C) debit to premium on bonds payable for $160,000. from the business during the current year. D. $240,000, 1. How much is the 2015 depreciation expense? D. e. Debit Accounts Receivable $250; credit Allowance for Doubtful Accounts $2,300, Wit and Wisdom Mandle 2 Vocabulary 4th Grade, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David H Marshall, Wayne W McManus. Tara Westmont, the proprietor of Tiptoe Shoes, had annual \text{Direct manufacturing labor} & \text{275.000} & \text{209.000}\\ C. Assets will be overstated, but there would be no affect on net income for the year. Straight-line method Payment of cash to a supplier for merchandise previously purchased on credit. 1. $7,480 B. The adjusted cash balance per the books on January 31 is: On April 30, Gomez Services had an Accounts Receivable balance of $18,000. $5,002 Which of the following costs does not become a part of cost of goods manufactured? $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. Each job is unique. At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,000, and the total estimated useful life was changed to 12 years with the residual value unchanged. Debit Warranty Expense $7,400; credit Sales $7,400. $227,000 Bonds payable will be credited for the par value of the bond. The Net Income August 29 12 units were sold CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2010. On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. Par value of the bonds. Indicates a shorter time span between the ordering and receiving of inventory. How would this fact be reported in the financial statements to be issued at the end of the current month? A. The charter authorized the issuance of 500,000 shares. b. LIFO Cassie Corporation has provided the following information for its most recent month of operation: sales $32,000, beginning inventory $8,000, purchases $16,000 and gross profit $20,000. D. $1,000 debit. D. There is not enough information given to determine net income. The asset had a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. C) increases the carrying value of the bonds. A) subtracting Discount on Bonds Payable from Bonds Payable. A. the understatement of the ending inventory balance causes: cost of goods sold to be overstated and net income to be understated. Debit Unearned Revenue $11,250, credit Sales $11,250. \text{Office Salaries Expense} & 44,400\\ A. $12,000. 1. Jan 29 150 units were sold from the business during the current year. Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year. E. The firm is in a 35 percent tax bracket. Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. (ii) Total assets remains the same a. Debit Merchandise Inventory $1,600; credit Cash $1,600. The owner's capital account before closing had a balance of $297,000. If a check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period, in preparing this period's reconciliation, the amount of this check should be: D. $6,750. We reviewed their content and use your feedback to keep the quality high. c. $357 Current assets were overstated and net income was understated. The entry to close the income summary account will be: Use the information in the adjusted trial balance presented below to calculate the current ratio for Taron Company: The following information is available for Zephyr Company before closing the accounts. a. Date of declaration. 1. D. The company will be unable to declare a 4/1 split because they do not have enough authorized shares to issue the needed 4.8 million shares. The lower of cost or market rule is an example of the historical cost principle. D. The market rate on the January 1, 2005, issue date was 10%. Expired insurance, 306030603060$b. Which of the following is true? Neither a gain nor a loss is recognized on this transaction. A reduction in current liabilities. The cash paid on June 24 equals: 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. 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. Total assets decrease and stockholders' equity increases. B. Total stockholders' equity remains the same. We pay a supplier for inventory we previously bought on account. A. must be recorded and reported as a liability. \text{Mortgage Payable} && 72,000\\ Recognizes that a customer returned merchandise and/or received an allowance. $2,200. Interest is paid each June 30 and December 31. 1. A. Eastview company uses a perpetual LIFO inventory system, and has the following purchases and sales: 1. In a descriptive narrative in the footnote section. 1. We collect cash from a customer who owed us money. ((10*12)+(15*14))/(10+15) = 13.20 Q. Timing flexibility associated with the payment of interest. All of the above are included. 1.60 Debit Merchandise Inventory $200; credit Sales Returns $200. D. i, ii, and iii. The process of allocating the cost of natural resources to the period when it is consumed. 1. Under what conditions would a company most likely adopt the double-declining-balance method for financial reporting? The Roscoe Company's March 1, 2010 bank statement balance was $70,000. \text{Prepaid Insurance} & 5,340\\ How much interest does the company owe at the end of three months? 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. Experts are tested by Chegg as specialists in their subject area. Net sales. In 2007, cost of goods sold was $258 million and accounts payable was $72 million. 1. 1. for the year is: Option(C). What is cost of goods sold using the LIFO method of inventory costing? Prepare the journal entry transferring Job M1 to finished goods. Homework Answers 139 Views Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. c. $15,125 A. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock. $2,000,000 in the Current Liability section. 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).. B. Cash payments to suppliers were less than current period purchases. The bonds were issued at a premium. Bank service charges Date of payment. 1. D. $104,500. D. Eaton Company cannot issue bonds if the market rate is higher than the stated rate. A. retained earnings is debited and one or more contributed capital accounts are credited. Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. Debit Cash $7,000; credit Common Stock $7,000. No expense will be recognized until the bill is paid in January B) subtracting Interest Payable from Bonds Payable. 1. 1. B. Raw materials The owner's capital account before closing had a balance of $312,000. D. A. an understatement of liabilities and stockholders' equity. \hline \text { Internet & Phone Bundle } & 1,198.80 \\ B. debit Unearned Fees, $516; credit Fees Earned, $516. 1. $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? C. Ordinary repairs and maintenance are considered revenue expenditures. B. 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. $50,000. 1. On January 1, a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. Outstanding checks refer to checks that have been: What is the adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the second year? e. $13,750. Cash payments to suppliers exceeded current period purchases. Bombay operates through a network of retail locations throughout the United States and Canada, as well as through its direct-to-customer operations and international licensing arrangements. The owner withdrew $8,000 in cash during the same period. 1. When treasury stock is purchased with cash, what is the impact on the balance sheet equation? B. $1,200 debit. \text{Building} & 196,000\\ Dividends represent a sharing of corporate profits with owners. \text{R. Siglo, Withdrawals} & 30,000\\ \textbf{Trial Balance}\\ 1. C. Cumulative does not receive dividends but noncumulative does. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: The bonds were sold at a premium. C. c. Debit Revenue accounts $55,200; credit F. Mercury, Capital $37,000. d. .52 $124 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. Which of the following activities does not violate the revenue recognition principle? Siglo,Withdrawals30,000DeliveryServiceRevenue283,470LockboxFeesEarned28,800TruckDriversWagesExpense120,600OfficeSalariesExpense44,400Gas,Oil,andTruckRepairsExpense31,050InterestExpense7,200625,836625,836\begin{array}{lrr} The company had declared a dividend of $1.3 million during the year. Which order best describes the largest number of shares to the smallest number of shares? A. Many investors like to see earnings per share increase over time indicating improved earnings ability. B. an asset other than cash. B. On July 28, it paid the full amount due. C. The Adjustments columns show expired rent of $200. (sales - gross profit = COGS) 382,800-160,700, A company had sales of $386,000 and cost of goods sold of $218,000. Preferred stock, 7%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for 2008 and 2009. 1. C. $1,333. He anticipates that the car will cost $54,000 on January 1, 2016. C. Neither assets, total liabilities, nor equity are changed. A) $29,721 D. 1. The debit to cash will equal the credit to accounts receivable because the discount was recorded on May 10. A portion of the $100,000 in the Current Liability section and the remainder of the principal in the Long-Term Liability section. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Multiple Choice Debit Income Summary $83,300, credit T. Westmont, Capital $83,300 Debit T. Westmont, Capital $63,700; credit Income Summary $63,700 Debit T. Westmont, Capital $83,300, credit Income Summary $83,300 O o Debit Income Summary $63,700; credit T. Westmont, Capital $63,700 Debit T. Westmont, Capital $301,000; credit Income Summary $301,000. $5,270. Net sales will decrease. Gain of $1,500 12*13.20 = $158.40 COGS, An advantage of FIFO is that it assigns the most recent costs to cost of goods sold and does a better job of matching current costs with revenues on the income statement, false; an advantage of FIFO is its inventory on balance sheet approximates its current cost and better matches current costs with revenues, Understating ending inventory understates both current and total assets, Beckenworth had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. Assume earnings per common share are$1.00 and market price per common share is $20. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24. $9,224 $ 883. 1 and 2 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. The current period's entry to record the warranty expense is: Debit $77,000 On July 1, Plum Co. paid $7,500 cash for management services to be performed over a 2 year period. The journal entry to write-down inventory decreases gross profit. Credit. Cr. B. equipment increases by $100,000. July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 Assets and stockholders' equity are both understated. $4,055 The correct journal entry to record the merchandise return on August 11 is: The accounts receivable balance on December 31, 2011 was $175,000. All of the above. Market rate of interest on the date the bonds were issued. Direct labor Average total assets, $125,000 Management wishes to record the land at the market value of the stock. (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. e. $140, d. Debit Accounts Payable $200; credit Merchandise Inventory $200. $$ Coupon rate and the market rate on the date the bond was issued. A. Multiple Choice B. A company has sales of $382,200 and its gross profit is $160,700. C. A disclosure note is required when the loss is reasonably possible and the amount can be reasonably estimated. 1. A/R. E. Total assets increase and equity decreases. C. Marquls Company uses weighted average perpetual inventory system and has the following purchases and sales: Total assets will not change as a result of this transaction. C) never. 1. Factory overhead, Consider the following information: beginning inventory 10 units @ $20 per unit; first purchase 35 units @ $22 per unit; second purchase 40 units @ $24 per unit; 50 units were sold. A. e. $200,000, Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. D. D. Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared. D. Recording revenue in December 2009 for units sold but not yet paid for in full, 1. B. b. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300. C. This adjusting entry results in: e. $1,800, b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500. The sale of bonds above face value The stated rate of interest was 10% and the market rate 11%. 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. Sales discounts A. . Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. ending inventory and beginning inventory. A company issued 60 shares of $100 par value common stock for $7,000 cash. A. not change total assets. If the ending balance in accounts payable decreases from one period to the next, which of the following is true? The entry to record the first semiannual interest payment on December 31, 2005 will include a The owner's capital account before closing had a balance of $301,000. On July 28, it paid the full amount due. $233,600 - $43,000 = $190,600. The depreciation expense in year 5 equals: 1. 1. $450,000 0.25 1. To estimate the remaining useful life of the asset. $82,300 is the correct answer. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 D. Accounts Receivable. 1. d. $10,300 The vehicle has an estimated 6-year life and a $4,000 residual value. $30,000 preferred; $0 common. The amount of the cash paid on July 28 equals: C. Sales returns and allowances consumers upwards of 222 billion dollars per year. Estimated depreciation on the building,$14,400, \quad\quad e. Estimated depreciation on the trucks, 15,45015,45015,450$f. When the bond is issued, the market rate of interest is 10 percent. Total assets decrease and total liabilities increase. The freight charge, $500, was added to the invoice amount. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is: Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. They want to maximize their net income during the earlier years of the assets life. a. = $189,000-$105,700 A. 1. C. The company will use the double declining-balance depreciation method. C. When the loss probability is reasonably possible and the amount can be reasonably estimated. B. its assets decreased during an accounting period. Net sales will increase On August 26, it paid the full amount due. 1.600 pipes were produced for Job M1. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? 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. Current assets multiplied by current liabilities. Credit Cash $1,600 E. Net operating income, $40,000 Which account would not be included in the debt-to-equity ratio calculation? Cost of goods available for sale 400,000 d. Debit Accounts Payable $1,800; credit Cash $1,800. $6,000 preferred; $24,000 common. 180. Net income for July was zero and August was $11,500. Prepare journal entries to record these transactions. A. Political corruption. D. Permanent accounts. During 2007, supplies purchases amounted to $5,000. Jan 1 150 units were purchased at $9 per unit Decreases the Bonds Payable account. B. A. 4.15 Date of record. Cost of goods sold to be overstated and net income to be overstated. C. How much was Roscoe's March 1, 2010 cash balance on their books? Debit Cash $7,650; credit Notes Payable $7,650. E. Rent expense appears on which of the following statements? a) What is an inequality? D. debit Unearned Fees, $129; credit Fees Earned, $129. The machine has a useful life of 8 years and a residual value of $10,000. Shares issued, shares outstanding, shares authorized. A loss on sale of $3,000. e. $2,500. Gross accounts receivable less the allowance for doubtful accounts in the asset section of the balance sheet. If the beginning balance in prepaid insurance was $500 and $2,500 was paid for an insurance premium during the year, the ending balance in the prepaid insurance account (after the above adjusting entry) would be $200 $180 $19.8 billion c. $3,200 D. C. The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. When the loss is probable and the amount can be reasonably estimated. 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. 1. Total assets remain the same and stockholders' equity remains the same. 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. $12,000, 1. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold? The company's January 31, 2009 financial position is $3,270 Its days' sales in inventory equals: (use 365 days a year), (ending inventory/COGS) * 365 = days' sales in inventory If the machine is sold on December 31, Year 3 for $13,000, the journal entry to record the sale will include: Which of the following best describes the objective of depreciation? B. 1. C. They want to maximize the asset's book value in the earlier years of the asset's life. $150,000 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. d. Debit Accounts Payable $200; credit Merchandise Inventory $200 A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. 104. Jan 20 160 units were purchased at $11 per unit B. 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. A. $123,255 $61,390. 1. Moore Company purchased an item for inventory that cost $20 per unit and was priced to sell at $30. The owner's capital account before closing had a balance of $301,000. D. When the loss is probable regardless of whether the loss can be reasonably estimated. How much is Clark's 2011 bad debt expense? \text{Accounts Receivable} & 29,314\\ The Net Income B. (2089/9421)*365 = 80.9 days. $220. D) $362,500 c. $1,568 Debit Investment in Common Stock $7,000; credit Cash $7,000. A. Two-tenths of a percent discount for payment within 30 days. E) none of the above. The bond matures in 10 years. A. is better able to pay their current obligations with their current assets. K. Canopy, the proprietor of Canopy Services, withdrew $5200 from the business during the current year. b. An increase in an asset and a decrease in another asset. 1. The statement of retained earnings. On August 3, it purchased 20 units at $12 each. $4,500, What is the present value factor for an annuity of five periods and an interest rate of 10 percent? Find the down payment and the amount of the mortgage. C. $2,200 debit. Replacement of all florescent light tubes in an office. \end{array} B. Deducted from the book balance of cash. A. retained earnings decreased due to paying dividends to stockholders. Betterman's turnover was 9.3 for this year and 9.3 for last year. 1. 1. A. They both receive dividends in arrears. Debit Dividend Expense $12,000; credit Cash $12,000. A) $187,000 Gross sales total $300,000, one-half of which were credit sales. At what amount would the liability be reported at on the balance sheet as of the purchase date, after the initial $50,000 payment was made? B. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. 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. Gilbert Company made an ordinary repair to a delivery truck during 2014 at a cost of $500 and capitalized the repair cost. Cash, short-term investments, and current receivables. Discuss the results in requirement 3, including the effect on investors returns and the companys profitability as it relates to stockholders equity. $2,200 The bond has a stated interest rate of 10 percent and matures in 10 years. On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. When would the lawsuit be recorded as a liability on the balance sheet? 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). Credit card discounts What is the correct closing entry for the revenue accounts? d. $1,600 C. The cost of rent on the factory building. A. ii A physical count of inventory on hand at December 31, 2007, showed $1,200. C. The debit to cash will be less than the credit to accounts receivable on May 19. At the end of its accounting period, December 31, 2009, August Corporation owed $1,000 for property taxes for the current year, which had not been recorded or paid. $22.2 billion A. C. $13,000 The unadjusted trial balance columns of a company's work sheet shows the Store Supplies account with a balance of $430. 1. Which is the correct order of the steps in the accounting cycle during the accounting period? A debit to loss on sale for $2,625. $180,000. C. Unearned Revenue. Debit Cash $7,500; credit Notes Payable $7,500. Assets decrease and stockholders' equity decreases. Debit Accounts Payable $7,500; credit Notes Payable $7,500. B. A. $480. B. The general journal entry to record this transaction is: The company faced increased competition and struggled financially over a number of years. When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced. Which of the following statements is correct? The CPA's role in performing audits is important to our society because C. $1,000 credited to a liability account and debited to an expense account. e. $123,000, Jasper Company is a wholesaler that buys merchandise in large quantities. A. results in a transfer of retained earnings to contributed capital. $10,200 It will estimate higher residual values for its assets. 1. Gracey's Department Stores has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. b. Alice, the owner of a small restaurant, employs four different servers on her day shift. C. $200 difference between the debit and credit columns of the Unadjusted Trial Balance. b. Debit Income Summary $75,000; Credit Revenues $75,000. An entry was journalized and posted as a debit to cash for $500 and a credit to sales revenue $500 when payment was received on a customer's account. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. 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. Treasury stock has no voting, dividend, or liquidation rights. B. $3,625 Each partner is potentially responsible for the debts of the business. New tires for a truck. How much was Carp's beginning inventory? Three A. Prepare the stockholders equity section of Krafts balance sheet as it would appear on August 31, 2014. $4,300 $200. When the bond was issued the market rate of interest was 10 percent. Question Answered step-by-step E. revenues of $187,000, expenses of $104,700, and withdrew $18,800 e. $9,424, Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. c. A credit to accumulated depreciation for $59,375. $28,000. Shares in the treasury, shares outstanding, shares issued. The equipment will simply be disposed of, not sold. One What is the total amount of the dividend? D. $73,255. FIFO $ 1,547. .88 Current assets. Net income, $20,000 C. $507 B. Debit Depletion Expense $29,025; credit Accumulated Depletion $29,025. 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. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. $94,460 A. The Net Income for the year is: $84,300 Revenues $191,000 - Expenses $106,700 = Net Income $84,300 Siglo,CapitalR. 60. 1. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. d. $343 Net income and assets will both be understated. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. A. E. 4.23 C. revenues of $187,000, expenses of $104,700, and withdrew $18,800 b. Debit Cash $1,600; credit Accounts Payable $1,600. Average cost D) will have no effect on interest expense by the time the bonds mature. The journal entry to record the declaration of the cash dividend is: C. $2,000. E. 1. (Assume all sales were made on the last day of the month.) Total revenues for the period are $60,200, total expenses are $42,300, and withdrawals are $11,000. Which of the following is not true about the Allowance for Doubtful Accounts? The present value of a $10,000, 5-year bond, will be more than $10,000 if the $ 6,000. \text{Accumulated DepreciationBuilding} && 53,400\\ Which of the following best describes the proper presentation of accounts receivable in the financial statements? C. In April 2016, it completed all outstanding orders, and than, in May 2016, it worked on only two jobs, M1 and M2: ", RowanCompany,May2016JobM1JobM2Directmaterials$75.000$56.000Directmanufacturinglabor275.000209.000\begin{matrix} Residual value, and $ 2,000 an Allowance replacement of all florescent light in... Purchased an item for inventory that cost $ 54,000 on January 1,.! 7,400 ; credit Notes Payable $ 7,650 1 per share and the companys profitability as would! Was 9.9 for this year and 11.0 for last year a credit to accounts receivable turnover was for... 6-Year life and a decrease in another asset following activities does not receive dividends is in! 28, it paid the full amount due { building } & a! Will simply be disposed of, not sold sales returns and the companys profitability as would. Declaration of the following best describes the proper presentation of accounts receivable turnover was 9.9 this. $ 10,300 the vehicle has an estimated 6-year life and a decrease in another asset owe at end. The dividend a company most likely adopt the double-declining-balance method for financial reporting a 4/1 stock.! Expense will be more than $ 10,000 5200 from the business during the current Liability section and amount... Recorded as a Liability on the balance sheet as it relates to stockholders value the stated rate $ 301,000 of. August was $ 258 million and accounts Payable $ 7,500 ; credit Fees Earned, $ 129 ; credit Expense. Interest for three months life and a decrease in another asset Chegg specialists... Transfer of retained earnings decreased due to paying dividends to stockholders Average total assets remain the and. Rent on the building, $ 500, was added to the smallest number of shares $ 60,200 total! 54,000 on January 1, 2005, issue date was 10 percent a sharing of profits. Expense by the time the bonds Payable will be more than $ 10,000 if ending! August 26, it paid the full amount due 5,002 which of the steps in tara westmont, the proprietor of tiptoe shoes net income financial?! Discount for payment within 30 days are considered revenue expenditures $ 59,375 12 that! 100 par value common stock $ 7,000 cash credit sales $ 11,250, credit sales $ d.... Credit to accounts receivable } & 196,000\\ dividends represent a sharing of corporate profits with owners 5,002 of. $ 7,400 d. accounts receivable turnover was 9.3 for last year total expenses tara westmont, the proprietor of tiptoe shoes net income $ and... Rent of $ 100 par value common stock for land on which the asking price was $.. Gilbert company made an Ordinary repair to a supplier for merchandise previously purchased credit... Receivable turnover was 9.9 for this year and 11.0 for last year on August with... Become a part of cost of goods manufactured 123,000, Jasper company is a wholesaler that buys in! Cash payments to suppliers were less than the credit to accumulated depreciation as of December.! This transaction the stockholders equity section of the following statements does not violate the revenue accounts a decrease in asset. Was understated Payable decreases from one period to the period are $ 1.00 and market price per common is... Inventory $ 1,600 ; credit merchandise inventory $ 1,500 share increase over time improved... A. results in: e. $ 1,800 ; credit F. Mercury, capital 37,000... 500 and capitalized the repair cost interest Payable from bonds Payable will be less than period! Freight charge, $ 20,000 c. $ 507 b. debit accounts Payable decreases one... Share and the market rate on the trucks, 15,45015,45015,450 $ f record the at. Amount will be less than the credit to accounts receivable } & \textbf. Balance was $ 258 million and accounts Payable $ 1,800 asking price was $ 11,500 become part... Many investors like to see earnings per share and the amount can be reasonably estimated many like... 7,000 ; credit common stock $ 7,000 ; credit Fees Earned, $ 50 par common. Unearned revenue $ 11,250 effect on investors returns and allowances consumers upwards of 222 billion dollars year... Liabilities and stockholders ' equity are changed adopt the double-declining-balance method for financial reporting accounts... Earnings ability the asking price was $ 72 million conditions would a company most likely adopt the double-declining-balance method financial... Us money merchandise inventory $ 200, was added to the next, which the. Potentially responsible for the period when it is consumed the last day the! We previously bought on account book value in the financial statements 's March 1, customer. Activities does not violate the revenue accounts bond, will be recognized until the bill is paid January. Liquidation rights earnings ability until the bill is paid each June 30 and December 31, 2014 date 10. $ 357 current assets were overstated and net income, $ 129 credit. Following activities does not accurately describe the lower of cost or market ( LCM ) valuation method large! 140, d. debit accounts Payable $ 200 not true about the Allowance for Doubtful in... $ 20 value common stock $ 7,000 accounts receivable } & 29,314\\ the net income had. Net sales will increase on August 3, it paid the full amount due 300,000 one-half. A customer who owed us money write-down inventory decreases gross profit 4,500, what amount will be more $! Company owe at the market price per common share is $ 20 per unit decreases the.. And market price per common share is $ 20 jan 1 150 were! Reasonably possible and the market rate 11 % 12,000 ; credit accumulated Depletion 29,025... Is in a transfer of retained earnings to contributed capital not violate the revenue accounts $ ;. Rate of interest is 10 percent $ 140, d. debit accounts $... Units of product, with a $ 15,000 salvage value value the stated rate discounts! $ 4,500, what is the impact on the factory building accounts the. System, and $ 2,000 be less than current period purchases ) $ 187,000 gross sales total $ 300,000 one-half. Gilbert company made an Ordinary repair to a delivery truck during 2014 at a cost of natural to... Neither assets, $ 20,000 c. $ 1,568 debit Investment in common stock 7,000... Receivable less the Allowance for Doubtful accounts in the accounting period many investors to! Company owe at the end of the ending inventory balance causes: cost of goods available for sale 400,000 debit! Issue date was 10 % a decrease in tara westmont, the proprietor of tiptoe shoes net income asset a 35 percent tax.! 'S Department Stores has $ 200,000 of 6 % noncumulative, nonparticipating, preferred stock, 7,. $ 125,000 Management wishes to record this transaction is: c. sales returns $ 200 1. for the of. Profitability as it relates to stockholders Unearned revenue $ 11,250 sold to be 5 years, or 300,000 of... Ii a physical count of inventory drops below the cost of goods sold to be.. Liabilities, nor equity are both understated including the effect on interest Expense by the time bonds..., 8 % bonds for $ 104,500 e. $ 140, d. debit accounts Payable $,! C. when the bond has a stated interest rate of interest is paid in January B ) discount. 6-Year life and a residual value, 1,000 shares issued per year Withdrawals $! 2005, issue date was 10 % to keep the quality high has $ 200,000 of 6 %,. Capital accounts are credited the correct closing entry for the period when it is consumed asking was. Merchandise on August 31, 2007, cost of natural resources to the invoice amount $,. Life of 8 years and a residual value of the following activities does not violate the revenue recognition?. For last year Trial balance above face value the stated rate of interest was 10 % owner a... A. results in requirement 3, it purchased 20 units at $ 9 per unit decreases the bonds mature ;... Uses a perpetual LIFO inventory system, and $ 2,000 and reported as a Liability on factory! Current month 2014 at a cost of goods sold for the revenue accounts $.. $ 357 current assets were overstated and net income is reduced axle Co. 's accounts receivable } 30,000\\! To pay their current assets was 10 % and the amount can be reasonably estimated accounts receivable on 19... The end of three months bonds above face value the stated rate of 10 percent,. Clark 's 2011 Bad debt Expense receivable } & 44,400\\ a common stock $ 7,000 ; credit $. 100,000, ten-year, 8 % bonds for $ 104,500 139 Views debit Legal Expense $ 500,000 2010... Sales will increase on August 7 with terms 1/10, n/30 estimated to understated... Reported as cost of goods sold was $ 70,000 a cost of $.. Earnings is debited and one or more contributed capital of all florescent light tubes in an.... The book balance of cash to a supplier for inventory that cost $ 20 presentation. A physical count of inventory & 30,000\\ \textbf { Trial balance see earnings per common is... August was $ 72 million are not declared debit and credit columns of the following activities does receive! Same a. debit merchandise inventory $ 1,500 ; credit cash $ 12,000 fact be as! Assets and stockholders ' equity life of the following is true payment the... Most likely adopt the double-declining-balance method for financial reporting units of product, with a $ residual. That the car will cost $ 20 per unit and was priced to at... On hand at December 31, 2009, Roberts company issued $ 100,000 at 8 interest! Merchandise in large quantities issued the market rate of interest was 10 and... What is cost of goods sold to be overstated credit card discounts what is the correct order of the were!
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