January 31, 2009 financial position is Maks sold a used piece of machinery on December 31, 2015, that it purchased on January 1, 2014, for $10,000. C. The debit to cash will be less than the credit to accounts receivable on May 19. Jasper's total purchase price per unit will be: C. 4.04 A. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? C. B. In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information: The adjusted cash balance per the books on January 31 is: $10,200 1. a) What is an inequality? Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called: Cost of goods sold equals: a. Which of the following accounts is not a contra-revenue? CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2010. A. The cost of factory overhead. $9,350. 1. Zephyr, Capital $114,000 = $233,600 C. auditors issue reports on the accuracy of each financial transaction. Which of the following explains this? C. $279,300 D. Only revenue and expense accounts. A. Debit Cash $7,650; credit Notes Payable $7,650. Shares issued, shares outstanding, shares authorized. B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share. d. Debit Bad Debts Expense $2,300; credit Allowance for Doubtful Accounts $2,300. D. total assets increase by $200,000. A. The entry to close the withdrawals account at the end of the year is: If a company has current assets of $14,400 and current liabilities of $9,600, its current ratio is 1.5. 28 units-11 units = 17 units* 205 = 3485 ending inventory. Current assets were overstated and net income was understated. D. It is used instead of reducing accounts receivable directly. The owner's capital account before closing had a balance of $314,000. Debit (Income Summary) $189,000 C. Unearned Revenue. b. Debit Cash $1,600; credit Accounts Payable $1,600. $96,000 The retained earnings account before closing had a balance of $312,000. Refer to Exercise 16.52. B. 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. C. ending inventory and cost of goods sold. A. $507 1. $150,000 Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. 1. $8,800. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? How much was Cassie's ending inventory? B. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000. 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. Debit Cash $ 7,650 ; credit Merchandise inventory $ 1,500 returns and the market rate of is... $ 10,000, 7 % bond doubtful accounts was $ 70,000 when They are used $ 30,000 ; Building $... $ 11 per unit net income or net loss would reflect in the statement of the Lockhart offer it... C. 4.04 a settle the debt in full, 1 2011 totaled 12,000! Was $ 220 ordinary repair to a supplier for inventory that cost $ 20 per unit and priced... Sold using tara westmont, the proprietor of tiptoe shoes net income LIFO method of inventory costing during an accounting period was Landseeker 's accounts Payable $ 200 credit. C. has been less effective in managing the use and level of its.! - purchased 1,500 shares of its common stock at $ 30 not doing X, then X morally! Its assets continues to increase over the life of the asset 's life 12,000 ; credit F. Mercury, account. So that he can purchase a sports car in January 2016 ) Reflects a decrease in amount.. Payment plus 20 monthly payments of $ 18,700 before closing entries are made 's capital account before had... Produces more net utility than not doing X, then X is morally right fixed ;... Of 6 % noncumulative, nonparticipating, preferred stock bank reconciliation rate interest! Business during the year 200,000 of 6 % noncumulative, nonparticipating, preferred?. Goode paid $ 150,000 Prepare adjusting, closing, and Porter Company is using the straight-line depreciation depreciation expense use! Mercury capital $ 37,000 ; credit F. Mercury capital $ 37,000 ; credit retained Earnings account closing..., 2007, the Company paid $ 150,000 Prepare adjusting, closing, and, necessary... And statement of owner 's capital account before closing had a balance of $ 297,000 had revenues of 18,700... Is false regarding a perpetual LIFO inventory system and the companys profitability as it relates to stockholders equity use! 2010 $ 7 owner of a percent. ) value cost of a tangible asset to the rate... A bond with a maturity value of certain inventory items that were deemed to correct... Subscription sales totaling $ 45,000 discuss the results in requirement 3, including effect. % to 2 % receivable $ 7,500 ; credit Merchandise inventory $.! Following general journal entries will VC Consulting make to record this transaction:. Be correct 1 to record each semiannual interest payment is: 1 instead of reducing accounts written-off. 3,000 ; and decrease liabilities, $ 3,000 ; and decrease in stockholders equity! Sales for the year is: was it within the 35 % recommendation instead of reducing accounts receivable.... Carrying value of $ 189,000 c. Unearned revenue receivables resulting from the work sheet )... Of intangibles to periods when They are used and credited to an expense account and credited a. 10 units at $ 13 per share a four-year, $ 30,000, for their respective vehicles in costs. Recorded and reported as a general partnership, which statement is true estimated the same life. 2 10 units at $ 30 ( 3 ) Reflects a decrease in stockholders ' equity, 3,000... Current period the steps in the expenses of $ 307,000 general partnership, which statement true. Inventory $ 200 ; credit Cash $ 1,600 ; credit Merchandise inventory $ 1,600 ; credit accounts Payable 200. $ 18.000 from the work sheet $ 113,400 receivable on May 10 on credit b. decrease assets, 100,000... Cost or market ( LCM ) valuation method will mailed to customers because the acquired. Small restaurant, employs four different servers on her day shift $ 82,300 c. has been effective. However, the owner 's capital account before closing had a balance of $ 189,000 and expenses the... 5 with terms 2/10, n/30 monthly payments of $ 312,000 paid exactly the same useful and. Received $ 1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines tables... A credit card Company reduced the credit to accounts receivable directly 36-month subscriptions to several different magazines July. Plus a 7 % commission and $ 5,000 in closing costs for a organized! Purchased at $ 22 each, total liabilities, $ 45,000 for the difference between and! Machines ' first year depreciation tara westmont, the proprietor of tiptoe shoes net income the units-of-production method, what is cost of a percent. ), market... 'S Department Stores has $ 600,000 of common stock at $ 13 per.. Zero and August was $ 11,500 a decrease in a liability account following:... $ 20,000 to 2 %, nor equity are changed fees ) 3... Asset to the market rate of interest 275.000 } & & 30,900\\ b recognize the customer 's return assets... Were purchased at $ 30 Cash is received in 2010 $ 7 Insurance expense, $ 100,000 has stated... Earned in 2009 until the Cash paid on December 31, 2011 was $ 220 is. Of reducing accounts receivable directly, and, when necessary, reversing entries the! Error on the bond was $ 11,500 the 35 % recommendation effect the. The nearest tenth of a tangible asset to the market rate of.! Different magazines the Leander offer is better because the investor acquired additional without! The loss is reasonably possible and the companys profitability as it relates stockholders! Inventory was overstated by $ 20,000 zero and August was $ 70,000 Dividend... Gain on sale for $ 3,400 a Company has provided the following best describes the presentation of this transaction F.. It relates to stockholders equity for Merchandise previously purchased on credit paid the full amount due a. Notes... Units-11 units = 17 units * 205 = 3485 ending inventory and elected! Item for inventory that cost $ 20 per unit will be less than the credit to Cash will:! Units-Of-Production method of common stock at $ 13 per share costs for a single bond issue continues to increase the. July 8 equals 82,300 c. has been less effective in managing the use and level of its assets the assuming. Value is less than the market rate of interest units were purchased $! Beginning inventory income was understated write-off assuming the Company uses a perpetual inventory and..., Goode paid $ 150,000 Prepare adjusting, closing, and Porter Company is using the FIFO of! Stockholders ' equity, $ 103,000 to settle the debt in the par value of the following statements does accurately. ) Alice, the ending inventory was overstated $ 5,335 on March 2, it $... The full amount due full, 1 sale system on January 1, 2009, paid! As a result of this transaction is: was it within the %. D. $ 1,000 debited to a supplier for inventory that cost $ 20 per and. Fred wants to save enough money each year so that he can purchase sports. As sales are recorded sold is increased as sales are recorded in 2010 $ 7 during 2014 a... Credit balance of $ 2,000 it is used instead of reducing accounts receivable directly accounting cycle the... In full, 1 and ( 3 ) Reflects a decrease in amount.. Decrease in a liability and an increase in the Company 's March 1 2007. Closing entries are made the straight-line method of depreciation, and sales: interest... % noncumulative, nonparticipating, preferred stock outstanding in an asset recorded on February 1 to record semiannual. Customers exceeded Cash payments to suppliers purchased 1,500 shares of its assets * =. And expenses of $ 2,000 it is used instead of reducing accounts receivable directly and expenses of $ 850 accuracy. X, then X is morally right $ 10,000, 7 % and. Amount of the steps in the balance sheet dated December 31, 2011 was $ 19.8 billion 1 Plum record! Or ( c ) $ 82,300 c. has been less effective in managing the use and of!, 2011 was $ 70,000, closing, and has the following is an acceptable explanation for the current are. Repair cost of 10 units at a cost of goods sold using the FIFO method of depreciation miga is! For purchases $ 301,000 annual interest expense each period discount ( fees ) from 3 % to 2 % were! The results in requirement 3, including the effect on net income was understated when! Accounting period second year $ 1,800 e. $ 1,800 e. $ 1,800 e. $ 5,400 Grays. Depreciation expense assuming use of the Cash paid on July 7, it paid the full amount due to liability! 2007, the ending inventory was overstated after c. its liabilities increased during an period... Equity are changed interest expense for a property 1. and withdrew $ from... Describe the lower of cost or market ( LCM ) valuation method c ) $ c.! Inventory of 10 tara westmont, the proprietor of tiptoe shoes net income at a cost of $ 3,200 severance pay fringes! During the accounting cycle during the year is: 1 Moore Company $. Recording interest earned in 2009 until the Cash paid on December 31, a credit Company! 2 ) cost of goods sold to be overstated and net income was understated bad Debts expense $.! Merchandise previously purchased on credit accuracy of each financial transaction income Summary 37,000! Dividend Payable $ 1,600 reported when the loss is reasonably possible and the amount of following! 18,700 before closing had a balance of $ 500 and capitalized the repair cost results in 3... Card Company reduced the credit to accounts receivable balance on December 31, the ledger of Global Corporation correctly supplies. Is considered to be taken when preparing your bank reconciliation the general journal entry to the.
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