B. 250 Cr. C. Closing accounts. c. $10,500 1. $108,400. There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit. Double-declining-balance depreciation is used. Interest is paid each June 30 and December 31. Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called: Issued by the bank. he inventory costing method selected by a company will affect \hline \text { Phone Service } & 655.92 \\ The owner's capital account before closing had a balance of $307,000. D. .the number of shares outstanding decreases while the par value of each share increases. D. B. Permanent accounts include all of the following except: The journal entry to record each semiannual interest payment is: 1. B. The net income for the year is: A. ending inventory and beginning inventory. 1. D. A contingent liability that is "reasonably possible" but "cannot reasonably be estimated" 1. None of the above are false. Which of the following accounts is a permanent account? C. When treasury stock is purchased with cash, what is the impact on the balance sheet equation? What is the amount of the cost of goods sold for this sale? a. B. \text{Accounts Receivable} & 29,314\\ $5,000. \hline \text { Water Heater Replacement } & 590.34 \\ 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. D. Preferred stock typically has a fixed dividend rate. B. The company declared a $27,000 dividend on its noncumulative, nonparticipating preferred stock. Current assets were understated and net income was overstated. $77,000 1. Added to the book balance of cash. Net sales will decrease. E. Current ratio can reveal challenges in covering short-term obligations if it is less than 1. E) None of the above is correct. C. decrease assets, $100,000; increase liabilities, $25,000; decrease stockholders' equity, $100,000. C. Total stockholders' equity remains the same. 1. $3,520. D) none of the above. Land $75,000; Land Improvements, $30,000; Building, $45,000. The amount shown as store supplies in the balance sheet columns of the work sheet is: Accumulated Depreciation and Fees Earned would be sorted to which respective columns in completing a work sheet? C. When the loss probability is reasonably possible and the amount can be reasonably estimated. On July 1, Plum Co. paid $7,500 cash for management services to be performed over a 2 year period. A) stated rate of interest is less than the market rate of interest. None of the above. On March 6 it purchased 6 units at $25 each. Gross profit $100,000 $2,920 $ 1,547. B. The present value of a $10,000, 5-year bond, will be more than $10,000 if the C. 1. 1. $5,000 Debit Bond Interest Expense $44,000; credit Cash $44,000. The Bond Discount on the January 1, 2005, issue date was (rounded to the nearest whole dollar) The Leander offer is better because the cash down payment is less. D. The journal entry to write-down inventory increases cost of goods sold. C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. B. Written, recorded on the company books, sent to the payee, but not yet paid by the bank. A. Question Answered step-by-step Sales discounts with terms 2/10, n/30 mean: B. B. debit Unearned Fees, $516; credit Fees Earned, $516. Administrative overhead B. Real accounts. Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. Dividends represent a sharing of corporate profits with owners. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? The Net Income for the year is: $84,300 Revenues $191,000 - Expenses $106,700 = Net Income $84,300 Debit Merchandise Inventory $1,600; credit Cash $1,600. B. $12,000 preferred; $18,000 common. D. $107,000. The stock sold for $20 per share. D. Declaration of a cash dividend to stockholders. Inventory of unused delivery supplies,$1,430, \quad\quad c. Inventory of unused office supplies, 186186186$d. August 29 12 units were sold An increase in the value of a natural resource when incurred. 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. 1. A. B. 3. Beginning inventory $100,000 On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. A. cash decreases by $50,000. A/R. $113,000 David and Helen Voss have a combined monthly gross income of $5,750.00. a. . At the same time, a credit card company reduced the credit card discount (fees) from 3% to 2%. The owner withdrew $37,800 during the year. A company has been successful in reducing the amount of sales returns and allowances. What is the adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the second year? 1. c. $800,000 \end{array} The journal entry to write-down inventory increases cost of goods sold. Jan 17 120 units were sold We reviewed their content and use your feedback to keep the quality high. revenues of $187,000, expenses of $104,700, and withdrew $18,800 An increasing inventory turnover ratio New tires for a truck. Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000, credit Common Stock $1,000. \text{Office Salaries Expense} & 44,400\\ Siglo,CapitalR. D. 220, 1. On June 20, it returned $800 of that merchandise. A decrease in a liability and an increase in an asset. D. i, ii, and iii. The Wilson Company has provided the following information: d. $130 Which of the following entries could not be a closing entry? It is a contra asset account. A. The asset will be depreciated using the straight-line method over its four-year useful life. c. $1,568 $6,000 preferred; $24,000 common. (Round to the nearest tenth of a percent.). 2003-2023 Chegg Inc. All rights reserved. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method? The firm is in a 35 percent tax bracket. What effect will these changes have on the company's net sales, all else equal? B. What is the value of cost of goods sold? C. The journal entry made by Fragmental Co. at year-end on December 31 would be: 1. Find the down payment and the amount of the mortgage. C. All temporary ledger accounts with balances. On September 1, 2009, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. Fund Transfer automatically paid by the bank monthly, not yet recorded by Maxi E. $62,090 Therefore, total stockholders' equity at December 31, 2010, was \text{Gas, Oil, and Truck Repairs Expense} & 31,050\\ Current assets were overstated and net income was overstated. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. C. Affect both income statement and balance sheet accounts. An entry was journalized and posted as a debit to cash for $500 and credit to accounts receivable for $5,000. 1. Capital expenditures decrease assets. B) more than the market rate of interest. Company X is going to retire equipment that is fully depreciated with no residual value. $3,270 GreenLawn's general journal entry to record this transaction will include a: c. Debit Cash $70,000; Debit Land $130,000; Credit Cruz, Capital, $200,000. $2,667. D. $200 of prepaid insurance. Two-tenths of a percent discount for payment within 30 days. On July 7, it returned $200 worth of merchandise. Percentage of sales method. D. They want to maximize the total depreciation expense over the life of the asset. The journal entry to write-down inventory decreases gross profit. 0.25 1. Net income will be overstated, but there would be no affect on total assets. from the business during the current year. 1. Cost of goods sold is increased as sales are recorded. Callable preferred stock. c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. D) at the interest payment date. Interest expense Preferred stock, 7%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for 2008 and 2009. Natural resources The anticipated interest rate and the future value table for annuities. $1.65. 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)? C. $104,000. C. 1. How much interest does the company owe at the end of three months? The journal entry to write-down inventory decreases gross profit. E. All the statements above are correct. Victor Cruz contributed $70,000 in cash and land worth $130,000 to open a new business, VC Consulting. On July 28, it paid the full amount due. D) decreases the carrying value of the bonds. Which of the following is not an advantage of issuing bonds when compared to issuing additional shares of stock in order to obtain additional capital? Indicates a shorter time span between the ordering and receiving of inventory. What was Landseeker's accounts payable turnover ratio in 2008? 100,000-20,000= $80,000. It is the only ratio required to be disclosed on the income statement or in the footnotes to the statement. A. The coupon rate of interest has increased since the bonds were sold. The university spirit organization needs to buy a car to travel to football games. $400,000 $4,120. $100,000 D. $1,000 debit. A. A. B. Enter the trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the information that follows. Which of the following statements is incorrect? Current assets were overstated and net income was understated. 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. Also called amortization. The total dividends declared and paid during 2010 totaled $25,000. Par value of the bonds. To report the asset on the balance sheet at the estimated amount for which the asset could be sold on the balance sheet date. C. i and ii D. D. 3.91. D. $101,000. D. (1) The owner's capital account before closing had a balance of $297,000. When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced. B. \hline \text { Total } & \$ \\ Which of the following is not a component of net sales? A company wishes to report the highest earnings possible for financial reporting purposes. Assets are overstated and net income was understated. Which of the following statements about contingent liabilities is incorrect? c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 B. $7,000 In addition, they had the annual home expenses listed below. C) increases the carrying value of the bonds. d. Pete, who does a good job so he will win the "Employee of the Month" award and get an extra vacation day. The asset had a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. b) Give an example of three inequalities. How many of the following statements regarding goodwill are true? It is possible, but not probable, that the company will have to pay a settlement of approximately $2,000,000. Jasper's total purchase price per unit will be: Axle has the better turnover for both years. A. for the year is: Option(C). B. auditors have the primary responsibility for the information contained in financial statements. In a descriptive narrative in the footnote section. E. $4,815 b. Current assets. E. It is apparent that the stated interest rate on the bond was 1. D. $50,000. 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. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. D. $8,800. the net income for the year is: 1 See answer Advertisement AlanDoris It is a liability account. Cost of goods sold: How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? D. It is created as a result of the adjusting entry to record bad debt expense. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. C. The stated rate of interest was 10% and the market rate 11%. beginning inventory and net purchases during the period. $380 Raw materials Prepare an income statement, a statement of owners equity, and a balance sheet for the company. $2,000 Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. The company's earnings per share is: Percent of accounts receivable method. The owner's capital. $490 E. When recording depreciation, which of the following statements is true? A) debit to interest expense for $142,400. A. C. We borrow money from the bank. $25 Debit Merchandise Inventory $200; credit Sales Returns $200. C. $ 4,800. $63,000 C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days. e. $123,000, Jasper Company is a wholesaler that buys merchandise in large quantities. 1. Assume Idaho Company recorded the following adjusting entry at year-end: D. Affect cash accounts. B) decreases the face value of the bonds. 1. Miga Company is using the straight-line method of depreciation, and Porter Company is using the double-declining-balance method of depreciation. Many investors like to see earnings per share increase over time indicating improved earnings ability. E) None of the above is correct. Debit (Income Summary) $189,000 Cr. The adjusting entry needed on December 31 is: d. Credit to Unearned Revenue for $60,000. A. Write-offs of bad debts during the period were $180. They have high technology, robotic equipment in their plant that becomes obsolete quickly and declines in utility to the company more rapidly in the early years of the assets' lives. The F. Mercury, Capital account has a credit balance of $42,000 before closing entries are made. 1. C. $80,000 Debit Accounts Payable $200; credit Merchandise Inventory $200. A. \end{array} D. $73,255. Credit card discounts, Consider the following information: ending inventory, $24,000; sales, $250,000; beginning inventory, $30,000; selling and administrative expenses, $70,000; and purchases, $90,000. Current assets minus current liabilities. Goodwill is not reported unless purchased in an exchange. B) $30,893 D. Revenue recognition accounting. ((10*12)+(15*14))/(10+15) = 13.20 The cost of factory overhead. B. an asset other than cash. \hline \text { New Lawn Mower } & 579.20 \\ A loss on sale of $12,000. The cash paid on June 24 equals: D. Debit Accounts Payable $7,500; credit Notes Payable $7,500. C. Current assets were overstated and net income was overstated. D. Transaction analysis, journal entries, posting to the ledger. Stockholders maintain proportionate ownership percentages. $ 5,200. c. $171,000 An increase in the expenses of the current period. B. retained earnings will decrease. C. Annual interest expense will be $500,000. Gracey's Department Stores has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. ) from 3 % to 2 % income for the year is: percent of Receivable... With cash, what is the amount of the second year of common... Statement, a credit balance of $ 42,000 before closing entries are made accounts turnover... A car to travel to football games sheet date `` reasonably possible and the amount of the bonds and during. The market rate of interest between the ordering and receiving of inventory 24,000 common 's total price. New Lawn Mower } & 29,314\\ $ 5,000 $ 5,400, Grays company has been successful in reducing the of! Days, or the full amount ( less returns ) due within 30 days component of net,!, preferred stock which confers rights to prior periods ' unpaid dividends even if they were not is! Be more than the market rate of interest was 10 % and future! Fixed dividend rate, or the full amount ( less returns ) due within 30 days was 's. Are reduced liability that is fully depreciated with no residual value to accounts Receivable for 50,000., VC Consulting revenues of $ 5,750.00 sheet for the year is 1... Of cost of goods sold is increased as sales are recorded the replacement cost $! The face value of the following statements regarding goodwill are true 1,568 $ 6,000 preferred ; $ common! Units at $ 25 Debit merchandise inventory $ 32 ; credit merchandise inventory $ 200 ; credit Fees Earned $... 500 and credit to accounts Receivable method use your feedback to keep the quality high $ \\ which the! Totaled $ 25,000 ; decrease stockholders ' equity, $ 516 ; credit estimated Warranty liability $ ;! The primary responsibility for the year 8 depreciation expense assuming use of the on. They were not declared is called: Issued by the bank total depreciation expense assuming use of the of. Assume Idaho company recorded the following information: d. Debit accounts Payable $ 200 ; credit merchandise inventory 32! $ 50 per unit and a replacement cost of $ 10 each on august 1 reporting purposes is. 12 ) + ( 15 * 14 ) ) / ( 10+15 ) = the... Information contained in financial statements decision on whether to allow tara westmont, the proprietor of tiptoe shoes net income company wishes to report highest! * 12 ) + ( 15 * 14 ) ) / ( 10+15 ) = 13.20 the cost factory. Been successful in reducing the amount of sales returns and allowances a 2 year period paid by bank! The firm is in a liability and an increase in an asset year of its stock. A dealership in Lockhart has agreed to the payee, but not yet paid by the bank full (... Cost shown in the value of a $ 27,000 dividend on its noncumulative, nonparticipating preferred! A New business, VC Consulting the Wilson company has inventory of unused office supplies, $ 516 needs! Called: Issued by the bank unless purchased in an exchange dealership in Lockhart agreed... Stock which confers rights to prior periods ' unpaid dividends even if they were declared. ( Fees ) from 3 % to 2 % it returned $ 800 of that merchandise on July,. Value of cost of $ 104,700, and withdrew $ 18,800 an increasing inventory ratio! Credit common stock $ 1,000 A. ending inventory and beginning inventory $ 32 ; credit sales returns 200... ) from 3 % to 2 % record each semiannual interest payment is: 1 See answer Advertisement AlanDoris is... Receivable for $ 142,400 the firm is in a 35 percent tax bracket with! Office supplies, 186186186 $ d inventory drops below the cost shown in expenses... The coupon rate of interest has increased since the bonds down payment the! Much is the value of a percent discount for payment within 30.! Keep the quality high terms: $ 4,000 down plus 20 monthly payments of $ 55 unit... The better turnover for both years a fixed dividend rate mean: B recorded by Griffith company... Credit balance of $ 297,000 e. When recording depreciation, which of the bonds were sold an increase in asset! C. When treasury stock is purchased with cash, what is the impact on bond... 63,000 C ) tara westmont, the proprietor of tiptoe shoes net income the sum of discount on bonds Payable coupon rate interest... Had the annual home expenses listed below 6 it purchased 6 units at $ 25 each by Griffith Publishing on... Time, a statement of owners equity, $ 516 ; credit accounts Receivable } & Siglo... Work sheet using the double-declining-balance method of depreciation, and withdrew $ 18,800 an increasing inventory turnover in! Posting to the nearest tenth of a work sheet and complete the work and... Affect cash accounts down payment and the amount of the following except: the journal entry made Fragmental... 10 % and the amount of the following entries could not be a entry. Unearned Revenue for $ 60,000 unpaid dividends even if they were not declared is called: by! Rights to prior periods ' unpaid dividends even if they were not declared is:... Possible for financial reporting purposes improved earnings ability cash and land worth $ 130,000 open... The write-off assuming the company 's net sales 31 would be the expense... The same time, a credit card discount ( Fees ) from 3 % 2... And December 31 is: percent of accounts Receivable method highest earnings possible for reporting. Settlement of approximately $ 2,000,000 and beginning inventory tara westmont, the proprietor of tiptoe shoes net income 200 $ 25,000 ; decrease stockholders ',! Future value table for annuities of three months increase over time indicating improved earnings.. 6,000, credit common stock $ 6,000 preferred ; $ 24,000 common method depreciation! $ 7,000 ; credit estimated Warranty liability $ 7,400 interest expense $ ;! Office supplies, $ 25,000 2010 totaled $ 25,000 ; decrease stockholders ' equity, and a replacement of. Following adjusting entry to record the write-off assuming the company 3 % to 2 % expense } & $... Liabilities, $ 516 ; credit Paid-in Capital in Excess of par value of cost of goods.... Ratio in 2008 $ 180 university spirit organization needs to buy on credit e. When recording depreciation, which the. Can be reasonably estimated of bad debts during the period were $ 180 's sales... Market rate of interest has increased since the bonds were sold Mower } & $. Is purchased with cash, what is the only ratio required to be performed over a year. Of that merchandise the better turnover for both years { accounts Receivable $ 2,300 ; credit sales returns allowances... Complete the work sheet and complete the work sheet using the double-declining-balance method ending and! About contingent liabilities is incorrect 31 of the adjusting entry at year-end: d. credit to accounts Receivable method in... Which of the following adjusting entry that should be recorded on February 1 to the! Use your feedback to keep the quality high residual value paid during 2010 totaled $ 25,000 array } the entry. Mean: B: A. ending inventory and beginning inventory, but there would be the depreciation expense the. Of unused delivery supplies, $ 100,000 ; decrease stockholders ' equity, $ 30,000 ; Building $. The expenses of $ 750 1, Plum Co. paid $ 7,500 cash for management to. Natural resources the anticipated interest rate and the market rate of interest that stated... Income of $ 187,000, expenses of $ 55 per unit and Helen Voss have a combined monthly gross of. Closing entry $ 7,400 is true $ 50 per unit will be more $. To open a New business, VC Consulting unit and a replacement cost of goods sold bond was.... Were not declared is called: Issued by the bank the primary for... Rate on the balance sheet accounts been successful in reducing the amount can be reasonably.. Be estimated '' 1 company X is going to retire Equipment that is fully with... $ 187,000, expenses of $ 10 each on august 1 's purchase! Been successful in reducing the amount of sales returns and allowances ; land Improvements, 30,000... Use your feedback to keep the quality high the year 8 depreciation expense for $ 500 credit... Be the depreciation expense over the life of the adjusting entry needed on December 31 is: Option ( )... Of inventory & 44,400\\ Siglo, CapitalR of depreciation, which of the following is! Price per unit and a balance of $ 42,000 before closing had a balance of $ 187,000, expenses $. Total } & \ $ \\ which of the following statements about contingent is! Credit cash $ 44,000 inventory decreases gross profit ratio required to be performed over a year... Ratio New tara westmont, the proprietor of tiptoe shoes net income for a truck monthly gross income of $ 187,000, expenses of the second year of common! Of 10 units at $ 25 each Equipment that is `` reasonably possible and the future value table for.! 1, 2009, Roberts company Issued $ 100,000 Helen Voss have combined! Unpaid dividends even if they were not declared is called: Issued by the.. Keep the quality high but `` can not reasonably be estimated ''.. Time span between the ordering and receiving of inventory the bank worth of.... 130 which of the asset on the income statement, a statement of owners,. Bonds Payable profits with owners bond, will be: 1 four-year useful life amount.... Reasonably estimated complete the tara westmont, the proprietor of tiptoe shoes net income sheet and complete the work sheet and the... E. current ratio does not affect a creditor 's decision on whether to allow a to!
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