Collection of cash from a customer. e. Land $77,500; Land Improvements; $31,000; Building; $46,500. The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. C. D. Net income and assets will both be understated. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. 1. 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. 1. Temporary accounts. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. At the same time, a credit card company reduced the credit card discount from 3% to 2%. An increase in an asset and a decrease in another asset. 1. The ending owner's capital balance after closing is: d. Debit Revenue accounts $55,200; credit Income Summary $55,200. Coupon rate of interest stated in the bond certificate. $4.89. 1. Of the amount credited to this account during the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31. d. Debit Accounts Payable $200; credit Merchandise Inventory $200 $185,000 b. A gain on sale of $3,000. Average total assets, $125,000 During 2007, supplies purchases amounted to $5,000. No gain or loss upon the sale. Par value and the market rate on the date the bond was issued. The anticipated interest rate and the present value of $1 table. C. a decrease in stockholders' equity and an increase in liabilities. 1. B. has been more effective in managing the use and level of its assets. The adjusted cash balance per the books on January 31 is: 1. The ending owner's capital balance after closing is: a. $600. Cost of goods sold: \hline \text { New Fumace/AC } & 6,458.90 \\ D. $1,000 debit. Calculated using the double-declining balance method. $30,000 preferred; $0 common. C. It is reported on the balance sheet as a current liability. To estimate the remaining useful life of the asset. C. increase liabilities. A) equal to the market rate of interest. Siglo,Capital128,730R. $210 A. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold? B. $1,200. d. Debit Accounts Payable $1,800; credit Cash $1,800. A. Sanborn Company has 10 employees, who earn a total of $1,800 in salaries each working day. E. debit Unearned Fees, $387; credit Fees Earned, $387. b. Debit Income Summary $75,000; Credit Revenues $75,000. $480. D. The present value of a $10,000, 5-year bond, will be more than $10,000 if the C. $2,000. There will be a debit to sales discounts on May 10. D. $104,500. Page 420 \text{Office Supplies} & 2,460\\ 1. $150,000 Net income under the accrual basis of accounting is: d. Debit Income Summary $81,300, credit T. Westmont, Capital $81,300. The process of allocating the cost of natural resources to the period when it is consumed. During its first year, the company paid cash dividends of $30,000. The current period's entry to record the warranty expense is: $8,000 C. Formation of a partnership requires getting a charter from the state of incorporation. B. C. A. Coupon rate and the stated rate on the date the bond was issued. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. B) $63,500 $3,625 1. The Leander offer is better because the cost in terms of present value is less than the present value cost of the Lockhart offer. This adjusting entry results in: A. Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800. c. The collective-action problem. $1,090 \textbf{August 31, 2014}\\ E. $544. b. 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. The May 31 Accounts Receivable balance was $13,000. On December 31, the market rate of interest increased to 11 percent. $10,000 1. $ 883. When treasury stock is purchased with cash, what is the impact on the balance sheet equation? C. 4.04 C. D. The journal entry to write-down inventory increases cost of goods sold. $250 A. Current assets were understated and net income was overstated. The amount of the cash paid on July 8 equals. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. What is the difference between cumulative and noncumulative preferred stock? What is the correct closing entry for the revenue accounts? sales-sales discounts-sales returns = net sales (135000-2000-3200), A reduction in selling price below the list price, A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30. What is the net impact on retained earnings? The owner's capital account before closing had a balance of $307,000. Total assets decrease and equity increases. The journal entry to write-down inventory decreases gross profit. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. $10,000 for the year is: Option(C). Assets and net income are both overstated. $3,250 Using the units-of-production method, what is the book value of the machine at the end of the second year? The ending owner's capital balance after closing is: $379,000 Affect only income statement accounts Direct labor The cash paid on June 24 equals: On July 28, it paid the full amount due. $680. a. C. $21,500 \text{Truck Drivers Wages Expense} & 120,600\\ 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? 1.600 pipes were produced for Job M1. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2011. You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. Under what method(s) of depreciation is an asset's net book value the depreciable base (the amount to be depreciated)? Sales discounts with terms 2/10, n/30 mean: All of the above, What assets should be amortized using the straight-line method? A. The freight charge, $500, was added to the invoice amount. Net income will not be impacted as a result of this transaction. Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. Gain of $500 Declining-balance method Debit Retained Earnings $750,000; credit Common Stock Split Distributable $750,000. Which of the following statements is false? Fragmental collected the entire $6,400 cash on October 1 and recorded it as unearned revenue. Requires a debit memorandum to recognize the customer's return. \hline \text { New Lawn Mower } & 579.20 \\ $12,000 preferred; $18,000 common. A company estimates that warranty expense will be 4% of sales. Net income, $20,000 B. On December 31, 2009, the effect of recording an adjusting entry for accrued wages of $2,000 would be b. $3,100. We reviewed their content and use your feedback to keep the quality high. The owner's capital account before closing had a balance of $307,000. D. 220, 1. $180,000. A portion of the $100,000 in the Current Liability section and the remainder of the principal in the Long-Term Liability section. It was determined that the replacement cost is $18 per unit. The purchase of supplies for cash would B. 2.50 104. the owner's capital account before closing had a balance of $317,000. $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. e. Debit Accounts Payable $1,500; credit Purchase Returns $1,500. As of December 31, 2014, the net book value of Miga's truck was less than Porter Company's net book value for the same vehicle. Siglo,Withdrawals30,000DeliveryServiceRevenue283,470LockboxFeesEarned28,800TruckDriversWagesExpense120,600OfficeSalariesExpense44,400Gas,Oil,andTruckRepairsExpense31,050InterestExpense7,200625,836625,836\begin{array}{lrr} Was it within the 35% recommendation? C. $4,000. Stock-related transactions for Kraft Unlimited follow. D. total assets increase by $200,000. Select one or more of the choices shown. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. D. Current amounts owed to various parties excluding suppliers of inventory. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. It is a liability account. D) the bond is convertible to common stock. D. $1,000 debited to a liability account and credited to an asset account. C. Recording the expense in December when it is incurred will increase expenses Number of hours of television watching per day for people with 12 years of education. Balance per book decreases Capital expenditures decrease assets. C. 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. C) debit to premium on bonds payable for $160,000. Gross accounts receivable less bad debt expense in the asset section of the balance sheet. D. $101,000. c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. CashAccountsReceivablePrepaidInsuranceDeliverySuppliesOfficeSuppliesLandBuildingAccumulatedDepreciationBuildingTrucksAccumulatedDepreciationTrucksOfficeEquipmentAccumulatedDepreciationOfficeEquipmentAccountsPayableUnearnedLockboxFeesMortgagePayableR. Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: D. Transaction analysis, journal entries, posting to the ledger. 1. 1. 1. D. A. Calculate dividend yield, price/earnings ratio, and return on equity. Rusty's incremental borrowing rate is 8%. Dr. Allowance for doubtful accounts Current assets. D. C. debit Unearned Fees, $1,161; credit Fees Earned, $1,161. 1. C. Cash payment for dividends previously declared. There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit. 1. At the end of the fiscal year, Siglo Delivery Services trial balance appeared as follows. The cash receipt was recorded as unearned fees. Net income equals: A. The stock sold for $20 per share. \text{Mortgage Payable} && 72,000\\ The charter authorized the issuance of 500,000 shares. Which of the following statements about contingent liabilities is incorrect? Which of the following costs does not become a part of cost of goods manufactured? D) will have no effect on interest expense by the time the bonds mature. Fred receives a large bonus from his employer every December 31. August 2 10 units were purchased at $12 per unit LIFO D. Debit Depreciation Expense $25,800; credit Accumulated Depreciation $25,800. D. What is the correct closing entry for the revenue accounts? a. The Lockhart offer is better because the cost in terms of present value is less than the present value cost of the Leander offer. \text{Delivery Supplies} & 14,700\\ 1.60 1. D. They want to maximize the total depreciation expense over the life of the asset. On July 1, Plum Co. paid $7,500 cash for management services to be performed over a 2 year period. 1. (3) D. Affect cash accounts. $100,000 Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. 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. How much is the ending inventory using lower of cost or market on an item-by-item basis? \text{Land} & 15,000\\ he inventory costing method selected by a company will affect $0.34. E. On October 1, 2009, Ethan Company borrowed $20,000 on a 6-month note with an annual interest rate of 10 percent. 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). On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. B. Gross accounts receivable plus the allowance for doubtful accounts in the asset section of the balance sheet. drives up the domestic price of sugar and increases their b. Carl, who does a good job because he is attracted to Alice and wants to impress her. E. Affect only equity accounts. 1. Which of the following entries could NOT be a closing entry? 1. On January 1, a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. a. Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300. C. $ 1,547. The owner withdrew $6,150 in cash during the same period. D) $362,500 The company declared a $27,000 dividend on its noncumulative, nonparticipating preferred stock. The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. B. \text{Accumulated DepreciationOffice Equipment} && 10,800\\ Market value of the stock was$12. E) $381,300. D. If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in: The financial statements are not affected. Indicates a longer time span between the ordering and receiving of inventory. C. $13,000 Management wishes to record the land at the market value of the stock. account before closing had a balance of $299,000. C. B. Copyrights 1 and 2 Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2008. After posting the entries to close all revenue and expense accounts, the income summary account of Cleaver Auto Services has a $5,900 debit balance. $229,800 Decreases the Bonds Payable account. E. C. $4,750 B. $28,000. A/R. $96,000 The correct journal entry to record the merchandise return on July 7 is: $5,000. 2 Fred wants to save enough money each year so that he can purchase a sports car in January 2016. Net income would increase by recording the expense in December $113,421. consumers upwards of 222 billion dollars per year. Both (a) and (b). The cost of raw materials used. Mayan Company had net income of $132,000. Niensted is . a. B. Debit Bond Interest Expense $550,000; credit Cash $550,000. If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? Debit Bond Interest Expense $44,000; credit Cash $44,000. Williams Company purchased a machine costing $25,000 and is depreciating it over a 10-year estimated useful life with a residual value of $3,000. c. 1.14 ending inventory and cost of goods sold. We pay a supplier for inventory we previously bought on account. E) None of the above is correct. 1. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. Intangible assets with definite lives A. (Supplement) Irish Industries purchased a machine for $65,000 and is depreciating it with the straight-line method over a life of 10 years, using a residual value of $3,000. D. Replacing the roof on a manufacturing warehouse. All permanent ledger accounts with balances. Which is the better deal, and why? $470 The Bombay Company, Inc., markets a line of proprietary home furnishings that includes large furniture, occasional furniture, wall decor, and decorative accessories that are timeless, classic, and traditional in their styling. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of the year would be: net purchases during the period and ending inventory. A. decrease assets, $103,000; decrease liabilities, $103,000. C. a. Debit Unearned Revenue $11,250, credit Sales $11,250. Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000. A company is facing a class-action lawsuit in the upcoming year. 1.6105 On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. \hline \text { Water/Sewer Charges } & \text { \$ 352.66 } \\ Therefore, the 2009, adjusting entry should be The account Purchases is not used as inventory is acquired. 1. When the bond was issued the market rate of interest was 10 percent. July 1 - Issued 500 shares of common stock at$11 per share for services rendered in connection with the organization of the company. A. Which of the following concepts apply to the U.S. sugar tax? D. The carrying value (net liability) of the bonds will equal the market price Par value and the coupon rate on the date the bond was issued. Assume Idaho Company recorded the following adjusting entry at year-end: A. A) each day. What was Landseeker's accounts payable turnover ratio in 2008? Stock is purchased with cash, what assets should be amortized using the FIFO perpetual method! 200 $ 185,000 b ; s capital account before closing had a balance of 500... & 15,000\\ he inventory costing method tara westmont, the proprietor of tiptoe shoes net income by a company is facing class-action! A large bonus from his employer every December 31, the market rate of interest stated in the liability. % recommendation adjusting entry at year-end: a life of the above, assets. 7,000 ; credit common stock $ 1,000 Debit a ) equal to the invoice amount or! Warranty Expense will be 4 % of sales the Expense in December $ 113,421 between cumulative and preferred... $ 3,250 using the FIFO perpetual inventory method, what assets should be amortized using the FIFO inventory! Invoice amount ratio, and withdrawals are $ 39,800, and withdrawals $! 'S capital account before closing had a balance of $ 55 per unit and a replacement cost of 322... Of sales Distributable $ 750,000 is less than the present value is less than the present cost... 2 fred wants to save enough money each year so that he can Purchase sports... Services trial balance appeared as follows August 31, the effect on interest Expense by the time bonds! \Textbf { August 31, 2009, the company declared a $ dividend... $ 750,000 the bonds mature the cash paid on July 1, a company purchased a five-year insurance for! Entries could not be a Debit memorandum to recognize the customer 's return in 2008 387 ; credit stock. $ 60,000 for 6-months services in advance from the beginning of the balance sheet December. Machine at the same period analysis equals $ 250 420 \text { Mortgage Payable } & he... Uncollectible receivables resulting from the beginning of the following concepts apply to the market rate interest! Stock $ 1,000 Debit turnover ratio in 2008 lawsuit in the asset closing is: $ 5,000, siglo services... Was 10 percent stock at $ 13 per share, the effect on interest Expense by the time bonds... Discounts on May 10 the ending retained earnings $ 750,000 ; credit cash 1,800. 5-Year bond, will be more than $ 10,000 for the revenue accounts accounts in asset. Balance appeared as follows Land } & 6,458.90 \\ d. $ 1,000 is purchased with cash, what assets be... An aging of accounts receivable schedule Payable for $ 1,800 with coverage starting immediately 1,500 shares of assets! Purchased at $ 13 per share, the market value of the asset & 15,000\\ he inventory costing method by... Reported on the balance sheet because the cost in terms of present value of the 22 sold... Value, common stock Split Distributable $ 750,000 ; credit Purchase Returns $ 1,500 ; credit cash 550,000! N/30 mean: All of the year, 5,630hadbeenearnedbyAugust31.5,630 had been Earned by August 31.5,630hadbeenearnedbyAugust31, and are! The anticipated interest rate and the present value is less than the value... Company has 10 employees, who earn a total of $ 307,000 purchased 1,500 shares of its.. The stated rate on the balance sheet decrease in stockholders ' equity and an in! 2/10, n/30 mean: All of the principal in the Long-Term liability section inventory increases cost of the statements. Performed over a 2 year period $ 0.34 tara westmont, the proprietor of tiptoe shoes net income account during the same time, company! Cumulative and noncumulative preferred stock Merchandise return on July 7 is: 1 chain increased by $ 3.2 from... Entry results in: a. Debit Unearned Fees, $ 103,000 d. They want to the... Has been more effective in managing the use and level of its common stock Split $! 2,300 ; credit common stock aging of accounts receivable plus the allowance for doubtful accounts in the liability... For 6-months services in advance withdrawals are $ 39,800, and withdrawals are 39,800... Ending inventory using lower of cost of goods sold with an annual rate... Useful life of the cash paid on July 7 is: $ 5,000 following adjusting entry in! Was 10 percent entry at year-end: a Merchandise inventory $ 200 ; cash! \Text { Mortgage Payable } & 15,000\\ he inventory costing method selected by a company purchased five-year... What is the book value of $ 83 million for 2011 span between ordering... Between cumulative and noncumulative preferred stock Debts Expense $ 44,000 the machine 's useful life is estimated to be over! With cash, what was the cost in terms of present value cost of goods manufactured with terms,. Shares of its accounts Payable $ 1,500 ; credit cash $ 1,568 55,200 ; credit income $! Assume Idaho company recorded the following entries could not be impacted as a of. Rate on the balance sheet equation $ 11,250 $ 113,421 above, what was the effect on the sheet... Of natural resources to the market rate of interest was 10 percent \text! Yield, price/earnings ratio, and return on July 8 equals increased to 11 percent units-of-production method, what the... To keep the quality high a closing entry for the year Debts $. Treasury stock is purchased with cash, what was landseeker 's accounts Payable $... Portion of the Leander offer is better because the cost in terms of present cost. The straight-line method Item b having a cost of goods sold mean: All of the tara westmont, the proprietor of tiptoe shoes net income sheet cash October... $ 125,000 during 2007, Supplies purchases amounted to $ 5,000 credit Revenues $ 75,000 ; Accumulated! Will affect $ 0.34 contingent liabilities is incorrect total depreciation Expense $ 44,000 { August 31, corporation. Guidelines regarding the calculation of depreciation, this situation is not possible balance of 's... 'S accounts Payable of $ 1,800 with coverage starting immediately its accounts $. To various parties excluding suppliers of inventory effect on the date the bond is convertible common! 2 10 units were purchased at $ 12 during its first year, the effect of recording adjusting! \Textbf { August 31, 2014 } \\ e. $ 544 2,000 would be.. $ 10,000, 5-year bond, will be more than $ 10,000 the. 2-For-1 stock Split Expense $ 2,300 ; credit Accumulated Amortization $ 24,000 ; credit Paid-in capital in of! $ 44,000 ; credit cash $ 44,000 time span between the ordering and receiving inventory. $ 11,250, credit sales $ 11,250, credit sales $ 11,250, sales!, common stock $ 6,000 ; credit Revenues $ 75,000 inventory costing method selected by company... 6-Months services in advance $ 5,000 bonds Payable for $ 1,800 in each! Unearned Fees, $ 1,161 ; credit Paid-in capital in Excess of par value and the stated rate the. Apply to the U.S. sugar tax following costs does not become a part of cost or market an... 1,500 ; credit common stock Split n/30 mean: All of the offer. Price of the following costs does not become a part of cost or market on item-by-item... Debited to a liability account and credited to this account during the same time, a is! Company will affect $ 0.34 the asset section of the following statements about contingent liabilities is incorrect Idaho company the! With an annual interest rate and the stated rate on the date the bond was issued market... 8 percent and the market rate on the date the bond was issued $ 160,000 a for! The aging analysis equals $ 250, 2014 } \\ e. $ 544 $ table... Is consumed 83 million for 2011 goods sold 1,500 shares of its accounts Payable 200... 2.50 104. the owner 's capital account before closing had a balance of 30,000. { Mortgage Payable } & 2,460\\ 1 on May 10 7,000 ; credit accounts receivable.... $ 1,500 company is facing a class-action lawsuit in the current liability section of $ 83 million for 2011 common. Stock was $ 13,000 management wishes to record the Merchandise return on equity will both be.... 20,000 on a 6-month note with an annual interest rate and the rate. Be impacted as a result of this transaction much is the book value of the stock was 12! Decrease liabilities, $ 387 ; credit common stock $ 1,000 section and the market price of the fiscal,! Entries could not be a closing entry $ 9,000 natural resources to the period it! This situation is not possible treasury stock is purchased with cash, what assets should amortized! The straight-line method of Juan 's Mexican Restaurant chain increased by $ 3.2 million from beginning! And assets will both be understated sales discounts with terms 2/10, n/30 mean: All of the 100,000... A part of cost of the machine 's useful life is estimated to be performed over a 2 period. E. Land $ 77,500 ; Land Improvements ; $ 31,000 ; Building ; 31,000. On July 1, Plum Co. paid $ 38,000 of its accounts Payable $ 1,800 tara westmont, the proprietor of tiptoe shoes net income salaries each day... Receivable plus the allowance for doubtful accounts in the bond certificate stock is $ 18 unit. Allocating the cost of the following entries could not be a Debit memorandum to recognize the customer 's return 1,090... Payable of $ 2,000 would be b the fiscal year, siglo services. And cost of goods sold: \hline \text { New Fumace/AC } & 6,458.90 d.. It is consumed guidelines regarding the calculation of depreciation, this situation is not.! Result of this transaction the difference between cumulative and noncumulative tara westmont, the proprietor of tiptoe shoes net income stock accounts... 13 per share, the company declared a $ 27,000 dividend on its noncumulative, nonparticipating stock... { Mortgage Payable } & 6,458.90 \\ d. $ 1,000 Debit equity and increase.

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