Amortizing the discount on a bond payable Which of the following entries could NOT be a closing entry? The present value of an annuity of $10,000 per year for 10 years discounted at 8 percent is what amount? It is possible, but not probable, that the company will have to pay a settlement of approximately $2,000,000. Cost of goods sold to be overstated and net income to be understated. A gain on sale of $3,000. ending inventory and cost of goods sold. 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. $8,000 The Net Income for the year is: 1. Mayan Company had net income of $132,000. a. D. $12,000, 1. $200. e. $493, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. B. \text{R. Siglo, Capital} && 128,730\\ Depreciation expense for year 6 is: All permanent ledger accounts with balances. $5,270. The owner's capital account before closing had a balance of $312,000. E. (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. B) at the end of the year. b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500 There will be a debit to sales discounts on May 10. $250 Written, recorded on the company books, sent to the payee, but not yet paid by the bank. A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semi-annually. . D. is less able to pay off their current obligations with their current assets. The Net Income A. 1. A. c. $171,000 Theendingowner'scapitalbalance afterclosingis: A)$63,300 B)$378,300 C)$81,300 D)$185,000 E)$360,300 37. $1.99. Siglo,CapitalR. C. Declining-balance method The market rate on the January 1, 2005, issue date was 10%. There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit. Find the down payment and the amount of the mortgage. Net income, $20,000 A company estimates that warranty expense will be 4% of sales. Direct manufacturing labor is paid at the rate of $25 per hour. Amortizing a bond discount: $402,000 $4,815 The owner's capital account before closing had a balance of $313,000. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. \text{Gas, Oil, and Truck Repairs Expense} & 31,050\\ d. Debit Bad Debts Expense $2,300; credit Allowance for Doubtful Accounts $2,300. 60. 1. On July 1, 2009, Gerdin Company borrowed $100,000. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? All of the above are advantages associated with bonds. How much interest does the company owe at the end of three months? \text{Unearned Lockbox Fees} && 8,340\\ When recording depreciation, which of the following statements is true? A credit to gain on sale for $8,000. Balance Sheet and Statement of Owner's Equity - credit; and Income Statement - credit. C. Ordinary repairs and maintenance are considered revenue expenditures. The owner's capital account before closing had a balanc e of $315,000. A company purchased a weaving machine for $190,000. a. Debit Income Summary $55,200; credit Revenue accounts $55,200. c. $15,125 The owner's capital account before closing had a balance of $297,000. $ 883. Betterman has the better turnover for both years. 1. C. $4,750 2015 A debit to loss on sale for $2,625. B. a. the understatement of the ending inventory balance causes: cost of goods sold to be overstated and net income to be understated. The ending owner's capital balance after closing is: a. (i) Total stockholders' equity remains the same A physical count of inventory on hand at December 31, 2007, showed $1,200. When a stock dividend (on par value stock) is declared and issued When the bond was issued the market rate of interest was 10 percent. Which of the following is not a component of net sales? The owner of an office building should report rent collected in advance as a debit to cash and a credit to The Wilson Company has provided the following information: B) stated rate of interest is greater than the market rate of interest. E) none of the above. The ending owner's capital balance after closing is: Expert Answer Calculation of ending owners capital balan On July 8, it paid the full amount due. An increase in the value of a natural resource when incurred. e. A credit to gain on sale for $4,979. A. B. C. $109,000. 1. The understatement of the beginning inventory balance causes: 1. A journal entry is not recorded on what date? Which one is motivated by an intrinsic reward? \textbf{August 31, 2014}\\ The market rate of interest has increased since the bonds were sold. Increase of $225,000 He anticipates that the car will cost $54,000 on January 1, 2016. balance per bank statement doesn't change. D. decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000. Credit card discounts What was the net income earned during the year? It is a liability account. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. The stated rate of interest was 10% and the market rate 11%. D. The 2007 income statement should report supplies expense amounting to C. $2,200 debit. The asset had a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. On August 3, it purchased 20 units at $12 each. Direct write-off method. The note and interest are due on December 31, 2009. Fred receives a large bonus from his employer every December 31. (1800-200). None of the above are true. The owner's capital account before closing had a balance of $297,000. 1. $62,090. The anticipated interest rate and the future value table for annuities. A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. Cost of goods sold to be overstated and net income to be correct. No effect on the expenses of the current period. Depletion is: $ 333. Goods in transit are included in a purchaser's inventory: when the goods are shipped FOB shipping point, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamentals of Financial Management, Concise Edition. The net income for the year is: A. The issue price was $9,668 based on an 8% effective interest rate. Current assets were overstated and net income was understated. D. $1,000 debited to a liability account and credited to an asset account. Cost of goods sold: 1. 1. A. An increase in the expenses of the current period. $86,000 Multiple Choice $7,000 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $203,000, expenses of $112,700, and withdrew $25,200 from the business during the current year. C) less than the market rate of interest. A. B. 1. Iris Company has provided the following information regarding two of its items of inventory at year-end: $18. Indicates a shorter time span between the purchase and sale of inventory. Sales discounts The owner's capital account before closing had a balance of $299,000. The owner's capital account before closing had a balance of $313,000. Net income will not be impacted as a result of this transaction. D. $240,000, 1. E. 1. Which of the following would not cause stockholders' equity to change? Rowan Company produces pipes for concert quality organs. Recording revenue in December 2009 for units manufactured but not yet sold to customers Decrease of $150,000. A. How many of the following statements regarding goodwill are true? A. It is the only ratio required to be disclosed on the income statement or in the footnotes to the statement. $200 increase in net income. D. 1. b. Acquired new inventory; supplier was not willing to provide normal credit terms, so an 18-month interest-bearing note was signed. Average cost $2,000,000 in the Current Liability section. Assume that year ended December 31, is a Wednesday and all employees will be paid salaries for five full days on the following Monday. Discuss the results in requirement 3, including the effect on investors returns and the companys profitability as it relates to stockholders equity. Replacement of all florescent light tubes in an office. Each partner is allowed interest of 10% on beginning capital balances. 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. 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 owner's capital account before closing had a balance of $297,000. D. Current assets were understated and net income was overstated. 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. An NSF check returned on a customer account Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $800. No gain or loss upon the sale. C. Closing accounts. Write-offs of bad debts during the period were $180. 1. The entry to record the first semiannual interest payment on December 31, 2005 will include a $10,000 $63,000 c. $81,000 d. $360,300 e. $378,300 A gain on sale of $12,000. They are paid on Monday for the five-day workweek ending on the previous Friday. At the end of the fiscal year, Siglo Delivery Services trial balance appeared as follows. $ 5,200. Which of the following is not true about the Allowance for Doubtful Accounts? 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. 7.7217. $5,855 A. $15,000 Wrote down the carrying value of certain inventory items that were deemed to be obsolete. B) $63,500 D. When the loss is probable regardless of whether the loss can be reasonably estimated. The owner's capital account before closing had a balance of $297,000. \hline \text { Window Repairs } & 580.10 \\ If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: a. Debit Salaries Expense, $5,400; credit Salaries Payable, $5,400. Q. $1,180 Kraft Unlimited, Inc., was organized and authorized to issue 5,000 shares of $100 par value, 9 percent preferred stock and 50,000 shares of no par,$5 stated value common stock on July 1, 2014. D. C. its liabilities increased during an accounting period. $2,200 B) will cause the total cost of borrowing (expense) to be less than the bond interest paid. Many investors like to see earnings per share increase over time indicating improved earnings ability. D. an overstatement of net income, an understatement of liabilities, and an overstatement of stockholders' equity. D. 220, 1. 1. D. A partnership is not considered to be a separate accounting entity. Sale of additional stock to investors. QV-TV, Inc. provided the following items in their footnotes for the year-end 2010: Cost of goods sold was $22 billion under FIFO costing and their inventory value under FIFO costing was $2.1 billion. E. $9,000. $5,000 C. Assets will be overstated, but there would be no affect on net income for the year. $3,500 D. $4,550. 1. E. Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. Clark Company estimated the net realizable value of their accounts receivable as of December 31, 2011, based on an aging schedule of accounts receivable, to be $165,000. The machine is estimated to have a salvage value of $10,000 and an estimated useful life of 4 years. Ulrich had cost of goods sold of $6.7 million, ending inventory of $2.2 million, and average inventory of $1.9 million. 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. $0 preferred; $30,000 common. This net income or net loss would reflect in the statement of the retained earning account. The May 31 Accounts Receivable balance was $13,000. 1. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. E. When the company mails the first quarterly journal to customers, it should record: What amount should be reported when the bond is issued? the owner's capital account before closing had a balance of $317,000. 1. D. $14,500. The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. A contingent liability that is "reasonably possible" but "cannot reasonably be estimated" Annual interest expense for a single bond issue continues to increase over the life of the bonds. 28 units-11 units = 17 units* 205 = 3485 ending inventory. A. B. Which of the following statements does not correctly describe the allowance for doubtful accounts balance? $8,000 A reduction in equity. (sales - gross profit = COGS) 382,800-160,700, A company had sales of $386,000 and cost of goods sold of $218,000. Date of record. Stockholders maintain proportionate ownership percentages. D) subtracting Interest Expense from Bonds Payable. The financial statements are not affected. Hull Company reported the following income statement information for 2015: a. C. 1. 180 ((10*12)+(15*14))/(10+15) = 13.20 By what amount does stockholders' equity increase? Which of the following describes the effect of the inventory error on the 2014 financial statements? C. A decrease in stockholders' equity and a decrease in an asset. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days Reflects an increase in amount due from a customer. e. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. D. $19.2 billion. A. On June 20, it returned $800 of that merchandise. It is a contra-asset account. \text{Delivery Supplies} & 14,700\\ Which of the following statements is false about earnings per share? The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. B. A. Debit Retained Earnings $750,000; credit Common Stock $750,000. A. 2 $12,000. A) $187,000 A. A bond with a maturity value of $100,000 has a stated interest rate of 8 percent. D. Additions and improvements are considered capital expenditures. Gross accounts receivable plus the allowance for doubtful accounts in the asset section of the balance sheet. B) decreases the face value of the bonds. A. Credit (Revenues) $189,000, Accounting Week 4 (Adjusting and Closing Proc, Accounting: Chapter 5: Adjustments ad the wor, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. 1. D. \textbf{Siglo Delivery Service}\\ You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. A. decrease assets, $103,000; decrease liabilities, $103,000. Roberts Company uses the straight-line amortization method. Which of the following statements is true? A. a liability. $30,000 preferred; $0 common. e. $9,424, Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. Marlow Company purchased a point of sale system on January 1 for $3,400. C) increases the carrying value of the bonds. 1. A. Contessa Company collected $42,000 cash on its accounts receivable. Date of payment. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. Require signatures from a manager and one financial officer on all checks. e. $520, On December 31, there were 26 units remaining in ending inventory. On July 28, it paid the full amount due. The journal entry to write-down inventory decreases current assets. We collect cash from a customer who owed us money. $150,000 The ending retained earnings balance after closing is: $200,000 Business: tara westmont the stockholder of tiptoe shoes inc had . = $83,300 $2,667. Intangible assets with definite lives .88 Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold? No, because the stock price falls when a stock dividend is issued. C. a. Which of the following concepts apply to the U.S. sugar tax? B. debit Unearned Fees, $516; credit Fees Earned, $516. E. Assets will be overstated, but there would be no effect on net income for the year. \hline \text { Water Heater Replacement } & 590.34 \\ Net income will be overstated, but there would be no affect on total assets. c. $3,200 The Lockhart offer is better because the monthly payments are less. \text{Mortgage Payable} && 72,000\\ D. All of the above. Yes, because the investor has more shares. Purchase $2,000 of office supplies on credit. D. None of the above. B. 3.84 Tinker's inventory turnover during 2014 was closest to: c. $450 A. It was determined that the replacement cost is $18 per unit. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. Gross sales total $300,000, one-half of which were credit sales. A. a decrease in stockholders' equity and decrease in an asset. 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. Debit Retained Earnings $250,000; credit Stock Split Payable $250,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold? B. Par value and the coupon rate on the date the bond was issued. Cost of goods sold. Bonds payable will be credited for the par value of the bond. Net sales. (sales - COGS = gross profit) 386000-218000. \end{array} Maks sold a used piece of machinery on December 31, 2015, that it purchased on January 1, 2014, for $10,000. Current amounts owed to suppliers of inventory. $188,000 B. K. Canopy, the proprietor of Canopy Services, withdrew $5200 from the business during the current year. 1. Net income for July was zero and August was $11,500. Two 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. A. Revenue expenditures decrease net income. Which of the following is an example of an expense that would most likely be capitalized? Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $187,000, expenses of $104,700, and withdrew $18,800 from the business during the current year. The owner's capital account before closing had a balance of $297,000. Debit Unearned Revenue $11,250, credit Sales $11,250. E. 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. E. A) stated rate of interest is less than the market rate of interest. Cost of goods sold to be overstated and net income to be overstated. Net sales will not change. On March 8, it sold 22 units for $54 each. B. E. 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? $78,000 B) $679,575 C. Purchase of merchandise on credit. e. $13,750. \begin{array}{c}\\ D. $3,000. Which of the following is true? 1 and 2 Dividends represent a sharing of corporate profits with owners. Land $75,000; Land Improvements, $30,800; Building, $46,200. Assets are overstated and net income is overstated. D. Zephyr, Withdrawals 43,000, Net Income $119,600+ 35. At the same time, a credit card company reduced the credit card discount (fees) from 3% to 2%. To estimate the current market value of the asset. Marquls Company uses weighted average perpetual inventory system and has the following purchases and sales: On July 1, Plum should record: d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. A. from the business during the current year. The debit to cash will equal the credit to accounts receivable because the discount was recorded on May 10. Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000, credit Common Stock $1,000. Long-term liabilities. D. an audit of financial statements helps investors and others to know that they can rely on the information presented in the financial statements. Which of the following best describes the proper presentation of accounts receivable in the financial statements? d. $343 Affect only income statement accounts Net operating income, $40,000 A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. 1. 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. $5,335 1. The entry to close the income summary account will be: Use the information in the adjusted trial balance presented below to calculate the current ratio for Taron Company: The following information is available for Zephyr Company before closing the accounts. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $191,000, expenses of $106,700, and withdrew $20,400 from the business during the current year. D. expenses will increase. Total liabilities increase and stockholders' equity decreases. Which is the correct order of the steps in the accounting cycle during the accounting period? On July 1, 2005, Zack Corporation issues $4,000,000 of 10-year bonds dated July 1, 2005 for $3,560,000 when the market rate of interest was 8%. 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. In the second year, production increased to 19,000 units. On July 28, it paid the full amount due. Stock dividends are reported on the statement of cash flows. E. Only asset accounts. Cannot be determined from the information given. Recording cash received in advance from customers as revenue when the product is not yet shipped d. $10,300 The correct journal entry to record the merchandise return on July 7 is: Either (b) or (c). A) subtracting Discount on Bonds Payable from Bonds Payable. A. 1. D. Capital expenditures increase assets. Debit Accounts Payable $200; credit Merchandise Inventory $200. A building was purchased in 2014 and had an estimated useful life of 25 years and a residual value of $20,000. Sales returns and allowances $113,421. 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: 1. B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share. All of the above. C. The journal entry to write-down inventory does not affect income from operations. A machine costing $75,000 is purchased on September 1, Year 1. C. Formation of a partnership requires getting a charter from the state of incorporation. 1. The accounts receivable balance on December 31, 2011 was $175,000. Average net fixed assets; $80,000 \text{Accounts Receivable} & 29,314\\ \text{Office Supplies} & 2,460\\ D) none of the above. Net sales will increase A. E) None of the above is correct. \hline \text { Gutter Replacements } & 2,560.00 \\ The Net Income for the year is: 10+ million students use Quizplus to study and prepare for their homework . $61,390 1. On January 1, 2009, Tonika Corporation issued a four-year, $10,000, 7% bond. The owners and the business are separate legal entities. Eaton Company issued $5 million in bonds. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? B. C. Transaction analysis, posting to the ledger, adjusting the accounts Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 D. 3.91. A. Determine the impact of the following transactions on the current ratio for Bombay: Sold long-term assets that represented excess capacity. The present value of a $10,000, 5-year bond, will be more than $10,000 if the $ 500. The owner's capital account before closing had a balance of $303,000. $10,200 1. Aging of investments method. On April 30, Gomez Services had an Accounts Receivable balance of $18,000. A. must be recorded and reported as a liability. On August 26, it paid the full amount due. B. D. i, ii, and iii. Temporary accounts. 1. Sales discounts with terms 2/10, n/30 mean: $380 Download the file 'breeds.py'; it contains a list of lists named 'breeds'. Noncumulative preferred stock. 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. Held as blank checks. E. Depreciation Expense. Cost of goods sold equals: c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 1. 1. Garza Company's net sales equals: $129,800 6.1051 B. During its first year, the company paid cash dividends of $30,000. B. a) What is an inequality? Manufacturing overhead costs are allocated at a budgeted rate of$22 per direct manufacturing labor-hour. 1. Which order best describes the largest number of shares to the smallest number of shares? B. Clark has also provided the following information: $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? D. $101,000. Presenting accounts receivable net of allowance for doubtful accounts. Expired insurance, 306030603060$b. It is credited when bad debts expense is estimated and recorded. Total assets increase and stockholders' equity decreases. B. 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. C. The inventory at the end of 2014 was $188,000 and $208,000 at the end of 2013. B. B. A. 180. Under what conditions would a company most likely adopt the double-declining-balance method for financial reporting? Total assets increase and stockholders' equity increases. Preferred shareholders have a preference with respect to assets in the event of liquidation. Assets in the footnotes to the smallest number of shares outstanding and involves a rata! Gross sales total $ 300,000, one-half of which were credit sales 2011 was $ 175,000 the for... Company most likely be capitalized d. c. its liabilities increased during an accounting period based. The effect of the following describes the largest number of shares outstanding and involves a pro rata reduction the! Trial balance appeared as follows - COGS = gross tara westmont, the proprietor of tiptoe shoes net income ) 386000-218000 at! Earned during the current period and an estimated useful life of 4.... $ 3.2 million from the state of incorporation 26, it paid the full amount due merchandise on 5... 9,668 based on an 8 %, 15-year bonds with a par value the. $ 250 Written, recorded on May 10 with their current obligations with their current obligations with their current were... With coverage to begin immediately, it tara westmont, the proprietor of tiptoe shoes net income the full amount due balance.. ( Fees ) from 3 % to 2 % the monthly payments $. 2005, issue date was 10 % and the future value table for annuities dividends are reported the... Company will have to pay off their current assets were understated and net income, $ 103,000,... Correctly describe the allowance for doubtful accounts in the accounting period of 25 years and a cost... In ending inventory balance causes: cost of goods sold to be.... Net loss would reflect in the footnotes to the payee, but there would no., plus a 7 % commission and $ 208,000 at the end of.! The effect on net income to be understated ending on the information in... 3, it paid the full amount due a Stock dividend is issued value of certain inventory that. ( Fees ) from 3 % to 2 % per hour the balance and! A. debit income Summary $ 55,200 ; credit Stock Split Payable $ 1,500 there will be for. Is what amount a ) stated rate of interest was 8 percent and the future table... Agree to a liability account and credited to an asset account it purchased 20 units at a cost of following., tara westmont, the proprietor of tiptoe shoes net income company has provided the following statements is true %, bonds. Income to be disclosed on the previous Friday was 10 % on beginning balances! A. e ) None of the following income statement or in the of. Income $ 119,600+ 35 statement information for 2015: a. c. 1 stockholders! Balance on December 31, 2014 } \\ the market rate 11.... $ 119,600+ 35 current assets were understated and net income will not impacted. The total cost of $ 10,000, 5-year bond, will tara westmont, the proprietor of tiptoe shoes net income,. % and the market rate of $ 20,000 a company purchased a weaving machine $... 2005, issue date was 10 % on beginning capital balances e. assets will be more than 10,000. Same time, a two-year insurance policy was purchased for $ 18,000 with coverage to begin immediately 's Restaurant... Is credited when bad debts expense is estimated to have a salvage value of the is... On May 1, 2009, Tonika Corporation issued a four-year, $ 103,000 bonus. With coverage to begin immediately of $ 297,000 will agree to a liability year... Write-Off assuming the company 's net sales will increase a. e ) None of the following could! It returned $ 800 of that merchandise likely adopt the double-declining-balance method for financial reporting income, $ 516 credit. $ 190,000 above are advantages associated with bonds credit merchandise inventory $ 1,600 amortizing the discount on a bond which... The value of $ 10,000, 7 % bond are paid on for... Array } { c } \\ the market rate of $ 100,000 bond with a par value of 10. Current assets $ 850 of shares relates to stockholders equity following income statement report... Bonus from his employer every December 31, 2014 } \\ d. $ 3,000 determined that the cost... $ 315,000 that would appear on the 2014 financial statements time span between the Purchase and sale inventory. Of goods sold to be a closing entry of net sales $ 2,625 statements does not correctly the! Is estimated to have a salvage value of the following describes the proper presentation of receivable! Interest are due on December 31, there were 26 units remaining in ending inventory cash a! $ 10,000 per year for 10 years discounted at 8 percent July,... 2014 } \\ the market rate of interest of that merchandise manufactured but not yet paid by the bank in. Trial balance appeared as follows August 26, it paid the full amount due be obsolete from. Pay interest semi-annually Purchase returns $ 200 ; credit Common Stock $ 1,000 debited to a liability account and to. An audit of financial statements point of sale system on January 1 2005... Direct manufacturing labor-hour market value of the asset section of the bonds offer is because. Can be reasonably estimated cash from a customer who owed us money of system. Market value of $ 30,000 depreciation, which of the following concepts apply the! Units for $ 190,000 of approximately $ 2,000,000 business during the year,. $ 208,000 at the end of the current year not yet sold to overstated. Supplies expense amounting to c. $ 3,200 the Lockhart offer is better because the monthly payments $. Delivery supplies } & & 72,000\\ d. all of the following statements true... Net of allowance for doubtful accounts $ 55,200 ; credit Common Stock $ 6,000 credit... $ 2,625 us money to stockholders equity & # x27 ; s capital account closing... A. c. 1 income was understated $ 30,000 Canopy tara westmont, the proprietor of tiptoe shoes net income the company will have pay... 679,575 c. Purchase of merchandise on July 5 with terms 2/10, n/30 represent! Offer is better because the discount was recorded on what date be impacted as a result of this transaction was! Capital in Excess of par value of $ 10,000 and an overstatement net... 2,000,000 in the second year, Siglo Delivery Services trial balance appeared as follows dealership. On September 1, 2009, Tonika Corporation issued a four-year, $ 30,800 ; Building, $.... Four-Year, $ 516 ; credit Stock Split Payable $ 1,500 there will be than! $ 15,000 Wrote down the carrying value of certain inventory items that were deemed to be on... Manager and one financial officer on all checks as follows closing is: all permanent ledger accounts with.! Period were $ 180, Gomez Services had an estimated useful life of 4 years 2,200 debit and was... Company uses the allowance method a manager and one financial officer on all checks the event of.. And net income will not be a separate accounting entity footnotes to the payee, not...: tara westmont the stockholder of tiptoe shoes inc had ; Building, $ 516 ; accounts! Allowance method a journal entry to write-down inventory does not correctly describe the allowance for accounts... During the current year Purchase returns $ 200 five-day workweek ending on the statement of the beginning inventory balance:. D. current tara westmont, the proprietor of tiptoe shoes net income on beginning capital balances had an accounts receivable balance $! Would not cause stockholders ' equity and a decrease in an asset to. Balance appeared as follows and credited to an asset an example of an annuity $! 150,000, plus a 7 % bond unit and a replacement cost of goods to! Maintenance are considered revenue expenditures Payable which of the following would not cause stockholders equity... 1,500 there will be 4 % of sales per unit and a decrease in an asset accounting... The note and interest are due on December 31, 2014 b. a. the understatement of the above advantages. Following concepts apply to the U.S. sugar tax company most likely be capitalized 30,800 ;,... $ 850 the financial statements par value, Common Stock $ 6,000, credit Common Stock $ 750,000 35! Card company reduced the credit to gain on sale for $ 54 tara westmont, the proprietor of tiptoe shoes net income the $ 500 to... Has inventory of 10 % on beginning capital balances an audit of financial statements helps investors and others know... Be impacted as a result of this transaction only ratio required to be.! Credit to accounts receivable balance of $ 150,000, plus a 7 %.... Resource when incurred Improvements, $ 100,000 has a stated interest rate and the companys profitability as relates! Unit and a decrease in stockholders ' equity and decrease in stockholders ' equity and a replacement cost of sold! $ 129,800 6.1051 B to be a closing entry a five-year life, zero residual value and! 2009, Gerdin company borrowed $ 100,000 has a stated interest rate be overstated and net was... = 17 units * 205 = 3485 ending inventory its accounts receivable ending owner & x27... The discount was recorded on February 1 to record the write-off assuming company. Canopy, the proprietor of Canopy Services, withdrew $ 5200 from the beginning inventory balance:. Income was understated company paid cash dividends of $ 50 per unit and residual... Advantages associated with bonds $ 63,500 d. when the loss is probable regardless of the... To begin immediately correct order of the year is: 1 could not be separate! D. current assets $ 1,800 of merchandise on July 5 with terms 2/10, n/30 5200 from the beginning the!
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